Serious Consequences.

The center of emergent worries.

1. Katelyn Jetelina:

We are knee-deep in a substantial Covid-19 infection wave. Wastewater levels—a good indicator of community spread—remain high and continue to increase, especially in the South and the West, where levels are coming close to last winter's.

(CDC; annotations by YLE)

Thankfully, immunity keeps our hospitals from overflowing at this point, but severe disease trends continue to mirror infections. For example, in California, hospitalizations this summer are as high as last winter.

(Source: CDC; annotations by YLE)

This pattern—2024 summer rates reaching winter rates— is not unique to the U.S. Covid-19 hospitalizations in the U.K., Spain, and Australia all show similar trends.  (Source: yourlocalepidemiologist.substack.com)

---

2. Russian forces have made swift and significant territorial gains in Ukraine, taking advantage of Kyiv’s military shortages and blunders as support grows among the Ukrainian public for a negotiated end to the war. The eastern Donetsk region is the central focus of Moscow’s renewed offensive, which began late last year but has significantly increased in recent weeks. President Vladimir Putin’s main battlefield goal this year is to grab as much land as possible, according to senior Ukrainian officials who spoke to the Financial Times.  “Our defences are showing cracks,” said one senior Ukrainian official familiar with military operations. He warned that Russian forces had achieved “tactical success” in Donetsk and that more advances were likely unless the situation turns around. Taken together, Russia’s advances have more than reversed the hard-fought gains made by Ukraine’s army last year. According to research by Pasi Paroinen of the Black Bird Group, an open-source military research group based in Finland, the amount of territory captured by Russian troops since early May is nearly double that which Ukraine’s military won back at heavy cost in terms of lives and military materiel with its summer offensive a year ago. (Source: ft.com)

---

3. Hamas announced it had selected Yahya Sinwar, the group’s leader in Gaza and architect of the Oct. 7 attacks against Israel, to succeed the former head of its political wing, Ismail Haniyeh, who was killed last week in Tehran. The ascension of Sinwar, a U.S.-designated terrorist, as the main leader of Hamas cements the Islamist group as an armed-resistance movement against Israel, shifting away from its role as a political entity aimed at governing. Sinwar also advocates a close alignment with Iran and his firmer grip on the group indicates he has overcome the voices within Hamas who were skeptical of that approach. (Source: wsj.com)

---

4. David Ignatius:

U.S. messages to Iran have also made clear that the risk of a major escalation is extremely high, with serious consequences for the stability of the new government of President Masoud Pezeshkian.

(President) Biden’s diplomacy with Netanyahu has been just as complex. Last Thursday, the two had a sharp telephone conversation in which Biden complained that the Israeli leader was obstructing U.S. efforts for a cease-fire and hostage release in Gaza. Biden is said to have pressed Netanyahu to be a “good partner,” speaking in a salty voice that was more “Scranton Joe” than “Washington Joe,” according to a knowledgeable source.

But since the contentious phone call, Netanyahu has moved toward the U.S.-brokered cease-fire deal. As of last week, Netanyahu was insisting on changes in the U.S.-negotiated formula that mediators feared would be dealbreakers. This week, he is said to have advised at least one member of his right-wing coalition that he supports the pact without amendments. (Sources: washingtonpost.com, timesofisrael.com, italics mine)

---

5. In less than a week, Japan has completely upended the world’s expectations for its markets and economy. The country was the darling of the financial world for over a year. Its weak currency pushed the stock market to record highs and rekindled inflation after decades. Then the Bank of Japan hiked rates last Wednesday and Governor Kazuo Ueda indicated he intended to keep going, helping trigger a sharp rise in the yen and wild gyrations across the global markets. Traders and investors were forced to abandon strategies based on macro views that Japan’s currency would stay weak and interest rates wouldn’t rise too fast. “Without a doubt this is absolutely new ground for markets. There’s soul searching everywhere now that we have a Bank of Japan that seems hellbent on getting away from years of zero or negative rates policy,” said Stephen Miller, a consultant at Grant Samuel Funds Management and former BlackRock Inc. fund manager. “Japan is now at the center of emergent worries — across everything, stocks, bonds, yen, credit, everything.”  (Sources: apnews.com, bloomberg.com)