Bloomberg - Evening Briefing - ‘We made progress’

A debt limit deal seems near, and just days before the full faith and credit of the US would be placed in question for the first time in the nation’s history. House Republicans who threatened to push the US into default unless the White House agreed to unrelated budget cuts may have won a two-year cap on federal spending. “We made progress,” House Speaker Kevin McCarthy said Friday morning. The urgency was underscored, at least to some negotiators, by Fitch’s warning that the brinkmanship was risking America’s AAA status. Moody’s also warned of a downgrade if the US misses a mid-June interest payment on Treasuries. Any deal would have to pass Congress next week and face opposition from unhappy lawmakers on both sides of the aisle. That discontent could play out in the 2024 election. As always in a presidential election cycle, it’s the economy—US inflation and consumer spending accelerated last month, highlighting steady price pressures and putting pressure on the Fed not to pause its rate hike campaign. Meanwhile, US employment remains at a half-century high and predictions of a soft landing as opposed to recession are becoming louder. Still, all bets are off—economically and politically—if the US plunges into default, still a distinct possibility. And even if it’s avoided, the self-induced crisis has already damaged the US economy.

Nvidia’s revenue forecast soared past expectations, igniting a global jump in tech stocks linked to artificial intelligence as the company neared a $1 trillion market value. “It looks like the new gold rush is upon us, and Nvidia is selling all the picks and shovels,” wrote analyst Christopher Rolland. Short sellers lost $2.3 billion in one day and one famous Wall Street name missed the boat. Amid the frenzy, Microsoft is urging caution against AI’s potential harm: the US needs a new agency to regulate the technology, President Brad Smith said, comparing it to the printing press and elevator.

China’s muted economic rebound and Beijing’s reluctance to deploy large-scale stimulus are reverberating around the globe, crushing commodity prices and weakening equity markets. And its second recent Covid wave is surging, expected to peak at 65 million cases around the end of June. One bright spot, so far untested: Amid tensions from TikTok to the suspected Chinese spy balloon, Biden predicted this week that US-China relations will improve “very shortly.”

“That was insane, sorry,” Elon Musk said after Twitter delivered a pretty messy start to Florida Governor Ron DeSantis’s presidential campaign. DeSantis is visiting early primary states like Iowa, New Hampshire and South Carolina, pitching himself as an “anti-woke” and “drama-free” alternative to Donald Trump. But it looks like Republican voters aren’t ready to quit the twice-impeached former president, and a rematch with Biden looks likely as of today. That’s despite deep doubts Trump can win—given his pending New York prosecution, his loss in a recent sexual assault trial, and potential indictments for his handling of highly classified documents and alleged role in a broad election conspiracy tied to the Jan. 6 insurrection. 

Ron DeSantis’s effort this week to announce his candidacy on Twitter ran into some technical trouble Photographer: Chris Delmas/AFP

Global warming-induced heat waves are worsening other problems around the world: Ships in the Panama Canal are being asked to lighten their loads, and wildfires in Canada’s top energy-producing province of Alberta have knocked out a fifth of the nation’s natural gas output. Scorching temperatures in Malaysia are pushing up food inflation—and putting pressure on government bonds. It’s a great time to be in the air conditioning business, Lara Williams writes in Bloomberg Opinion, but they’re not going to stop a giant migration from the globe’s hottest places if the climate crisis isn’t contained.

The summer season in the Northern Hemisphere starts this weekend—and already US air travel is near pre-pandemic levels as Americans head overseas. It’s not too late to book a Hamptons vacation: In fact, procrastinators might find a deal as the real estate frenzy on eastern Long Island cools off. And one popular post-pandemic holiday perk is “WFA,” in which employees at companies including American Express and Google allow employees to work from anywhere for a few weeks a year. 

Prices in the Hamptons are sinking this season Source: StayMarquis

• Kilicdaroglu tries to unseat Erdogan in Turkey’s runoff election.
• US jobs data expected to show hiring moderated in May.
• Bola Tinubu is sworn in as Nigeria’s fifth democratically elected leader. 
• Salesforce, Dell, Macy’s and Lululemon report earnings.
• OPEC+ meets in Vienna to review production policy. 

Exactly why Google co-founder Sergey Brin wants a fleet of airships remains a partial mystery. But as his Pathfinder 1 takes shape, one rationale seems straightforward enough: He just likes airships. This has been an industry in search of a booming, profitable purpose for a very long time. They could haul cargo in an environmentally friendly fashion or appeal to passengers who want to leisurely, exotic travel. They can also deliver much-needed supplies to hard-to-reach disaster zones.

The 122-meter-long Pathfinder 1 Photographer: Balazs Gardi for Bloomberg Businessweek

Get Bloomberg’s Evening Briefing: If you were forwarded this newsletter, sign up here to get it every Saturday, along with Bloomberg’s Evening Briefing, our flagship daily report on the biggest global news.

Bloomberg Invest Summit returns to New York, June 6-8. We will have influential leaders from Nasdaq, JPMorgan, the SEC, Franklin Templeton, the WMBA, Charles Schwab, Blackrock, Goldman Sachs and many more. Register now to secure your spot.