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The World
China pours cold water on bilateral meeting with US defense secretary: China has told the US there is little chance of a meeting between the countries’ defense ministers at a security forum in Singapore due to a dispute over sanctions, the latest obstacle to top-level dialogue between the two powers. US defense secretary Lloyd Austin wants to meet Li Shangfu, China’s new defense minister, at the Shangri-La Dialogue security forum in Singapore in June. However, arranging such a meeting is fraught with difficulty because Li was placed under sanctions by the US in 2018 in relation to Chinese imports of Russian arms when he was serving as a general. (Financial Times)
Treasury Secretary Janet Yellen said Washington intends to crack down on Russia’s ability to skirt sanctions imposed by the US and allies after its invasion of Ukraine. “Because these sanctions are having an impact, Russia is trying to get around them,” Yellen said in excerpts of remarks released by the Treasury that she’s scheduled to deliver Thursday during a press conference in Niigata, Japan. “This year, a central piece of our strategy is to take further actions to disrupt Russia’s attempts to evade our sanctions.” (Bloomberg)
The United States and its allies have dismantled a major cyberespionage system that it said Russia’s intelligence service had used for years to spy on computers around the world, the Justice Department announced. In a separate report, the Cybersecurity and Infrastructure Security Agency portrayed the system, known as the “Snake” malware network, as “the most sophisticated cyberespionage tool” in the Federal Security Service’s arsenal, which it has used to surveil sensitive targets, including government networks, research facilities and journalists. (New York Times)
Israel’s army and Palestinian militants exchanged heavy cross-border fire on Wednesday, with hundreds of rockets launched from Gaza towards Israel after the Israel Defense Forces (IDF) carried out deadly strikes on what it says are Islamic Jihad organization targets along the strip. The latest violence comes a day after Israeli military airstrikes killed three leaders of the Palestinian militant group and 10 other Palestinian men, women and children in Gaza and led to threats of retaliation. Israel has been bombarding the Islamic Jihad’s operatives and infrastructure, using unmanned drones for surveillance as it monitors militant preparations to propel rockets, IDF chief spokesman Rear Adm. Daniel Hagari said. (CNN)
China’s war chest: how Beijing is using its currency to insulate against future sanctions. For more than a decade, Beijing has been trying to reduce its reliance on the dollar, motivated by risks emerging from the US economy – such as the financial crash of 2008 – and the desire to boost its own sphere of influence. But in the last year, a drive to insulate China’s economy from dollar-based sanctions has emerged as possibly the most important incentive for decoupling from the dollar, as China looks to prepare for the possibility of conflict with Taiwan. (The Guardian)
Years of widening economic inequality, compounded by the pandemic and political storm and stress, have given Americans the impression that the country is on the wrong track. Now there's empirical data to show just how far the country has run off the rails: Life expectancies have been falling. The Centers for Disease Control and Prevention reported last year that life expectancy at birth fell in 2021 to its lowest level since 1996, a decline of nearly a year on average from 2020. That was after a decline by 1.8 years from 2019 to 2020, producing the worst two-year decline since 1921-23. COVID is far from the only explanation for America's dismal trend line. The pandemic accounted for about half the decline in life expectancy, according to the CDC. "Unintentional injuries," a category that includes drug overdoses, contributed an additional 16%, followed by heart disease (4.1%), chronic liver disease and cirrhosis (3%) and suicide (2.1%). Those factors haven't occurred in a vacuum. They're connected to what the CDC called "the social determinants of health" — "economic policies and systems, development agendas, social norms, social policies, racism, climate change and political systems." (Los Angeles Times)
Pancreatic Cancer Vaccine Shows Promise in Small Trial: Using mRNA tailored to each patient’s tumor, the vaccine may have staved off the return of one of the deadliest forms of cancer in half of those who received it. (New York Times)
Big law firms fall out of fashion with idealistic Generation Z: Students and early-career attorneys are increasingly looking past the biggest global law firms, fearing the lack of a work-life balance and assignments that clash with their personal ethics, a survey has found. Just under 40 per cent of budding lawyers in the so-called Generation Z cohort — defined as being born between 1995 and 2012 — said they would like to join one of the US’s largest 200 firms, down from almost 60 per cent when the poll was last carried out three years ago. The results “indicate Gen Z continues to place an extremely high value on . . . flexible work arrangements, a trend that has only been heightened amid the pandemic”, said Jacqueline Bokser LeFebvre, a managing director at leading recruitment firm Major, Lindsey & Africa, which carried out the global survey between January and March. (Financial Times)
Economy
The price of goods and services in the US remained stubbornly high in April, rising 4.9.% from a year ago, the labor department reported. The annual rate of inflation has fallen sharply since hitting a 40-year high of 9.1% last June. April’s rise nearly matched the 5% rise recorded in March. It was the 10th consecutive month the rate has declined, but prices are still rising at a rate that is more than twice the Federal Reserve’s target rate of 2% a year. The latest consumer price index (CPI) – a widely followed measure of the costs for goods and services in the US economy – showed prices rising 0.4% over the month, up from a 0.1% increase in March. (The Guardian)
Profits are falling for companies, and the only question is how much worse they will get. Big U.S. companies are lining up to report how much profit they made during the first three months of the year, with the reporting season kicking off in earnest on Thursday and Friday. The widespread expectation is that companies across the S&P 500 will report the biggest drop in earnings since the spring of 2020. That’s when the pandemic was demolishing the global economy. Still-high inflation, a struggling manufacturing industry and signs of slowdown elsewhere in the economy mean analysts expect S&P 500 companies to report a 6.6% drop in earnings per share from a year earlier. Besides being the sharpest drop in nearly three years, it would also mark a second straight quarter of profit decline for the S&P 500, according to FactSet. That’s something investors call a “profits recession.” (Associated Press)
Dollar weakens against Asia currencies after US data shows easing inflation. (Financial Times)
The amount of companies engaging in unsolicited M&A outreach to potential sellers continues to climb, JPMorgan's Anu Aiyengar said. "You've got 10 plus such deals already announced, and there are 10X of those in terms of conversations already happening," the bank's global head of M&A said at Axios' BFD event held in San Francisco. "It's still a buyers market," she said, adding that it's the most amount of strategic unsolicited activity in more than a decade. (Axios)
The U.S. has approved more than $42 billion in federal student loan debt forgiveness for more than 615,000 borrowers in the past 18 months as part of a program aimed at getting more people to work in public service jobs, the U.S. Department of Education said this week. The Public Service Loan Forgiveness program is open to teachers, librarians, nurses, public interest lawyers, military members and other public workers. It cancels a borrower’s remaining student debt after 10 years of public interest work, or 120 monthly payments. The program is separate from President Joe Biden’s student debt relief plan, which would wipe away or reduce loans for millions of borrowers regardless of what field they work in. The U.S. Supreme Court is currently considering whether that plan can go ahead. (Associated Press)
Mortgage demand surged after Fed signaled potential pause in rate hikes. Mortgage rates fell slightly last week after the chairman of the Federal Reserve suggested a potential end to a historic string of interest rate hikes. The drop wasn’t substantial, but it was enough to boost demand from current homeowners hoping to refinance their mortgages to lower rates. As a result, applications to refinance a home loan jumped 10% last week, compared with the previous week, seasonally adjusted. Refinance demand, however, was still 44% lower year over year. (CNBC)
In an effort to close discriminatory pay gaps, the largest employer in the nation — the federal government — wants to ban salary history questions from its own job interview process. Relying on a job applicant's current salary to determine their pay offer can perpetuate unfair pay practices, scholars and gender equity advocates have long argued, effectively anchoring some candidates to lower wages throughout their careers. The U.S. Office of Personnel Management, which oversees 2.2 million federal employees across the country, released a proposed regulation Wednesday morning that would prohibit federal agencies from using a job candidate’s current or past salary to determine pay in most federal jobs, as Axios first reported. (Axios)
Technology
For months, Google has been under pressure to reinvent its core search business and respond to the rise of artificial intelligence programs that can generate content. Google started introducing more to the public — slowly. At its annual developer conference, Google unveiled a version of its search engine that uses large language models, AI tools that are trained on enormous volumes of text to answer users’ queries conversationally. The update will exist only in a new, experimental space dubbed “Search Labs,” which users who sign up for a wait list will be able to access. Certain features may eventually graduate to the main search engine; others will be scrapped entirely. (Bloomberg)
Tweaking Vegetables’ Genes Could Make Them Tastier—And You’ll Get to Try Them Soon. thanks in part to new genetic technology such as the gene-snipping technique CRISPR and DNA sequencing that is cheap enough to use liberally. “There’s never been a better time to be a fruit breeder or a vegetable breeder because we have more tools and techniques,” says Susan Brown, an apple breeder at Cornell University. Some companies are beginning to use those tools to tackle the challenge of developing tastier veggies. One company, Pairwise, is fighting the same compounds that plagued Brussels sprouts: glucosinolates. But this time researchers are modifying salad greens—and they’re armed with the science of gene editing. (Scientific American)
TikTok’s Chinese parent has delayed the rollout of its shopping platform in the U.S. as concerns over the video-sharing app’s future deter merchants from joining, dragging on the company’s plans to earn more money from its prize global asset. ByteDance has postponed opening the shop to all sellers, originally intended for early spring, to June at the earliest, people familiar with the matter said. Its actual launch date might get pushed back further because of merchants’ concerns about a possible ban of the app and tepid adoption of live-streaming e-commerce in the U.S., the people said. (Wall Street Journal)
Microsoft Eyes Firefox Search Deal as Bing Chatbot Gains Sputter. In February, Microsoft’s Bing search engine launched a chatbot that gives humanlike answers to questions, a feature CEO Satya Nadella said would energize Bing and pressure web-search leader Google. But Bing has barely eked out any gains against Google in the past few months, new data show. That reality may leave Bing with only one option to try to move the needle in search: Win deals to replace Google as the default search engine of a web browser such as Firefox or Apple’s Safari. Bing’s leaders have told colleagues that Microsoft wants to bid for the Firefox contract, which is set to expire this year, according to two people who have direct knowledge of the discussions. (The Information)
In a significant move made by Disney, the company announced that U.S. customers are getting a new app that combines Disney+ and Hulu content. The company also announced that it is raising the price of the Disney+ ad-free tier later in the year. During Disney’s quarterly earnings call, CEO Bob Iger revealed that the new streaming option will launch later this year. However, the company also plans to keep Disney+, Hulu and ESPN+ as standalone platforms. The news comes after Disney+ lost 4 million subscribers in the second quarter of 2023. Hulu gained 200,000 subs. (TechCrunch)
Smart Links
New York City-Area Rents Surge by Most in Nearly Two Decades. (Bloomberg)
Microsoft Won’t Raise Salaries for Full-Time Employees This Year. (Wall Street Journal)
26 Empire State Buildings Could Fit Into New York’s Empty Office Space. That’s a Sign. (New York Times)
Consumer prices in China rose 0.1% in April, the slowest rate in two years. (CNBC)
Denmark has a debt ceiling, too. It’s never been a problem. (CNN)