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The World
NATO is to increase its forces on high alert by more than sevenfold to 300,000 in response to Russia’s invasion of Ukraine as part of a sweeping overhaul to better protect its eastern flank. In a historic shift from the post-cold war era, when military spending was cut and troops pulled back from eastern Europe, secretary-general Jens Stoltenberg said the western alliance would also increase deployments close to Russia, shifting the focus from deterring any invasion to a full defence of allied territory. (Financial Times)
France pushes for higher global oil production at G7 summit: Crude price cap should not just apply to Russia, says Macron, as leaders seek to ease energy pressures. (Financial Times)
Orders for long-lasting goods and the number of houses going under contract in the U.S. both rose last month, signs that demand is holding up as economic growth slows. Orders for durable goods rose 0.7% in May, driven by increases in big-ticket items including cars, computers and military aircraft. The pending home sales index, an indicator of home sales based on contract signings, also rose 0.7% on the month to 99.9, the National Association of Realtors said. (Wall Street Journal)
A housing correction will reach from “coast to coast” in the US, but it will fall short of a crash, according to Mark Zandi, chief economist at Moody’s Analytics. With the Fed introducing the biggest increase in interest rates in years to combat rising inflation, home prices will likely fall in the housing markets that are most “juiced,” says Zandi. Regions with signs of significant speculation, namely in the Southeast or Mountain West, can expect the pendulum to swing back. Cities and states due for a correction include Phoenix and Tucson in Arizona, the Carolinas, northeast Florida, and above all, Boise — “the most overvalued market in the country,” per Moody’s analysis. (Bloomberg)
Bidding wars overheated the home-buyer market; now they’re coming for renters: Competition among renters means many tenants feel compelled to pay more each month than what the landlord is asking. (Wall Street Journal)
Letter writing campaign: In the wake of the Supreme Court decision to overturn Roe v. Wade, the city of Chicago fired off 300 letters to CEOs in states facing abortion bans, pitching the city as a more welcoming business location. (Chicago Tribune)
Patagonia is going beyond travel benefits, promising to bail out employees who are arrested at abortion rights protests. Meanwhile, Duolingo's CEO told Pennsylvania politicians the company will move operations out of its Pittsburgh HQ if the state bans abortion. (Bloomberg, CBS Pittsburgh)
Early signs indicate SoCal is using less water: Less than a month after sweeping water restrictions took effect across Southern California, early indications suggest residents are finally heeding calls to conserve as officials reported a noticeable 5% drop in demand throughout the region. (Los Angeles Times)
The CFPB eyes rent-a-banks: Consumer groups pushing for banking regulators to crack down on so-called rent-a-bank lending for personal loans may have found a willing watchdog. Zixta Martinez, deputy director of the Consumer Financial Protection Bureau, said at a recent consumer group conference that the agency is taking a "close look" at the lending partnerships between banks and nonbanks, which are often fintech companies. "Some lenders employing rent-a-bank schemes have unusually high default rates, which raise questions about whether their products set borrowers up for failure," Martinez said at the June 15 Consumer Federation of America’s assembly. "And our complaints database reveals a range of other significant consumer protection concerns with certain loans associated with bank partnerships.” (Protocol)
The largest U.S. banks said they would increase payouts to shareholders after the Federal Reserve said the banks are able to keep lending in a severe hypothetical recession. Four of the six biggest banks boosted their dividend payments on Monday. The collective 15% increase in payouts is relatively muted compared with last year, when the banks raised dividends by 40%. Several banks also outlined plans to buy back their own stock. (Wall Street Journal)
Economy
US hedge funds are running their most cautious bets on stock prices in more than a decade, in a sign that many managers believe market declines may yet have further to run. By the middle of this month, US funds had cut their net exposure — the difference between bets on rising prices and bets on falling prices — to around their lowest level since at least 2010, according to a Morgan Stanley note sent to clients. Funds in Europe and Asia, meanwhile, cut their bets to around the lowest level of the past year. (Financial Times)
Venture capital-backed startups raised far fewer rounds of funding during the past three months than they did during the more ebullient days of late last year and early this year, according to new data from analytics firm CB Insights. Deal activity across the globe dropped 23% between the first quarter and second quarter of this year, the firm found, using data for the second quarter through June 23. That’s a stark contrast to the previous quarter, where the deal count dropped only 1.4%. (Bloomberg)
World’s Most Aggressive Central Bank Raises Key Rate to 200%: Zimbabwe’s central bank raised interest rates to a record and the government officially reintroduced the US dollar as legal currency to rein in surging inflation and stabilize the nation’s tumbling exchange rate. (Bloomberg)
Sam Bankman-Fried’s FTX crypto exchange is exploring whether it might be able to acquire Robinhood Markets Inc., according to people with knowledge of the matter. FTX is deliberating internally how to buy the app-based brokerage. Robinhood hasn’t received a formal takeover approach from FTX. (Bloomberg)
As crypto markets melt down, hedge funds are increasingly shorting tether, as a bet against either the broader economy or the quality of the assets backing USDT. (Wall Street Journal)
Klarna isn’t happy with the latest Barclays and StepChange report on “buy now, pay later,” which called for more retailer support for regulated BNPL products. “It is mind-boggling and frankly irresponsible in a cost of living crisis, that Barclays should use StepChange to endorse their high-cost installment credit product,” head of Klarna U.K. Alex Marsh said. (Protocol)
Technology
Amazon’s Prime Day appears to be losing some of its momentum. Sales growth for the online shopping extravaganza has slowed and consumers aren’t purchasing orders as large as they once did, data show. Amazon doesn’t appear to be investing in the event as it has in the past, and many of the deals have been focused on the company’s own products. Excluding electronics, the discounts on many items don’t surpass those on other days at Amazon, data show. The online commerce giant plans to hold Prime Day this year on July 12 and 13, continuing a recent trend of holding the event longer than a day to maximize its revenue. Amazon’s sales are projected to reach roughly $7.76 billion in the U.S. from Prime Day, or about 17% more than during last year’s event, according to research firm Insider Intelligence. (Wall Street Journal)
Cybersecurity M&A still strong after record year: Funding to cybersecurity startups has proven resilient in a market where threats and attack surfaces are ever expanding. Likewise, M&A dealmaking involving cybersecurity startups has remained robust this year, even with a sputtering economy, buoyed by several significant deals. (Crunchbase)
At Tesla, returning to the office creates new problems: Elon Musk’s mandate that staff get back to the office if they want to keep their jobs set off a rush for parking and desks—and a vow from Musk to show up seven days a week himself. (The Information)
Miners are having trouble paying back loans backed by crypto-mining equipment. Some crypto miners are finding it difficult to pay back up to $4 billion in loans backed by their mining equipment, as the value of mining rigs has dropped by half. (Protocol)
Smart Links
Only 20% of U.S. workers in office three days or more: IBM CEO. (CNBC)
As gas prices surge, stations now hold up to $175 of your money when you swipe. (Wall Street Journal)
Amtrak spent 11 years and $450 million to save Acela riders 100 seconds. (Vice)
America’s hottest city keeps getting hotter: How Phoenix is battling extreme heat (Fast Company)
Canada banning single-use plastics to combat pollution, climate change. (Washington Post)