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The World
US diplomacy push after Chinese balloon incident comes under bipartisan fire at House panel. Withering criticism aimed at senior envoy for East Asia and Pacific over back-to-back trips to Beijing by Antony Blinken and Janet Yellen. Democratic congresswoman worried ‘State Department not being forthcoming with information about its engagement with the PRC’. (South China Morning Post)
Xi’s surprise meeting with Duterte the latest bid to improve ties with Manila: Chinese president urged former Philippine leader to ‘play an important role’ in promoting relations between the two nations. (South China Morning Post)
The Biden administration’s potential curbs on sales of advanced semiconductors to China could undermine huge new government investments in domestic chip-making, the U.S. chip-industry trade group said. The Biden administration is considering a raft of new curbs on the sale of chips to China, aiming to disrupt Beijing’s use of artificial intelligence for hacking and weapons development. At the same time, the administration is rolling out $39 billion in grants for new U.S. chip-making plants after the passage of the Chips Act last year. (Wall Street Journal)
North Korea launched two ballistic missiles eastward early on Wednesday, Japan's and South Korea's militaries said, just hours after a U.S. ballistic missile submarine arrived in a South Korean port for the first time in four decades. Both of the missiles appeared to have fallen outside Japan's exclusive economic zone, the Japanese Defence Ministry said. (Reuters)
Vladimir Putin ordered the seizure of Danone and Carlsberg’s Russian operations after businessmen close to the Kremlin expressed an interest in the assets, according to people close to the decision. On Tuesday the government appointed Yakub Zakriev, Chechnya’s agriculture minister, as head of the Danone business and installed Taimuraz Bolloev, a longtime friend of Putin, as director of Carlsberg’s Baltika subsidiary. Zakriev, 34, is a close ally of the region’s strongman leader Ramzan Kadyrov, while Bolloev, who previously ran Baltika in the 1990s, is reportedly close to billionaires Yuri and Mikhail Kovalchuk. (Financial Times)
Israeli protesters campaigning against the government’s push to pass a law curbing the courts’ oversight powers demonstrated at train stations across Israel as part of a fresh day of protests against the judicial overhaul. ass rallies were held at numerous sites around the country, including a demonstration attended by tens of thousands on Tel Aviv’s Kaplan Street. Thousands of protesters blocked part of the Ayalon Highway, the main route through the coastal city, with police using a water cannon and mounted officers to clear demonstrators. The day of protests came as the government has plowed ahead with legislation that will do away with courts’ ability to strike down cabinet and ministerial decisions over their “unreasonableness,” part of a wide-reaching package of changes to the judiciary that critics say will remove critical fetters on government power and drastically weaken the Supreme Court. (Times of Israel)
The House voted overwhelmingly to pass a resolution affirming America’s strong support for Israel and condemning antisemitism, a move that sought to put Democrats on the spot after a progressive leader called the country racist.
The measure passed 412-9, with one member voting present. (Wall Street Journal)
From rapid cooling body bags to ‘prescriptions’ for AC, doctors prepare for a future of extreme heat. In Phoenix, where daytime temperatures are topping 110 degrees Fahrenheit for the third straight week, emergency room doctors think of extreme heat as the public health emergency it has proved itself to be: In 2022, Arizona’s Maricopa County reported a 25% increase in heat-related mortality from the previous year. “Heat is just something we know we need to be really worried about,” said Geoff Comp, an emergency medicine physician at Valleywise Health Medical Center. Protocols developed by Comp, who is also associate program director of the Creighton School of Medicine/Valleywise emergency medicine residency, include treating heat stroke victims with the latest standard of care: immersive cooling in a body bag filled with ice and zipped to about shoulder level. Just as global warming and climate change have resulted in more extreme heat around the world, mortality attributable to heat-related illness has climbed in the U.S., not only in traditionally vulnerable regions such as Arizona and Texas, but also in historically temperate places like the Pacific Northwest, where 2021’s heat dome resulted in 650 deaths in the U.S. and the Canadian province of British Columbia. Experts believe extreme heat is also linked to higher all-cause mortality. (STAT News)
The heat index reached 152 degrees in the Middle East — nearly at the limit for human survival. (Washington Post)
Tokyo Heat Smashes 150-Year Trend as Extreme Weather Bakes Globe: Temperatures are far above historic seasonal averages, leaving Japan’s fast-growing elderly population particularly vulnerable to heat. (Bloomberg)
Phoenix hits at least 110 degrees for 19th straight day, breaking records in worldwide heat wave. (Los Angeles Times)
A Heat Wave Will Cook Your Electric Car Battery, If You Let It: As EV adoption picks up in Arizona, Texas and other US states experiencing record high temperatures, drivers are learning to protect battery health. (Bloomberg)
Only 1% of US Homes Have Changed Hands So Far This Year: The US home turnover rate in the first half of 2023 has fallen to the lowest in at least a decade as high mortgage rates compel owners to stay put, Redfin Corp. said. About 14 out of every 1,000 US homes changed hands during this period, down from 19 in the same period during 2019, according to the real estate brokerage’s report examining housing turnover since the pandemic. (Bloomberg)
Why United Airlines’ huge bet on Newark airport is not paying off: On a good day, passengers flying into Newark airport in New Jersey can catch a glimpse of the Statue of Liberty. On a bad day they have to sleep on the floor. No company’s fortunes are more entwined with the airport than United Airlines, which accounts for 57 per cent of passengers. Roughly an hour from Manhattan, Newark is a central pillar of chief executive Scott Kirby’s plan to use bigger, more efficient jets to grow the carrier. It is also United’s transatlantic gateway at a time when international travel is rebounding sharply from the coronavirus pandemic. But last month, the airport was the source of operational difficulties, which undercut Kirby’s claim that United was better prepared for the busy summer season than rivals. Kirby has since said the airline will operate fewer flights from Newark to minimise disruption, something that analysts fear could create an opening for competitors. (Financial Times)
Economy
Stocks Extend Winning Streak as Bank Earnings Spur Optimism: Stocks extended recent gains Tuesday, with the major U.S. indexes boosted by banks and shares of artificial-intelligence related companies. The S&P 500 rose 0.7%, while the Dow Jones Industrial Average added 1.1%, about 367 points, and the Nasdaq Composite advanced 0.8%. The Dow extended a winning streak to seven days, closing at its highest level since April 2022. The Nasdaq is now 37% higher in 2023. (Wall Street Journal)
Retailers’ Problems Get Real: Merchants are selling more stuff, but now it is often at lower prices. Maybe retailers will make it up on volume. Americans bumped up their spending at retailers last month, but at a slower pace. The Commerce Department on Tuesday reported that retail sales in June rose by a seasonally adjusted 0.2% from a month earlier, less than the 0.5% economists polled by The Wall Street Journal expected to see and less than the 0.5% logged in May. The details of the report were less-discouraging, though. First, that May gain was revised up from a previously reported 0.3%. Second, sales excluding gasoline stations, car dealers, building-materials stores and food services—the so-called control group that economists use to track the underlying pace of consumer spending—rose 0.6% in June from May. (Wall Street Journal)
Wall Street is having a tough time emerging from the doldrums. Morgan Stanley said that second-quarter profit fell 13% from a year ago, driven by a 22% decline in trading revenue. Investment-banking fees were about flat after falling sharply in recent quarters. JPMorgan Chase and Citigroup last week both reported drop-offs in trading and investment banking. At Goldman Sachs, a Wall Street standard-bearer, analysts expect profits to drop by more than half when the bank reports on Wednesday. (Wall Street Journal)
Morgan Stanley predicts assets under management will hit $20tn. (Financial Times)
French President Emmanuel Macron criticized EU antitrust chief Margrethe Vestager's decision to hire a U.S. economist over a European to help oversee Big Tech, adding her previous work could lead to conflicts of interest. Leaders of the main political groups at the European Parliament have also chided Vestager for picking Fiona Scott Morton, 56, the former chief economist at the U.S. Department of Justice during former President Barack Obama's tenure. (Reuters)
Self-employed people in the U.S. are more likely than other workers to be highly satisfied with their jobs: Most self-employed workers (62%) say they are extremely or very satisfied with their job, compared with 51% of those who are not self-employed. They also express higher levels of enjoyment and fulfillment with their job. In turn, those who are not self-employed are more likely than self-employed workers to say they find their job stressful and overwhelming. Some 48% of self-employed workers say their contributions at work are valued a great deal, compared with a quarter of those who are not self-employed. (Pew Research Center)
Technology
Microsoft is to charge $30 a month for generative artificial intelligence features in its widely used productivity software, slapping a bigger premium than expected on a technology that many in the industry hope will bring a powerful boost to revenues. For customers who sign up, the new features are set to add a hefty 53-83 per cent increase to the average monthly cost of business-grade versions of the Microsoft 365 service, a suite of software formerly known as Office 365 that is used by hundreds of millions of workers. Microsoft’s Copilot subscription service adds AI to the company’s popular Office products like Word, Excel and Teams. Satya Nadella, Microsoft chief executive, defended the pricing decision as part of a generational shift in technology that would bring a new dimension to one of the software company’s core products. (Financial Times)
Microsoft closes at record after revealing pricing for new A.I. subscription. (CNBC)
Cameo, the video shoutout app that gained in popularity during the pandemic shutdowns, told employees that it was laying off at least 80 workers because of financial pressures. The cuts leave fewer than 50 people at the startup, down nearly 90% from its peak headcount last year. (The Information)
Bikeshare is still growing: Bikeshare continues to appeal to urban riders after surging in popularity during the pandemic. Annual ridership of programs across six major American cities grew 27% last year from pre-Covid levels to nearly 45 million trips, with 2023 on pace for another record jump, according to official US data. The most dramatic growth has been for the Citi Bike program in New York City, where officials have taken steps to significantly expand the bike lane infrastructure. The continued bikeshare growth comes even as many people continue to work from home, and as fewer people say they use bikes to commute to their jobs. (City Lab)
How big is the proposed Microsoft-Activision deal? Except for deals struck by Tencent, Microsoft, Take-Two, and Activision Blizzard, acquisition prices are usually located in the low billions. According to media reports, only 19 video game company acquisitions or mergers in history had a price tag of more than $1 billion. That those billion-dollar deals often include mobile game developers like Zynga, Supercell, King, Moonton and most recently Scopely, which was bought for $4.9 billion by Savvy Games Group which in turn is wholly owned by Saudi Arabia, is no coincidence. The revenue in the mobile game market was estimated at $92 billion or a market share of 50 percent in 2022 according to Newzoo analysts. (Statista)
Smart Links
Web3 funding plummets as AI steals the show. (Crunchbase)
Kering tries to fix Gucci with management overhaul. (Financial Times)
Meet the Billionaire Who Convinced Messi to Pick MLS Over Saudi Arabia. (Bloomberg)
Medicaid coverage policies shape maternal health disparities: Study. (STAT News)
Google restricting internet access to some employees to reduce cyberattack risk. (CNBC)