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The World
Biden, testing Xi, will bar Hong Kong’s leader from economic summit: The White House has decided it will bar Hong Kong’s top government official from attending a major economic summit in the United States this fall, according to three U.S. officials familiar with the matter, in the latest test of President Biden’s bid to reset relations with China. Chief Executive John Lee, along with 10 other Hong Kong and Chinese officials, was placed under sanctions by Washington in 2020 after implementing a national security law, imposed by Beijing, that enabled the targeting of pro-democracy leaders, tarnished the reputation of the courts and earned international condemnation as leaders sought to silence dissent. (Washington Post)
The military balance between China and Taiwan is "rapidly tilting to China's favor," Japan said in its annual defense report released Friday, amid tensions over the self-ruled island, which Beijing considers its territory. The Defense Ministry's 2023 white paper, received by the cabinet of Prime Minister Fumio Kishida the same day, said there is increasing global concern about China's intensifying "coercive military activities" in the skies and waters surrounding Taiwan. (Nikkei Asia Review)
The Senate passed its annual Pentagon policy bill in a blowout vote Thursday, setting up battle lines with a conservative version that narrowly cleared the Republican-led House this month. The bipartisan 86-11 vote capped off two weeks of debate on the $886 billion bill that saw the upper chamber sidestep many of the culture war issues that House members approved largely along party lines. (Politico)
Scientists woke up a 46,000-year-old roundworm from Siberian permafrost: A female microscopic roundworm that spent the last 46,000 years in suspended animation deep in the Siberian permafrost was revived and started having babies in a laboratory dish. By sequencing the genome of this Rip Van Winkle roundworm, scientists revealed it to be a new species of nematode, which is described in a study published Thursday in the journal PLOS Genetics. Nematodes today are among the most ubiquitous organisms on Earth, inhabiting the soil, the water and the ocean floor. “The vast majority of nematode species have not been described,” William Crow, a nematologist at the University of Florida who was not involved in the study, wrote in an email. The ancient Siberian worm could be a species that has since gone extinct, he said. “However, it very well could be a commonly occurring nematode that no one got around to describing yet.” (Washington Post)
Humans ‘never experienced a world so hot in modern history,’ scientists say: July is on track to become the world’s hottest month on record — with some scientists saying the planet may be experiencing its warmest period in about 120,000 years. The finding, announced by the World Meteorological Organization and the EU’s Copernicus Climate Change Service on Thursday, comes as G20 climate ministers travel to India for talks on how to curb planet-warming emissions. “The soaring temperatures this July clearly demonstrate what we already know. The devastating effects of global warming are a reality,” said Denmark’s Climate Minister Dan Jørgensen. (Politico EU)
Dangers worsen as a long heat wave grips Southwest without relent. For nearly a month, millions of people across the American Southwest have sizzled, sweated and sweltered under a heat wave that refuses to let up. Forecasters say the heat wave is being driven by a ridge of high pressure that has parked itself over the region, creating a pressure cooker of slowly sinking warm air. But some experts say it is a worrisome indication of a climate that has been radically altered by human behavior colliding with the onset of El Niño. (Los Angeles Times)
Vital Atlantic Ocean current could collapse as soon as 2025: A study warns that the Atlantic meridional overturning circulation is close to a tipping point that would severely disrupt the climate – but other researchers say the timing is impossible to predict. (New Scientist)
Heat wave puts over two-thirds of U.S. population under heat alerts. (Axios)
Economy
BOJ tweaks policy to allow 10-year yields to rise past 0.5%: The Bank of Japan unexpectedly tweaked policy on Friday, providing more flexible bandwidth for government bond yields to fluctuate -- a potential step toward the end of the bank's yield curve control (YCC) framework. The nine-member board's decision - an 8-1 majority vote -- will allow 10-year JGB yields to rise above the current cap of 0.5%. While it maintained its policy of guiding yields 50 basis points above or below 0%, it added new wording in a statement, saying "it will conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits, in its market operations." (Nikkei Asia Review)
Bank of Japan Shocks Financial Markets by Loosening Grip on Bond Yields. (Bloomberg)
Booming markets neutralise impact of rate rises on US corporate fundraising: Rising stock prices and falling bond yields have made it so much easier for US companies to raise funds that much of the impact of the Federal Reserve’s interest rate rises has been neutralised, according to investors and several closely watched measures. The degree to which the environment has improved in recent weeks is reflected in the National Financial Conditions Index, compiled by the Chicago Fed, touching its lowest point in 16 months. However, looser financial conditions run counter to the Fed’s goal of slowing the economy to bring inflation under control, and make it more likely the Fed will have to keep interest rates higher for longer. (Financial Times)
The Dow Jones Industrial Average fell Thursday, ending a streak of 13 consecutive winning sessions. The Dow’s run of gains was the longest since 1987 and the second-longest on record. The blue-chip index fell 237 points on Thursday, or 0.7%. The S&P 500 fell 0.6%, while the tech-heavy Nasdaq Composite dropped 0.5%. Stocks were in the green for much of the session, losing steam in the afternoon. The major indexes were little-changed for the week, as investors weighed continued economic strength and stronger earnings than many on Wall Street had expected. (Wall Street Journal)
There’s a big reason airports and resorts are booked up this summer: Americans are taking off work and vacationing more than they have in over a decade. In some cases, their employers are forcing them to. The pandemic, along with jitters about a potential recession, dampened U.S. workers’ eagerness to take paid time off in recent years. Now, many vacation-bound employees say they’re over such worries. More working adults took vacation days in the first half of 2023 than they did in prepandemic years, according to data from the Labor Department. Company vacation calendars show more workers are checking out, and for longer stretches, this summer. The number of employees logging vacation days climbed 11% in June compared with the same month in 2022 and 20% compared with June 2021, according to human-resources technology firm Gusto, which tracks time-off requests from workers at more than 300,000 small and midsize businesses. The amount of time they took off also rose, by 5% from last year to an average 32 hours. (Wall Street Journal)
Technology
The algorithms powering Facebook and Instagram, which drive what billions of people see on the social networks, have been in the cross hairs of lawmakers, activists and regulators for years. Many have called for the algorithms to be abolished to stem the spread of viral misinformation and to prevent the inflammation of political divisions. But four new studies published on Thursday — including one that examined the data of 208 million Americans who used Facebook in the 2020 presidential election — complicate that narrative. In the papers, researchers from the University of Texas, New York University, Princeton and other institutions found that removing some key functions of the social platforms’ algorithms had “no measurable effects” on people’s political beliefs. In one experiment on Facebook’s algorithm, people’s knowledge of political news declined when their ability to reshare posts was removed, the researchers said. At the same time, the consumption of political news on Facebook and Instagram was highly segregated by ideology, according to another study. More than 97 percent of the links to news stories rated as false by fact checkers on the apps during the 2020 election drew more conservative readers than liberal readers, the research found. (New York Times)
OpenAI shuttered a tool that was supposed to tell human writing from AI due to a low accuracy rate. In an (updated) blog, OpenAI said it decided to end its AI classifier as of July 20th. “We are working to incorporate feedback and are currently researching more effective provenance techniques for text,” the company said. As it shuts down the tool to catch AI-generated writing, OpenAI said it plans to “develop and deploy mechanisms that enable users to understand if audio or visual content is AI-generated.” There’s no word yet on what those mechanisms might be, though. OpenAI fully admitted the classifier was never very good at catching AI-generated text and warned that it could spit out false positives, aka human-written text tagged as AI-generated. (The Verge)
Apple’s unveiling of its Vision Pro headset has reignited enthusiasm in virtual and augmented reality start-ups that have been starved of funding from investors who have preferred to bet on artificial intelligence groups. The tech giant believes its new “mixed reality” device will usher in a “new era” in “spatial computing”, arguing the Vision Pro will have a similar impact to how the iPhone has revolutionized mobile computing. AR, VR and mixed reality (XR) start-ups in the US in June raised $208mn, nearly as much in one month as in the previous three combined, data from PitchBook showed. That investment marked a 12-month high, apart from December when a single fundraising from Anduril Industries, a military tech start-up related to mixed reality, raised $1.48bn. (Financial Times)
Thirsty Data Centers Are Making Hot Summers Even Scarier: With drought spreading around the globe, battles over water are erupting between AI companies seeking more computing power and communities where their facilities are located. (Bloomberg Businessweek)
Walmart+ Launches Travel Perks in Battle With Amazon: Walmart launched a new travel benefit for members of its Walmart+ subscription as it continues to add features in a bid to compete with Amazon’s Prime membership and convert wealthier shoppers to frequent Walmart customers. Walmart+ members, who pay $98 for an annual membership, will be able to book flights, hotels and car rentals through a new travel site Walmart is launching through a partnership with travel site Expedia. The site will also offer cash-back rewards on purchases made through the portal, which shoppers will be able to use on future Walmart purchases or cash out at Walmart stores. The launch of the travel portal brings Walmart’s competition with Amazon to a new frontier. (The Information)
Smart Links
Intel shows signs of rebound from fall in PC chip demand. (Financial Times)
CEO Jensen Huang Runs Nvidia With a Strong Hand. (The Information)
Survey: Boston parents plan to spend $650 per child on back-to-school items. (WBUR)
Emmys delayed due to Hollywood strikes. (Axios)
Toyota Bringing Back Land Cruiser to US in August. What We Know Now. (Bloomberg)
Bud Light Brewer Lays Off Hundreds of U.S. Workers: Anheuser-Busch restructures corporate offices amid controversy and sales slump. (Wall Street Journal)