Saturday, 13 July 2019.
1. There’s a multi-trillion-dollar black hole growing at the heart of the world’s financial markets. Negative-yielding debt -- bonds worth less, not more, if held to maturity -- is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there’s even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.
2. Global oil stockpiles swelled surprisingly in the first half of this year as production cuts by OPEC and its partners failed to prevent the return of a surplus, the International Energy Agency said. World supply exceeded demand at a rate of 900,000 barrels a day during the first six months of 2019 as consumption proved far weaker than expected amid a faltering economy, the IEA said.
3. The promise of the Permian is shrinking. Producers in the nation’s oil-rich shale basins are dialing back growth plans in the face of a growing panoply of problems that’s killing returns and keeping skeptical investors at bay. The constraints are manifold: pipeline limits, reduced flow from wells drilled too close together, low natural gas prices and high land costs. But the most consequential is that shale-well production falls off at such a high rate -- as much as 70% in the first year -- that you need to keep spending cash on new wells just to maintain output.
4. Chinese and American physicists have managed to confine plasma in a powerful magnetic field and prevent it escaping, according to a paper they published in the latest issue of journal Physical Review Letters. This could solve a major problem in the construction of fusion reactors, which could use the technology to produce an endless supply of clean energy.
5. China’s foreign trade stumbled last month, as both imports and exports fell, despite Beijing’s efforts to revive domestic demand. Chinese exports fell 1.3% in June from a year earlier, after rising 1.1% the previous month, the General Administration of Customs said Friday. Imports fell 7.3% in June versus a 8.5% drop in May. Economists had expected continued weakness in foreign trade due to the volley of tariffs between the U.S. and China, sluggish demand and weaker commodities prices, but imports dropped more than expected.
6. The U.S. is losing importance as a trading partner of China as their tariff war drags on, dropping a notch to third place in the first half of 2019 to trail the European Union and Southeast Asia. Sino-American trade in goods declined 14% on the year to $258.3 billion, according to statistics out Friday from Chinese customs authorities. In exports, the U.S. sustained a much harder blow.
7. The U.S. government could run out of cash to pay its bills in early September, before Congress returns from recess, Treasury Secretary Steven Mnuchin said Friday as he urged lawmakers to raise the federal borrowing limit before they leave town at the end of the month. “There is a scenario in which we run out of cash in early September, before Congress reconvenes,” Mr. Mnuchin wrote in a letter to House Speaker Nancy Pelosi on Friday. “As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess.”
8. Wall Street analysts expect corporate reporting season — which kicks off next week — will confirm that America’s biggest public companies have entered a profit recession as they contend with slowing growth and mounting trade woes. Banks are set to take centre stage next week, with the pace of earnings reports hitting full speed over the following fortnight.
9. The Chinese government is set to shift its automotive strategy to rely more on hybrid vehicles as part of its efforts to clean up the environment, instead of centering solely on electric vehicles, a development likely to work in favor of Japanese automakers such as Toyota Motor and Honda Motor. Beijing has been scrambling to tackle its serious air pollution problem by implementing the world's strictest rules for exhaust emissions.
10. It’s no secret that US internet connectivity speeds pale in comparison to those in much of the developed world. But a new report shows that we’re falling even further behind — and the advent of new, faster wireless technology that would need to build off of existing, suboptimal infrastructure could further hinder US technological dominance and amplify the country’s digital divide. Currently, the US ranks 40th in the world for mean mobile download speeds — up a mere three spots from last year, according to a new report from internet speed measurement company Ookla. More dismally, the country ranked 94th in mean mobile upload speeds, falling 21 spots from 2018.
11. The Federal Trade Commission has endorsed a roughly $5 billion settlement with Facebook over a long-running probe into the tech giant’s privacy missteps, according to people familiar with the matter. FTC commissioners this past week voted 3-2 in favor of the agreement, with the Republican majority backing the pact while Democratic commissioners objected, the people said. The matter has been moved to the Justice Department’s civil division. It is unclear how long it will take to finalize, one of the people said.
12. The U.S. military says an American service member has been killed in action in Afghanistan, but offered no further details about the service member’s identity or circumstances surrounding the death. In a telephone interview, Taliban spokesman Zabihullah Mujahed said the militant group was behind Saturday’s killing, but offered no further details.
13. While much of the world’s focus on the Middle East centers on rising tensions between the U.S. and Iran,the Syrian government and its Russian allies have intensified airstrikes on Idlib and the surrounding areasin a months-long campaign to recapture the territory, upending lives and leaving residents wondering where else they can go, eight years into a brutal war. On Friday, airstrikes hit several cities in Idlib, killing 10 people, according to the White Helmets, a rescue group operating in opposition-held parts of Syria. Bakeries and residential neighborhoods were targeted as they have been in other recent attacks, which have also frequently hit hospitals.
14. In France and other Western societies, the proliferation of new political forces that challenge the established liberal order—from both the right and the left—has revived old patterns of vilifying the Jews as the embodiment of the corrupt elites supposedly responsible for society’s ills. Meanwhile, unfiltered social media has pushed these anti-Semitic tropes, long confined to the fringes, into the mainstream of public debate. On any given issue—from economic inequality to the financial crisis to immigration and terrorism—old and new conspiracy theories blaming the Jews have gained new traction, abetted by the political polarization and general crisis of confidence permeating Western democracies.
15. India is planning a large-scale purchase of drones for its 1.2 million-strong army to boost surveillance capability along its volatile borders with neighboring Pakistan and China. The drones would enable units on the border to carry out a 24-hour watch against threats, Indian Army chief Bipin Rawat said in New Delhi on Saturday. He didn’t provide details.
16. The retreat of polar sea ice is spurring Great Power competition for shipping lanes and resources in the Arctic Ocean. Air Force long-range radar stations in Alaska, once quaint relics, are back in the spotlight, tracking Russian bombers that probe the zone just outside of U.S. control. “These radar sites are essential to defending North American airspace,” says Air Force Lt. Gen. Tom Bussiere, commander of U.S. Alaskan Command. The Wall Street Journal has a lengthy report on what it's like to work at one.
17. A promising new way to treat some types of cancer is to program the patient’s own T cells to destroy the cancerous cells. This approach, termed CAR-T cell therapy, is now used to combat some types of leukemia, but so far it has not worked well against solid tumors such as lung or breast tumors. MIT researchers have now devised a way to super-charge this therapy so that it could be used as a weapon against nearly any type of cancer. The research team developed a vaccine that dramatically boosts the anti-tumor T cell population and allows the cells to vigorously invade solid tumors.
18. Amazon.com is the latest example of a large employer committing to help its workers gain new skills. The online retailer said Thursday it plans to spend $700 million over about six years to retrain a third of its U.S. workforce as automation, machine learning and other technology upends the way many of its employees do their jobs.
19. Amazon is adding subscribers to its music-streaming service at a faster rate than rivals such as Spotify, Apple and Google, making music the latest industry to be disrupted by the e-commerce group. The number of people subscribing to Amazon Music Unlimited has grown by about 70 per cent in the past year, according to people briefed on its performance. In April Amazon had more than 32m subscribers to all its music services including Unlimited and Prime Music.
20. Professional baseball allowed a glimpse at its future Wednesday night for keen-eyed observers of the home plate umpire’s right ear and back pocket. A computer officially called balls and strikes for the first time in the game’s history in the United States at a minor league all-star game.
Quick Links: The AI technique that could imbue machines with the ability to reason. Machine learning has been used to automatically translate long-lost languages. Facial recognition technology is growing stronger, thanks to your face. US stocks reach new highs as spotlight remains on Fed. US yield curve steepens by most in three years. US second-quarter earnings poised to reveal profit recession. As recession fears rise, skittish investors sell riskiest junk bonds. On the other hand: Junk bond funds garner $11 billion in inflows in past five weeks. Flak flies after Bank of England intervenes in funds debate. Deutsche Bank pulls iconic artworks from its New York City Lobby. The great race to rule streaming TV. Have it out at Area 51. Weather news: Katrina redux? Life in a city without water. It wasn't the 2008 Wimbledon men's final, probably the greatest tennis match ever played. But it was magnificent. Roger Federer advanced to the finals, defeating Rafael Nadal in four sets.
Political Links: How to fight a war in space (and get away with it). How Iran sees its standoff with the United States. North Korea is not desperate: The new "geo-strategic" environment in East Asia. Germany's populist party embraces its extremist wing. A ‘dark lord’ falls inRussia’s growing power struggle. US House votes to restrain Trump on Iran. The media is starting to tune Trump out, and it’s helping him in the polls. Jeffrey Epstein, the sex offender in plain sight. Labor Secretary Acosta resigns amid pressure over Epstein prosecution. Mueller to testify before a pair of House committees on July 24th. Trump's cave on Census stuns allies. Michael Bennet might be the Democrats’ best chance to beat Trump. Beto's support in Texas is evaporating. A top tier of candidates has emerged in New Hampshire. Can Dante de Blasio save his father's presidential campaign? (Editor's note: The question is the answer). Alan Dershowitz stepping down at Harvard Law.