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The World
Many businesses that laid off workers during the pandemic are already predicting they will need fewer employees in the future. As with past economic shocks, the pandemic-induced recession was a catalyst for employers to invest in automation and implement other changes designed to curb hiring. In industries ranging from hotels to aerospace to restaurants, businesses have reviewed their operations and discovered ways to save on labor costs for the long term. Economic data show that companies have learned to do more with less over the last 16 months or so. Output nearly recovered to pre-pandemic levels in 1Q21—down just 0.5% from the end of 2019—even though U.S. workers put in 4.3% fewer hours than they did before the crisis. (Wall Street Journal)
The U.S. is preparing to impose sanctions today on a number of Chinese officials over Beijing's crackdown on democracy in Hong Kong, as well as a warning to international businesses operating there about deteriorating conditions. The financial sanctions would target seven officials from China's Hong Kong liaison office, the official platform which projects Beijing's influence into the Chinese territory. A separate updated business advisory issued by the State Department would highlight U.S. government concerns about the impact on international companies of Hong Kong's national security law. (Reuters)
China’s spending on research and development is on track to exceed the U.S. by 2025, according to new research. Meanwhile, the US has greatly underinvested in science and innovation — Public R&D investment is near its lowest level in the last 60 years — possibly impairing people’s standards of living, health, national competitiveness and capacity to respond to crises, the paper from the Aspen Institute, a Washington think tank, said. “If China implements its current five-year plan, it will soon exceed the United States in total R&D expenditure,” author Benjamin Jones, a professor of entrepreneurship and strategy at Northwestern University in Illinois, said. “China has massively increased its science and innovation investments in pursuit of leading the world economically and strengthening its hand in global affairs.” (South China Morning Post, Aspen Institute)
The number of new coronavirus cases is increasing in every state, setting off a growing sense of concern that the pandemic in the U.S. is far from over. In the Upper Midwest, the Northeast and on the West Coast — including in Chicago, Boston and San Francisco — coronavirus infections remain relatively low. But the picture is different in pockets of the country where residents are vaccinated at lower rates. Hot spots have emerged in parts of Missouri, Arkansas and Nevada, among other states, leaving hospital workers strained. Less than a month after reports of new cases nationally bottomed out at around 11,000 a day, virus cases overall are increasing again, with about 26,000 new cases a day, and hospitalizations are on the rise. (New York Times)
L.A. County will require masks indoors amid alarming rise in coronavirus cases. The new order will go into effect at 11:59 p.m. Saturday. During the weeklong period that ended Wednesday, L.A. county reported an average of 1,077 new cases each day — a 261% hike from two weeks prior. Yesterday, the county reported 1,537 additional cases. (Los Angeles Times)
The Yankees' post-All-Star break opener against the Boston Red Sox on was postponed because of positive COVID-19 tests among 3 New York pitchers. All-Star outfielder Aaron Judge and two others are also in COVID-19 protocols, sources told ESPN. (ESPN)
The University of California has mandated COVID-19 vaccinations and will bar most students without them from campus. (Los Angeles Times)
In the UK, a record 520,194 were told to isolate by the NHS Covid-19 app last week, with warnings that factories are on the verge of shutting because so many staff are isolating. The manual Test and Trace system, which is separate from the app, also ordered 336,056 people to isolate, as cases returned to levels last recorded in January. (The Times)
Coronavirus deaths have almost doubled overnight in Scotland; hospital cases are higher than the government’s worst case scenario. (The Times)
Lebanon’s prime minister-designate Sa’ad Hariri quit after almost 10 months of failed attempts to form a new government, plunging the country deeper into crisis. Lebanon is suffering its worst-ever peacetime economic crisis. It has been exacerbated by a power vacuum since the current cabinet resigned shortly after the Beirut port explosion in August last year along with the failure to enact badly needed reforms. The crippled local currency dived lower on the news. (Financial Times)
At least 117 people have died in riots and looting in South Africa, acting minister in the presidency Khumbudzo Ntshavheni said, as the country's military is preparing to mobilize around 25,000 troops to help bring a measure of calm. (Johannesburg Times, Deutsche Welle)
At least 69 people have died as raging floods strike Western Europe. Strong rains caused rivers to burst their banks and wash away buildings in Belgium and Germany, where at least 1,300 remained missing. Homes and streets in the Netherlands and Switzerland also flooded. Weather forecasters say more rain is expected in the coming days. The death toll from the flooding in Belgium has risen to nine people. (New York Times, Deutsche Welle)
Justice Stephen Breyer has not decided when he will retire and is especially gratified with his new role as the senior liberal on the bench, he told CNN in an exclusive interview -- his first public comments amid the incessant speculation of a Supreme Court vacancy. Far from Washington and the pressures of the recently completed session and chatter over his possible retirement, Breyer, a 27-year veteran of the high court, said that two factors will be overriding in his decision. "Primarily, of course, health," said Breyer, who will turn 83 in August. "Second, the court." (CNN)
American Airlines, other companies resume donations to Republicans who objected to election results. The flow of money is a sign that corporate America’s promises were temporary, especially in light of razor-thin Democratic majorities. (Washington Post)
California passed the U.S.’s first state-backed guaranteed income plan. The state will use $35m to provide monthly cash payments to qualifying pregnant people and young adults leaving foster care. (The Guardian)
Economy
China buys friends with ports and roads; now the U.S. is trying to compete. To counter China’s rising global economic influence, Washington has taken a new direction with foreign assistance. Rather than just lend money or promote trade, as in recent decades, the U.S. is now investing dollars overseas to advance American national-security interests. It wants ports, cellular networks and other strategic assets to stay in friendly hands. The rare bipartisan program dedicates $60 billion for overseas infrastructure projects including cellular networks, vaccine production and maybe even a crumbling Greek shipyard. (Wall Street Journal)
U.S. retail banks slashed their branch networks and trimmed headcount in 1H21 in a bet that much of the foot traffic that went digital during pandemic lockdowns will never return. Wells Fargo, Citigroup and JPMorgan closed more than 250 branches, accounting for 1 to 5% of their networks. Wells Fargo, which had the highest U.S. branch count at the start of the year, took the lead by closing 154 branches, or 3% of its domestic network, and reducing headcount by 6%. (Financial Times)
China’s share of global bitcoin mining plunged this year while Kazakhstan rose to become the world’s third-largest player in the industry, according to research from Cambridge University. The research shows China accounted for less than half (46%) of the power used for bitcoin mining in April, down sharply from 75.5% in September 2019. That’s before authorities ordered a crackdown on the mining of cryptocurrencies. Kazakhstan saw an almost sixfold increase in its share of global bitcoin mining in the same period, climbing to 8.2% from 1.4%. The U.S., meanwhile, rose to 16.8% from 4.1% to take the second-top spot, while Russia and Iran were the fourth and fifth-largest countries for bitcoin mining respectively. (CNBC)
The new stats help confirm what many have expected—that China’s position as bitcoin’s top miner is in jeopardy. The decline happened earlier than previously thought, indicating miners were wary enough of Beijing to already start shifting their operations overseas before serious restrictions were announced. (The Information)
PayPal increases weekly cryptocurrency purchase limit fivefold to $100,000. (CNBC)
Visa and Mastercard have left open key gateways between Binance and the financial system despite rising regulatory scrutiny on the cryptocurrency exchange that has prompted some banks and smaller payments companies to cut ties, citing a consumer alert issued last month by the Financial Conduct Authority against Binance. (Financial Times)
Weekend Podcast Listening: Roberto Quarta — What Makes an Effective Board of Directors. In the time of an unprecedented global pandemic, boards – private and public – have been forced to re-examine priorities. And it’s not just trying to manage through Covid. ESG, diversity & inclusion, an evolving remote-work dynamic, a growing expectation that corporations will engage with social issues around race, gender and more. As companies face new challenges, what makes an effective board of directors? And how are companies with strong board compositions and engagement better equipped for turbulent times? To find answers, we spoke with Roberto Quarta. Roberto is Chairman of CD&R Europe, in addition to being Board Chair of WPP and Smith & Nephew. He is a former CEO and serves on both private and public boards. And as you’ll hear, to drive success, there’s one agenda in particular that has captured his attention – it’s what he calls the “human agenda.” (Working Capital Conversations)
Technology
Twitter released its 2020 diversity report, along with the results of a new kind of study on pay equity. The study found that while women make up just under 43% of the Twitter staff, they only take home about 37% of the company's overall compensation. The gap also exists for underrepresented minorities at Twitter. "In the US, 6.3% identified as Black and netted 4.7% of total compensation, and 5.8% identified as Latinx and netted 4.8% of total compensation," the report reads. (Protocol, Twitter)
Revolut, a London-based digital banking start-up, raised $800m in a funding round that makes it the UK’s most valuable private tech company of all time. The deal, led by SoftBank’s Vision Fund 2 and Tiger Global Management, values the six-year-old company at $33bn (£23.9bn), six times more than at its last fundraising in early 2020. The company is now worth more than NatWest, one of the UK’s Big Four retail banks. (Financial Times)
Tech workers who swore off the Bay Area are coming back: Critics said the pandemic would make the industry flee San Francisco and its southern neighbor, Silicon Valley. But tech can’t seem to quit its gravitational center. Bumper-to-bumper traffic has returned to the region’s bridges and freeways. Tech commuter buses are reappearing on the roads. Rents are spiking, especially in San Francisco neighborhoods where tech employees often live. And on Monday, Twitter reopened its office. (New York Times)
iPhone 12 line accounted for 63% of US iPhone sales in 2Q21, while the iPhone 12 mini is selling at lower numbers than the rest of the lineup. The four iPhone 12 models together had 63% of total US sales, while one year ago, the three iPhone 11 models had 65% of total US sales. The iPhone 12 Pro Max and the base iPhone 11 model had the largest share of any single iPhone, each at 23%. The iPhone 12 mini and iPhone XR had the smallest share, each at 5%. (9to5Mac)
Global smartphone shipments grew 12% YoY in Q2, with Xiaomi up 83% to take a 17% share and pushing past Apple to reach the second place for the first time ever. (Canalys)
Taiwan Semiconductor Manufacturing, the world’s largest contract chip maker, said it expects the chip shortage that has hampered car makers to start easing in the next few months after it ramped up its production of auto chips. The company is on track to increase output of microcontrollers used in cars by about 60% this year compared with last. (Wall Street Journal)
China’s semiconductor output hit a record high as Beijing boosts local production amid intensifying US-China tech war. China’s integrated circuit output surpassed 30 billion units in June, a 44 % increase over the previous year Demand for advanced chips from overseas remains high, with imports up nearly 30% for the month, as Beijing pursues semiconductor self-sufficiency. (South China Morning Post)
Smart Links
Apple, Amazon, Google and Facebook face at least 70 antitrust probes, cases. (The Information)
Tesla registrations in California surge 85% in second quarter. (Reuters)
Lufthansa will no longer address you as 'ladies and gentlemen'. (Deutsche Welle)
Transatlantic inflation surge fuels economists’ fears of overheating. (Financial Times)
Disney to relocate 2,000 California jobs to central Florida. (Los Angeles Times)
Disney plans to spread sports further beyond ESPN. (Variety)
Square building new bitcoin-inspired financial services business. (Bloomberg)
Cleveland Clinic, Mount Sinai Health System won’t administer Biogen’s drug for Alzheimer’s. (Wall Street Journal)