The heatwave blanketing Europe did not come without severe economic consequences. In France, where temperatures broke records in July, the heatwave is expected to cause one of the country’s biggest exports, wine, to decrease by up to 13%. In the worst-case scenario, this could lead to the country’s worst output of wine in 5-years.
The heat doesn’t stop there. It has been found that there is a clear decrease in productivity by workers when temperatures rise drastically:
“We know when people are too hot they become less productive, so even if they make it into work with the infrastructure not working as it should, they might be less productive,” said Bob Ward, director of policy and communications for the Grantham Research Institute on Climate Change and the Environment.
Urban centers like London can also be “doubly lethal,” Ward explained, because the cement buildings and roads absorb more heat, driving temperatures up. The bright sunshine reflecting off infrastructure also results in a chemical reaction that worsens air pollution, putting people with respiratory problems at greater risk, he said.”
Amazon finds itself in hot water with European regulators. Claims have been made against the technology giant that it uses data from third-party sellers on its platform in an unfair manner. As a result, a formal antitrust investigation has been opened against Amazon by the European Commission. The investigation will include the company’s agreements with marketplace sellers along with the strategies Amazon uses when deciding which retailer wins the “Buy Box” on the site.
In a statement, Commissioner Margrethe Vestager highlighted the need for fair competition throughout the e-commerce market:
“European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”
This is not a good sign for Amazon, as the company already faces antitrust scrutiny in the United States. The US Justice Department said it was looking into Amazon for acquiring significant power in the market, causing a decrease in competition.
Once again, the International Monetary Fund (IMF) has revised its growth expectations for the global economy downward. The IMF’s news growth rate came in at 3.2%, down 0.1% from the forecast in April, and 0.3% lower than the expected rate at the beginning of 2019.
“Risks to the forecast are mainly to the downside,” the IMF said. “They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low-interest rates.”
“Mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal,” the fund added.
These figures were followed by warnings by the IMF in 2020 for the United States, which could be held back by continued trade tensions with key global partners. However, global growth should still be within 0.1% of previous expectations, thanks to emerging economies in the Middle East and South America.
It was a month of mixed second-quarter earnings by technology companies in July. Alphabet, the parent company of Google, reported better-than-expected earnings in the quarter, which included the announcement of a $25 billion share buyback.
YouTube continues to be a strong business for the company:
“YouTube was again the second largest contributor of revenue growth, and [we’re] really pleased with the ongoing momentum that we’re seeing here,” Porat said.
Porat clarified that her assessment that deceleration in YouTube click growth contributed to overall slowing revenue growth was not the result of removing content from its platform that violated its policies.
“The click and CPC growth were unrelated to actions on policy enforcement,” Porat said of YouTube.
Meanwhile, Amazon reported mixed earnings, which left investors feeling underwhelmed. While sales for the company were up by 20% to $63.4 billion, profits for the company fell. Earnings per share came in at $5.22 against $5.57 expected by analysts.
Analysts weren’t too happy with profit results, but that didn’t stop CEO Jeff Bezos from remaining positive about the company’s business model:
“Q2′s results were negatively impacted by margin compression in North America due to the investments in next day Prime delivery, which we continue to believe is an example of short-term pain for long-term gain,” Moody’s Amazon Analyst Charlie O’Shea said in an email statement.
CEO Jeff Bezos said in the earnings release that the change has resulted in “a lot of positive feedback” and “accelerating sales growth.”
“Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started,” Bezos said in the statement.