Stocks tumble amid concerns over the Delta variant’s impact on growth.

The move comes in response to strong opposition to the Games among the Japanese public, with many worrying that the influx of visitors could turn it into a superspreader event.,

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Concerns that the highly contagious coronavirus Delta variant could slow the global economic recovery gripped financial markets on Monday, putting Wall Street on track for its worst daily decline in months.

The S&P 500 fell as much as 2 percent and was on pace for its worst drop since mid-May (not February as was earlier reported here). The Stoxx Europe 600 dropped 2.3 percent, its worst decline this year. Major indexes in Hong Kong and Japan had ended the day with a loss of more than 1 percent.

The sell-off on Wall Street was broad, reflecting a range of concerns about economic growth and the potential for rising Covid-19 infections to lead to the return of restrictions on travel and tourism. With oil prices tumbling, energy stocks led the declines, but shares of travel companies were also sharply lower. Norwegian Cruise Line and American Airlines each fell about 6 percent. Banks, also sensitive to the outlook for the economy, also tumbled.

The Dow Jones industrial average was down about 2.2 percent. The Nasdaq composite was down about 0.9, on track for its fifth consecutive day of losses.

Yields on government bonds also fell as investors turned to them in search of a less-risky place to park their investments. Bond yields fall as their prices rise. The yield on 10-year Treasury notes slid to 1.19 percent, while yields in Britain and Germany were also lower.

“There’s a fear that this is as good as it’s going to get for risky assets,” said Edward Moya, a senior market analyst at Oanda, a foreign currency exchange. “We’re still in the early stages of earnings season, where we’re going to see companies continue to voice concerns over pricing pressures.”

Consumers are also worried about the rise in prices. A consumer survey released by the University of Michigan on Friday showed that the inflation rate has become a primary concern for households, and led to a drop in consumer sentiment in early July. On Thursday, Jerome H. Powell, the Federal Reserve chair, told the Senate Banking Committee that inflation had risen to uncomfortably high levels and said he and his colleagues were watching price gains carefully.

The drop on Monday comes with the S&P 500 close to record highs. The index has gained 13 percent this year as investors bet on economic recovery, though there have been short, turbulent stretches amid concerns about growth and inflation. The rise of the Delta variant seemed to give investors a new reason to pull back.

The highly contagious variant now makes up the majority of new cases in the United States, which are now averaging over 31,000 a day. Los Angeles County on Sunday became the first major county to revert to requiring masks for all people indoors in public spaces. Cases are also rising fast in Europe and Asia.

In Japan, more than two dozen athletes, coaches, referees and other officials participating in the Tokyo Olympics have tested positive for the virus. A teenage alternate on the U.S. women’s gymnastics team tested positive for the coronavirus, the United States Olympic and Paralympic Committee confirmed Monday.

Oil prices fell after major oil producers reached a deal on Sunday to increase production. OPEC and Russia agreed to pump more oil next month, increasing worldwide supplies by 2 percent, but supplies are likely to remain tight until at least the fall, analysts said. West Texas Intermediate, the U.S. crude benchmark, dropped 5.3 percent to $67.99 a barrel. Shares for Occidental Petroleum Corporation fell 7 percent in early trading, while ConocoPhillips dropped 4 percent.

As part of Toyota's sponsorship of the Olympic Games, much of Tokyo's taxi fleet was replaced with a sleek, new Toyota model.
As part of Toyota’s sponsorship of the Olympic Games, much of Tokyo’s taxi fleet was replaced with a sleek, new Toyota model.Credit…Issei Kato/Reuters

Toyota said on Monday that it has decided against running Olympics-themed television advertisements in Japan, a symbolic vote of no confidence from one of the country’s most influential companies just days before the Games begin amid a national state of emergency.

The Japanese public has expressed strong opposition to the Games — delayed for a year because of the pandemic — with many worrying that the influx of visitors from around the world could turn it into a Covid-19 superspreader event, undoing national efforts to keep coronavirus levels low.

Toyota will refrain from airing television ads at home during the Games and its chief executive, Akio Toyoda, will not attend the opening ceremony, a company spokesman told local news media during an online news conference.

“Various aspects of this Olympics aren’t accepted by the public,” said the spokesman, Jun Nakada, according to the business daily Yomiuri Shimbun.

The ads will still be shown in other markets, Toyota Motor North America said in a statement. “In the U.S., the campaign has already been shown nationally and will continue to be shown as planned with our media partners during the Olympic and Paralympic Games Tokyo 2020,” the statement said.

The company had prepared ads for the event but will not air them because of concerns that emphasizing its connection to the Games could create a backlash, according to a person familiar with the company’s thinking who spoke on condition of anonymity because he was not authorized to speak publicly.

Toyota will continue its commitments to supporting Olympic athletes and providing transportation services during the Games, a spokesman said.

The vast majority of the Japanese public is opposed to holding the Games — set to begin on Friday — under current conditions, polling shows, with many calling for them to be canceled outright.

Japanese authorities and Olympic officials have played down the concerns, saying that strict precautions against the coronavirus will allow the Games to be held safely.

Anxieties have continued to mount, however. Earlier this month, Tokyo entered its fourth state of emergency in an effort to stop a sudden rise in virus cases as the country faces the more contagious Delta variant. Cases, which remain low in comparison to many other developed nations, have mounted to more than 1,000 a day in the city, raising apprehension that measures that had succeeded in controlling the spread of the coronavirus could be losing their effectiveness.

Further complicating the situation is a steady drip of news reports about Olympic staff and athletes testing positive for the illness after arriving in Japan.

Toyota became a top Olympic sponsor in 2015, joining an elite class of corporate supporters that pay top dollar for the exclusive right to displays the iconic rings of the Games in their advertising.

Until the pandemic hit, the company was one of the most visible supporters of the Olympics. In the run-up to the event, much of Tokyo’s taxi fleet was replaced with a sleek, new Toyota model prominently featuring the company’s logo alongside the Olympic rings. And the company pledged to make the event a showcase for its technological innovations, including self-driving vehicles to ferry athletes around the Olympic Village.

Vlad Tenev, the chief executive of Robinhood, the popular stock-trading app.
Vlad Tenev, the chief executive of Robinhood, the popular stock-trading app.Credit…Kimberly White/Getty Images for Robinhood

Robinhood disclosed the expected price range for its initial public offering on Monday, putting the popular stock-trading app one step closer to itself trading on the markets.

In an updated prospectus, Robinhood said it planned to sell shares at $38 to $42 each. At the midpoint of that range, it would raise $2.2 billion and be valued at about $33 billion; at the high end, it would be worth about $35 billion.

The announcement will formally kick off the final part of Robinhood’s long road to going public: a roadshow in which the company will pitch prospective investors on its financial performance.

It will test investor appetite for the online brokerage firm that forced a sea change in stock trading by eliminating commissions and becoming a platform of choice for a new generation of day traders — but has became a target for regulators and lawmakers that have accused it of misleading customers. At a House hearing in the wake of frenzied trading in so-called meme stocks, Vlad Tenev, the chief executive and a co-founder of Robinhood, faced sharp questions from lawmakers about the company’s policies and business model.

In an unusual move, Robinhood is reserving as much as a third of I.P.O. shares for its own customers, instead of the standard universe of mutual funds and other big institutional investors.

That fits into the company’s stated goal of “democratizing finance,” but it could also make trading in the offering even more volatile than in a traditional stock sale, potentially opening itself to even more criticism.

In the updated prospectus, Robinhood also provided estimates for how it performed in the second quarter, including continued growth in revenue and paying customers from the first three months of the year. Its net loss also shrank, though the first quarter had included a onetime accounting charge related to the billions of dollars it had raised earlier in the year.

It is set to begin trading on the Nasdaq market by the end of next week.

Rather than a stampede of workers returning to their offices, many large companies are approaching the reopening cautiously, at an underground station in London on Monday.
Rather than a stampede of workers returning to their offices, many large companies are approaching the reopening cautiously, at an underground station in London on Monday.Credit…Facundo Arrizabalaga/EPA, via Shutterstock

After 16 long months, the British government lifted nearly all of its pandemic restrictions across England on Monday including its guidance to work from home.

But as the so-called Freedom Day arrived, the nation is reporting nearly 50,000 new coronavirus cases a day in a population that is about two-thirds fully vaccinated. And now, a “pingdemic,” in which hundreds of thousands of people are being pinged by the National Health Service’s track-and-trace app and told to self-isolate because they were near someone who tested positive, is causing staff shortages in all industries.

Rather than a stampede of workers returning to their offices, many large companies are approaching the reopening cautiously as the government says there needs to be “personal and corporate responsibility” over some measures. By 10 a.m. on Monday, travel on the London Underground was 38 percent of normal demand, no higher than the same period last week, and the vast majority of people were still wearing masks.

And so, most employers are keeping a return to the office as voluntary, requiring mask-wearing away from desks and limiting their office capacity to prevent crowding. For example, the Bank of England is asking staff to return only once a week starting in September. But there was some loosening of policies on Monday inside the central bank — restrictions on the use of elevators were eased and spaces between desks will be removed.

At JPMorgan Chase’s offices in London, usually home for 12,000 employees, masks still need to worn in communal spaces and meeting rooms, social distancing indicators are still marked around the buildings, and capacity remains capped at 50 percent. The biggest change on Monday is that employees from any team are allowed to return to their office if they wish, which has slightly increased occupancy from about 30 percent recently, but is still far below capacity. Over the summer, the bank intends to gradually raise the limit.

In the City of London, the capital’s main financial district, the health and safety measures in Goldman Sachs’s 826,000-square-foot European headquarters are staying the same. That means workers must wear a mask when not sitting at their desk and continue to take part in the on-site testing program. Social distancing will reduce the office’s normal capacity. Recently, on average, about 30 percent to 40 percent of the bank’s 6,5000 employees have been in the office.

Goldman Sachs is also monitoring vaccination rates from voluntary surveys of its staff, which has shown a “significant upward trajectory” since June, according to an internal memo.

“We will continue to monitor local case rates and public health safety guidance, and will update our in-office protocols as and when appropriate,” the memo, sent by Richard Gnodde, the chief executive officer of Goldman Sachs International.

At the London office of McKinsey & Company, masks will be required only in busy areas beginning Monday, the one-way system around the building will be abandoned, there won’t be limits on how many people can use a meeting room, and staff won’t have to get their temperature checked when entering the building. But there is still no requirement to return to the office.

Even Prime Minister Boris Johnson will be working from home on Freedom Day as he too has been pinged by the National Health Service to self-isolate for 10 days.

Bill Ackman in 2018. He said the Universal Music deal’s “complexity and structure” had concerned some investors in his special purpose acquisition company, or SPAC.Credit…Krista Schlueter for The New York Times

The billionaire investor Bill Ackman said Monday he had pulled back from a plan to use his jumbo-sized SPAC to purchase a stake in Universal Music Group, the world’s largest record label, after the Securities and Exchange Commission raised concerns about the complex transaction.

Under the proposed deal, Mr. Ackman’s special purpose acquisition company, or SPAC, would have purchased a 10 percent stake in Universal Music, the label behind Taylor Swift, Lil Wayne and Lady Gaga, valuing the company at more than $40 billion.

But the deal would have been complicated, and the S.E.C. was concerned whether it qualified as a SPAC deal at all. These blank-check companies, which use capital from the public market to invest in a private company, taking it public in the process, have drawn a lot of attention from investors over the past year — and increasing regulatory scrutiny.

In a letter to investors, Mr. Ackman said the team at his investment company, Pershing Capital, had failed to change the agency’s mind about the multilayered deal. Investors in the SPAC, known as Pershing Capital Tontine Holdings, seemed wary, too: Its shares had lost nearly a fifth of their value since the deal was announced.

We underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure,” Mr. Ackman wrote.

The deal called for the Pershing Square Tontine to invest $4 billion for a 10 percent stake in Universal Music, which was already being taken public by its parent, Vivendi. That would have left $1.5 billion in the investment vehicle, which would have been rolled over into a new publicly traded acquisition fund that would have looked to do another deal. Existing investors in Pershing Square Tontine would have received a financial instrument that gave them the right to buy into yet another deal vehicle, which would seek its own takeover target.

While Mr. Ackman’s SPAC is stepping back from the Universal Music deal, Mr. Ackman is not — his hedge fund will buy the stake directly instead.

Pershing Square Tontine now has 18 months to find and close a new deal, unless shareholders give it more time, and “our next business combination will be structured as a conventional SPAC merger,” Mr. Ackman said.

Jeff Bezos will travel to space in a reusable suborbital capsule built by his company, Blue Origin.
Jeff Bezos will travel to space in a reusable suborbital capsule built by his company, Blue Origin.Credit…Reuters/REUTERS
  • England’s reopening: Covid restrictions in England are lifted, meaning more office workers can venture back to their desks. But will they?

  • Bezos goes to space: Jeff Bezos, who just stepped down as chief executive of Amazon, hopes to become the second billionaire rocket company founder to go to space, following Richard Branson.

  • Netflix earnings: Everyone you know signed up for Netflix during the pandemic. What happened in the quarter when everyone wasn’t stuck at home?

  • United Airlines earnings: First of three progress reports this week from U.S. air carriers navigating their way out of the pandemic.

  • Southwest Airlines and American Airlines earnings: Delta Air Lines last week said domestic leisure travel had fully recovered to 2019 levels. But there’s still a huge question whether businesses will continue to curb travel, perhaps permanently.

  • Tokyo Summer Olympics: The event, delayed a year, begins as the city of Tokyo is under a state of emergency because of the pandemic. Most spectators are banned in response to a sudden jump in coronavirus cases. NBC Universal will also offer highlights from the games and coverage of the men’s basketball contest on its year-old streaming service Peacock.

The Zegna men's wear fashion show in Milan in early 2020.
The Zegna men’s wear fashion show in Milan in early 2020.Credit…Valerio Mezzanotti for The New York Times

In 1910, Ermenegildo Zegna was founded in the foothills of Northern Italy as a family-run maker of wool fabrics.

On Monday, the company, now a global luxury fashion house that owns the Thom Browne brand, took a major step onto the public stock markets — through one of the biggest trends on Wall Street in recent years.

Zegna announced on Monday that it would gain a listing on the New York Stock Exchange by merging with a publicly traded acquisition fund known as a SPAC. The deal is expected to value Zegna at about $3.2 billion, including debt, and may pave a path for other privately held luxury giants to follow suit.

The deal is also the latest sign that big luxury fashion companies are gearing up to get even bigger, seeing an opportunity in taking over rivals and becoming empires. It is a trend that has perhaps been exemplified by LVMH Moet Hennessy Louis Vuitton, the fashion empire that in recent years has struck deals to buy the likes of Tiffany & Company.

Such takeovers have soared in recent years, with rivals across the ocean taking on similar empire-building ambitions. Capri Holdings, formerly known as Michael Kors Holdings, acquired the Italian fashion house Versace for $2.1 billion in 2018, while Tapestry, once known as Coach, has bought companies including Kate Spade and Stuart Weitzman.

The luxury industry has been resilient, as consumers have kept up spending on jewelry, apparel and other indulgences — including as the global economy slowly emerges from a pandemic. Shares of LVMH, whose brands include Dior, Stella McCartney and Fenty, are up by more than 60 percent this year; those in Kering, the parent of labels like Gucci and Saint Laurent, are up by 45 percent.

For much of its existence, Zegna was known primarily as a top-tier maker of men’s wear fabrics and, later, suiting. (It still makes suits for other high-end labels, notably Tom Ford.) But with its purchase in 2018 of a majority stake in the fashion label Thom Browne, Zegna began its own ambitious plan to become a stable of luxury brands.

Zegna now runs nearly 300 stores in 80 countries. And in a sign of optimism about revived consumer spending on fashion, the company expects its sales this year to come close to prepandemic levels.

While Zegna’s pursuit of more resources to expand is not novel, how it is doing so is.

It is merging with a SPAC — formally known as a special purpose acquisition company — a fund that is raised in the stock markets solely for the purpose of merging with a privately held company and giving it a stock listing.

“We will continue to invest in creativity, innovation, talent and technology in order to sustain Zegna’s leadership position in the global luxury market,” Ermenegildo Zegna, the company’s chief executive and grandson of its founder, said in a statement.

Such funds have exploded in popularity over the past two years for allowing companies to join stock markets more quickly than through a traditional initial public offering. (SPACs have increasingly come under scrutiny by regulators in the United States, where most of these funds are listed.)

Merging with Zegna is a fund run by Investindustrial, a European investment firm. The deal will give Zegna about $880 million in fresh cash while allowing its founding family to retain a roughly 62 percent stake.

“Our goal now is to support Zegna in this important new chapter of its history while opening the opportunity to the public to invest in one of the last great iconic independent luxury brands,” Sergio Ermotti, the chairman of the Investindustrial SPAC, said in a statement.

The deal is expected to close by the end of the year, pending approval by the SPAC’s shareholders.

Vanessa Friedman contributed reporting.

A Saudi Aramco oil refinery in Saudi Arabia. A deal reached on Sunday by the countries in OPEC Plus could help ease the pressure on gas prices.
A Saudi Aramco oil refinery in Saudi Arabia. A deal reached on Sunday by the countries in OPEC Plus could help ease the pressure on gas prices.Credit…Ahmed Jadallah/Reuters

Major oil-producing nations have agreed to begin pumping more oil beginning next month, Stanley Reed reports in The New York Times.

The deal, reached on Sunday by the countries in a group known as OPEC Plus, could help ease the pressure on gas prices and inflation as economies around the world recover after pandemic lockdowns.

Gasoline prices in the United States have been steadily rising, and the average price of a gallon of regular gasoline in the United States is now $3.17, according to AAA. A year ago, as pandemic lockdowns kept people close to home, gas cost just $2.18 a gallon on average. And the higher gas prices have been adding to inflation, a key measure of which climbed at the fastest pace in 13 years in June.

Under the deal announced on Sunday, OPEC Plus, a group of 23 nations led by Saudi Arabia and including Russia, will increase output each month by 400,000 barrels a day, beginning in August. That will add about 2 percent to the world’s supply by the end of the year. The group accounts for roughly 40 percent of the world’s crude oil.

Janet Yellen, the Treasury secretary, questioned tariffs that the Trump administration placed on $360 billion of Chinese imports.
Janet Yellen, the Treasury secretary, questioned tariffs that the Trump administration placed on $360 billion of Chinese imports.Credit…Erin Scott for The New York Times

Treasury Secretary Janet L. Yellen has cast doubt on the merits of the trade agreement between the United States and China, arguing that it has failed to address the most pressing disputes between the world’s two largest economies and warning that the tariffs that remain in place have harmed American consumers.

Ms. Yellen’s comments, made in an interview with The New York Times last week, come as the Biden administration is seven months into an extensive review of America’s economic relationship with China, write The Times’s Alan Rappeport and Keith Bradsher. The review must answer the central question of what to do about the deal that former President Donald J. Trump signed in early 2020 that included Chinese commitments to buy American products and reform its trade practices.

Tariffs that remain on $360 billion of Chinese imports are hanging in the balance, and the Biden administration has said little about the deal’s fate. President Biden has not moved to roll back the tariffs, but Ms. Yellen suggested that they were not helping the economy.

“Tariffs are taxes on consumers, in some cases it seems to me what we did hurt American consumers and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China,” she said.

But reaching any new deal could be hard given rising tensions between the two countries on other issues. The Biden administration warned U.S. businesses in Hong Kong on Friday about the risks of doing business there, including the possibility of electronic surveillance and the surrender of customer data to authorities.

Chinese officials would welcome any unilateral American move to dismantle tariffs, according to two people involved in Chinese policymaking. But China is not willing to halt its broad industrial subsidies in exchange for a tariff deal, they said.

Academic experts in China share the government’s skepticism that any quick deal can be achieved.

“Even if we go back to the negotiating table, it will be tough to reach an agreement,” said George Yu, a trade economist at Renmin University in Beijing.

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