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The World
President Joe Biden plans to speak with his Chinese counterpart, Xi Jinping, by the end of the month at a moment of simmering tensions between the countries over Taiwan and trade. The long-discussed call between the two leaders, their first in four months, would come at a crucial moment given tensions over the status of Taiwan, and as the Biden administration weighs cutting import duties on goods from China to help reduce inflation pressures on American consumers. (Reuters)
Biden says Pentagon does not support Nancy Pelosi visit to Taiwan. (Financial Times)
Distrust and unease loom as South Koreans grow wary of China’s clout. The topic of relations with China, a top trading partner and powerful neighbour, remains a sensitive one among South Korean industry and government officials. Even BTS, which has a passionate fan base in China, has been subject to Beijing’s crackdowns. (South China Morning Post)
Liz Truss will go head-to-head with Rishi Sunak in the race to become Britain’s next prime minister as the bookmakers and opinion polls put the foreign secretary as the favourite to succeed Boris Johnson. After five bruising rounds of voting by Tory MPs, Truss and Sunak will battle it out over the summer for the support of 150,000 members to succeed Johnson as the party’s next leader. Although the former chancellor received the biggest vote among MPs, Truss is the favourite to win the contest based on her popularity with party members. According to Ladbrokes, the odds of her being the next Conservative party leader are 4/7, while Sunak is at 11/8. (Financial Times)
Truss the human hand grenade relies on allies to attack Rishi Sunak. (The Times)
Italian prime minister Mario Draghi’s government was unravelling as members of his national unity coalition walked out of parliament ahead of a vote of confidence in his leadership. Matteo Salvini’s rightwing League, Silvio Berlusconi’s Forza Italia and the populist Five Star Movement said they would boycott the vote, saying Draghi had failed to give the Italian public adequate answers to pressing questions. Draghi is expected to submit his resignation again to president Sergio Mattarella, which could trigger early elections and exacerbate a political crisis. This followed his previous offer to resign last week, which was rejected. (Financial Times)
The EU told member states to cut gas usage by 15% until March as an emergency step after President Putin warned that Russian supplies sent via the biggest pipeline to Europe could be reduced further and might even stop. Deliveries via Nord Stream 1, which accounts for more than a third of Russian gas exports to the EU, are due to resume on Thursday after a 10-day halt for annual maintenance. (Reuters)
Russia signals plan to annex more parts of Ukraine. Foreign minister says Moscow’s war aims now extend beyond the eastern Donbas region. (Financial Times)
Heat warnings and advisories were in place for parts or all of 28 states. People in the Southeast and the Southern Plains faced the most oppressive temperatures, with triple digits forecast for Wednesday and beyond across parts of Oklahoma, Texas, Arkansas and Louisiana, said Andrew Orrison, a Weather Service meteorologist. Oklahoma City broke a daily heat record dating back to the Dust Bowl era on Tuesday with a temperature of 110 — tied for the state’s highest-ever July temperature, the Weather Service said — and Austin is set on Wednesday to see its 40th straight day of highs over 100 degrees. (New York Times)
Economy
U.S. Home Prices Hit Record of $416,000 in June: The U.S. housing market is rapidly cooling as record prices and rising mortgage rates weigh on home sales, locking out potential buyers. The median existing home price is up 13.4% on the year. (Wall Street Journal)
More Americans are relocating to Europe, driven across the Atlantic by the rising cost of living, inflated house prices, a surging dollar and political rancor at home. Italy, Portugal, Spain, Greece and France are among the most popular destinations. Sotheby’s International Realty said requests from Americans looking to move to Greece rose 40% in the April-to-June period compared to a year earlier. In France and Italy, US demand is the highest it’s been in at least three years, according to Knight Frank real estate specialist Jack Harris. And Americans made up 12% of Sotheby’s Italian revenue in the first quarter, compared to just 5% in the same period a year ago. (Bloomberg)
The slowdown in venture-capital funding has spread to early-stage startups, with that part of the market suffering one of the biggest investment drops in more than a decade. In the second quarter, venture capitalists invested around $16 billion in U.S. early-stage deals—known as Series A and B rounds—a 22% decrease from the year-earlier period, according to PitchBook Data Inc. That marked the biggest quarterly year-over-year decline in early-stage funding since at least 2010, with the exception of a drop in the second quarter of 2020, when investors pulled back briefly amid the onset of the global pandemic. (Wall Street Journal)
US consumers are bending but not breaking as prices soar. Can it last? Signs of distress emerge as Americans save less and poorer borrowers fall behind on car loans. (Financial Times)
JPMorgan Chase’s investment bank has set up a unit to compete with growing competition from direct lenders, committing a “significant chunk of capital” to hold leveraged loans on its balance sheet. JPMorgan is funding the loans and intends to hold them to maturity rather than underwriting the debt for syndication, a practice where the bank is already a dominant player. (Financial Times)
Technology
Microsoft eases up on hiring as economic concerns hit more of the tech industry. Microsoft declined to specify which divisions will be slowing the pace of hiring. The company lowered its quarterly earnings guidance in June, but attributed the move to changing exchange rates. (CNBC)
Google says it will pause hiring for two weeks, except for offers that have already been made, after saying last week it would slow hiring for the rest of 2022. (The Information)
Tesla reported a higher-than-expected quarterly profit as a string of price increases on its best-selling electric vehicles helped offset production challenges caused by COVID-19 lockdowns in China. Chief Executive Elon Musk said he expects inflation will begin to ease by the end of the year, and he told a conference call that Tesla does not have a demand problem. (Reuters)
Tesla has dumped 75% of its bitcoin holdings a year after touting ‘long-term potential’. (CNBC)
The Great Netflix Correction: loss of subscribers throws streaming business model into question. Decline triggers anxiety about entertainment sector and sparks sell-off among media stocks. (Financial Times)
Top European chip equipment supplier ASML warned that the world's semiconductor supply chain will face disruptions if the U.S. forces the company to stop selling its mainstream equipment to China. (Nikkei Asia Review)
Smart Links
Gasoline prices may have peaked for the summer and could be headed below $4. (CNBC)
US and Canada launch trade dispute with Mexico over clean energy. (Financial Times)
EY boss targets $10bn boost from Silicon Valley tie-ups after break-up. (Financial Times)
Fuel spills in The Bahamas near white sand beaches of Great Exuma. (Reuters)
Qantas Flight Cancellations Spiral, Piling Pressure on CEO Joyce. (Bloomberg)
Millennial and Gen Z workers aren’t saving enough for retirement. (CNBC)
Extreme heat piles on Europe’s summer travel chaos. (Washington Post)