Biden 'weighing options' after devastating debate, NYT says

Good morning. Here's what happened overnight and what you need to know today.

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1.

Biden crisis: The New York Times, citing unnamed sources, reported that US President Joe Biden told a key ally he is considering whether to continue in the presidential race. The White House denied the report, which claimed Biden acknowledged that he may not salvage his candidacy if he cannot convince the public he is fit for the job after his shaky debate performance. Biden privately recognised that his upcoming appearances, including an interview with ABC’s George Stephanopoulos and campaign stops in Pennsylvania and Wisconsin, were critical, the report said. The conversation is the first public indication that the president is seriously considering whether he can recover. It follows reports that Barack Obama privately voiced concerns about the president’s performance and Lloyd Doggett becoming the first sitting Democratic member of Congress to publicly ask Biden to step aside. Earlier, House Democrat Jim Clyburn, a key figure in Biden’s 2020 win, suggested a "mini-primary" for the party if Biden steps aside. Later, Bloomberg reported dozens of Democratic lawmakers are considering signing a letter demanding Biden’s withdrawal, as a pro-democracy business group, Leadership Now, called for Biden to “pass the torch” to the next generation of “highly capable Democrats” to avoid the threat of a second Trump term. (The New York Times)(Reuters)

2.

Harris bet: Betting markets are favouring Vice President Kamala Harris as the 2024 Democratic nominee, with odds surging after The New York Times reported President Joe Biden confided to a key ally that recovery might be impossible after his poor debate performance. Harris, who was due to sit down with Biden and a group of influential Democratic governors on Wednesday, is cited by Reuters as the top alternative to Biden according to seven senior sources. Bets momentarily had her with a 50% chance, compared to Biden's 29%, according to PredictIt. Biden's odds plummeted after the Time’s report, with Harris's odds surging from 18% to 57%. Bets on another website, Polymarket had Biden's odds dropping to 49%, from 90% on Thursday. Although Harris is the bookmakers' favourite to replace Biden, a Reuters-Ipsos poll shows Michelle Obama, who has said she is not interested in running, as the only candidate significantly leading Trump, with Biden and Trump tied at 40% each. (Forbes)(Wall Street Journal)(Financial Times)

3.

Gradual slowdown: US labour data showed a gradual slowdown in the jobs market, pushing Treasury yields lower and stocks to new record highs as investors anticipated a potential easing of interest rates by the Federal Reserve. An ADP report showed a modest increase of 150,000 in private payrolls in June, primarily driven by gains in leisure and hospitality. However, wage growth for job changers slowed to 7.7% annually, while those staying in their jobs saw it drop to 4.9%, the lowest since mid-2021. Continuing jobless claims rose for the ninth consecutive week to 1.86 million for the week ending 22 June, the highest since November 2021. Layoffs announced in June totalled 48,786, according to Challenger, Gray & Christmas Inc, the highest for any June since 2009, excluding 2020. Separate data showed the US service sector contracted in June at the fastest pace in four years. The figures give an overall picture of weakening demand for workers, highlighted by job cuts as companies adjust to higher borrowing costs. Treasury yields fell across the curve and the S&P 500 index and technology-laden Nasdaq finished a shortened session at record highs ahead of the Fourth of July holiday. (Reuters)(Bloomberg)

4.

AI accents: Billionaire Xavier Niel's French AI research lab, Kyutai, unveiled a new voice assistant, Moshi, capable of expressing 70 different emotions and styles at an event in Paris. The featured emotions are similar to those promised by an OpenAI voice assistant product that was delayed due to safety concerns. In a thick French accent, Moshi provided advice on climbing Mount Everest and recited a self-composed poem. Kyutai CEO Patrick Pérez said Moshi would be the “first real-time voice AI assistant release” with “tremendous potential to change the way we communicate with and through machines.” Kyutai plans to release its models and research as open-source technology in coming weeks. Launched in November with €300 million in funding from Niel, French billionaire Rodolphe Saadé, and former Google chairman Eric Schmidt, Kyutai is showing Europe can be a global player in AI development, Niel told Bloomberg. (Bloomberg)

5.

Toppled Tories: Britain's Conservative Party is bracing for a significant defeat to Keir Starmer's Labour Party tomorrow, with polls predicting a record-breaking majority for Labour in the upcoming election. Final projections from YouGov suggest Labour could secure a 212-seat majority, the largest in modern history. As both Labour leader Starmer and Prime Minister Rishi Sunak wrap up their campaigns, the Conservatives shifted their focus to retaining enough seats to form a strong opposition. Starmer urged voters not to become complacent, emphasising the need for participation to achieve change. While Sunak and ex-Prime Minister Boris Johnson campaigned at late night rally on Tuesday, though Johnson's endorsement was tepid. Meanwhile, The Sun newspaper, historically a Conservative supporter, has endorsed Labour, criticising the Conservatives for internal conflicts and ineffective governance. The election has been marred by a betting scandal with nearly a dozen individuals involved, drawing attention to similar regulatory gaps in Australia concerning political betting. (Reuters)(Capital Brief)

6.

Poison pill: Southwest Airlines has adopted a "poison pill" strategy to prevent Elliott Investment Management from increasing its stake in the company. The move followed the activist investor pushing for leadership changes including a board shakeup, following disappointing financial results. Facing pressure to resign, Southwest's CEO Bob Jordan has refused to step down. The poison pill will issue one right for each share of common stock, becoming exercisable if any person or group acquires 12.5% or more of the shares. At that point, holders would be able to buy their entitled new stock at a 50% discount. Executive Chair, Gary Kelly, said the airline has tried to engage constructively with Elliott but that the board adopted the poison pill as Eliott could "significantly increase" its current stake of 11%. Elliott's push for change comes as Southwest has lost nearly 22% of its value over the past year. Shares closed 1.$ higher after the announcement. (Reuters)(Axios)

7.

Bid revived: Skydance Media has reignited its bid to purchase Shari Redstone's National Amusements for USD1.75 billion ($2.61 billion) in a bid to merge with Paramount Global, just weeks after an earlier agreement fell apart, The Wall Street Journal reported. The preliminary deal, awaiting approval from a Paramount directors' committee, includes a higher valuation for National Amusements and a 45-day period for other bidders to make offers, the paper said citing sources. National Amusements, holding 77% of Paramount's voting shares, has referred the agreement to the special committee. The will-they, won’t-they saga has turned into one of the messiest media deals in recent memory during which Paramount’s CEO and four directors parted ways with the company. Paramount is facing a declining cable business, significant debt and costly streaming service expansion. Its interim leadership is focused on aggressive cost-cutting including layoffs and exploring international streaming partnerships. Paramount shares rose over 13% on Wednesday following the reports. (The Wall Street Journal)

8.

Red catch: Chinese authorities seized a Taiwanese fishing boat, Ta Chin Man 88, and its five crew members late Tuesday, near the Taiwanese island of Kinmen, roughly 3 kilometres from China, escalating tensions between Beijing and Taipei. The boat was captured by two Chinese Coast Guard vessels for allegedly violating China’s summer fishing ban and using illegal nets, according to China's coast guard. Taiwan’s coast guard reported the vessel was taken to a Chinese port, with three of the five crew members being Indonesian migrant workers. Hsieh Ching-chin, spokesman for Taiwan’s Coast Guard Administration, called for their release, highlighting past instances where fines sufficed and asserting the crew should not be pawns in geopolitical tensions. It is the first time since 2007 that China detained a Taiwanese ship for fishing out of season. Beijing's increased pressure on Taiwanese President Lai Ching-te has led to boat incidents, military drills, and expanded laws threatening "separatists" with the death penalty. (Bloomberg)(Reuters)(The New York Times)