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The World
S&P 500 Starts a New Bull Market as Big Tech Lifts Stocks: U.S. stocks rose Thursday, ending the S&P 500’s longest bear market since the 1940s and marking the start of a new bull run. The broad index powered higher over the past few months, in large part because of a handful of companies posting outsize gains. Many of those same stocks, including Amazon, Tesla and chip maker Nvidia, led the market’s advance. (Wall Street Journal)
US President Joe Biden and UK Prime Minister Rishi Sunak agreed an “Atlantic declaration” to strengthen economic ties between the two countries on Thursday, in a further sign of the allies turning their back on globalisation and trying to cut China out of supply chains. The declaration aims to increase US-UK trade in areas such as defence, nuclear materials and the critical minerals used in electric-car batteries, as Biden tries to build “economic security” among western allies. Biden, speaking after talks between the two in the White House, endorsed Sunak’s attempt to lead a debate on regulating artificial intelligence, including hosting the first global summit on the issue this autumn. (Financial Times)
The U.S. Supreme Court handed a major victory to Black voters who challenged a Republican-drawn electoral map in Alabama, finding the state violated a landmark law prohibiting racial discrimination in voting and paving the way for a second congressional district with a Black majority or close to it. The 5-4 ruling authored by Chief Justice John Roberts affirmed a lower court's decision that the map diluted the voting power of Black Alabamians, running afoul of a bedrock federal civil rights law, the 1965 Voting Rights Act. Roberts was joined by fellow conservative Justice Brett Kavanaugh and the court's three liberals, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson. (Reuters)
White House Prepares for Possibility Supreme Court Could Kill Student Loan Forgiveness Plan: If the court blocks the program, the Biden administration is unlikely to respond with a new plan to cancel student debt on a large scale using a different legal authority, the people said. Though some policy officials in the administration have analyzed alternative legal routes to massive debt cancellation, such a plan, if pursued, likely wouldn’t take shape for many months, the people said. They added that it remains unclear if Biden has the appetite to take another crack at across-the-board debt forgiveness, an approach that would likely face another protracted legal battle. Meanwhile, administration officials are discussing more targeted policy options, as well as measures aimed at helping borrowers who will soon be required to resume making payments on their loans for the first time in more than three years after payments were suspended due to the pandemic. Their goal is to be prepared to respond to the potential blocking of the program with an explanation of the other ways the administration is trying to assist borrowers. Biden hasn’t yet signed off on a post-Supreme Court-decision strategy, the people said. (Wall Street Journal)
Washington DC and Philadelphia experienced their worst air quality in years as intense wildfires in Canada continue to impact millions. The poor conditions have forced event cancellations and grounded flights across the US. Nearly 100 million people are experiencing very poor air quality in North America. US President Joe Biden described the fires as a "stark reminder of the impacts of climate change". Data from the US Environmental Protection Agency's Air Quality Index (AQI) shows that cities in North America had the worst air quality in the world on Thursday morning. Cities including Washington DC, Philadelphia and New York had significantly worse air quality than cities abroad such as Lahore, Dhaka and Hanoi. (Associated Press)
A natural weather event known as El Niño has begun in the Pacific Ocean, likely adding heat to a planet already warming under climate change. US scientists confirmed that El Niño had started. Experts say it will likely make 2024 the world's hottest year. They fear it will help push the world past a key 1.5C warming milestone. It will also affect world weather, potentially bringing drought to Australia, more rain to the southern US, and weakening India's monsoon. The event will likely last until next spring, after which its impacts will recede. (Associated Press)
European firefighters have joined in on the fight to put out hundreds of active wildfires in Canada, Ursula von der Leyen, the president of the European Commission, said on Thursday. "Canada has requested support from the EU Civil Protection Mechanism — and we are responding promptly," von der Leyen said. "France, Portugal and Spain are offering the help of more than 280 firefighters. More will come," she added. Spain, which battles wildfires each summer and is bracing for a difficult season amid a prolonged drought and record-hot spring, will send 80 to 100 firefighters to Canada. Neighboring Portugal, which has a record of deadly fires as well, has pledged another 100 firefighters. Meanwhile, US President Joe Biden on Thursday also directed authorities to respond to Canadian requests for help. "I have directed the National Interagency Fire Center to respond promptly to Canadian requests for additional firefighters and fire suppression assets such as air tankers," Biden said in statement. (Deutsche Welle)
Economy
US Homeowners Saw First Equity Loss Since 2012 Last Quarter: The cooling housing market is making a dent on the equity wealth US homeowners accumulated during the pandemic. Owners with a mortgage lost a small amount of equity last quarter — down 0.7% from a year earlier — marking the first annual decline since 2012, according to property data provider CoreLogic. The drop amounted to an average of $5,400 per borrower. (Bloomberg)
Mortgage rates dropped this week after a three-week climb, as rates remain volatile amid conflicting economic indicators. The 30-year fixed-rate mortgage averaged 6.71% in the week ending June 8, down from 6.79% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed rate was 5.23%. “While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective homebuyers,” said Sam Khater, Freddie Mac’s chief economist. (CNN)
Home Insurers Curb New Policies in Risky Areas Nationally: Insurance companies are pulling back on homeowners’ policies in vulnerable areas nationally out of fear of floods, storms and fires made worse by climate change and soaring costs of rebuilding. American International Group is planning curbs on home-insurance sales to affluent customers in some 200 ZIP Codes across the U.S. at high risk of floods or wildfires, people familiar with the matter said. The states affected include New York, Delaware, Florida, Colorado, Montana, Idaho and Wyoming, the people said. AIG has already restricted new business in California. In a little-noticed pullback, Farmers Group earlier this year stopped offering new home-insurance policies in hurricane-prone Florida. A spokesman said that “with catastrophe costs at historically high levels and reconstruction costs continuing to climb,” the pause was designed to help Farmers more effectively manage its risk exposure. State Farm and Allstate, meanwhile, are pulling back from California’s home-insurance market. (Wall Street Journal)
China’s producer prices slump 4.6% in May, worse than expected: Economists surveyed by Reuters expected China’s consumer price index to rise 0.3% year-on-year after marking a two-year low of 0.1% in April. Month-on-month, economists predicted a 0.1% decline. Recent economic data pointed to a disappointing recovery from China’s strict Covid lockdown measures as the economy struggles with softening demand and falling exports. (CNBC)
Every Major News Organization Is Headed by a Woman: With a two-thirds female leadership triad, CNN joins every other major U.S. news organization as being woman-led. The presidents of all major networks are women; Kimberly Godwin helms ABC News, Rashida Jones heads MSNBC, Rebecca Blumenstein leads NBC News, Wendy McMahon leads CBS News, and Suzanne Scott leads Fox News. The tides have long been turning in the media. The New York Times’ CEO is a woman (Meredith Kopit Levien), and women are currently editors-in-chief at the Washington Post (Sally Buzbee), the Wall Street Journal (Emma Tucker), Reuters (Alessandra Galloni), McClatchy (Robyn Tomlin), and, yes, Fortune (Alyson Shontell). (Fortune)
To fill offices, Google issues ultimatum while Salesforce tries charity: Google is cracking down on remote work, while Salesforce is donating to charity for every day workers come in from June 12 to 23. (Washington Post)
Google Union Pushes Back on Three-Day Return-to-Office Mandate. (Bloomberg)
Losses on meat alternatives leave investors with sour aftertaste: Shares in plant-based food groups suffer big falls while analysts see more potential from alternatives grown from stem cells. Despite a boom in ethically-focused investing and growing concerns about the meat industry’s carbon footprint, consumers have not developed a taste for plant-based alternatives, which still only account for a fraction of a single per cent of the global meat market. Until they can match meat on flavour, texture and cost, plant-based substitutes are unlikely ever to win a substantial chunk of the market, say analysts. On all those fronts, a rival technology — cultivated alternatives grown from animal stem cells — may pose a bigger long-term threat to legacy meat companies than their plant-based peers. (Financial Times)
Technology
GM will adapt its electric vehicles to Tesla Inc.’s Superchargers, following Ford Motor Co.’s lead and all but ensuring it will become an industry standard in the US. GM Chief Executive Officer Mary Barra broke her seven-month silence on Twitter to announce the news with Tesla CEO Elon Musk on Twitter Spaces Thursday, saying GM EVs will gain access to 12,000 Superchargers. GM shares rose 3.8% in extended trading in New York. Tesla climbed 4.8% on the news. (Bloomberg)
Tech entrepreneurs who left the Bay Area during the pandemic are returning, saying they can't miss out on the funding, hackathons, and networking of the AI boom. (New York Times)
At an all-hands, Zuckerberg addressed Apple's Vision Pro unveiling, saying “that could be the vision of the future of computing” but “not the one that I want.” (The Verge)
Smart Links
India predicted to outshine China as Asia remains a bright spot for global growth. (CNBC)
Leaving New York for Miami Can Save Nearly $200,000. (Bloomberg)
Meta Reveals Twitter Competitor It Plans to Launch as Stand-Alone App. (Wall Street Journal)
Frequent Fliers Wonder: Is Elite Status Worth It Anymore? (Wall Street Journal)