Hello from Washington, where the dog days of summer have arrived and the unbearable humidity is ensuring DC lives up to its “swamp” nickname. And as if our screen time wasn’t high enough, the debate continues on whether the newest Twitter competitor, Mark Zuckerberg’s Threads, is really here to stay. Here are some things you need to know for the week ahead.
The big summit: Leaders of the countries that make up the North Atlantic Treaty Organization will convene in Lithuania on Tuesday for a two-day summit. The meeting comes at a critical time as Russia’s war in Ukraine approaches its 18-month mark, especially on the heels of the short-lived mutiny by Yevgeny Prigozhin, Wagner Group’s leader. Look out for discussions around how the organization may further aid Ukraine for its counteroffensive, including cluster bombs provided by the US, and whether Sweden will be eventually allowed to join NATO.
But before then, President Joe Biden makes a stop in the UK, where he’ll hold talks with Prime Minister Rishi Sunak and visit King Charles at Windsor Castle. The big defense overhaul: US and other allies have fueled much of Ukraine’s weapon supply since the start of its war with Russia. Still, Ukraine’s Minister for Strategic Industries Oleksandr Kamyshin says he doesn’t want the country to rely on others forever. In a race to overhaul the industry, Kyiv is building up arms production, and Kamyshin hopes to turn Ukraine into a major weapons exporter again. But with a history of corruption and inefficiency in the industry, it’s a hefty job to embark on.
The big thaw: Treasury Secretary Janet Yellen wrapped up her high-stakes trip to China Sunday that she’d described as a mission to revive engagement between the two largest economies. While in China, Yellen held ten hours of talks that she described as “direct, substantive and productive,” and said had brought US-China ties closer to a “surer footing.”
It’s part of a broader push by President Joe Biden’s administration to mend relations with America’s main geopolitical rival and open more lines of high-level communication, and follows a June visit by Secretary of State Antony Blinken. US Climate Envoy John Kerry is set to travel to the country later this month.
The big Fed speak: Fed officials Neel Kashkari, Christopher Waller, Loretta Mester and Mary Daly are expected to speak this week. Wall Street will be keen to look out for clues on if rate hikes will resume, especially after this week’s Fed minutes revealed the decision to pause was less unanimous than it originally seemed. The Fed’s Beige Book will also be released on Wednesday. The big tech debacle: Although Wall Street strategists are voicing concerns about the heavy concentration of Big Tech stocks in this year’s S&P 500 rally, history shows there’s no need to fret. One worthy comparison to the market dominance of mega-caps like Apple and Amazon is the tech bubble at the turn of the millennium, which proved to be greater and longer-lasting. It may even be a reversal of 2022’s pummeling instead of a sign of eventual floundering.
The big bond-market selloff: Newly released economic data alludes more interest-rate increases could come at the end of July, which doesn’t help bond-market sentiment as some yields reached the highest levels in more than a decade. Now, Wall Street is looking ahead and trying to figure out what to expect at the central bank’s September meeting. — but division among investors will likely fuel volatility for the next few months.
The big earnings: Another quarter has gone by and earnings season is once again upon us, offering a look at how companies are coping with persistent inflation and an uncertain economic outlook. The list of marquee names up this week include JPMorgan, Wells Fargo, Citigroup, Delta Air Lines and PepsiCo.
The big heat wave: Texas was one of the hottest places on Earth last week when a heat wave suffocated land stretching from Florida to Mexico. And as climate scientists say there are more days of harmful weather conditions to come, one group is especially at risk for these extreme temperatures: incarcerated people. Two-thirds of Texas prisons lack air conditioning, a common trait among detention centers across the US. Experts say the increasingly hot temperatures and a growing prison population will continue to be a lethal combination.
The big opinion: The Food and Drug Administration granted full approval to the Alzhiemer’s drug Leqembi last week. But its makers Eisai and Biogen will have to clear a number of hurdles before effectively rolling the drug out to customers, Bloomberg Opinion’s Lisa Jarvis writes. A common diagnosis method for Alzheimer’s is through Amyloid PET scans, which aren’t covered by Medicare. The drug also has some not-so-ideal side effects, and requires lots of legwork for patient candidacy approval, Jarvis writes.
And finally, the post-pandemic surge in inflation and the Federal Reserve’s rapid increase in interest rates have put the middle class in a financial vice grip. Bloomberg reporters Shawn Donnan, Claire Ballentine, Alexandre Tanzi and Christopher Cannon talk to middle class voters around the United States for The Big Take podcast. Listen on iHeart, Apple Podcasts, Spotify and the Terminal.