US celebrates 250th birthday in sweltering heat

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Happy Birthday: The US is celebrating its 250th birthday this weekend but extreme heat has led to cancellations and postponements of events. US President Donald Trump is set to deliver a speech and watch fireworks at Mount Rushmore in South Dakota while a ball drop in New York City’s Time Square at midnight will commence the July Fourth holiday. However, many festivities have been cancelled due to extreme heat engulfing the country’s east coast. Philadelphia cancelled its Salute to Independence parade on Friday (US time) while the National Mall in Washington shut down its Great American State Fair in the early afternoon. A number of Washington suburbs have called off fireworks or postponed them. The National Weather Service has issued an extreme heat warning for much of the Midwest, mid-Atlantic and Northeast from eastern Kansas to southern Maine, including the cities of St. Louis, Indianapolis, Baltimore, Philadelphia, New York and Boston. Forecasters say Philadelphia could reach 39.4C while New York City’s Central Park is set to hit 38.9C. A day before celebrations, Trump pardoned six people who he said were sentenced for “fixing their car”. (Bloomberg) (NYT) (NBC)

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Not over: Markets rallied globally as investor jitters over the end of the AI boom subsided. South Korean stocks rebounded on Friday after nearly a 10% drop during the two previous sessions. The Kospi index ended 5.76% higher as Samsung rallied 8.22% and SK Hynix jumped 10.88%. The Information reported that Anthropic is in talks with Samsung to be a manufacturing partner for a custom artificial intelligence chip. Japan’s Nikkei reversed early losses to end 1.47% higher, while the Hang Seng gained 1.28%. European markets had their best day since May as the Stoxx 600 rallied 0.68% while the DAX gained 0.78%. The FTSE also rose 0.25%. US stock markets were closed on Friday to observe Independence Day but Nasdaq 100 futures rebounded 1.2%. Meanwhile, Brent crude rose 0.13% to around USD68.78 ($99.09) while Crude oil rose 0.45% to USD72.12 a barrel as tanker traffic through the Strait of Hormuz increased. Spot gold gained 1.49% to USD4,187.3 an ounce following weaker-than-expected US jobs data. (Bloomberg) (Reuters) (Bloomberg)

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Backfill preparations: European NATO allies have replaced most of the assets the US has cut from its rescue plans in case of a war in Europe, according to Deputy Supreme Allied Commander Europe. In April, US President Donald Trump made fresh threats to withdraw from NATO as he was unhappy over the alliance’s response to the Iran conflict. In June, US Secretary of Defense Pete Hegseth announced a six-month review of US forces in Europe, shocking NATO allies. “European allies have definitely stepped up in terms of backfilling the adjustment in the US forces in Europe,” Stringer said. He noted this was a demonstration of “a stronger Europe in a stronger NATO”. In areas Europe is unable to provide equivalent forces will be matched with different assets. Stringer emphasised the preparedness of European allies for the shift in US priorities and commitments and that burden-sharing and burden-shifting “is now being done in a sensible, proportionate way, absolutely driven by military logic”. (Bloomberg) (Bloomberg)

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Closing loopholes: Anthropic is cracking down on workarounds that have allowed Chinese companies, including Ant Financial, to access its AI tools. To crackdown, Anthropic has targeted “transfer station” services which relay requests from users in China through Claude accounts registered overseas before returning the responses. It is also updating its tools to identify new techniques that circumvent its terms of service. Citing people familiar with the matter, the FT reported Ant provided employees with corporate Claude accounts and were able to use it through the company’s intranet which is linked to its Singapore office. ByteDance is reportedly using VPNs to use Claude as the company introduced a reimbursement scheme to allow engineers to put personal subscriptions on their expenses. While these loopholes don’t violate US or Chinese law it is against Anthropic’s terms of service which bars Chinese companies and their foreign subsidiaries from using its models. Anthropic said it “enforces this policy through continuous, evolving detection systems, working alongside our partners to identify and ban accounts that violate our policies”. (Financial Times)

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No Election: Andy Burnham, the former Greater Manchester mayor, will not call a general election if he succeeds Keir Starmer as the UK's prime minister. In an ‘Ask Me Anything’ on Reddit, Burnham replied “no” when asked whether he would go to the polls and noted he would stick to the party’s promises from the 2024 election. Burnham also said on the social media platform he would push for greater public control of services such as water; forge closer ties with the EU; look to negotiate return agreements for reject asylum seekers; seek electoral reform; ensure the UK’s defense investment plan is “fully funded”; and remain committed to support the Ukraine. Last month, Burnham won a seat in parliament and confirmed a leadership bid following Starmer’s resignation on 22 June. Leadership nominations close on 16 July and if Burnham remains unopposed he is set to become the Labour leader the following day and prime minister on 20 July. (Reddit) (Bloomberg)

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Socceroos out: The Socceroos are out of the World Cup after a tense match against Egypt early Saturday morning at Dallas Stadium. The team was down 0-1 by half time but scored during the second half to equalise. Neither team scored during overtime with the match ending in a penalty shootout 2-4. Socceroos coach Tony Popovic said: “It's tough”.“I think we showed the world that Australian football is strong…[It's] a wonderful group and I'm devastated that we can't progress.” Egypt’s next game will be on 8 July at Atlanta Stadium. Today’s games include Argentina taking on tiny island nation Cabo Verde at Miami Stadium and Colombia will be going up against Ghana at Kansas City Stadium. On Sunday, co-host Canada will play Morocco while Paraguay takes on France. (FIFA) (ABC)

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KPMG saga: In this week’s On The Call, host Harshdeep Kaur, editor in chief John McDuling and ideas editor James Hennessy dissect the scandal that has got the Australian government considering a crackdown of the Big Four accounting firms. KPMG’s whistleblower crisis has seen a number of senior executives resign and led to Lendlease ending its 68 year old relationship with the firm. And government departments including the Reserve Bank of Australia and the Australian National Audit Office put their contracts with the firm for its own whistleblower service under review. At the heart of this story is a question long being asked about the Big Four: Can firms designed to audit clients be trusted to police themselves when they are also selling those same clients tax advice and consulting services? The conversation also looks into another question raised in this saga about the strength of whistleblower protections available in Australia. As Capital Brief first revealed, the whistleblower at the centre of this scandal told the parliamentary inquiry that if they had the opportunity, they would not speak up again. (Spotify) (Apple)