Good morning, friends, and welcome to the first full week of September, where the big question is suddenly: Is market sentiment turning negative after US stocks slumped on Thursday, setting off a wave of selling that swept developed markets from the US to Europe and Asia on Friday?

The US selloff on Thursday was led by the same tech stocks that led the ‘post-covid’ rally, the Wall Street Journal reports. The tech-heavy Nasdaq dropped nearly 5% while the S&P 500 lost 3.5%. Apple was the biggest loser of the session, seeing its market cap fall by USD 180 bn — the biggest single-day loss for a US-listed company ever. Another wave of selling on Friday saw the Nasdaq close down 3.3% for the week — its worst single-week performance since March, the Financial Times notes. European shares closed the day down 1.1% on Friday, CNBC says.

Finger on the scale? SoftBank has played a huge role in the pandemic-defying equity rally: Masayoshi Son’s SoftBank has ploughed bns of USD into US equity derivatives, fuelling the boom in tech stocks over the past few months, the Financial Times reports. One US hedge fund manager described the trades as “some of the biggest I’ve seen in 20 years of doing this … the flow is huge.”

No dotcom meltdown 2.0? “We continue to think that tech stocks will fare less well than most other sectors as the economic recovery continues, we don’t expect that a collapse in tech stocks will drag the entire market down for an extended period in the way that it did in 2000-02,” said Capital Economics’ Jonas Goltermann.

The open question: What does the selloff mean for the many tech IPOs now in the hopper, including Asana, Palantir, Snowflake, Ant Financial and (quite likely) Airbnb?

We’ll see today how the EGX responds and European shares will follow suit tomorrow, but we’ll have to wait until Tuesday to see what’s in story for US equities: The NYSE and Nasdaq are both closed tomorrow in observance of the US Labor Day holiday. Futures point to a dip at the opening bell.

US benchmark crude futures also tumbled on Friday, dropping almost 4% to see oil post its worst week since June and close below USD 40 / bbl for the first time in a month, Bloomberg reports. Saudi oil giant Aramco has cut prices of October shipments to Asia and the US, indicating that the world’s biggest producer is expecting demand to fall back in the coming weeks.

SAT and SAT Subject Tests have been canceled indefinitely in Egypt due to “persistent test security incidents,” nonprofit organization College Board — which develops and administers the SATs — announced in a recent email. The exams will be canceled immediately through June 2021 at least, covering the remainder of the 2020-21 academic year. The decision follows repeated breaches despite additional security measures, leading to numerous cancellations of SAT tests and results, College Board said. The SATs are required examinations for students applying for undergraduate university admission and scholarships, particularly in the US.

CORRECTION- September 8, 2020

An earlier version of this story incorrectly said that the announcement about SAT cancellations came from nonprofit organization ETS. 

Education Minister Tarek Shawky confirmed the news during an interview with Ala Mas’ouleety’s Ahmed Moussa last night, during which he revealed that the exams were cancelled after the questions were leaked (watch, runtime: 25:22). The ministry has approved the ACT test for American diploma students, which can be taken instead of the SAT, he said, adding that the ACT is an electronic test which reduces the chances of it being leaked online (watch, runtime: 25:22).

Another blow to 2020 high school graduates: How will this impact the 2020 cohort of university applicants remains to be seen. 2020 IGCSE applicants have already seen exam cancellations followed by an international tussle over grading, with the value of their grades called into question, we reported last week. Students, along with parents and teachers, have expressed concern that these grades might jeopardize their university prospects.

Education will be a hot button issue this week as we should hear on Tuesday what the coming school year will look like for private national and public K-12 schools, Shawky said in a statement last week. The announcement is expected to cover safety requirements, how tuition will be handled, private tutoring, and use of online platforms.

We’re heading back to the polls this week: The remaining seats in the newly-constituted Senate will be decided in run-off elections taking place on 8-9 September. The first-round of voting last month saw 174 representatives elected to the 300-seat upper chamber. The presidency will appoint 100 of the remaining seats, leaving 26 to be decided by this week’s runoff.

Other key news triggers coming up this month:

• Foreign reserves figures should out today or tomorrow;
• Inflation data for August will be out on or around Thursday, 10 September;
• Interest rate day falls on Thursday, 24 September when the central bank meets to discuss policy rates.

Flights to Cairo from Russia will resume “soon” after Russian Prime Minister Mikhail Mishustin signed agreements with Egypt to bring air travel back from the pandemic pause, Russian news outlet Sputnik’s Arabic service reported. Three direct weekly Russian flights should be added to Cairo Airport’s inbound schedule. Tourist flights between Cairo and Moscow resumed in April 2018 following a halt of over two years following the 2015 Metrojet crash. Charter flights to Red Sea destinations are yet to make a comeback.

Conferences taking place this month:

• An Egyptian Businessmen Association online meeting with its Bahraini counterpart will discuss mutual trade and investment opportunities on 8 September.
• The Chemical Industries Export Council and Expolink will organize a virtual conference to discuss export options for Egyptian chemical exporters in Kenya and Uganda from 14-15 September.
• Talents Arena will host Egypt’s first tech job fair which will be held online on 19 September under the banner JobStack.
• GAFI is hosting a virtual meeting with the Arab-German Chamber of Commerce and Industry and some 120 German companies to discuss investment prospects in Egypt sometime this month.

PSA- The capital city is going to see warm weather continue through Tuesday, with daytime highs of 36-37°C and overnight lows around 25°C, according to the Egyptian Meteorological Authority reports. South and central Sinai will also likely continue to see sporadic heavy showers.

The Health Ministry reported 130 new covid-19 infections yesterday, down from 157 the day before. Egypt has now disclosed a total of 99,712 confirmed cases of covid-19. The ministry also reported 16 new deaths, bringing the country’s total death toll to 5,511. We now have a total of 77,208 confirmed cases that have fully recovered.

The recent spike is not necessarily a sign of a second wave: The week of 22-28 August saw a spike in cases, with 1,137 new cases reported, compared to the 844 cases reported the previous week. While this did not necessarily signal the start of a second wave, it serves as a reminder that citizens must remain vigilant, Health Minister Hala Zayed said.

Quarantine centers are now 84% empty, 84% of ventilators lie idle, but intensive care units for covid-19 are operating at 48% capacity, Zayed said in a covid-19 update during a cabinet meeting on Thursday. Data gathered on 8,203 patients confirmed that the virus impacted the respiratory system more than the digestive system. The sample also showed that those aged 60-69 were most likely to die from the disease, while only 1% of infected children under 10 ended in a fatality.

Uber has seen demand for ride-hailing reach 65% of its pre-covid level, Egypt general manager Ahmed Khalil said in an interview with Masrawy. He said he didn’t expect any further recovery in the short term and that the company is assessing the services it will provide in the coming period before making any decisions about raising prices.

Initial trials of Russia’s Sputnik-V covid-19 vaccine show a “strong immune response,” with all of the 76 participants developing antibodies while showing no negative side effects, according to results published on Friday in the medical journal the Lancet. Phase 3 trials are still needed to ensure there aren’t any long-term safety concerns and issues with the effectiveness of the vaccine over time. Some 3k people have been recruited for the large-scale testing phase with the initial results expected to be published in October or November this year. Russia became the first country in the world to approve a vaccine against covid-19 for civilian use on 11 August, without finishing phase 3 trials.

Egypt has been in talks to locally manufacture the Russian vaccine while our homegrown vaccine is currently in a third phase of testing. Reuters, the New York Times and the Financial Times also have the story.

Meanwhile, the World Health Organization (WHO) is looking to allocate 20% of the supply of any initial covid vaccine to Africa. The WHO is gunning for 230 mn doses of a covid-19 vaccine to be allocated to Africa’s frontline health workers and most vulnerable through COVAX, a global initiative working to distribute 2 bn doses by the end of 2021, Reuters reports.

US ELECTION WATCH- Donald Trump faces an angry backlash across the pond after an exclusive from The Atlantic — the headline says it all: Trump: Americans who died in war are ‘losers’ and ‘suckers’. The Trump camp has denied the story. Meanwhile, Democratic challenger Joe Biden has added former rival Pete Buttigieg and former Obama administration officials to his transition team, Reuters reports.

Dubai’s USD 2 bn sukuk issuance last week was 5x oversubscribed, the UAE’s WAM news Agency reports. The move follows a number of regional debt offerings that have garnered demand from yield-hungry international investors, including Abu Dhabi’s USD 5 bn issuance last month, and Egypt’s USD 2 bn financing package that was 1.75x oversubscribed. Look for more Egypt covid debt-related news in the Speed Round below.

The agreement between Israel and the United Arab Emirates to normalize ties could be given legal “peace treaty” status, akin to the Camp David agreement between Israel and Egypt, the Times of Israel reports, citing a report by Israeli news site Walla, which notes that the UAE has agreed to the request. The two countries are set to sign a detailed agreement in a White House ceremony in the coming weeks.