| There are some optimistic noises being made about the US debt-ceiling fight. But Wall Street is warning that even if disaster is avoided, the economy won’t escape damage from this spectacular own-goal by Congress. Behind market fears of a historic default is the less-discussed risk of what would follow a deal. Many predict lawmakers will ultimately reach an agreement, but the bruising standoff and the Treasury’s efforts to return to business as usual will wreak significant collateral damage. Ari Bergmann, whose firm specializes in risks that are hard to manage, says investors should hedge for the aftermath. Here’s why. —David E. Rovella The fallout is already global. America’s sway over the world economy is being eroded by self-inflicted policy wounds—and not just of the debt-ceiling variety. From a slow-off-the-blocks Federal Reserve in 2021 to this year’s regional bank bonfire, the rest of the world is wondering if the dollar’s preeminent status in global trade and finance may be worth reconsidering. Record-low unemployment in the US was even stronger than previously thought. Applications for benefits fell by the most since 2021 after fraudulent claims in at least one state had boosted numbers in previous weeks. Stocks climbed on hopes a default will be avoided and Treasury yields rose on speculation the Fed will need to keep interest rates higher for longer. Here’s your markets wrap. Walt Disney dealt a $1 billion blow to Florida and Governor Ron DeSantis just as the far-right Republican positions himself for the GOP’s nominating contest. DeSantis has made targeting the company a centerpiece of his campaign to restrict LGBTQ rights while punishing corporate dissent. Now Disney is closing a luxury hotel at Walt Disney World and dropping plans to relocate 2,000 California employees to a new corporate campus it was building in his state.  Walt Disney is shutting down Star Wars Galactic Starcruiser, a live action role playing game that doubles as a high-end hotel in Orlando, Florida. Photographer: Allen J. Schaben/Los Angeles Times /Getty Images Frank founder Charlie Javice was indicted by a federal grand jury on charges she defrauded JPMorgan in its $175 million acquisition of the college financial planning site. Javice was arrested in early April on charges that include conspiracy, wire fraud affecting a financial institution and bank fraud. Vienna became the weakest housing market among major European capitals, posting a double-digit decline that surpassed even hard-hit Stockholm, according to the inaugural Bloomberg City Tracker. The Austrian capital posted a drop of 12.2% from peak levels a year ago, while Stockholm was down 6.4%. By contrast, Madrid, Milan and Zurich showed gains. The US Supreme Court left in place a broad liability shield for social media companies when it comes to content posted by users, continuing the legal insulation enjoyed by the likes of Twitter, Facebook and Google. The court refused to limit the immunity companies have enjoyed under a decades-old law, Section 230 of the Communications Decency Act. The unprecedented devastation of Australia’s 2019-2020 “Black Summer” bushfires, its apocalyptic scenes broadcast globally for all to see, was a warning to the world. Three years later, the lasting health effects of the catastrophe are still manifesting themselves. In this episode of Bloomberg Investigates, we see the damage done to the most vulnerable.  Wildfires like this one near the town of Nowra in the Australian state of New South Wales laid waste to huge swaths of land in late 2019 and early 2020. Photographer: Saeed Khan/AFP Many times throughout its history, Apple has redefined consumer technology by breathing new life into an existing category of gadgetry that had yet to fulfill its promise. On June 5, Apple Chief Executive Officer Tim Cook will take the virtual stage at Apple’s Worldwide Developers Conference and try to do the same for mixed-reality headsets. However, despite Apple’s track record, an air of doubt surrounds the device, expected to be sold under the name Reality. And a lot is riding on it.  Tim Cook must sell the world on Apple’s new headset Photographer: Justin Sullivan/Getty Images North America 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.
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