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The World
Wall Street is heading into earnings season this week with high expectations after strong profits fueled a stock market rally in the first half of the year. Money managers will be watching whether companies will again trounce Wall Street’s forecasts for earnings. The S&P 500 has gained 16% this year and notched 38 record closes, most recently on Friday. With stock valuations sitting above long-term norms, investors will also be looking to executives for clues on what the future holds for company profits. (Wall Street Journal)
A team of American government investigators is ready to begin assisting the investigation into the assassination of Haiti’s president. While the White House and Pentagon are reviewing the Haitian government’s request for troops to help secure the country, there has been little enthusiasm for sending American soldiers or Marines to the country. But a team of F.B.I. agents and Department of Homeland Security officials will assist the investigation into last Wednesday’s killing of President Jovenel Moïse of Haiti. (New York Times)
Thousands of Cubans took to the streets from Havana to Santiago in rarely seen protests, expressing frustration over pandemic restrictions, the pace of COVID-19 vaccinations and what they said was government neglect. President Miguel Diaz-Canel, who also heads the Communist Party, blamed the U.S. for the unrest. (Reuters)
Pfizer will meet with federal health officials as soon as today to discuss the need for a booster dose of the coronavirus vaccine as it prepares to seek authorization. (Reuters)
L.A. County sees more than 3,000 new coronavirus cases in three days, as California will require masks at school, a cautious decision that treats all students the same. (Los Angeles Times)
Myanmar caught off guard as cases surge, oxygen dwindles: The Health Ministry on Saturday reported a record 4,377 new confirmed cases for a total of 188,752, as well as a record 71 deaths, bringing the toll to 3,756. The number of tested people found to be infected is hovering around 25%, and equally alarming is how quickly the numbers have been rising. The data on vaccinations is not very clear, but it appears that as of last month, only 3.5 million doses had been administered to the country’s 55 million people, meaning a maximum of 3.2% of the population would be fully vaccinated with two doses. (Associated Press)
One in six people who suffered a bout of COVID-19 will face an irregular heartbeat and reduced energy levels for at least four months after experiencing their initial symptoms. The research aggregated data from Apple Watches, FitBits, and other health tracking devices, finding that, for some participants, it took several months after contracting the virus to return to their normal resting heart rate. (Jerusalem Post, JAMA)
Czech feminists are celebrating a victory against the patriarchy after a bill was passed ending the legal requirement to add the suffix “ova” to women’s names. The addition is a longstanding convention in the Czech language and is commonly added to foreign names, meaning that “Angela Merkelova” and “Serena Williamsova” make regular media appearances. The legislation was approved by parliament despite claims that the change threatens grammatical, and even social, chaos. Campaigners say, however, that the requirement is archaic and demeaning, claiming that the historical roots of the suffix are the possessive form of the surname of a father or husband. Opponents of the change contend that “ova” merely confers femininity and that the bill is an assault in the culture wars. (The Times)
GOP voting bills advance in Texas House and Senate after overnight committee hearings: Authors of the legislation are moving to ban drive-thru and 24-hour voting options, enhance access for partisan poll watchers and prohibit local election officials from proactively distributing applications to request mail-in ballots. Both bills also include language to further restrict the state’s voting-by-mail rules, including new ID requirements for absentee voters. (Texas Tribune)
CA residents not leaving en masse, UC survey says: A UCSD study looking into Google trends from the past five years found no notable difference in Californian searching behavior with regard to words including “moving” and “U-haul.” A jump would suggest that residents were taking steps toward leaving the state now more than before, but no such increase occurred. In contrast, current research does show a greater geographic disparity in who is planning to move, when compared to a UC Berkeley poll from 2019. According to the 2021 survey, 37% of Northern California residents outside of the Bay Area are considering leaving the state, compared to only 17% of “San Diego/Orange County” residents. (Daily Californian)
Firefighters struggled to contain an exploding northern California wildfire under blazing temperatures as another heatwave blanketed the west, prompting an excessive heat warning for inland and desert areas. (Associated Press)
The recent heat wave hit Northwest businesses from Christmas trees and doughnuts to fish: Farms and stores in Oregon and Washington are still recovering and assessing the damage from last month’s record-high temperatures. (Wall Street Journal)
TN Gov. Bill Lee recently announced the state will now buy plane tickets for tourists planning to visit Tennessee's largest cities, an initiative being funded by tax dollars and drawing opposition from one of the legislature's top leaders. Joined in a video by country music star Brad Paisley, Lee took to social media to promote the initiative, called "Tennessee on Me." (The Tennessean)
Economy
Europe startup funding spike lifts demand for new financing tools: With funding to European startups on a tear, founders there have been looking at different ways to finance themselves besides knocking on the doors of venture capital firms. Increasingly, their capital stack can now include debt and revenue-based financing, as startups seek less dilutive ways to fund their growth. (Crunchbase)
Bitcoin miners broke new ground in Texas, a state hailed as the new cryptocurrency capital. The Lone Star State is at the center of global attention to produce bitcoin. (Washington Post)
Digital payments processor Stripe, the most valuable U.S. technology startup, has taken its first major step toward a stock market debut by hiring a law firm to help with preparations. The 11-year-old company, which was valued by investors at $95 billion in a fundraising round in March, has sat out this year's red-hot market for initial public offerings (IPOs), using private tender offers to allow some of its existing investors and employees to cash out their holdings. Stripe has tapped Cleary Gottlieb Steen & Hamilton LLP as a legal adviser on its early-stage listing preparations. (Reuters)
Including a private equity allocation in an otherwise balanced portfolio can lead to outperformance. PitchBook released a new piece of research aiming to end the long debate on the value of including private equity in an investment portfolio. The data is specific to 60/40 portfolios: when private assets are included within the equity allocation, the fund’s performance is stronger than its private equity-less counterparts. This is true even when underperforming funds are involved. (Institutional Investor)
It is extraordinary to find that America’s banks and industrial stocks now move more closely with foreign share prices than with U.S. growth stocks, which are dominated by the FANGs— Facebook, Amazon, Netflix and Google —along with Microsoft. There hasn’t been a disconnect like this since at least 1991, when daily data for the Russell 1000 Growth index starts. It gets even more extreme when the market is divided between growth and cheap “value” stocks trading on a lower valuation than the rest of the market. Data from Dartmouth Prof. Kenneth French shows that the link between moves in the two groups—the correlation of the daily changes over 12 months—is the weakest since at least 1926. (Wall Street Journal)
‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off: Columbia and other top universities push master’s programs that fail to generate enough income for graduates to keep up with six-figure federal loans. Lured by the aura of degrees from top-flight institutions, many master’s students at universities across the U.S. took on debt beyond what their pay would support, the Journal analysis of federal data on borrowers found. At Columbia, such students graduated from programs including history, social work and architecture. (Wall Street Journal)
With 14 transactions in 2Q21, health system M&A are still below recent historical averages from before COVID-19, according to a Kaufman Hall report. Even so, revenue from the deals is the second-highest in recent years at $8.5 billion. Health systems in general are shifting their focus from acquisitions of small, independent hospitals to regional partnerships, and for-profit chains are focusing on building strong regional markets and divesting hospitals outside their core scope of business, the report found. (Healthcare Dive)
Technology
Sony's console business is by most accounts firing all on cylinders, with record revenue and strong sales of the PlayStation 5 helping it maintain its industry lead. But the company's reputation among small developers isn't as strong as its platform success, and missteps with its approach to cross-generation software is starting to take a toll on player goodwill. (Protocol)
Mozilla's crowdsourced study about YouTube over a 10-month period finds 71%+ videos flagged as objectionable by participants were recommended by YouTube itself. The research suggests YouTube’s AI continues to puff up piles of “bottom-feeding”/low-grade/divisive/disinforming content — stuff that tries to grab eyeballs by triggering people’s sense of outrage, sewing division/polarization or spreading baseless/harmful disinformation — which in turn implies that YouTube’s problem with recommending terrible stuff is indeed systemic; a side effect of the platform’s rapacious appetite to harvest views to serve ads. (TechCrunch)
Spotify may enter the events business, using data about consumer’s interests to host virtual and in-person events. The move could help improve Spotify’s relationships with artists which has historically been strained, as musicians have complained that they don’t make much money from use of their work on the streaming service. The tickets sold from these events would be a new source of income, diversifying its revenue further following the nearly billion-dollar expansion into podcasting. (The Information)
Apple in early talks with NFL on Sunday Ticket Game. (The Information)
Smart Links
Goldman wrangles over whether to pay junior bankers higher salaries. (Financial Times)
Inside the ‘League of Legends’ studio’s plans to dominate your smartphone. (Washington Post)
Y Combinator launches a new way for co-founders to find each other. (Protocol)
The solar wind bubble that protects Earth has been mapped for the first time. (MIT Technology Review)
Apple's Eddy Cue joins Duke University Board of Trustees. (Tech Investor News)
What companies get canceled for. (Statista)