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The World
US-China Handshake Fails to Stem Asia’s Fear of Another Ukraine: A highly anticipated defense forum in Singapore kicked off with a friendly handshake between Pentagon chief Lloyd Austin and Chinese Defense Minister Li Shangfu. It ended Sunday with few other signs of optimism that the world’s biggest economies could avoid an eventual collision. Singapore warns a simultaneous war would be ‘catastrophic’, while China and the US fundamentally disagree over Taiwan, global rules. (Bloomberg)
U.S. and China lock horns at Asia’s top security forum: At a major conference billed as a “dialogue,” the top defense officials of the United States and China found themselves locked in a standoff. Flashpoints had flared across the region: In the skies above the South China Sea just days earlier, a Chinese fighter jet performed what U.S. officials described as “an unnecessarily aggressive maneuver” when intercepting a U.S. aircraft. Over the weekend, as Secretary of Defense Lloyd Austin urged his Chinese counterparts to open channels of communication with the United States, a Chinese ship nearly collided with a U.S. destroyer transiting through the Taiwan Strait. There was no bilateral meeting between Austin and Chinese Defense Minister Gen. Li Shangfu, even though they spent the weekend under the same ritzy roof. (Washington Post)
A Chinese warship came within 150 yards of a U.S. destroyer in the Taiwan Strait in "an unsafe manner," U.S. military officials said, as China blamed the United States for "deliberately provoking risk" in the region. U.S. and Canadian navies on Saturday were conducting a joint exercise in the strait, which separates the island of Taiwan and China, when the Chinese ship cut in front of the U.S. guided-missile destroyer Chung-Hoon forcing it to slow down to avoid a collision, the U.S. Indo-Pacific Command said in a statement. (Reuters)
China’s defense minister defended sailing a warship across the path of an American destroyer and Canadian frigate transiting the Taiwan Strait, telling a gathering of some of the world’s top defense officials in Singapore on Sunday that such so-called “freedom of navigation” patrols are a provocation to China. (Politico)
Saudi Arabia seeks to boost oil price with output cut of 1mn barrels a day: Saudi Arabia will cut oil production by 1mn barrels a day in a bid to prop up oil prices, it announced after a fractious meeting of the Opec+ group of producers in Vienna on Sunday. The kingdom’s energy minister Prince Abdulaziz bin Salman, Opec’s de facto leader, made the move as part of a deal in which several weaker African members will have quotas reduced from next year. Russia, the world’s second-largest oil exporter, could also have its production targets lowered, though the group said this was subject to review. Meanwhile, the UAE will be able to increase its production. (Financial Times)
Oil jumps 2% on Saudi plan to deepen output cuts from July. (Reuters)
NATO Chief Pushes Turkey to Allow Sweden to Join Alliance: NATO Secretary General Jens Stoltenberg said Sunday that Sweden has “fulfilled its obligations” to Turkey to bolster its counter-terrorism laws, which should clear its path for membership in the alliance. (Bloomberg)
After weeks of protest from physician organizations and patients, UnitedHealthcare has put a controversial new prior authorization policy for gastroenterology procedures on hold. The policy, which requires physicians and patients to get approval from the insurance giant for nearly all gastroenterology procedures, including diagnostic and surveillance colonoscopy, or potentially face paying out of pocket, would have gone into effect on June 1. Instead, the company is adopting a different policy that it calls “advanced notification,” requiring physicians to let United know they’ll be performing certain gastrointestinal procedures and provide information such as why it’s needed and the patient’s medical history. “This Advance Notification will not result in the denial of care for clinical reasons or for failure to notify,” a UnitedHealthcare spokesperson told STAT in an email. (STAT News)
US cancer drug shortage forces doctors to ration life-saving treatments: A severe shortage of cancer therapies is forcing thousands of patients to miss life-saving treatments, several leading healthcare organizations have warned. There are 14 oncology medicines listed “in shortage” by US regulators, including the generic chemotherapy drugs cisplatin and carboplatin, which are first-line treatments for many common types of cancer. (Financial Times)
‘Extraordinary’ survival data for lung cancer patients is seen as boost for AstraZeneca drug. (STAT News)
Current College Students Say Their Degree Is Worth the Cost: 71% of currently enrolled bachelor’s degree students nationally strongly agree or agree that the degree they are receiving is worth the cost, and just 8% strongly disagree or disagree. Attitudes toward cost are broadly similar across different types of higher education institutions, although students attending private not-for-profit institutions are slightly more positive. Forty-one percent of students attending private not-for-profit institutions strongly agree the degree they’re receiving is worth the cost, compared with 33% of those attending public colleges. (Gallup)
Economy
Wall Street hasn’t been this bearish on the stock market in more than a decade. Tech shares are a different story. Hedge funds and other speculative investors have built up a big bet that the S&P 500 will decline, marking their most bearish positioning since 2007. At the same time, they are preparing for a rally in the technology-focused Nasdaq-100, with net bullish wagers in recent weeks approaching the highest levels since late last year. The divergence in positioning reflects the fragility of the 2023 stock rally, strategists say. The S&P 500 is up 12% this year, but it would be negative without the contribution of seven big tech companies, according to S&P Dow Jones Indices data through the end of May. That potentially leaves the index vulnerable to a steep pullback if even one or two big companies misstep. (Wall Street Journal)
Why the U.S. Remains Far From Recession: What happened to that widely expected recession? Instead, the lingering effects of the pandemic have built economic resilience even in the face of rising rates. (Wall Street Journal)
Fitch warns it could still cut U.S. debt rating even after deal: While the deal to raise the debt ceiling and cut spending are “positive considerations,” Fitch said “repeated political standoffs” over the federal government’s borrowing limit “lowers confidence in governance on fiscal and debt matters.” (Politico)
China set to account for less than half of US’s low-cost imports from Asia: Reshoring index shows inbound Chinese goods fell to lowest level in 10 years amid geopolitical tensions. (Financial Times)
Inflation is pushing Japan into a new era that could lift equities by spurring more households to move savings out of low-yielding bank deposits, the head of the country’s stock exchange operator has said. Hiromi Yamaji, president of the JPX group that controls the Tokyo and Osaka exchanges, said he expected many Japanese to stop sitting on so much cash — the country’s households have amassed ¥1 quadrillion ($7tn) in bank savings — and look to stock markets for better returns in response to rising living costs. (Financial Times)
Technology
Apple’s Long-Awaited Next Big Thing Is Nearly Here at Last: Over the past two decades or so, Apple Inc. has released a number of industry-shifting products: the iPod in 2001, the iPhone in 2007, the iPad in 2010 and the Apple Watch in 2015. On Monday, the company hopes to do it all over again — this time with its first mixed-reality headset. While no product will ever live up to the iPhone, the headset has the potential to usher in a new era: It could kick off the shift to a different interface that upends how people work, play games and entertain themselves. It’s also a risky endeavor that could backfire for Apple. Mixed-reality headsets are still a nascent field, and many people are hesitant to wear a computer on their face. The Apple device also will have design quirks, such as an external battery pack, and a price tag of roughly $3,000. Moreover, it may not have a “killer app” when it launches. But I believe — like Apple — that the headset could be the future of the computer and that the company needs to start somewhere. While the first model will likely be a flop in terms of unit sales — at least compared with Apple’s other categories — the company could still become the market leader within a matter of quarters. (Bloomberg)
Watch Apple’s WWDC 2023 at 1 pm ET. (Watch here)
Apple's headset—rumored to be called the Reality Pro or Reality One—will reportedly cost $3,000. With a price that high, the first-generation version is likely geared toward developers and professionals rather than the mass consumer. According to analyst Ming-Chi Kuo, via MacRumors, the second-generation version could come in both high-end and mid-priced models. (Wired)
iOS 17 Is Coming. Here’s What iPhones, iPads and Apple Watches Are Missing. (Wall Street Journal)
Apple is planning 53 new, remodeled or relocated stores globally over the next four years. The company is preparing a big expansion in China, Japan, South Korea and India, in addition to overhauling stores in the US and Europe. It’s also planning its first outpost in Malaysia and will relocate a key location in Australia. (Bloomberg)
Payment apps like PayPal and Venmo might be convenient, but they’re not banks — and a federal financial services watchdog is worried that too many consumers are treating them as such. Some consumers are using services like PayPal, Venmo, Cash App and Apple Pay for direct deposit of paychecks, or simply storing lots of cash in them. But the Consumer Financial Protection Bureau wants people to know they don’t have the same protections as a bank or credit union. CFPB Director Rohit Chopra warned that payment services like PayPal, Venmo, Cash App and Apple Pay “are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe.” (CNN)
Smart Links
Hong Kong’s Office Towers Have Never Been So Empty. (Bloomberg)
Largest terminal at Long Beach, California port won’t open Monday after getting hit by labor turmoil. (CNBC)
Restaurant Chain Cava Set to Launch IPO. (Wall Street Journal)
Eggs are going on sale just months after their prices hit records. (Wall Street Journal)
Airlines say ready to avoid repeat of summer travel chaos. (Reuters)