The World
The U.S. budget gap more than doubled in May, pushing the deficit for the fiscal year to near $2 trillion. The federal deficit widened to $424 billion, more than twice what it was in May 2019. For the first eight months of the fiscal year, the deficit totaled $1.9 trillion, compared with $739 billion in the same period a year earlier. Meanwhile, the recession became official, and the longest U.S. economic expansion in records dating back to 1854 ended. (Wall Street Journal, Finance 202)
Investment agreement, 5G and Hong Kong are among the sensitive topics ahead of Wednesday’s EU-China dialogue, as Beijing pivots to Europe and President Xi calls top European leaders far more regularly. Meanwhile, China has leap-frogged Russia to become the world’s second largest arms exporter. (South China Morning Post, The Times)
US retakes position as globe's top renewable energy market in EY report. (Consulting.US)
France unveiled a €15bn aid package for aerospace industry, and Hong Kong’s government leads a $5bn bailout of Cathay Pacific, while German manufacturers gear up for the biggest production pick-up since reunification. (Financial Times, Nikkei Asian Review, The Telegraph)
74% of Americans support the nationwide protests, and 69% say police forces have not done enough to ensure that blacks are treated equally to whites. The finding marks a significant shift when compared with the 2014 reactions to police killings of unarmed black men in Ferguson, Mo., and New York. (Washington Post-Schar School poll)
Since the start of June, 14 states and Puerto Rico — locations previously not hot spots — recorded their highest-ever seven-day average of new coronavirus cases. Meanwhile, fewer than half the states are following federal recommendations to report probable cases and deaths (Washington Post, Washington Post)
More than half of U.S. school districts have buildings in need of major repairs, and 41% of districts have problems with their HVAC systems, according to a new GAO report. (EducationDive)
Finance
92% of private equity professionals globally believe distressed fund activity will increase in the wake of the coronavirus pandemic. Likewise, PE managers viewed distressed funds as the biggest fundraising opportunity in the near future, with 83 percent indicating more investor demand for strategies targeting distressed assets. (Institutional Investor)
Hong Kong-based hedge funds are considering uprooting their operations as China prepares to impose sweeping national security legislation and the industry worries it could find itself in Beijing’s crosshairs. (Financial Times)
The recession is generating winners and losers in corporate America, with cash-rich behemoths set to grow while debt-heavy companies and the economy lag. Meanwhile, some 25,000 U.S. stores could close permanently — most mall-based retailers, led by department and clothing stores. (Bloomberg, Bloomberg)
Fitch anticipates annual enrollment declines could range from 5% to 20% for many universities this fall. Private colleges could experience more meaningful financial effects than public colleges, given a higher reliance on tuition and student fee revenues. (Fitch Ratings)
Technology
IBM told Congress it will no longer offer, develop, or research facial recognition technology, while Apple will announce a shift to its own main processors in Mac computers, replacing chips from Intel. (The Verge, Bloomberg)
Pinterest is working to keep revenue flowing as it has received an increasing number of requests for payment extensions from struggling advertisers. (Wall Street Journal)
A hackers-for-hire group targeted thousands of individuals and hundreds of institutions globally, including advocacy groups, journalists, elected officials, lawyers, hedge funds and companies. Meanwhile, the U.S. Homeland Security’s cybersecurity unit warns Windows 10 users to patch their systems, after exploit code for a “wormable” bug was published online. (Financial Times, TechCrunch)
An extensive report explores social media content moderation and concludes that major companies have marginalized the people who do this work, outsourcing the vast majority of it to third-party vendors. (NYU Stern)
Goldman Sachs released its monthly digital gaming update. (Goldman Sachs)
Smart Links
10 commitments companies must make to advance racial justice. (Harvard Business Review)
Cities use sewer systems as COVID-19 early warning signs. (The Verge)
Russia birth rate fell for 4th straight year in 2019. (Wall Street Journal)
Saturn’s moon Titan is migrating away 100 times faster than predicted. (Cal Tech)
Drug researcher develops 'fat burning' molecule. (Science Daily)
Twitter is nerve center of the American news cycle. (Axios)