Weekend roundup

Here’s what you missed while you were living your best life:

• 🇨🇳 China surprised investors by cutting key rates. Beijing lowered a short-term policy rate and its benchmark lending rates on Monday, in an effort to boost growth. That comes after weaker than expected Q2 data last week.

• 🛬 Ryanair slumped after reporting a 46% fall in quarterly profit. The budget airline said it expected fares to be lower than previously expected in the coming months. Other European airline stocks also dropped.

• 🤖 Delta struggled to restore normal operations after last week’s cyber outage. The airline is battling operational issues after the outage hit its crew tracking system. It has canceled another 1,250 flights beyond the 3,500 it had already scrapped.

Featured weekend story

Mystery bond buyer clears a Chinese developer’s debt

A major Chinese real estate developer is trying a new way to solve its debt problems. China Fortune Land Development (CFLD) is selling deeply discounted bonds to a mystery buyer, which is then writing off the debt.

Little is known about the buyer, Bazhou Yongsen. The company was established in 2016 in the same city where CFLD is based, according to Bloomberg ($), citing company registration platform Tianyancha. It also reported that some bondholders didn’t meet anyone from Bazhou Yongsen or knew where the money for the bond purchases were coming from.

Some investors say the strategy could be a model for dozens of troubled real estate companies that are struggling to pay creditors. It relies on a willingness to accept ‘haircuts’ – big discounts on bonds – and recover a small amount of cash, rather than wait years for larger payouts that may not come.

CFLD is also a significant company in the story of China’s property crisis. Its default in 2021 marked the start of the affair, which led to more than $140 billion of real estate bonds in default.

What to watch this week

Treasury yields fell as investors considered Joe Biden dropping out of the presidential race and looked ahead to a week of important data. S&P 500 futures ticked higher after the index’s worst week since April.

Indices at 12:00 AM (ET)

Here are your upcoming market events:

• 🛒 US PCE. Economists expect Friday’s reading of the Fed’s favorite inflation gauge to show a 0.1% increase in June, bringing the three-month annualized rate below the central bank’s 2% target. That would confirm market expectations of a rate cut in September.

• 🚗 Earnings. Tesla and Alphabet report Tuesday, with IBM, Ford, and General Motors among other big names releasing numbers later in the week.

• 🇪🇺 Eurozone PMIs. The data on Wednesday will be closely watched after the ECB held rates on Thursday and said future moves were “data-dependent.”

Off-balance sheet items

Here’s what we’re reading this week:

• 👎️ It’s time to do away with “dry promotions” (HBR). Instead of providing solid career opportunities, all too often companies resort to filling vacancies from outside. And when they do promote people, many employers give them “dry promotions” – more responsibility without more money.

• ⚰️ How billionaires die (Intelligencer). The more money you have, the longer you live – until…

• 🏃 Why you don’t need to exercise every day (The Seattle Times). Keeping fit requires consistency, motivation and discipline – establishing a routine and sticking with it. But building fitness also involves regularly breaking that routine and getting enough rest. In fact, choosing when not to work out can be as important as the exercise itself.

Chart of the week

The bottom line

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