Business review from the Economist

Recession fears grow around the world

Spooked by concerns over trade, geopolitical tensions and the possibility of recession, stock markets on Wednesday had their worst day of the year so far. The S&P 500, Dow Jones industrial average and Nasdaq indexes all fell by 3% in a day. In Europe, the DAX was down by 2.2% and the FTSE 100 by 1.4%. Investors were particularly concerned by the yield on long-term U.S. government bonds falling below that on short-term bonds for the first time since 2007. Such a yield-curve inversion is usually seen as a harbinger of a downturn.

Also weighing on markets was news that Germany's GDP shrank by 0.1% in the second quarter compared with the previous three months, underlining the recent fall in German exports and industrial output. Britain's economy also shrank in the second quarter, by 0.2%, the first contraction of British GDP since the end of 2012.

The growth rate of Chinese industrial output slowed to 4.8% in July compared with the same month last year. That was the slowest pace in more than 17 years and more evidence of the chilling effects of the trade war on the Chinese economy.

Markets had lifted last Tuesday when the Trump administration said it would postpone a 10% tariff on some Chinese imports until Dec. 15. The list of goods includes smartphones, laptops, video game consoles and toys, which President Donald Trump suggested would benefit shoppers in the run-up to Christmas. The delay applies to two-thirds of the products subjected to this particular levy. A 10% tariff will be collected on the other Chinese goods from Sept. 1st.

South Korea removed Japan from its list of trusted trading partners, escalating a trade dispute. Japan dropped South Korea's preferential trading status this month. Trade between the two countries will now have to go through more red tape.

Saudi Aramco, Saudi Arabia's state oil company, is to take a 20% stake in the refining and chemicals assets owned by Reliance Industries, an Indian conglomerate. The deal, which is being negotiated, deepens existing ties between the companies and will be one of the biggest foreign investments in India to date.

Boeing delivered just 19 planes in July, the least since the financial crisis. The company is holding more than 150 of its 737 Max aircraft, which have been grounded after two fatal crashes. The ripples from the grounding continue to spread. Norwegian Air Shuttle ASA said it was ending flights from Ireland to the United States in part because of the "continued uncertainty" of the 737 Max's return to service. It is Norwegian Air's first retreat from a transatlantic market it had entered assertively.

After years of on-off negotiations with a plot worthy of a soap opera, Viacom and CBS agreed to merge, reuniting two media companies that were split in 2006 and combining assets such as Paramount and MTV with one of the United States' big four networks. Shari Redstone, whose family controls both companies, will become chairwoman of ViacomCBS.

Global politics from the Economist

Vote signals change at the top in Argentina

An indicative vote in Argentina's presidential election suggested that the opposition, led by Alberto Fernández with former President Cristina Fernández de Kirchner (no relation) as his running-mate, would win the election in October. The Argentine peso shed a quarter of its value against the dollar and its main stock market fell by 37%. Investors fear the return of Cristina Fernández, whose policies between 2007 and 2015 ruined the economy.

The election of Alejandro Giammattei as Guatemala's president threw doubt on the safe-third-country agreement signed by outgoing President Jimmy Morales with the United States.

Canada's ethics commissioner criticized Justin Trudeau, the prime minister, for pressing a former attorney-general to drop charges against a firm accused of bribery in Libya. The commissioner said Trudeau and his office acted outside the bounds of convention, and that their behavior was "tantamount to political direction." His report complicates Trudeau's bid for re-election in October.

Two treatments for Ebola proved to be effective in tests conducted in the Democratic Republic of Congo, where the latest outbreak has killed 1,900 people. The survival rate jumped to 90% if the treatments, which employ special antibodies, are given soon after infection.

Mystery surrounded an explosion in Russia's far north that led to a spike in radiation in nearby towns. Analysts said they think it may have been a Skyfall, a cruise missile powered by a tiny nuclear reactor that the Russians are developing.