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The World
China and the U.S. took steps to halt the downward spiral in relations, with Secretary of State Antony Blinken meeting Chinese leader Xi Jinping, though the two powers might have trouble keeping their global rivalry from swamping the tentative rapprochement. During two days of meetings in Beijing, Blinken and senior Chinese foreign-policy officials agreed to more high-level talks, continuing a thaw after months of near-frozen contacts. They also promised to find common ground on increasing flights between the two countries and combating the flow of fentanyl into the U.S. No apparent breakthroughs occurred on the range of contentious issues that have sent ties plummeting, from U.S. support for Taiwan and restrictions on technology exports to China to Beijing’s close relations with Moscow. Blinken said he raised concerns about Chinese intelligence activities in Cuba. A key goal of the Biden administration—establishing a military communication channel between the countries to address frequent incidents around Taiwan—didn’t materialize either. (Wall Street Journal)
China cuts two more key lending rates as economy sputters: A slew of economic data in the last few weeks fell short of expectations, and China appears to be teetering on the brink of deflation as reopening optimism fizzles. Top investment banks, including Goldman Sachs and JPMorgan, recently cut their full-year GDP estimates for China, and warned of headwinds ahead. (CNBC)
Groundwater loss changed Earth’s tilt: Humans have pumped enough water from underground reservoirs to shift Earth’s geographic North Pole at a speed of 4.36 centimetres per year. The motion of atmospheric masses and water masses during seasonal changes causes the planet’s poles to naturally wobble by up to several metres every year. But to fully explain how much the axis has tilted between 1993 and 2010, human-made groundwater shifts have to be taken into account. More than 2 trillion tons of water were depleted from underground reservoirs during that time, particularly for irrigation in northwestern India and western North America. (Nature)
Swaths of East Texas without power amid a heat wave after severe storms: Some Texans may have to wait a week for their power to be restored during a period of extreme heat and humidity. (Texas Tribune)
Defaults raise alarm over stability of San Francisco’s commercial property: Owners have handed back the keys to some of the city’s most valuable real estate. Lenders to San Francisco’s beleaguered commercial real estate market are braced for defaults on billions of dollars of debt after the owners of the city’s largest shopping mall and biggest hotel ceased loan payments and handed back the keys on what was once the city’s most valuable property. This week, Westfield and Brookfield Properties announced they had stopped making payments on a $558mn loan secured against San Francisco’s sprawling downtown mall that they have owned since 2002, and would surrender the premises to its lenders. (Financial Times)
American Airlines’ Radical Plan to Reinvent Business Travel: Work travel isn’t what it used to be—and that’s left American rethinking its strategy. Once some of airlines’ most profitable customers, the typical road warrior “just went away,” said Vasu Raja, American’s chief commercial officer. That’s left American rethinking the contracts that have long dictated employees’ travel choices—and accounted for a chunk of the airline’s revenue. Under these contracts, airlines provide companies discounts on fares, and in exchange, those companies pledge to hit volume targets for bookings. Companies might strike deals with different carriers in different markets. Over 60% of American’s corporate deals aren’t hitting their goals, Raja said. Rather than woo companies with extra perks and price cuts, American is diminishing the role of relationships with some corporate travel agencies and customers. The airline has slashed more than 40% of its 350-person sales team, which mostly handles corporate accounts and travel agencies, according to people familiar with the matter. It’s offering fewer corporate contracts and shrinking the size of discounts it offers to some companies, corporate travel agencies say. (Wall Street Journal)
State of the Global Workplace: 2023 Report. This annual report represents the collective voice of the global employee. In this year's report, we examine the global rise in employees who are thriving at work, even as worker stress remains at a record high. Key Findings: (Gallup)
Employee engagement reached a record high in 2022.
The majority of the world's employees are quiet quitting.
Employee stress remained at a record high.
In 2022, the world experienced a surge in job opportunities.
Over half of employees are actively or passively job seeking.
Engagement matters more than where workers work.
"Quiet quitters" know what they would change at work.
Economy
'Great Resignation' continues as quarter of workers look to change jobs - PwC: A quarter of workers surveyed by PwC expect to change jobs in the next 12 months, up from 19% last year, as they are increasingly left cash-strapped in a cooling economy while dealing with inflationary pressures. Even as the 'Great Resignation' continues, around 42% of the employees surveyed by PwC in its new study of the global workforce said they are planning to demand payrises to cope with the higher cost of living, up from 35% last year. (Reuters)
How Much America’s Biggest Companies Are Paying Their Workers: In a year marked by tech layoffs and high inflation, competition for workers helped to lift paydays at most S&P 500 companies for the second straight year, according to a Wall Street Journal analysis. Compensation for the median worker at 278 companies in the S&P 500 index was higher in 2022 than in the year before, according to the Journal’s analysis of data collected by MyLogIQ. About 100 of the companies said their median worker’s pay rose 10% or more, roughly the same number as in 2021. (Wall Street Journal)
Two-year UK mortgage rate rises above 6%: For first time since 2008 two-year gilts also pass 5% ahead of expected increase in interest rates this week. (Financial Times)
How overworked are Hongkongers? More than half of employees log over 45 hours a week, some longer than 70 hours: union survey. Hong Kong Federation of Trade Unions says 7.3 per cent of respondents work more than 70 hours a week, well above International Labour Organization recommendation. Findings prompt call for standardized work week and better legal protection for employees. (South China Morning Post)
Technology
US semiconductor giant Intel Corp. has inked an agreement in principle with the Israeli government to build a chip manufacturing plant in Kiryat Gat at an investment of $25 billion. Prime Minister Benjamin Netanyahu said the Intel investment was “unprecedented” in Israel and would go toward building a chip manufacturing plant that will use the most advanced technology in the world. In 2019, Intel already held talks for an investment of around $10 billion into building the Kiryat Gat chip plant. (Times of Israel)
It is make or break for Intel’s giant bet on Germany: The American chipmaker’s capital spending would constitute the biggest foreign direct investment in German history. (The Economist)
Why Amazon built a second headquarters and how the pandemic reshaped HQ2: Six years ago, Amazon kicked off a sweepstakes-style contest in search of where to build a second headquarters. The competition drew bids from 238 states, provinces and cities vying to be the next anchor for the nation’s dominant online retailer and second-largest private employer. This week, Amazon formally opened the doors of the first part of its new East Coast headquarters, dubbed HQ2, in northern Virginia. The first phase, called Metropolitan Park, includes two 22-story office towers, which can accommodate 14,000 of the 25,000 employees Amazon plans to bring on in Arlington. About 2,900 employees have already moved in, and Met Park will be occupied by 8,000 employees in the fall. (CNBC)
Mark Zuckerberg Was Early in AI. Now Meta Is Trying to Catch Up. The CEO considers artificial intelligence critical to long-term growth and is taking more control over efforts. Many Meta AI researchers have departed in the last year. (Wall Street Journal)
Tech Giants Do Heavy Lifting in 2023 Stock Market Rebound: The information technology and communication services sectors were responsible for almost 90 percent of the S&P 500’s year-to-date return as of June 7. Excluding companies from these two sectors, the S&P 500 would have been up just 1.41 percent at the time, instead of 11.98 percent including the tech industry. Perhaps even more strikingly, just seven out of the 500 companies that comprise the S&P 500 accounted for 84 percent of the index’s year-to-date return as of June 7. Apple, Microsoft and Nvidia alone are responsible for more than half of the index’s gains this year, with Alphabet, Amazon, Meta and Tesla contributing another 34 percent. Taking these companies out of the equation, the S&P 500 would have returned a meager 1.88 percent this year and no one would be talking about a bull market right now. (Statista)
Smart Links
Mass Immigration Experiment Gives Canada an Edge in Global Race for Labor. (Bloomberg)
Himalayan glaciers on track to lose up to 75% of ice by 2100. (Reuters)
The 10 most expensive metro areas in the U.S. for renters—4 of them are in California. (CNBC)
Messi's first match with Inter Miami set for July 21. (Axios)
The Apple Device You Shouldn’t Buy Right Now—and the Ones You Should: Do not buy an iPhone. MacBook Air? Go for it. (Wall Street Journal)