Asian stocks climb after Wall Street’s best day since 2022

Good morning. Today, we bring you details on Disney’s multibillion-dollar spending plans in Europe and a closer look at Microsoft’s AI strategy — beyond OpenAI.

But first, some upbeat news to close off a turbulent week in markets. Japanese stocks opened strongly this morning, taking their momentum from the overnight surge on Wall Street, which had its best day since 2022.

The broad Topix index rose about 1.5 per cent in the first hour of trading today, matched by similar gains across Asia. The yen, whose rapid surge played a central role in Monday’s crash in Tokyo shares, traded relatively calmly at about Y147.2 against the dollar.

Yesterday, US equities posted their strongest daily gains since November 2022 as a drop in US unemployment claims helped to soothe fears over an imminent economic slowdown. Concerns around the US economy remain the overwhelming driver of sentiment, traders said. Here’s what analysts are saying.

• Bargain buys: Big investors such as BlackRock and UBS are among those hunting for cheap stocks after Monday’s sell-off, focusing on megacap tech groups.

• US politics: Recent market volatility is a warning to Kamala Harris that her campaign cannot count on a rebounding economy ahead of November’s election.

Robert Armstrong of Unhedged and other FT experts from London to Tokyo will break down the recent trading turmoil in a subscriber-only webinar next Wednesday. Don’t miss it. And here’s what I’m keeping tabs on today and over the weekend:

• Economic data: Germany publishes its consumer price index today, as will Russia, which also reports its second-quarter GDP.

• Results: Bridgestone, Hargreaves Lansdown and RTL report.

• Paris Olympics: The Games will hold medal ceremonies for athletes beaten by competitors later revealed to have been doping, ahead of the closing ceremony on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Disney plans to spend $5bn making blockbuster movies and TV shows in the UK and continental Europe over the next five years, according to its European boss. Disney’s regional president said the success of Deadpool & Wolverine showed there was “a lot of life left” in superhero franchises.

• More on media: Two US television giants, Paramount and Warner Bros Discovery, have admitted that their cable channels are worth $15bn less than they thought.

2. Exclusive: Perplexity AI has increased its monthly revenues and usage seven-fold since the start of the year, after closing a new $250mn round of funding. The artificial intelligence-powered search engine answered roughly 250mn questions in the last month, compared with 500mn queries for the whole of 2023. Madhumita Murgia and Cristina Criddle have more details.

3. Mozambique’s former finance minister, Manuel Chang, has been found guilty of accepting $7mn in bribes as part of what became known as the “tuna bonds” scandal, and underwriting a series of bogus investments that ultimately imploded and wrecked the country’s economy. More details from yesterday’s trial in New York.

4. Ukraine has captured roughly 350 sq km in Russia’s Kursk region, with its forces fighting to expand and solidify their presence yesterday. Russia’s defence ministry said its troops fought off the largest Ukrainian incursion since the start of Moscow’s full-scale invasion in 2022. Here are the latest updates on the war.

5. Barclays has become the first UK bank to tell staff it will scrap the bonus cap imposed by the EU, following the UK’s post-Brexit decision to remove the limits last year. According to an internal memo seen by the FT, “material risk takers” among its senior staff will be eligible for awards of up to 10 times their fixed pay.

The Big Read

Microsoft chief executive Satya Nadella’s bet on OpenAI in July 2019, long before its flagship ChatGPT became a household name, has since created one of the industry’s most successful partnerships. Last year, a quashed coup against co-founder Sam Altman only served to remind investors of how central the start-up had become to the tech giant’s artificial intelligence ambitions. But in the eight months since the crisis, Nadella has been working to execute an AI strategy independent of the start-up. Here’s how Microsoft is spreading its bets beyond OpenAI.

We’re also reading . . . 

• Chinese economy: At their annual summer retreat in Beidaihe, China’s leaders are fretting over a vexing problem: how to increase household spending.

• Flipping burgers: Research on entry-level McDonald’s workers is shedding new light on questions surrounding low-wage pay and inequality, writes Soumaya Keynes.

• Bear attacks: Encounters in Romania and Italy have highlighted difficulties in balancing public safety with the preservation of wildlife.

Chart of the day

Despite rising concern over climate change, Green parties have lost a quarter of their seats in the European parliament, dropping from fourth to sixth place after June’s elections. The movement needs to make a choice about who they want to represent and what they are prepared to do to curtail carbon emissions, writes John Burn-Murdoch, or risk remaining on the sidelines.

Take a break from the news

Simon Kuper explains why Olympic medals are usually a signal that a country is doing important things right, far beyond sport.

Additional contributions from Benjamin Wilhelm and Harvey Nriapia