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The World
Last week’s NATO summit revealed a major realignment within the U.S.-led trans-Atlantic alliance. European nations, once seen as less steadfast in their support for Kyiv and more vulnerable to Russian pressure, are determined to help Ukraine win an unambiguous victory. At the same time, the Biden administration, which orchestrated a unified Western response to Russian President Vladimir Putin’s invasion last year, is increasingly cautious—constrained by domestic politics and a fear of direct confrontation with Moscow. In Europe, the once-gaping divisions between different capitals have narrowed sharply, as countries previously seen as soft on Russia, including France, Italy, Spain and to a lesser extent Germany, have all moved much closer to Ukraine’s fiercest supporters: Poland, the Baltic and the Nordic states. (Wall Street Journal)
Moscow seizes Russian subsidiaries of Danone and Carlsberg’s Baltika: First such move against western businesses since takeovers of Finland’s Fortum and Germany’s Uniper in April. (Financial Times)
Russia has pulled back from humanitarian cooperation at the U.N.: In recent weeks, Moscow has pushed for the removal of a U.N. peacekeeping mission from Mali, blocked a critical U.N. aid supply line for Syria, and is now threatening to end an agreement that allowed Ukraine to resume its Black Sea grain exports, officials say. (Wall Street Journal)
Global companies are accelerating their push to decouple China data in response to the country’s increasingly stringent data and anti-espionage laws, as relations between Washington and Beijing deteriorate. The drive for full localization of data in China and separation of information technology systems from the rest of the world has accelerated over recent months as Beijing strengthens its control and regulation of data. US consulting firms including McKinsey, Boston Consulting Group and Oliver Wyman are splitting their IT systems, according to a half-dozen staff at the companies. “Multinationals are concerned . . . it’s named the anti-espionage law and espionage naturally gets people a bit worried,” said Alex Roberts, a data compliance expert at law firm Linklaters in Shanghai. (Financial Times)
Japan and Saudi Arabia are expected to launch a strategic dialogue between finance ministers that will cover a wide range of issues, from national security to the economy. Japanese Prime Minister Fumio Kishida met with Saudi Arabian Crown Prince Mohammad bin Salman on Sunday, where they were to agree to launch regular diplomatic talks soon. (Nikkei Asia Review)
Millions in US under warnings as record heat expected to continue next week: More than 100 million people, around a third of Americans, were under extreme heat advisories this weekend and that record-breaking heat was expected to continue into the new week. There were advisories from coast to coast, with the south-west and parts of the west hard hit and officials warning that conditions could get worse in Arizona, California and Nevada. Residents were warned to “take the heat seriously and avoid time outdoors” by the National Weather Service, which said it was “potentially deadly to anyone without effective cooling and/or adequate hydration”. (The Guardian)
Northeast Rain Prompts Flood Warnings, Flight Cancellations: Flash floods in Pennsylvania left four people dead and three missing as storms rolled over much of the region. (Wall Street Journal)
‘Mindblowing’: how James Webb telescope’s snapshots of infant universe transformed astronomy. Light from ancient galaxies took more than 13bn years to reach Nasa’s £6.8bn James Webb probe and have provided scientists with stunning images. The results are scientifically dramatic and have revealed that the universe was already deep into the process of star formation only a short time after its big bang birth – although the photographs themselves are scarcely stunning in appearance: a handful of smudges, a couple of glowing spheres and an image that has been described as a glowing dog bone. The world of astronomy has been dazzled, nevertheless. Among the objects caught in the telescope’s giant mirror is one that turns out to be the oldest known galaxy in the universe. The prosaically named JADES-GS-z13-0 appears as it did a mere 320m years after the big bang, long before the creation of our own planet. It also turns out to be tiny compared with our own galaxy, yet it was clearly creating new stars at a rate comparable to the Milky Way. (The Guardian)
Economy
China's Q2 GDP growth slows to 0.8% q/q, just above expectations: China's economy grew at a frail pace in the second quarter, although the annual figure was flattered by base effects, data showed on Monday, with overall momentum faltering rapidly due to weakening demand at home and abroad. GDP grew just 0.8% in April-June from the previous quarter, data released by the National Bureau of Statistics showed, versus analysts' expectations in a Reuters poll for a 0.5% increase and compared with a 2.2% expansion in the first quarter. (Reuters)
Markets appear convinced the Federal Reserve can pull off a soft landing: Wall Street is more convinced than ever that inflation is subsiding. That’s giving investors hope that the Fed might be able to pull off what once seemed impossible: containing pricing pressures without tipping the economy into recession. Parts of the economy, such as the housing market, have undeniably slowed. But so far, the overall economy has evaded a downturn. This coming week, investors will get a look at fresh data on retail sales and existing-home sales, as well as a slew of earnings. (Wall Street Journal)
Dollar’s Busted Bull Run Has Bears Calling End of an Era: Standard Bank expects ‘multi-year downtrend’ is coming; Goldman, Invesco are skeptical that weakness will deepen. (Bloomberg)
Millions of high earners are slated to lose a popular tax break: Savers ages 50 and older can make catch-up contributions in their 401(k) accounts each year. Starting next year, those catch-up funds will be funneled only into after-tax Roth accounts for those who earned more than $145,000 the previous year. This change means many workers will pay taxes on their catch-up money up front during high-earning years, rather than in retirement when they may be in a lower tax bracket. (Wall Street Journal)
Why ‘everything aligns' for Japanese stocks: One of the surprise performances of the year has been Japanese stocks which have recently hit their highest levels in more than 30 years. The country's stock exchange is pushing companies to improve their valuations as foreign investors become net buyers of Japanese stocks. Meanwhile, the economy is expanding as inflation and wage growth return and higher-spending tourists come back, explains Goldman Sachs Research's Bruce Kirk, chief Japan equity strategist. (Goldman Sachs Exchanges)
New grads have no idea how to behave in the office. As the Class of 2023 enters the workforce after college years dominated by hybrid internships and virtual classes, employers are seeing a lack of the “soft skills” needed to navigate the office, which in the past might have been picked up by osmosis on the job, from mentors and by practicing on campus. Their solution: instruction in the likes of engaging in professional conversations, giving live presentations—and what not to wear. (Wall Street Journal)
The hottest new perk in tech is freedom: How small tech companies are using remote work to compete with the big guys. Smaller tech companies have picked up the mantle of remote work. They are much more likely than their larger peers to allow people to work fully remotely, with 81 percent of those with fewer than 5,000 employees either allowing remote work or only having remote options, according to new data from Scoop Technologies, a software firm that builds tech to help hybrid teams coordinate and also tracks the office policies at major companies. Meanwhile, just 26 percent of companies with more than 25,000 employees are fully flexible. (Vox)
Technology
Microsoft moved a step closer to sealing its contentious $75bn purchase of Activision Blizzard with the announcement on Sunday that arch-rival Sony has signed a license for the games company’s most popular title, Call of Duty, after the deal is completed. The agreement signaled a truce between the two gaming giants after a bruising 18-month battle that had seen the Japanese company become the biggest opponent to the acquisition. It follows regulatory breakthroughs for Microsoft on both sides of the Atlantic last week that have left it on brink of clinching victory for a deal that is expected to reshape the gaming industry. The pact appeared to resolve Sony’s biggest complaint about the acquisition, which it has said would hurt competition by giving Microsoft the power to make Call of Duty exclusive to its own Xbox game console and other services. The weekend agreement followed the failure late on Friday of a last-ditch legal attempt by US regulators to prevent the deal from closing. (Financial Times)
Google’s New Search Tool Could Eat the Internet Alive. Google Search, like the rest of the internet, is pivoting to generative AI. The first step is Search Generative Experience, an experimental tool currently available as a public beta. Instead of sending you off to other corners of the web, more search results appear within Google. Sort of like ChatGPT, it pulls information from various websites, rewords it, and puts that text on top of your search results—pushing down any links you see. In the process, it stifles traffic to the rest of the internet, lessening the very incentive to post online. With AI, Google Search might eventually set off a doom loop for the web as we know it. (The Atlantic)
Russia bans officials and state employees from using Apple devices for “work purposes”, after the FSB said Apple helped the NSA hack Russian diplomats' iPhones. (Financial Times)
According to a study commissioned by Apple, users have downloaded apps more than 370 billion times in the past 15 years, while developers have earned more than $320 billion on the App Store since its launch. Taking into account all the things that people buy, book or order via apps these days, the App Store economy is even larger than that, though. According to the Analysis Group, Apple’s App Store facilitated more than $1.1 trillion in billings and sales last year, more than doubling from 2019, when the total was estimated at $519 billion. (Statista)
Smart Links
Russian scientists warn of powerful solar flare activity on Monday. (Reuters)
UPS Union Asks Biden Not to Intervene in Case of Strike. (Bloomberg)
United reaches preliminary, 4-year labor deal with pilots, with up to 40% raises. (CNBC)
Apple’s New Vision Group Reflects Shift Away From Steve Jobs Approach. (Bloomberg)