Default damage

A key part of US President Joe Biden’s foreign policy these past few years has been to try and counter China’s growing influence across the western Pacific. Nations largely ignored by Washington for decades have been courted by Beijing as it seeks to cement both soft and hard power in the region. Now, thanks to the risk of a US default, Biden has had to abandon what was to be an historic visit aimed at advancing American efforts to reassert itself in a part of the world it once dominated. The crisis back home, brought on by Republican demands for future spending cuts as the party’s price for paying America’s debt, caused Biden to cut short his trip, centered on the Group of Seven summit in Japan. The GOP meanwhile says he shouldn’t go at all. Addressing America’s self-inflicted crisis—which is already doing damage to the economy—Biden nevertheless expressed confidence negotiators would reach an agreement to avoid a catastrophic default. —David E. Rovella

Japan is unlikely to be a cakewalk for Biden either. The G7 meeting is the latest focal point of the fight for global influence between the West and its allies and authoritarian nations such as China and Russia. The advent of a multipolar world comprising rival factions, most clearly seen in attitudes to Russia’s war on Ukraine, will be on show in a series of high-profile summits in the coming months. At stake is a so-called battle of offers over countries such as Brazil, Vietnam, South Africa and Kazakhstan.

Not that long ago, it was all about slamming “Team Transitory” as Wall Street assailed the US Federal Reserve for moving too slow to arrest inflation. The death watch by “Team Recessionary” began in earnest a year ago, and since then every other headline seemed to end with “as recession looms.” But after a year of dire predictions, no downturn occurred and inflation has slowed. That combination is reviving hopes among the optimists, including Fed Chair Jerome Powell, for a “soft landing” scenario in which price pressures dissipate without massive job losses or an economic dip.

Or not. According to JPMorgan Asset Management, a US recession is a virtual certainty. The good news though is that in this scenario, the Fed may lower interest rates by the third quarter as growth loses momentum. “Inflation is too high and it will take a recession to bring it back down,” says Seamus Mac Gorain, head of global rates in London.

Steve Cohen (of SAC Capital fame) says forget all that. Investors are too worried about a market downturn, he says, and focusing too much on recession odds may cause them to miss the “big wave” of opportunities brought on by artificial intelligence. “I’m making a prognostication,” says Cohen, owner of the New York Mets—currently fourth in the NL East. “We’re going up.”

US National Security Adviser Jake Sullivan says there was intense military activity underway in parts of Ukraine, stopping short of saying whether Kyiv’s much-anticipated counteroffensive against Russia had begun. “This is not like a D-Day landing on a beach,” Sullivan says. “These types of military operations are more dynamic, more layered, more multifaceted.”

Insatiable demand for AI investments has made chipmaker Nvidia the best-performing stock on the S&P 500 this year. It’s also given the fortune of Chief Executive Officer Jensen Huang a major boost. Huang’s wealth has grown 98% this year to $27.3 billion, making him the biggest gainer among US and global tech billionaires, according to the Bloomberg Billionaires Index.

Citadel Securities sued a pair of former employees after they broke off to form a market-making firm for cryptocurrencies. The company claims Leonard Lancia and Alex Casimo started raising capital and building their high-frequency trading firm, Portofino Technologies, while still working at Citadel Securities with access to proprietary information.

Vans haven’t always been objects of desire. When Fiat launched its Multipla model in the late 1990s, supporters of the soccer team Juventus—many of whom worked for the Italian carmaker—were subjected to stadium banners calling them as unpleasant-looking as the van they built. While Mercedes-Benz’s passenger car division likes to trumpet its popularity among royalty and world leaders, its vans division has long been more of the people. Now things are changing.

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive it in your mailbox daily along with our Weekend Reading edition on Saturdays.

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.