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The World
The White House and Republicans in Congress struggled to make meaningful progress towards a deal to raise the US borrowing limit, leaving the economy and financial markets in a dangerous limbo little more than a week before a potential debt default. President Joe Biden and Kevin McCarthy, the Republican House Speaker, met on Monday evening at the White House for direct talks they each called “productive”, raising hopes that they were moving closer to an agreement. But staff-level negotiations that occurred late on Monday and on Tuesday yielded no signs of a breakthrough — just pledges to continue conversations. (Financial Times)
McCarthy, Graves Signal Impasse in White House Debt Talks: House lawmakers preparing to leave Washington on Thursday; votes on any deal likely pushed until just before deadline. (Bloomberg)
Republicans question June 1 debt ceiling deadline as talks zero in on potential trade-offs. (CNBC)
CNN Poll: 60% say debt ceiling increase should come with spending cuts. (CNN)
Biden Has No Good Options in Debt-Ceiling Fight: Any deal struck with Republicans threatens to anger his party, but the alternative could require painful political choices. (Wall Street Journal)
An apparent attack on Russian soil by anti-Putin Russians, fighting in support of Ukraine, has sparked confusion and anger in Moscow. Residents of the settlements under attack in Russia’s Belgorod region have been resettled in other areas as authorities continue “clearing the territory” after the cross-border incursion that launched in Ukraine, officials said on Tuesday. One civilian died as a result of the fighting, according to regional governor Vyacheslav Gladkov. But questions linger about the group behind the attack, how it took place, and what it means for the war. (CNN)
Militias used US armored vehicles in attack over Russian border. (Financial Times)
Russia and China are set to sign a set of bilateral agreements during the Russian prime minister's trip to Beijing as the two giant neighbours pledge closer cooperation even as the West remains critical of their ties amid the war in Ukraine. Prime Minister Mikhail Mishustin - the highest ranking Russian official to visit Beijing since Moscow sent thousands of its troops to Ukraine in February 2022 - was holding talks with Chinese President Xi Jinping and Premier Li Qiang, according to the Russian government. (Reuters)
China’s new ambassador to the U.S. arrives to ‘safeguard’ Beijing’s interests: Xie Feng, China’s new ambassador to the U.S., arrived in New York Tuesday, according to a release from China’s embassy in the U.S. Xie assumes office after a roughly six-month period in which China did not have an ambassador to the U.S. The prior ambassador, Qin Gang, was promoted in December to become China’s new foreign minister. (CNBC)
The veteran diplomat will face several thorny issues straining relations between the two superpowers. (South China Morning Post)
The U.S. and Taiwan say they’re ready to sign an initial agreement strengthening trade ties in the coming weeks, the latest step in an increasingly tight relationship between the two governments. Because it falls short of a full free trade pact, the deal won’t require an up or down vote from Congress. But U.S. Trade Representative Katherine Tai’s office said it would help U.S. businesses send more goods to Taiwan, while streamlining regulatory procedures so products move more smoothly. “We look forward to continuing these negotiations and finalizing a robust and high-standard trade agreement,” Tai said in a statement. The announcement is almost sure to be met with anger by China, which claims Taiwan as its own territory and has reacted furiously to signs of the still-technically unofficial relationship between Washington and Taipei growing stronger. (Semafor)
U.S. Surgeon General Vivek Murthy warned that social media poses a threat to kids' mental health, escalating calls for new safeguards aimed at minors. The advisory adds to scrutiny over the effects of excessive use and harmful content, which has been blamed for consequences ranging from disrupting kids' sleep to promoting suicidal thoughts. Murthy told Axios he's calling on policymakers, platforms and parents to create safe limits. He's previously said he believes age 13 is "too early" for kids to join social media. The White House is concurrently releasing plans that include creating an interagency task force on kids' online safety, establishing best practices for teaching digital literacy and habits and supporting efforts to stymie harassment and child abuse online. (Axios)
Absent new, more ambitious climate policies, the world is headed for a magnitude of climate change that would put about 2 billion people at risk of extreme heat by the end of the century, a new study finds. Limiting global warming to the Paris Agreement's target of 1.5°C (2.7°F) above preindustrial levels would yield a five-fold reduction in the population exposed to unprecedented heat by the end of this century. The nearly 1.2°C (2.16°F) increase in global average surface temperatures to date has already knocked more than 600 million people out of the "human climate niche" in which society has historically thrived. The researchers of the study, published Monday in Nature Sustainability, define that niche by looking at how human population density varies with temperature and precipitation. (Axios)
Guam braces for floods, landslides and high winds from Typhoon Mawar: It may be among the strongest storms on record to strike the island. The typhoon, packing maximum sustained winds of 145 mph, will slam into the island by Wednesday afternoon local time, according to the National Weather Service on Guam. Forecasters expect the storm to unleash a “triple threat” of destructive winds, a dangerous ocean surge and excessive rainfall that will cause flooding. (Washington Post)
Economy
EU and US Discuss Aligning Investment Controls With Eye on China: The European Union and the US are discussing working closely to address risks from investing in sensitive technologies in countries like China as they develop new tools to cope with an increasingly hostile economic environment. Both partners will seek to align their approaches for outbound investment screening “to prevent our companies’ capital, expertise, and knowledge from supporting the technological advances of strategic rivals in ways that threaten our national security,” according to the latest draft statement for a high-level meeting next week in Lulea, Sweden. (Bloomberg)
Large asset management groups are piling back into fixed income to lock in the higher yields on offer after a “cataclysmic” period of performance for bonds last year. A steep rise in US interest rates over the past 12 months sent bond prices tumbling but has now left yields on Treasury notes higher than they have been for most of the past decade. With the Federal Reserve close to the end of its tightening cycle, institutional and retail investors are buying both sovereign and corporate bonds. “Bonds are exciting again, for the first time in a long time. They were boring with zero rates for several years,” Sebastien Page, chief investment officer of T Rowe Price’s global multi-asset strategy, told the Financial Times. (Financial Times)
America has declared: Now is a terrible time to buy a house. That implies stronger-than-ever demand for rental property, especially single-family homes. Housing is still segregated across much of America, with the most expensive neighborhoods almost entirely owner-occupied and less desirable locales containing most of the rental properties. In some parts of the country, however, that's changing. Built-to-rent housing can provide the opportunity to move into a brand-new house — often with professional property management and other amenities attached — without the need to raise a huge down payment or a long-term commitment to stay in place. Such houses aren't available everywhere. In 10 states, including Oregon, Massachusetts and West Virginia, there is no built-to-rent construction of single-family homes ongoing or planned at all, per the National Rental Home Council. (Axios)
UPS strike looms in a world grown reliant on everything delivered everywhere all the time. UPS delivers millions more packages every day than it did just five years ago and its 350,000 unionized workers, represented by the Teamsters, still seethe about a contract they feel was forced on them in 2018. In an environment of energized labor movements and lingering resentment among UPS workers, the Teamsters are expected to dig in, with the potential to cow a major logistical force in the U.S. The 24 million packages UPS ships on an average day amounts to about a quarter of all U.S. parcel volume, according to the global shipping and logistics firm Pitney Bowes, or as UPS puts it, the equivalent of about 6% of nation’s gross domestic product. Higher prices and long wait times are all but certain if there is an impasse. “Something’s got to give,” said Thomas Goldsby, logistics chairman in the Supply Chain Management Department at the University of Tennessee. “The python can’t swallow the alligator, and that’s going to be felt by all of us.” (Associated Press)
Technology Was Supposed to Transform Insurance Pricing. It Hasn’t. Insurtech startups made lofty promises on disrupting incumbents. But they couldn’t leverage data as freely as they’d hoped—and struggled against ‘900-pound gorillas’ in the industry. (Wall Street Journal)
Technology
Apple expands US chip sourcing with multibillion-dollar Broadcom deal: Apple and Broadcom have struck a “multibillion-dollar” agreement for the chip company to provide 5G components made in Colorado and other parts of the US to the iPhone maker, as part of Apple’s push to source more parts from American facilities. Apple said the partnership, which centres on 5G radio frequency components and builds on its existing relationship with Broadcom, was part of its 2021 commitment to spend $430bn with US suppliers and manufacturers over five years. (Financial Times)
Beijing moves to limit collateral damage from Micron sales ban: China’s foreign ministry, the commerce ministry and tabloid Global Times have all described the Micron ban as an individual case, and not a signal that other US firms may be in jeopardy. (South China Morning Post)
Musk Wants to Challenge Google and Microsoft in AI: Elon Musk says it could involve different parts of his corporate empire, including Twitter, which he predicted could halt its losses as soon as next month. (Wall Street Journal)
NASA's flagship program to get people back to the Moon is at risk in the debate over the country's budget. The Artemis program has survived two presidential administrations and has bipartisan support in Congress. Both administrations have worked to reduce the political risk of the multibillion-dollar program, awarding multiple contracts to commercial companies in multiple states and partnering with international space agencies. Efforts to insulate Artemis from possible cuts, delays and cancellation are facing a major test with the current budget fight on Capitol Hill. If NASA's funding is stalled at the 2022 enacted level or reduced, agency administrator Bill Nelson has warned Artemis II and Artemis III could be delayed. The current launch dates are 2024 for Artemis II and 2025 for Artemis III. (Axios)
Bankrupt rocket company Virgin Orbit is shutting down after selling its facility leases and equipment to a trio of aerospace companies in an auction: “As Virgin Orbit embarks on this path, the management and employees would like to extend their heartfelt gratitude to all stakeholders,” the company said in a statement. (CNBC)
Netflix outlined how it intends to crack down on the rampant sharing of account passwords in the U.S., its latest bid to reel in more subscribers to its video streaming service as its growth slows. To combat password sharing, Netflix said it will limit U.S. viewership of its programming to people living in the same household. Those who subscribe to Netflix’s standard or premium plans — which cost $15.50 to $20 per month — will be able to allow another person living outside their household to use their password for an additional $8 per month, a $2 discount from the company’s basic plan. (Associated Press)
Smart Links
Almost 200,000 Job Cuts in Tech Pushes New Grads to Wall Street. (Bloomberg)
TSA PreCheck allows teens to join parents in faster security line. (Washington Post)
Microsoft launches generative AI tools for developers. (Financial Times)
Retailers Clamp Down on Returns: Merchants shorten return windows, increase mail fees and offer discounts to discourage returns. (Wall Street Journal)
Samsung faces threat of first-ever strike. (Financial Times)