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The World
U.S. President Joe Biden and Indian Prime Minister Narendra Modi are expected to deepen defense and technology cooperation between their countries during Modi's official visit to the White House, despite lingering concerns about human rights in India. Modi, who arrived about 30 minutes after the scheduled start of the tour, apologized. Later on Wednesday, Modi is scheduled to have a private dinner with the Bidens at the White House. Modi will attend a state dinner on Thursday night, after addressing Congress and holding a rare press conference with Biden. (Reuters)
Modi says this is India’s decade. That claim rests heavily on a handful of dominant conglomerates. Increasingly aligned with Modi’s priorities, the roughly half-dozen mega-firms—which include Reliance Industries and Adani Group, helmed by two of Asia’s richest tycoons—have the ability to raise vast sums of capital, and the experience and political connections to navigate India’s byzantine bureaucracy. Capitalizing on government subsidies and privatization plans, they are executing projects with a scale and speed that have eluded India in the past. Half a dozen conglomerates now control or have major stakes in 25% of India’s port capacity, 45% of cement production, a third of steel making, nearly 60% of all telecom subscriptions, and more than 45% of coal imports. An analysis by the Center for Monitoring Indian Economy, a research firm, shows that a quarter of all new investment proposals by private companies since 2014 have come from the companies. (Wall Street Journal)
The European Union agreed to an 11th round of sanctions against Russia for launching its invasion of Ukraine. Under the sanctions, the transit via Russia of goods and technology which may be used by the Russian military or aid in its defense and security, will be forbidden. The sanctions will also make it possible to impose restrictions on the sale of sensitive dual-use goods and technology to countries that could perhaps sell it on to Russia and expands the list of restricted items that could serve Russia's defense sector. (Deutsche Welle)
President Volodymyr Zelenskiy was quoted as saying progress in Ukraine's counteroffensive against Russian forces was "slower than desired", but that Kyiv would not be pressured into speeding it up. (Reuters)
Joe Biden’s top national security aide will fly to Denmark this weekend for an unannounced meeting with representatives from India, Brazil and other countries that have not condemned Russia’s invasion of Ukraine in a bid to boost support for Kyiv. Officials from South Africa, Turkey and possibly China are expected to attend the meeting in Copenhagen with Jake Sullivan, the White House national security adviser. Ukraine requested the meeting with developing countries of the “global south”, the people said. (Financial Times)
China lashed out at President Biden for describing President Xi Jinping as a dictator, a remark that injected fresh discord into the relationship between the two men at a time when the broader U.S.-China ties appeared on threshold of a thaw. Biden’s seemingly off-hand remark at a fundraiser near San Francisco on Tuesday evening appeared to push the boundaries of how a U.S. leader refers to his Chinese counterpart. While Xi, who is unelected and wields vast power, may fit the textbook description of a dictator, political analysts said the term is loaded and rarely used by U.S. presidents to describe leaders they hope to engage in diplomacy. Biden’s reference to Xi as a dictator, even if glancing, appears to be unprecedented for a sitting U.S. president in recent decades, said Jude Blanchette, a China specialist at the Center for Strategic and International Studies. “To have the world’s leading power refer to him in ways that de-elevate him, I think Xi Jinping will take that personally. He wants to be seen as a peer with the United States,” Blanchette said. (Wall Street Journal)
The pharmaceutical industry’s biggest lobbying group filed a long-expected lawsuit challenging Democrats’ drug pricing law that allowed Medicare to start negotiating prices for certain medicines. PhRMA joins a growing club of companies and trades challenging the law. Merck, Bristol Myers Squibb, and the Chamber of Commerce have already filed similar suits in different courts. (STAT News)
National test scores plummeted for 13-year-olds, according to new data that shows the single largest drop in math in 50 years and no signs of academic recovery following the disruptions of the pandemic. Student scores plunged nine points in math and four points in reading on the National Assessment of Educational Progress (NAEP), often regarded as the nation’s report card. The release reflected testing in fall 2022, comparing it to the same period in 2019, before the pandemic began. (Washington Post)
Community college graduates in healthcare fields generally outearn humanities students even from elite universities such as Stanford, UC Berkeley and UCLA, underscoring how much majors can matter. Amid fears about college costs and loan debt burdens, more students and families are looking to higher education for clear career dividends rather than a general quest for intellectual enrichment, one expert said. That trend has accelerated since higher education costs began to climb after the 2008 recession, he added. (Los Angeles Times)
Economy
With U.S. inflation still excessive, most Fed officials expect to raise interest rates further this year, Chair Jerome Powell told a House committee: “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell said on the first of two days of semi-annual testimony on Capitol Hill. Even so, the Fed last week kept interest rates unchanged after 10 straight hikes so it could take time to gauge how higher borrowing rates have affected the economy, Powell said.The hazier messaging suggests that Powell is seeking to balance competing demands from those Fed officials who want to keep raising rates and others who feel the central bank has done enough. (Associated Press)
Wall Street extended its sell-off Powell's congressional testimony reinforced the central bank's campaign to rein in inflation as he hinted at the likelihood of further interest rate hikes. All three major U.S. stock indexes were on track to notch their third straight daily declines. Tesla Inc, along AI-related stocks such as Microsoft Corp and Nvidia Corp were the heaviest drags. (Reuters)
Key Takeaways From Powell’s Testimony Before US House. (Bloomberg)
California Has Most Job Openings as Worker Shortage Deepens Across US. For all the high-profile layoffs in Silicon Valley, California is still suffering from a worker shortage. The Golden State led a nationwide jump in job vacancies in April that reversed recent declines and keeps pressure on the Federal Reserve to consider more interest-rate hikes. (Bloomberg)
Uber Is Laying Off 200 People in Its Recruiting Team: Latest cuts affect less than 1% of staff and follow other layoffs across the company. (Wall Street Journal)
Vacant Offices Are Piling Up in Silicon Valley; layoffs, hybrid-work patterns are reducing corporate footprints in Northern California towns. Office-vacancy rates in Silicon Valley, which includes the Northern California communities of San Jose, Palo Alto and Sunnyvale, were up to 17% in June from 11% in 2019, according to data firm CoStar Group. In some spots, such as Menlo Park and Mountain View, the rate surpassed 20% this spring, CoStar said. The level of surplus office space remains below what is available just north in San Francisco, where the vacancy rate has more than tripled from 2019 to more than 25%. But some analysts and investors expect Silicon Valley will narrow the gap because tech companies are going through layoffs and are shedding unwanted floors. (Wall Street Journal)
Home Listings Plummet as High Mortgage Rates Tie Owners Down: Active listings fell 7% in May, according to brokerage Redfin; homeowners choose to stay put to keep cheaper mortgages. (Bloomberg)
Boston-area home prices just hit an all-time high: The median price for a single-family home hit an all-time monthly high of $900,000 in May. The median price tops the previous record high of $899,950 set last June, and represents a 2.9% increase from May 2022. Lack of inventory and competition in the housing market are driving up prices, according Alison Socha, president of the Greater Boston Association Realtors. The few homes that are available for sale get multiple offers, Socha said. (WBUR)
Technology
The FTC sued Amazon for misleading users about canceling Prime subscriptions. The FTC has been investigating Prime subscriptions since 2021. The agency alleges that Amazon executives knew the cancellation process was so difficult that they dubbed it the "Iliad flow" a reference to Homer's epic about the "long, arduous Trojan War." Amazon users attempting to cancel their Prime subscription had to click through several pages in order to confirm the cancellation, and the company used tactics like emphasizing options to divert from the "flow" or warning signs next to the confirmation buttons in an attempt to stop people from cancelling, the complaint alleges. But Amazon also made it difficult for customers to avoid enrolling in Prime, obscuring the option to opt out of Prime during checkout or highlighting free shipment options included in Prime while hiding the subscription price, prosecutors said. (Semafor)
Intel stock dropped 6% after the company gave investors an update on the company’s turnaround plan to become a foundry competing with TSMC. Intel’s new reporting structure could help control costs at the chipmaker, which is seeking to trim as much as $10 billion from its costs over the next three years. (CNBC)
What Apple Didn’t Reveal About the Vision Pro: Apple left a lot of bold new features it had been developing for its new Vision Pro mixed-reality headset on the cutting-room floor—at least for now. Those include plans for fitness experiences, ambitious tools to help developers quickly and easily create augmented reality content and the ability to see full-body digital avatars during video calls. (The Information)
German tabloid Bild cuts 200 jobs and says some roles will be replaced by AI: Germany’s Bild tabloid, the biggest-selling newspaper in Europe, has announced a €100m cost-cutting programme that will lead to about 200 redundancies, and warned staff that it expects to make further editorial cuts due to “the opportunities of artificial intelligence”. Bild’s publisher, Axel Springer SE, said in an email that it would “unfortunately be parting ways with colleagues who have tasks that in the digital world are performed by AI and/or automated processes”. (The Guardian)
Use ChatGPT at work? Just 7% do in Japan, vs. half in U.S.: survey. (Nikkei Asia Review)
For the first time, U.S. regulators approved the sale of chicken made from animal cells, allowing two California companies to offer “lab-grown” meat to the nation’s restaurant tables and eventually, supermarket shelves. The Agriculture Department gave the green light to Upside Foods and Good Meat, firms that had been racing to be the first in the U.S. to sell meat that doesn’t come from slaughtered animals — what’s now being referred to as “cell-cultivated” or “cultured” meat as it emerges from the laboratory and arrives on dinner plates. The move launches a new era of meat production aimed at eliminating harm to animals and drastically reducing the environmental impacts of grazing, growing feed for animals and animal waste. (Associated Press)
Smart Links
Microsoft expects to build a quantum supercomputer within 10 years. (TechCrunch)
Japanese Startups Are Catching Up to Broader Market Rally. (Bloomberg)
More than 25% of U.S. workers are covered under pay transparency laws—that could soon be near 50%. (CNBC)
States Are Rushing to Regulate Deepfakes as AI Goes Mainstream. (Bloomberg)
NYC Tower Targets ‘Renters by Choice’ With $26,000 Apartments. (Bloomberg)