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The World
Tech-Led Nasdaq Enters Bull Market: US stocks rallied, with the Nasdaq closing more than a fifth above lows hit earlier this year, after fresh data showed inflation steadying in the world’s largest economy. Consumer prices in the US rose 8.5 per cent year on year in July, a slower increase than in June and below economists’ forecasts of 8.7 per cent. The data published on Wednesday also showed that on a month-on-month basis, there was no increase in inflation in July compared with the 1.3 per cent monthly rise in June. The figures added further fuel to a two-month recovery in financial markets, as traders bet the Federal Reserve might be led to temper its aggressive interest rate rises aimed at subduing soaring prices. The S&P 500 added 2.1% on Wednesday, and the Dow Jones Industrial Average rose 1.6%, or 535 points. Those indexes have risen 15% and 11%, respectively, from their lows about two months ago and are still down 12% and 8.3% in 2022. (Financial Times, Wall Street Journal)
The pace of price increases slowed in July as energy costs dropped, pulling annual U.S. inflation down slightly from a four-decade high. The Labor Department on Wednesday said the consumer-price index, a measure of what consumers pay for goods and services, rose 8.5% in July from the same month a year ago, down from 9.1% in June. (Wall Street Journal)
Fed Leaders, Unswayed by Softer CPI, See Rate Hikes Into 2023: “I haven’t seen anything that changes that." (Bloomberg)
China announced it would halt the naval drills it launched around Taiwan in response to U.S. House Speaker Nancy Pelosi's visit to the island, but continue "war preparation" while also reaffirming it reserves the right to use force to retake the island. (The Guardian)
Taiwan's Complexities Come Into Focus After Pelosi Trip: After the media frenzy last week over U.S. House Speaker Nancy Pelosi's visit to Taiwan, 34% of U.S. voters can find Ukraine on a blank map of Asia, and the share who say they are at least somewhat familiar with China-Taiwan relations declined to 49% from 56% in May. (Morning Consult)
Tens of thousands of Afghans who worked alongside U.S. troops and are eligible for potential relocation to the United States remain stuck in limbo in Taliban-controlled Afghanistan, nearly a year after Washington’s chaotic withdrawal from the country. There are around 77,200 Afghans who have applied for a special immigrant visa (SIV) to the United States still in Afghanistan, of which 10,400 primary applicants have received so-called chief of mission approval—a critical step for securing their SIV, according to two U.S. officials and a congressional aide briefed on the latest available data. These applicants often have family members slated to accompany them, so the number of Afghans awaiting safe passage to the United States could be three times that number, officials and congressional aides said. (Foreign Policy)
The US played an instrumental role in encouraging 136 countries to sign up to a global tax deal tabled by the OECD last October and hailed as the most important tax reform in more than a century. But over recent days it has become clear that how Washington intends to apply one of two parts of the proposals — a minimum corporate tax floor of 15 per cent — is at odds with how the agreement is likely to work elsewhere. The stripped-back version of president Joe Biden’s tax plans that featured in the Inflation Reduction Act, the White House’s flagship economics legislation that last week narrowly passed the Senate and is expected to pass in the House of Representatives this week, misses out key elements of the deal inked in Paris. (Financial Times)
North Korea's Kim Jong Un declared victory in the battle against COVID-19, with the leader's sister revealing he had suffered from fever and vowing "deadly retaliation" against South Korea which it blames for causing the outbreak. (Reuters)
Fertility rates rose in 80% of major developed nations last year but fell in Japan and South Korea. Many experts blame the two countries' persistently declining birthrates on the lack of gender equality in sharing housework and parental duties. In 2021, total fertility rates -- the average number of children born per woman over a lifetime -- rose on the year in 19 of 23 OECD (Organization for Economic Cooperation and Development) nations for which recent data is available, according to research by Nikkei. Many of those members of the OECD actually reversed a 10-year downtrend in birthrates. (Nikkei Asia Review)
New York City could introduce a traffic congestion charge of up to $23 a day late next year, which a study projected would reduce the number of cars entering Manhattan by 15-20%. The city wants to charge a daily variable toll for vehicles entering or remaining within the central business district, defined as between 60th Street in midtown Manhattan and Battery Park on Manhattan’s southern tip. (The Guardian)
Economy
Larry Summers Decries Tax Compromises by Democrats to Pass New Bill: “I am pretty offended by what’s happened here." (Bloomberg)
Investors are watching closely for hairline cracks in the US consumer loan market as lower-income borrowers feel the squeeze of high prices and rising interest rates. US household debt levels have skyrocketed this year as Americans borrow more to pay for increasingly expensive homes and cars. It’s not just big-ticket items: rising rents as well as higher prices at the petrol pump and in the grocery store have pushed consumers to rely more on credit cards. Research from the Federal Reserve Bank of New York shows that US households held a record-breaking $16tn in debt as of the second quarter of this year, an increase of roughly $2tn since before the pandemic. For now, overall delinquencies — debts past their due date — remain historically low at around 2.7 per cent and big lenders including banks have not yet registered a significant uptick in losses on consumer loans. (Financial Times)
U.S. rethinks steps on China tariffs in wake of Taiwan response: China's war games around Taiwan have led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, setting those options aside for now, according to sources familiar with the deliberations. President Joe Biden's team has been wrestling for months with various ways to ease the costs of duties imposed on Chinese imports during predecessor Donald Trump's tenure, as it tries to tamp down skyrocketing inflation. (Reuters)
China not intent on ‘destroying Taiwan economy’, but more trade pressure possible. Mainland authorities are unlikely to crash Taiwan’s economy, opting instead to target pro-independence politicians and businesses, analysts say. A de facto blockade by the Chinese military of the export-reliant island would spill over to global shipping and semiconductor businesses, experts say. (South China Morning Post)
The Snowballing US Rental Crisis Is Sparing Nowhere and No One. (Bloomberg)
Technology
Walt Disney defied concerns about a slowdown in the streaming industry by adding a robust 14.4mn subscribers to its Disney Plus service in the latest quarter, pushing its total number of paying streaming customers to 221mn — slightly ahead of Netflix. But Disney reduced its long-term guidance for its total number of Disney Plus subscribers due to its recent loss of rights to stream Indian Premier League cricket matches. Instead of as many as 260mn total subscribers by 2024, company officials now expect Disney Plus to reach 245mn. (Financial Times)
Fox predicts record political ad spending in US midterm elections. Lachlan Murdoch hails tripling of revenues at media group’s local TV stations since 2020 presidential campaign. (Financial Times)
United has paid a $10 million deposit for 100 electric flying taxis, a sign that the airline is growing more confident in the nascent technology. (Wall Street Journal)
Buy now or wait? What the new electric vehicle credits mean for you. The Inflation Reduction Act, which could become law within days, includes tax credits heralded as a way to make electric vehicles more affordable. But many of the stipulations have sparked confusion among potential car buyers. (Washington Post)
Smart Links
The 10 Worst US Airports for Flight Cancellations This Summer. (Bloomberg)
Canada largest private sector union elects first woman president. (Reuters)
Satellite imagery shows Antarctic ice shelf crumbling faster than thought. (Reuters)
July 2022 featured hottest nights in U.S. history. (Washington Post)