Happy Wednesday and welcome to your morning wrap of the latest business and political headlines from around the world.
First up, Russian President Vladimir Putin has hailed his country’s “unprecedentedly high” ties with China, as dozens of leaders, including North Korea’s Kim Jong-un, arrived in Beijing for a massive military parade intended to showcase a Chinese-led global order, The Guardian reported.
Putin called China’s leader, Xi Jinping, a “dear friend” after the two held talks at the Great Hall of the People and then at Xi’s personal residence. “Our close communication reflects the strategic nature of Russia-China relations, which are at an unprecedentedly high level,” Putin told Xi, according to a video on the Kremlin’s Telegram channel.
The Guardian also reported that Putin is the most prominent of a roster of autocrats, which also includes leaders from Iran, Myanmar, and Zimbabwe, who have gathered in China for several events designed to project the might of the world’s second-largest economy.
Former New Zealand prime ministers Sir John Key and Helen Clark are also attending, Stuff reported yesterday.
To the United States, where a federal judge ruled that President Donald Trump and Defense Secretary Pete Hegseth violated federal law by using the US military to carry out law enforcement in and around Los Angeles this summer, CNN reported.
US District Judge Charles Breyer said Trump’s use of California National Guard members and US Marines to protect federal agents during an immigration crackdown ran afoul of a 19th-century law that generally prohibits the use of troops for domestic law enforcement.
In the ruling, Breyer noted that Trump was considering deploying National Guard members to other cities. “President Trump and Secretary Hegseth have stated their intention to call National Guard troops into service in other cities across the country … thus creating a national police force with the President as its chief.”
He blocked the president from using troops again in California, although that part of the ruling is paused until next Friday to give the administration time to appeal.
US President Donald Trump.
To the Middle East, where Afghanistan’s Taliban government says a fresh magnitude-5.2 aftershock struck two days after a powerful quake hit the same region and killed more than 1,400 people and injured 3,000, the BBC reported.
There are no reports of new damage or new casualties. Rescue efforts have been complicated by landslides that have blocked roads.
The Taliban government, which is only recognised by Russia, has appealed for international help. The UN has released emergency funds, while the UK has pledged £1m in aid.
In business news, global stocks fell as a sell-off in government bonds spilled into the equity market, extending the recent wobble for tech shares, the Financial Times reported.
The S&P 500 was down 1.4% and the tech-heavy Nasdaq dropped 1.6%, while major European indices also fell.
Meanwhile, bond yields, which move inversely to bond prices, rose, with the yield on the 10-year Treasury climbing 0.05 points to 4.28%.
CNBC reported the increase in US bond yields also comes amid concerns the government might have to repay the money brought in by tariffs after a court struck down most of Donald Trump’s levies.
The federal appeals court ruled last week that most of the president’s tariffs are illegal because the congressional power to impose taxes, such as tariffs, is vested exclusively in the legislative branch of the Constitution. Trump responded that the decision was “highly partisan”.
The tariffs are expected to bring in US$172.1 billion in 2025, according to the Tax Foundation.
“If this ruling is upheld, refunds of existing tariffs are on the table, which could cause a surge in Treasury issuance and yields,” Raymond James policy analyst Ed Mills said in a note.
In other business news, US consumer food giant Kraft Heinz is splitting into two companies a decade after a US$46b mega-merger created one of the biggest food manufacturers in the world, CNBC reported.
One of the companies will include all the shelf-stable brands and will be home to names such as Heinz and Kraft Mac & Cheese. The other company will hold a portfolio of North American staples.
Kraft Heinz executive chair Miguel Patricio said the complexity of the company’s structure had made it difficult to allocate capital efficiently.
Meanwhile, billionaire investor Warren Buffett, who engineered the merger, said he was disappointed in the split.
Warren Buffett.
Finally, activist investor Elliott Management has disclosed a US$4b stake in PepsiCo and urged the beverage maker to revive its soda business, boost its share price, and close the gap with competitors, Reuters reported.
The company has lagged its rival Coca-Cola over the past five years, as it faces choppy demand for its snacks business and looks to shift to healthier drinks and sodas.
The investment firm singled out Pepsi’s North American beverages unit as an underperformer, saying growth and margins were lagging peers due to strategic missteps, and suggested the company re-franchise its bottling network along the lines of Coca-Cola.
Pepsi told Reuters it would review Elliott’s letter. Its shares were up 2% on the news.
