Know someone who would like this newsletter? Forward it to them.
The World
The U.S. Justice Department is investigating a cyber breach involving the federal court records management system, the department's top national security attorney told lawmakers yesterday. Matt Olsen, head of the Justice Department's National Security Division, alluded to the threat of cyber attacks by foreign nations as he told the U.S. House of Representative Judiciary Committee that the incident was a "significant concern. (Reuters)
Five House members are set to introduce legislation to officially designate Russia as a state sponsor of terrorism. The introduction of the bill will put Congress on a collision course with Secretary of State Antony Blinken, as Congress previously granted the secretary of State the authority to designate a country as a terrorist state. (Politico)
Russia’s Foreign Minister Sergey Lavrov has said that a call is being arranged between him and Secretary of State Antony Blinken, adding that it would “be interesting to listen to Blinken’s proposals on a prisoner swap.” Blinken has not confirmed that the U.S. is floating a prisoner exchange, saying only that a “substantial deal” has been offered. (Washington Post)
Russia has tasked mercenaries to hold sections of the frontline in Ukraine in a sign it is running short of combat infantry, Britain's Ministry of Defence said, as Kyiv steps up a counter-offensive in the south. (Reuters)
Iran has made steady advances in the design and production of military drones in recent years, and has stepped up their transfer to militant groups across the Middle East as it seeks to shift the dynamics of battlefields from Yemen to Gaza. Those efforts have now extended far beyond the region. Iran is now seeking to build its global clout and sell increasingly sophisticated weapons-capable drones commercially to other nations, including those that have been subject to various sanctions in recent years, like Venezuela and Sudan, according to Iranian news media, satellite images and defense experts inside and outside Iran. (New York Times)
President Biden and Chinese President Xi Jinping spoke for over two hours in a call that was meant to relieve tensions but nonetheless saw each side dig their heels in over Taiwan, with Xi saying China would "never leave any space for Taiwan independence" and Biden emphasizing that U.S. policy — which he previously stated included defending Taiwan militarily — had not changed. (New York Times)
The timeline for a potential Chinese attempt to take Taiwan by force seems to be getting shorter. Xi warned Biden not to "play with fire" over Taiwan on Thursday, according to the Chinese readout of a call between the two leaders. That contentious exchange comes with Beijing threatening "serious consequences" if House Speaker Nancy Pelosi follows through on a planned visit to the self-governing island. (Axios)
In Taiwan, a group of Japanese lawmakers including two former defense ministers made a rare visit to discuss regional security integration with Taiwanese President Tsai Ying-wen, with both sides pledging to deepen defense ties. (Associated Press)
U.S. Follows Russia in Dueling Trips to Africa: Blinken to travel to the continent after Lavrov’s “charm offensive” tour. (Foreign Policy)
The northwestern United States is enduring an extreme heat wave for the second straight summer. The National Weather Service issued an excessive heat warning for northwest Oregon, with forecasts in some inland areas running as high as 110°F (43°C). (Reuters)
The chief justice of California’s Supreme Court won’t seek a second term. Chief Justice Tani Cantil-Sakauye will not seek reelection to a second 12-year term after her current term concludes next year, she confirmed Wednesday. The departure means a third appointment to the state’s high court for Gov. Gavin Newsom if he wins reelection in November. (Los Angeles Times)
Support for Leaders Well Underwater Worldwide: Nearly two-thirds of the world leaders on Morning Consult's Global Leader Approval Tracker now have approval ratings under 40% — and more than a quarter have ratings under 30% — as inflation and energy prices leave leaders in the hot seat. The perpetually popular Indian Prime Minister Narendra Modi and Mexican President Andres Manuel López Obrador still draw more than 70% and 60% approval, respectively, while among the major Western leaders only Australia's Anthony Albanese is really sitting pretty, with 58% approval. (Morning Consult)
Economy
Inflation figure that the Fed follows closely hits highest level since January 1982. The personal consumption expenditures price index rose 6.8% from a year ago in June, the Bureau of Economic Analysis reported. (CNBC)
Worker Pay and Benefits Rose 1.3% in Second Quarter. (Wall Street Journal)
Eurozone growth boosted by tourism as inflation hits fresh high: France and southern Europe outperform forecasts but economists warn of darkening prospects as German GDP stalls. (Financial Times)
Investors are betting the U.S. dollar’s prolonged rise will hurt currencies ranging from the Hungarian forint to the Philippine peso, with the forint and the Polish zloty hitting fresh lows recently. The extended losses are another example of how the dollar’s strength is rippling through emerging-markets currencies and pressuring central banks across the globe to increase rates—even at the cost of a recession. (Wall Street Journal)
The S&P 500 posted yet another gain yesterday, even after new data showed the economy shrank for a second straight quarter. The index is up more than 7% so far in July, enjoying its best month since November 2020, when positive news about the effectiveness of COVID-19 vaccines first emerged. (Axios)
Bitcoin hits 6-week high topping $24,000 in a post-Fed rally: Bitcoin hovered around $24,000 on Friday, hitting a 6-week high as it continues to follow stock markets higher. The world’s largest digital currency hit $24,412 on 2:30 a.m. ET on Friday, according to CoinDesk data. This is its highest level in more than six weeks. Bitcoin’s rally began after the Federal Reserve hiked interest rates on Wednesday, but signaled that the pace of such rises could slow. (CNBC)
China's leadership tacitly acknowledged it is unlikely the country will hit a target of 5.5% gross domestic product growth this year, with the Politburo making no mention of the subject at a high-level conference. Pandemic-related lockdowns and turmoil in the property market related to attempts to crack down on out-of-control lending resulted in a growth rate of just 2.5% in the first half of the year, and a sudden acceleration to make up the difference in the coming months is unlikely. (Nikkei Asia Review)
Technology
The U.S. is the global leader in government data requests from Twitter, the company wrote in its annual transparency report. Its information requests accounted for 20% of the global volume, ahead of India, Japan and France, in that order. The U.S. has led the world in data requests from Twitter every year since 2012. The second half of 2020, when it slid to the No. 2 spot, was the only exception. More broadly, the U.S. requests more data from across tech companies (Apple, Facebook and Twitter) than other countries, too. (Source Code)
Vox Media is laying off 39 people, less than 2% of its total staff of more than 2000, in an effort to get ahead of economic uncertainty. The company will continue to hire for critical roles, the source noted, but will reduce the pace of hiring moving forward. More than two dozen listings still appear on Vox Media's website. (Axios)
Meta is reportedly starting to slash funding to U.S. news partners that run content on Facebook's News tab. A lot has changed since Facebook first brokered its deal with publishers in 2019, and news is now no longer a major driver of Facebook’s traffic. (Protocol)
Apple reports record Q3 revenue of $83B, up 2% YoY vs. $82.8B est., net income down 11% to $19.4B, iPhone revenue up 3% to $40.7B, Mac revenue down 10% to $7.4B. (Apple)
Amazon’s post-pandemic slump continued during the second quarter, as the e-commerce giant grappled with productivity challenges in its sprawling workforce, a costly space glut and sagging consumer demand. But because net sales came in at the high end of Amazon’s conservative forecasts investors seemed buoyed by the news, bidding its stock up 12% in after-hours trading. Revenue growth of 33% in its AWS cloud services business provided another bright spot. (The Information)
F.T.C. Chair Upends Antitrust Standards With Meta Lawsuit: Lina Khan may set off a shift in how Washington regulates competition by filing cases in tech areas before they mature. She faces an uphill climb. (New York Times)
The European Commission is considering creating a new directorate that may be headed by two top antitrust officials to enforce tough new rules aimed at reining in the powers of Big Tech, two people familiar with the matter said. (Reuters)
Smart Links
Chevron, Exxon post record quarterly profits as commodity prices boom. (CNBC)
The Science Behind Who Airlines Bump From a Flight—and How to Exploit It. (Wall Street Journal)
The CHIPS Act won’t solve the chip shortage. (Recode)
U.S.-U.K. Trade Advocates Can Cheer State-Level Deals Now and Push for Broader Negotiations After the Midterms. (Morning Consult)