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The World
Biden and NATO to offer support for Ukraine, not membership: President Joe Biden arrived in Britain on Sunday, starting a three-nation trip that will be dominated by a NATO summit in Lithuania aimed at showing solidarity with Ukraine in its fight against Russia while not yet accepting Kyiv as a member of the alliance. Biden landed at Stansted Airport and boarded the Marine One helicopter for central London, where he will meet British Prime Minister Rishi Sunak at 10 Downing Street on Monday. He will later travel to Windsor Castle for a visit with King Charles. The talks with the king, expected to include climate initiatives, will give Biden a greater sense of the man who succeeded his mother, Queen Elizabeth, after her death last September. (Reuters)
Ankara hasn’t seen sufficient progress from Sweden to support its application to join NATO, Turkish President Recep Tayyip Erdoğan warned U.S. President Joe Biden in a phone call Sunday ahead of a summit of NATO leaders this week. “Erdoğan stated that Sweden has taken some steps in the right direction by making changes in the anti-terrorism legislation,” Turkey’s communications directorate said in a statement following the bilateral call. (Politico EU)
North Korea Threatens to Shoot Down US Spy Planes: North Korea accused US spy planes of violating its air space and threatened to shoot them down, ramping up tensions just before NATO leaders meet this week in Lithuania for their annual summit. A spokesman for North Korea’s Defense Ministry said the US was engaging in “the most undisguised nuclear blackmail” by planning to bring a nuclear-armed submarine to the peninsula and conducting “hostile espionage activities” by flying spy planes off its east and west coasts, the state’s Korean Central News Agency reported. (Bloomberg)
The U.S. and China cleared the latest hurdle in a tentative effort to rebuild high-level dialogue, with Treasury Secretary Janet Yellen’s Beijing trip yielding some progress—though deeply entrenched tensions will test whether the fragile momentum can be sustained. Both governments gave positive assessments of the two days of meetings, agreeing to further talks, while acknowledging sharp disagreements, especially over U.S. restrictions on technology exports to China. Before leaving Beijing on Sunday, Yellen said she told Chinese officials that such U.S. moves are narrowly focused and done to protect national security. Outside of that, she said, the world’s two biggest economies have wide scope to interact. (Wall Street Journal)
Yellen’s China Trip Offers Economic Guardrails in Tense Rivalry. (Bloomberg)
Ron DeSantis says he will try to revoke China’s trade status if elected president: The Republican governor of Florida said he’d take ‘executive action as appropriate’ to revoke Beijing’s legal designation. (The Guardian)
Saudi Arabia may accept normal relations with Israel. For years Israel and Saudi Arabia have been partners in all but name. The leaders of the two countries confer in secret, share a rival in Iran, plan joint telecoms infrastructure, do quiet business deals and are members of American-led defence alliances. But while five other members of the Arab League already have agreed to full diplomatic relations with Israel, it has not been that simple for the Saudi kings to break 75 years of taboo against “normalisation” with the oft-reviled Jewish state. The Saudis’ conservative 87-year-old king, Salman bin Abdelaziz, has been loth to make any public overture to Israel while the Palestinian people remain stateless. The Saudis have long backed the Arab Peace Initiative of 2002, which stipulates that normalisation can come only after Israel vacates the territories it conquered in the war of 1967 and allows a Palestinian state there to be born. (The Economist)
Companies are bringing back relocation benefits, paying for workers to move across the country and around the world again, in a sign of how much bosses really do want workers back in the office. Job postings in the U.S. that mention relocation benefits were up nearly 75% as of February, the latest month available, when compared with the prior year, according to hiring platform Indeed[dot]com. On ZipRecruiter, job ads that tout relocation money have more recently doubled to 3.8 million, after falling under two million in 2020. Among big companies, Colgate-Palmolive Co. and Walmart Inc. have told certain new hires that they need to live near the office and show up several times a week—and they are willing to pay them to relocate. Some employers have also paid the cost to move remote hires made during the pandemic back on site, executives say. (Wall Street Journal)
East Coast Braces for Flash Flooding as Flight Cancellations Grow: Heavy rain and thunderstorms were forecast to pour over the northeastern U.S. beginning Sunday, bringing a risk of potential flash flooding from North Carolina to New Hampshire. By Sunday afternoon, a growing number of flights departing from airports in New York, New Jersey, Philadelphia and Washington, D.C., were canceled, according to data tracker FlightAware. More than 40% of flights scheduled to depart from New York’s LaGuardia Airport have been canceled, according to FlightAware. Philadelphia International Airport and Newark Liberty International Airport in New Jersey warned travelers the inclement weather was disrupting flights Sunday. (Wall Street Journal)
The Southwest Bakes With More Heat on the Way: Phoenix could be on track to break its record of 18 consecutive days with temperatures above 110 as a heat dome has settled over the desert Southwest. (New York Times)
Economy
Recharged Bond Rout Unnerves Investors: A run of strong economic data has rekindled the bond rout that rattled markets and the banking system for much of the last 18 months. Last week, the yield on the benchmark 10-year Treasury note, which rises when bond prices fall, topped 4% for the first time since early March, extending a two-month stretch of gains. The yield on the 2-year note hit its highest level since 2007. Behind the climb: the unwinding of bets that the Federal Reserve’s interest-fighting campaign would rapidly cool inflation, or even precipitate a recession. Last week’s readings on a still-tight labor market heightened worries that the Fed would have to raise rates to a higher level than previously expected, and then keep them there for longer. (Wall Street Journal)
New York City pension boss shuns stocks as interest rates rise: The head of one of the largest pension schemes in the US says it is planning to cut back investments in equity markets, in the latest sign that rising interest rates have brought an end to the “Tina” era that drove the past decade of stock price gains. Steven Meier, chief investment officer for the $250bn New York City Retirement System, said rising interest rates “changes the dynamic in terms of what you need to invest in — you really don’t need to have as much equity exposure now”. (Financial Times)
A $100 Billion Wealth Migration Tilts US Economy’s Center of Gravity South. Drive along the 240-mile stretch of the Atlantic coast from Charleston, South Carolina, through the grassy marsh land of southern Georgia and down into northern Florida, and you’ll see one of the most profound economic shifts in the US today. Welcome to the New New South. Electric-vehicle factories and battery plants are overtaking pine forests in this region of antebellum architecture and shrimp and grits. More broadly, the entire South from here, north to Kentucky and west to Texas is where businesses are moving to, jobs are being created and homes are being bought. The uplift isn’t happening equally everywhere, or equally for everyone. But the implications for the entire country are enormous. The numbers tell the story. For the first time, six fast-growing states in the South — Florida, Texas, Georgia, the Carolinas and Tennessee — are contributing more to the national GDP than the Northeast, with its Washington-New York-Boston corridor, in government figures going back to the 1990s. The switch happened during the pandemic and shows no signs of reverting. (Bloomberg)
Copper is unexpectedly getting cheaper. In late June Robert Friedland, the bombastic boss of Ivanhoe, a Canadian miner, warned that the world was running the risk of a “train wreck”, when a crunch in copper supply would derail the energy transition. The metal is used in everything from wiring to wind turbines—and green mandates in America, Asia and Europe will soon demand many more of these. The price of copper, Mr Friedland suggested, could jump ten-fold in response. Right now, however, the train is not so much derailed as chugging along happily. Having peaked at $10,700 a tonne in March last year, copper prices at the London Metal Exchange have dropped by around 10% since January, to $8,300 a tonne. Spot prices remain on par with or higher than those for delivery in three months, suggesting that investors do not expect them to bounce back soon. What is going on? (The Economist)
An increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia, according to an Invesco survey of central bank and sovereign wealth funds. The financial market rout last year caused widespread losses for sovereign money managers who are "fundamentally" rethinking their strategies on the belief that higher inflation and geopolitical tensions are here to stay. (Reuters)
China’s June inflation data misses expectations: China’s producer prices sank more than expected, official data showed, underscoring the challenges that beset the world’s second-largest economy in revitalizing growth momentum. Producer prices sank 5.4% in June from a year earlier, according to China’s National Bureau of Statistics. This was weaker than a Reuters poll that had expected a 5.0% decline, compared with the 4.6% decline in May. (CNBC)
Technology
Google is testing an artificial-intelligence program trained to expertly answer medical questions, racing against rivals including Microsoft to translate recent AI advances into products that would be used widely by clinicians. Google is betting that its medical chatbot technology, which is called Med-PaLM 2, will be better at holding conversations on healthcare issues than more general-purpose algorithms because it has been fed questions and answers from medical licensing exams. The company began testing the system with customers including the research hospital Mayo Clinic in April, said people familiar with the matter. (Wall Street Journal)
Following similar lawsuits, Sarah Silverman and two other authors sue OpenAI and Meta, claiming LLaMA and ChatGPT were trained on copyright-infringing material. (The Verge)
Apple’s Vision Pro Will Take Far Longer Than iPad, Watch to Spur Big Revenue: Apple’s iPhone and iPad became significant revenue contributors nearly instantly, while the iPod took a bit longer and the Apple Watch is still adding sales. But the latest major new device category, the Vision Pro mixed-reality headset, will take much longer to reach the same feat — if it ever does. That group brings in about $40 billion annually now, or about the same amount as the Mac. The Apple Vision Pro, which will likely be placed into the same financial reporting segment, will have an even longer ramp up. While multipurpose smartwatches were a niche item back in 2015, fitness trackers were popular and people had been accustomed to wrist watches for 200 years. The Vision Pro is a different story: it’s heavy, may not have compelling enough use cases, and requires an external battery. A bigger challenge will be convincing people to do something they’ve probably never done before: wearing a computer on their face. (Bloomberg)
Ant to Buy Back Shares at 70% Lower Valuation Than at IPO: Jack Ma-backed Ant Group Co. is proposing to buy back as much as 7.6% of shares in an effort to retain talent and provide a chance to cut stakes for investors ensnared by a years-long regulatory crackdown at the company. Each investor would be allowed to sell up to 7.6% of their equity rather than cashing out completely, according to a person familiar with the matter, asking not be identified discussing private details of the arrangement. (Bloomberg)
Median pre-money Series C, D and E valuations for U.S. startups showed signs of bouncing back — or at least not falling anymore — in Q2, according to new data from Carta. Since the downturn started about 18 months ago, late-stage startups have born the brunt of ripples from the private market, given their proximity to public-market valuations. This is only one quarter's worth of data, so don't start partying like it's 1999 yet. It's unclear if this pattern will hold; it could just be a blip (more on that below). This data only includes Carta customers and not the entire universe of private venture-backed companies. (Axios)
Smart Links
Move Over Dubai. This Tiny Emirate Wants to Be the Next Haven for Billionaires. (Bloomberg)
France bans fireworks on concerns about Bastille Day violence. (Politico)
Judge dismisses Tulsa Race Massacre survivors' suit for restitution. (The Oklahoman)
Saharan Dust Blowing Across the Atlantic Could Reach South Florida. (New York Times)
Some Conferences Steer Away From Florida, Citing State’s Divisive Laws. (Wall Street Journal)