Bloomberg - Evening Briefing - Just don’t panic

The same traders whose fear of the Fed sent markets hurtling into bear territory Monday are girding for a long dark night as stocks head for their longest slide in months. Investors are keen to see whether the central bank, which meets tomorrow, gives any indication as to whether it will raise rates at a faster clip. Stocks notwithstanding, President Joe Biden touted the humming US economy with its low unemployment, saying the powerful recovery from the pandemic recession will become more evident when inflation subsides. “I truly believe we made extraordinary progress by laying a new foundation for our economy,” Biden said Tuesday at a meeting of the AFL-CIO, the biggest US labor confederation. In addition to tapping the nation’s Strategic Petroleum Reserve to address high gas prices and working with European partners on plans to get Ukrainian grain to market, Biden cited proposals aimed at bringing down the cost of child care and prescription drugs and said the wealthiest Americans must “pay their fair share” in taxes. “I have a plan to bring down the cost of gas and food,” he said, seeking to position the Democratic Party for the coming midterm elections, but adding “it’s going to take time.” In Europe,​​ a new survey by economists shows many expect the Bank of England to raise interest rates faster and further than anticipated just a month ago as it battles the highest inflation in decades. As for all those investors out there watching their portfolios shrink, remember not to panic. Here’s your markets wrap.  —Margaret Sutherlin

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

In another sign of the worsening cryptocurrency spiral, the biggest US crypto exchange, Coinbase Global, will fire 18% of its workforce. In the past weeks the crypto market has plunged into turmoil with the Terra stablecoin collapse and crypto lender Celsius Network freezing withdrawals amid what looks like the digital equivalent of a bank run. 

Though Kremlin forces have been methodically destroying Ukrainian cities and killing thousands of civilians, Russia has begun to run out of weapons and soldiers with which to prosecute its war of aggression. It’s even dragging in old tanks from far-flung military districts after having much of its armor wiped out by Ukrainian forces during its botched initial invasion. As a result, Russia may be only a few months from needing a major regroup, senior European officials said. It’s a fresh sign things aren’t going as planned for Moscow, despite its gains in the East. Meanwhile a new tally shows Ukraine has suffered $4.3 billion in damage to farmland, machinery and livestock as a result of Vladimir Putin’s war. 

Maksym Katerin stands in the yard of his damaged house on June 13 after his mother and stepfather were killed during shelling in the eastern Ukraine city of Lysychansk. Photographer: Aris Messinis/AFP

Increased health risks, long waits and decades of debt. Should the Republican-appointee controlled US Supreme Court overturn Roe v Wade in the coming weeks, 26 American states are set to ban or severely restrict abortion. The consequences will be swift for millions of women across the country: For a look at what would happen, just look to Texas. 

As oil prices rise, the US is reaching out to a historical ally, one recently implicated in the brutal murder and dismemberment of American resident and Washington Post columnist Jamal Khashoggi. Biden will seek to mend ties with Saudi Arabia (despite its human rights record) and its de-facto ruler, Crown Prince Mohammed Bin Salman, during a trip there next month. It’s a reversal of Biden’s pledge to make the kingdom a “pariah.” 

Nobel Peace Prize laureate Yemeni Tawakkol Karman stands in front of an image of Jamal Khashoggi as she speaks during a 2018 commemoration in Istanbul, where Khashoggi was murdered. Photographer: Ozan Kose/AFP

US health officials are assessing Covid-19 vaccines for young kids this week. A manufacturing hub in central China is allegedly abusing its Covid control measures in order to prevent protests. And new data shows Black South Africans were more likely to be hospitalized at a younger age, less likely to have access to intensive care units and ventilators and had higher mortality from the disease than White South Africans.

Intense weather made worse by the climate crisis is wreaking havoc around the world. Europe is combatting a blistering heat wave where temperatures in Spain are soaring to 40 degrees Celsius (100 degrees Fahrenheit). Massive floods in Yellowstone National Park have washed away roads, bridges and homes. And in Arizona, New Mexico and other Western US states hit hard by drought, wildfires are exploding as officials struggle to contain them.

A fresh delay for another US weapons program, courtesy of one of America’s biggest defense contractors. Boeing said it expects to deliver Orca, the Navy’s 70-ton underwater drone, up to three years late. Roughly the size of a subway car, it’s part of a broader push for more pilotless options under the sea. 

The Orca prototype was christened in Newport, California, on April 28. Boeing says the real thing is going to take a lot longer. Source: Naval Sea Systems Command

• Americans whine about the economy, spend like its going out of style.
• The third Jan. 6 hearing is on Thursday. Here’s what’s coming.
• Senate Republicans may support gun legislation—with a big caveat.
• China looks to erase the British empire from Hong Kong’s history.
• Starbucks has allegedly threatened to take away transgender benefits.
• This country is expected to attract the most millionaires this year. 
• The best restaurant in America is an Indian spot in North Carolina. 

Across the US, people are quitting their jobs to become short-term landlords on Airbnb and VRBO. They’re amassing small empires of vacation homes with a special kind of business loan: It lets borrowers including the self-employed qualify based not on their salaries but on projected future income of the property they’re buying. Last year, investment-property loans without taxpayer backing totaled $9.9 billion, an eightfold increase since 2018. The vast majority qualified because of rental income. Is this the start of another housing bubble?

Smoky Mountains vacation home rentals in Wears Valley, TN. Photographer: Tamara Reynolds for Bloomberg Markets

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