The World
U.S. retail sales increased by the most on record in May, following the largest monthly drop on record in April. Retail sales jumped 17.7%, the biggest advance since tracking began in 1992. Separately, homebuilder sentiment posted its biggest monthly surge ever. (Reuters, CNBC)
Federal Reserve Chair Jerome Powell said the economy faces significant long-term damage from higher unemployment and small business failures. In Senate testimony he warned of risks widening gaps in living standards between rich and poor. Meanwhile, the IMF is set to slash economic forecasts and warns of a crisis “unlike anything the world has seen.” However, Morgan Stanley analysts say output will return to pre-lockdown levels by year-end as global growth bounces back sharply. (Wall Street Journal, CNBC, The Times)
The International Energy Agency sees the largest drop of oil demand in history this year, but forecast the biggest-ever one-year jump in 2021. (CNBC)
Top Senate Republicans are not embracing a $2 trillion rescue package. Meanwhile, the Trump administration is preparing a nearly $1 trillion infrastructure proposal for roads, bridges, 5G wireless infrastructure, and rural broadband. (Finance 202, Bloomberg)
China is warming to four more years of a Trump presidency, as it expects ties to deteriorate no matter who wins and the erosion of other U.S. alliances outweighs trade blows. Meanwhile, China again is America’s largest trading partner. Trade between the two nations rose to $39.7 billion in April, up nearly 43% from the month before. (Bloomberg, Wall Street Journal)
More than 40% of China’s population earned only about 1,000 yuan (US$141) per month last year, the top economic data agency confirmed, advancing debate over the country’s income gap. (South China Morning Post)
Three Indian soldiers were killed in a clash on the border with China, the first fatalities in four decades from the simmering conflict along the 3,488-km undemarcated border known as the Line of Actual Control. (South China Morning Post)
North Korea blew up an office set up to foster better ties with South Korea in a “terrific explosion” after threatening action if North Korean defectors went ahead with a campaign to send propaganda leaflets into the North. (Reuters)
University of Oxford identified what they called the first drug proven to reduce coronavirus-related deaths: a low-cost steroid. Meanwhile, Imperial College London scientists will start immunizing people this week with their experimental coronavirus shot. (New York Times, Associated Press)
Majorities of on-site workers report their employers are taking precautions to keep people from catching or spreading the coronavirus, including new or more frequent cleaning procedures at work, a measure 69% of workers report their employer is "always" taking. Additionally, 58% say their employer always provides personal protective equipment, and 54% say employers enforce a six-foot distance. 41%, say their employers always screen employees for cough or fever. (Gallup)
Travel demand probably won’t return to last year’s levels until about 2023, according to travel-search site Kayak: “The issue is not on the rental car or hotel side, it’s on the flight side.” (Bloomberg)
Economy & Finance
Why China is missing out on trillions in sustainable investment: ESG investing is slow to catch on without mandatory disclosure, and investors fear virus may delay rules that were due in 2020. (Bloomberg)
Businesses will slash new overseas investments by 40% this year and as much as 10% next year, according to United Nations forecasts, as multinationals bring production closer to home. (Wall Street Journal)
Tax collections will fall by more than 30% in at least 10 American states due to Covid-19. On average, states will suffer a 20% decline in tax revenue, the economists predict. (Bloomberg)
Data provider Bloomberg urged users to switch the way they price US dollar interest rate options — in case they are caught out by a move by the Federal Reserve to push rates below zero. Customers were recommended to review computer models for calculating interest rate volatility — a key component in pricing options, which give holders a right to buy or sell an asset on a set date. (Financial Times)
U.S. slumps to 10th spot in the World Competitiveness rankings: After losing the top spot to Singapore in 2018, the U.S. dropped further, dragged down by trade wars. Singapore was the most competitive economy for the second year in a row, followed by Denmark and Switzerland. (Bloomberg)
This year has seen more extreme cross-asset moves than any year since 1998 — and it’s only June. (Isabel Research)
Technology
Apple is under formal investigation by antitrust regulators in European Union, following a number of complaints related to how it operates the iOS App Store and also its payment offering, Apple Pay. (TechCrunch)
Amazon signaled it is willing to make its chief executive, Jeff Bezos, available to testify to Congress as part of lawmakers’ wide-ranging antitrust probe into the tech industry. (Washington Post)
Tesla is negotiating terms of a possible incentives deal with Travis County, TX that could bring the electric car maker’s next U.S. assembly plant — and thousands of jobs — to Austin. (Austin American-Statesman)
Venture capitalists split on whether one can invest over Zoom. While some argue Zoom can't replace an in-person pitch, more virtual deals could increase investments to overlooked founders outside Silicon Valley. (The Information)
Smart Links
Reading list on issues of race from Harvard faculty. (Harvard Gazette)
U.S. family offices lead global ranks with $396,000 salaries. (Bloomberg)
U.S. Open expects tennis, but no fans. (New York Times)
The 2021 Oscars are postponed two months to April 25. (Los Angeles Times)
The architectural history of door knobs. (Apollo Magazine)