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Last week, analysts at Goldman Sachs told clients that the potential economic impact of the Delta variant of the coronavirus would be “modest.” Even if that turns out to be the case, investors look nervous as infections spread because of the highly contagious strain.

Yesterday, the S&P 500 recorded its steepest one-day drop since May and European stocks had their worst day of the year. Inflation and antitrust enforcement had been worries for investors, but “I don’t see those things as what is driving the drop,” said Chris Brightman, who runs the money management firm Research Affiliates.

The drop caught some by surprise, because stocks have generally been resistant to the coronavirus. The S&P 500 index is 25 percent higher than it was before the pandemic. Economies have adapted, some companies have benefited, and government stimulus has protected the finances of many individuals and small businesses.

Most companies don’t seem to be altering their hiring or investment plans — yet. A private equity executive told DealBook that further lockdowns have been in the “tree of options” that companies have planned for, and the probability is now higher than before. Business leaders and investors in the U.S. are also getting clues from the “test case” of Britain, where the Delta variant has been spreading for several weeks, the person said. England lifted most of its pandemic restrictions yesterday, but the mood there remains cautious.

One reason U.S. investors are nervous is the price of oil, which dropped nearly 8 percent on Monday. Rising oil prices had been seen as a sign of a strong global rebound. The sharp decline, seemingly out of line with a modest increase in supply from oil-producing countries announced over the weekend, suggests that the global demand for oil, and therefore economic activity, could be lower than thought.

Bond markets also reflect economic unease. The economically sensitive 10-year Treasury yield has fallen to its lowest level since February, a time when the prospects for a pandemic recovery were far less certain. This is also a worry for stock investors. “You’ve had this sharp drop in bond yields, which the investment community is struggling to explain,” said Lori Calvasina of RBC Capital. “The equity world is confused by it, and concerned about it.”

There’s less confidence that Washington will come to the rescue again. Gridlock has made it difficult for Congress to pass an infrastructure bill. Many states want to end expanded unemployment benefits. A number of other pandemic safety net programs are about to expire. And the Fed is under pressure to raise rates to stem rising inflation. “A lot of the success was the coordinated policy from the Fed and the Treasury,” Brightman said. “Now, it looks like all of those extraordinary policies are coming to an end.”

Things are looking up, a little, in early trading today. Stocks are clawing back some of yesterday’s rout. But the dip may cause investors to take a closer look at whether current stock prices, still near all-time highs, are warranted given rising Covid cases and slowing vaccinations. “Although bargain hunters will be sniffing around, nervousness is still largely the sentiment rippling through the markets,” Susannah Streeter of Hargreaves Lansdown wrote in a note.

The pandemic recession was the shortest on record. The economic decline officially lasted just two months and ended in April 2020, according to arbiters at the National Bureau of Economic Research. That doesn’t mean the economy has fully recovered, though: The U.S. still has almost seven million fewer jobs than before the pandemic.

Amazon will stop Covid testing at its U.S. warehouses. The company told employees that they can now rely on other testing services, The Information reports. The move, which is said to also include the phase-out of other protective measures, comes as cases are surging and vaccination rates remain low in many of the states where Amazon has warehouses.

China rejects Western accusations of state-led hacking. Chinese diplomats accused countries including the U.S. and Canada of smearing Beijing by alleging ties to cyberattacks, including one on Microsoft. Relatedly, here’s how China has strengthened its cyberhacking capabilities, according to U.S. intelligence officials.

Opioid distributors near a $21 billion settlement. AmerisourceBergen, Cardinal Health and McKesson would set aside funds to resolve litigation by state and local governments. The potential deal must still be approved by a majority of those filing suit.

Today is Jeff Bezos’s launch day. The Amazon founder will lift off in a rocket operated by his New Origin space company at 9 a.m. Eastern, hoping to join Richard Branson in the space-faring billionaires’ club. Follow The Times’s live coverage of the launch here.

As the geography of a post-pandemic work force begins to take shape, the professional services giant PwC has tapped Morgan Stanley to sell its “global mobility” division, DealBook hears. The unit, which generates $200 million in operating earnings, advises companies on policies for a remote work force, deals with immigration issues and helps with global tax planning.

As many companies adopt hybrid models — and some go fully remote — advice on managing a distributed work force is more in demand. A spokeswoman for PwC said the firm does not comment on “rumors or speculation about any changes to our portfolio.” Morgan Stanley declined to comment.

PwC announced a major reorganization in June. The firm consolidated its operations into two units: “Trust Solutions,” to house its accounting and tax businesses, and “Consulting Solutions” for its advisory services offerings. As part of that revamp, PwC also announced plans to invest $12 billion in recruiting, training and technology and to hire 100,000 new workers by 2026.

PwC has tried on different shapes over the years. It sold its consulting arm to IBM for $3.5 billion in 2002 amid regulatory pressure on accounting firms to separate consulting from auditing, but rebuilt that business through acquisitions as it lost ground to rivals. (Regulators are once again scrutinizing the Big Four, which includes PwC, on their balance of accounting and consulting services.) PwC recorded $43 billion in sales in its latest fiscal year, with just over 40 percent from auditing, about 35 percent from consulting and 25 percent from tax and legal services.

— Ananya Das, a managing director at Guggenheim Securities, in a LinkedIn post that takes a different approach to advertising jobs for junior bankers, who often feel overworked and expendable, especially during the pandemic. “I imagine you to be unflappable,” she added, “a bunch of diamonds created under immense pressure and I tip my hat as I would not have survived.”

Shortly after the Capitol riot on Jan. 6, hundreds of big companies said that they would suspend political donations, either in total or specifically to the Republican lawmakers who voted against certifying the presidential election. Now, many of those companies have begun giving again to Democrats and to many of the Republican objectors.

Revelations about corporate political donations have emerged over the past week as candidates and companies have disclosed their latest filings. Here are some noteworthy developments:

In the first six months of the year, Lockheed Martin donated to 53 Republican members of Congress who voted against certifying the presidential election, according to the newsletter Popular Information. That was the most of any corporate PAC since the Capitol riot. Among those to receive money from Lockheed were Representative Andrew Clyde of Georgia, who The Times has reported is among the most vocal in trying to reframe the riot as nonviolent.

The House minority leader, Representative Kevin McCarthy of California, raised over $500,000 from the PACs of more than 60 corporations and business groups in the second quarter. Among the companies giving money to McCarthy that had pledged to pause contributions were Abbott Laboratories, Ford and UPS, according to The Hill.

Nearly three dozen companies have kept their pledges to stop donations to Republican objectors. Those include Amazon, Disney, Google, Microsoft and Morgan Stanley, according to Popular Information. And even among the companies that are giving again, as a group they have become less generous, The Wall Street Journal reports. It’s worth noting that these numbers include only donations made directly from corporate PACs. As DealBook has explained, companies can direct their money to candidates or political parties in many ways that are nearly impossible to track.


  • Apollo Global Management said it was in talks to partner with Fortress to buy Morrisons, the British supermarket chain. (FT)

  • In I.P.O. news: The language-learning app Duolingo is aiming for a $3.4 billion valuation, while the clothing rental service Rent the Runway said it had confidentially filed to go public. (Reuters, Bloomberg)

  • LVMH agreed to buy a majority stake in Off-White, the streetwear brand run by Virgil Abloh, and give him a bigger role at the French fashion conglomerate. (NYT)

  • Generate Capital, a big investor in green energy, raised $2 billion for its latest and largest fund. (WSJ)


  • A deep dive into how the F.D.A. approved a pricey and controversial Alzheimer’s drug despite misgivings from its own officials. (NYT)

  • Twitter temporarily suspended the account of Representative Marjorie Taylor Greene, Republican of Georgia, for spreading misinformation about the coronavirus. (NYT)

  • Treasury Secretary Janet Yellen urged fellow regulators to act quickly in regulating the fast-growing stablecoin industry. (NYT)

  • Government-linked hacking has become a widespread and perhaps long-lasting feature of the global order. (NYT)

Tokyo Olympics

  • How Dentsu became an unseen force behind the Olympics — and why the advertising giant is poised to miss out on an expected windfall. (NYT)

  • Dick Pound, a member of the International Olympic Committee, says that the I.O.C. shouldn’t be held responsible for a Covid outbreak at the games. (Times Opinion)

  • Why the beds in the athletes’ village are made of cardboard. (NYT)

  • “A Goldman Sachs Analyst by Day, He Helped Pitch Israeli Baseball Into the Olympics” (WSJ)

Best of the rest

  • Hacks using Israeli spyware show that Apple’s claims about iPhone security don’t live up to reality. (WaPo)

  • Leon Black shed a surprising amount of light on his personal life in rebutting accusations of sexual assault. (Bloomberg)

  • Entrepreneurs are holding “business showers” — like baby showers, but for newly formed start-ups. (NYT)

  • Workers are returning to the office, but the golden age of food trucks may be over. (NYT)

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