Know someone who would like this newsletter? Forward it to them.
The World
Canada officials warn historic wildfires could "last all summer": Some 434 wildfires were burning across Canada overnight as hazardous smoke from the blazes lingered in New York City and other parts of the U.S. The fires forced officials in British Columbia to order fresh evacuations over the weekend and evacuation orders remained in place for thousands of people Alberta and Quebec, as the air quality index reached 110 in New York on Sunday afternoon and levels remained unhealthy for sensitive groups overnight, according to monitoring groups. While the smoke in the U.S. didn't reach the dangerously hazardous levels of last week, the federal agency Natural Resources Canada forecasts above-normal fire activity across most of the country through September as the unprecedented spring season continues. (Axios)
The US Federal Reserve will need to take tougher action than expected to root out inflation, according to a majority of leading academic economists polled by the Financial Times, who predict at least two more quarter-point interest rate increases this year. The latest survey, conducted in partnership with the Kent A Clark Center for Global Markets at the University of Chicago Booth School of Business, predicts the Fed will lift its benchmark rate to at least 5.5 per cent this year. Fed funds futures markets suggest traders favor just one more quarter-point rate rise in July. (Financial Times)
Police arrested Nicola Sturgeon on Sunday in a widening investigation into the finances of the Scottish National party that has plunged the pro-independence movement into turmoil. The arrest and questioning of the former SNP leader and Scottish first minister — who was later released without charge pending further investigations — mark a big escalation in the probe. In a statement on Twitter made after her release, Sturgeon said: “I know beyond doubt that I am innocent of any wrongdoing.” The investigation has shaken the pro-independence SNP, which has dominated Scottish politics since taking power of the devolved government in 2007 but has been torn by divisions in the wake of Sturgeon’s shock resignation announcement in February. (Financial Times)
Russia appears to have moved to take direct control of Wagner, after months of infighting between defence officials and the private military group. Deputy Defence Minister Nikolai Pankov said on Saturday "volunteer formations" will be asked to sign contracts directly with the ministry of defence. The vaguely worded statement is widely believed to target the group. But in a furious statement on Sunday, Wagner boss Yevgeny Prigozhin said his forces would boycott the contracts.The private military group has played a major role in the war in Ukraine, fighting on the side of Russian forces. But Prigozhin, who is said to hold political ambitions of his own, has been embroiled in a public dispute with Defence Minister Sergei Shoigu and military chief Valery Gerasimov for months. (BBC)
Shadow Men: Inside Wagner, Russia’s Secret War Company (Wall Street Journal)
Ukraine is counter-attacking in multiple directions, with mixed results. Ukraine is just a week into its counter-offensive against the Russians, but already the reports from the frontlines range from upbeat to gloomy. On June 11th its 68th brigade reported that it had liberated Blahodatne, a village in Donetsk province, 10km inside Russian-occupied territory. Russian military bloggers suggested that the raid had gone much deeper still, and taken in other nearby villages. There was some progress made near Bakhmut further north-east, too, with Ukrainians advancing to encircle the devastated town that has been the only real focus of Russia’s offensive efforts for the past year. (The Economist)
Moscow police have arrested an American musician living in Russia on drug charges that could carry a sentence of up to 12 years in prison, Russian news services reported Sunday. Travis Leake, 51 years old, was arrested after police raided his apartment in Moscow last week and seized paraphernalia allegedly used for drug-dealing, state-run Russian news services said. Police also arrested Leake’s girlfriend, news services reported. A Moscow judge ordered him held until Aug. 6, a Moscow court website reported. (Wall Street Journal)
Here’s why obesity grew so quickly worldwide, and where that’s starting to change. It’s true that, worldwide, obesity continues to rise. But in high-income countries, such as the U.S., the rate of increase in body mass index, or BMI, has actually been slowing, even beginning to level off. The idea that growth in average BMI has been slowing down in the U.S. may seem surprising given headlines about the obesity crisis or the inescapable advertisements for new weight-loss-inducing medications such as Ozempic, Wegovy, and Mounjaro. But the trend doesn’t mean there’s nothing to worry about. More Americans than ever are reaching the territory of severe obesity. It also doesn’t mean countries that saw their obesity rates increase first are going to plateau at the same levels. Swinburn and other researchers find that different countries follow different obesity trajectories based on unique sets of social, policy, economic, and cultural factors. In American Samoa, roughly 60% of adults now have obesity — while many countries see their growth stagnating before reaching such heights. In France, for example, the obesity rate has long hovered around 20%. The U.S., in the none-too-healthy middle, remains one of the countries with the highest obesity prevalence in the world. (STAT News)
Tech companies that led the way in embracing remote work early in the pandemic are increasingly leading their workers right back to the office—whether they like it or not. Google, Lyft, Meta Platforms and Salesforce have all recently walked back remote-work policies they originally set forth, or gotten serious about enforcing existing policies, after deciding that working in the office is more efficient and cost-effective. As recently as early 2022, tech companies still had to worry that pushing too hard on office requirements could mean losing employees to competitors offering a remote-first model. This year, the number of layoffs in the industry has grown to more than 200,000. While surveys show workers still give priority to flexibility, their job prospects aren’t what they once were, tipping the scale back to employers and emboldening them to start pressing for facetime. (Wall Street Journal)
At this rate, women won't achieve pay parity until 2056, report finds. Saturday marks the 60th anniversary of the Equal Pay Act, which prohibits employers from paying women less than men for the same work. Why it matters: Since the law passed, the wage gap between men and women has narrowed substantially — but not all the way. By the numbers: In 1963, the typical woman working full-time, year-round earned 59 cents for every dollar earned by a male counterpart. In 2022, that number was 82 cents, per government data. (For women of color, the gap is wider.) At the rate we're going, women working full-time year-round wouldn't achieve pay parity with men until 2056, per calculations from the progressive Center for American Progress out Thursday morning. And the projection is rosy. It would be unlikely for the trend to continue at that pace without major structural changes, said Sara Estep, the associate director of CAP's Women's Initiative and the report's co-author. (Axios)
A portion of a vital highway on the East Coast of the U.S. collapsed in Philadelphia after a tanker truck carrying gasoline caught fire underneath an overpass, officials said on Sunday. No deaths or injuries were reported, but officials said the situation remains fluid and that investigators were still searching the scene of the collapse. Smoke billowed from the rubble of the collapsed section of the northbound lanes of I-95, the main north-south interstate on the East Coast, running from Miami through Washington and New York before ending at the Canadian border in the state of Maine. The southbound overpass was closed as the fire made it structurally unsound, officials said. (Reuters)
Economy
Foreign banks’ involvement in initial public offerings in mainland China has fallen to its lowest level in more than a decade, in a sign of the difficulties they face retaining a foothold in the country’s closed-off financial system. So far this year, foreign banks have been involved in just $297mn worth of new listings, or 1.2 per cent of the total. The proportion is lower than in any full year since Dealogic began collecting the data in 2009, when the banks were involved in about half of total listings by value. Last year’s 3.1 per cent represented the third-worst year on record. Not a single US bank has been involved in the 109 IPOs in China’s vast stock market in 2023. (Financial Times)
Companies and their largest investors are selling shares at a pace not seen in years as stock prices rebound. Since the end of April, companies and private-equity firms have sold more than $24 billion worth of stock in so-called follow-on sales, according to Dealogic. More than $17 billion changed hands in May alone, well above the $6.9 billion monthly average last year. The sales were done at smaller discounts than usual, on average, reflecting a robust market. (Wall Street Journal)
Major Chinese state-owned lenders decided to reduce interest on deposits across the board, a move widely seen as a harbinger of a policy rate cut by the country's central bank. The decision came after a series of regional and smaller banks lowered their deposit rates in April. The last time major state-run banks slashed deposit rates simultaneously was in September 2022. (Nikkei Asia)
New York City announced a new minimum pay-rate for app food delivery workers amid a rise in use of services like UberEats and DoorDash since the pandemic. Manhattan’s 60,000 food delivery workers currently make on average about $7.09 an hour, according to a news release from the city, explaining the new pay-rate will allow them to eventually earn at least $19.96 an hour. The pay will increase to $17.96 an hour on July 12 then increase again to nearly $20 an hour in April 2025. Pay will be adjusted annually for inflation, the city added. The city says delivery apps will have flexibility in how they pay delivery workers the new minimum rate. As long as workers make the minimum amount, apps can choose to pay them per trip, per hour worked or through their own formula. (CNN)
Technology
Andreessen Horowitz has combined its finance and consumer investment teams into one, merging what were two of the hottest pandemic-era investment categories that have since cooled. The investment firm’s leaders have encouraged the combined team, led by general partner Alex Rampell, to pursue artificial intelligence deals, two people briefed on the change said. The shakeup is an example of how Andreessen Horowitz, one of the world’s highest profile startup backers, is reacting to the collapse of startup valuations over the past year. (The Information)
Netflix's tightening of password-sharing among users has led to a surge in new sign-ups, with viewers opting to pay lest they miss out on the next big streaming thing. Why it matters: Until just recently, Netflix password sharing was de rigueur among users. But the streaming giant raised eyebrows this year by enforcing — then expanding — a policy designed to dramatically limit the ability of family, friends and even former paramours to use a single login. Driving the news: On Friday, analytics firm Antenna released data that showed a massive jump in U.S. user acquisition in the immediate aftermath of Netflix alerting U.S. subscribers last month that it would begin curbing shared passwords. Netflix saw close to 100,000 daily sign-ups on May 26 and May 27, Antenna shared in a blog post. "Average daily Sign-ups to Netflix reached 73k during that period, a +102% increase from the prior 60-day average. These exceed the spikes in Sign-ups Antenna observed during the initial U.S. Covid-19 lockdowns in March and April 2020." Some Netflix subscribers opted to cancel, but those numbers were swamped by new sign-ups, Antenna noted. (Axios)
Major League Soccer has been around for a quarter century, but the red-hot media race for U.S. professional sports rights is fueling its new future, today. Why it matters: Apple is going all-in, deploying money and a content strategy in an innovative bet that the world’s most popular game can finally make a dent domestically. Zoom in: Apple’s push goes far beyond the 10-year rights deal it signed last year to stream MLS games in a subscription package on Apple TV+, for which will pay the league no less than $2.5 billion. The tech giant is also right in the middle of Wednesday's shocking news that Lionel Messi — one of the world’s most popular players — intends to leave Europe to play for MLS club Inter Miami. Between the lines: Apple will reportedly pay Messi a cut of revenue from new subscriptions to its MLS Season Pass — compensation on top of his team salary and another profit-share arrangement from league partner Adidas. (Axios)
Mercedes first to sell vehicles in California with hands-free, eyes-off automated driving. Mercedes-Benz received a permit from California regulators that will allow the German automaker to sell or lease vehicles in the state equipped with a conditional automated driving system that allows for hands-off, eyes-off driving on certain highways. The California Department of Motor Vehicles said Thursday it issued an autonomous vehicle deployment permit to Mercedes-Benz for its branded Drive Pilot system. The hands-off, eyes-off system can be used on designated California highways, including Interstate 15, under certain conditions without the active control of a human driver. This means drivers can watch videos, text or talk to a passenger (or even mess around with any number of third-party apps coming to new Mercedes models) without watching the road ahead or having their hands on the wheel. (TechCrunch)
“The AI Founder Taking Credit For Stable Diffusion’s Success Has A History Of Exaggeration. ‘Stability AI became a $1 billion company with the help of a viral AI text-to-image generator and — per interviews with more than 30 people — some misleading claims from founder Emad Mostaque. Mostaque, 40, has maneuvered himself to the forefront of what some are calling the greatest technological sea change since the internet — despite having no formal experience in the field of artificial intelligence. Interviews with 13 current and former employees and more than two dozen investors, collaborators and former colleagues, as well as pitch decks and internal documents, suggest his recent success has been bolstered by exaggeration and dubious claims. (Forbes)
Google’s Bard AI can now write and execute code to answer a question. Large language models (LLMs) like ChatGPT and Google Bard can provide some decent answers to certain types of questions, but these computers are ironically pretty bad at computing stuff. Google has a new solution to try to get language models to do simple tasks, like math, correctly: have the AI write a program. Google says that now when you ask Bard a "computational" task like math or string manipulation, instead of showing the output of the language model, that language model will instead write a program, execute that program, and then show the output of that program to the user as an answer. (Ars Technica)
Smart Links
As Fed Signals Rate Pause, Powell Will Have to Placate Hawks. (Bloomberg)
Goldman Sachs Slashes Brent Outlook to Below $90 by Year-End. (Bloomberg)
How North Korea’s Hacker Army Stole $3 Billion in Crypto, Funding Nuclear Program. (Wall Street Journal)
Inside the quest to engineer climate-saving “super trees”. (MIT Technology Review)
Meta’s first generative AI feature will be AI stickers in Messenger. (The Verge)