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Dow drops greater than 380 factors, S&P 500 is ready to snap 7-day successful streak

Traders on the floor of the New York Stock Exchange

Source: NYSE

Shares fell on Tuesday as Wall Street began the shortened vacation week on concerns that perhaps the best economic recovery from the pandemic was behind us.

The Dow Jones Industrial Average fell about 380 points, dragged down by losses at JPMorgan, Chevron and Goldman Sachs. The S&P 500 lost 0.7% and the Nasdaq Composite traded the flat line after both averages hit records at the opening. US markets were closed on Monday for Independence Day on July 4th. The S&P 500 has had a seven-day winning streak, the longest since August.

Investors are juggling multiple signs that rapid economic growth may peak from the depths of the pandemic. The ISM Services Index, a key benchmark for the services sector, slowed from a record high in the previous month to 60.1 in June, data released Tuesday showed. Economists polled by Dow Jones expected a pressure of 63.5. This follows Friday’s job report, which showed that the unemployment rate rose back to 5.9% from 5.6%, compared to expectations.

Bond yields also fell Monday, with 10-year government bond yields below 1.4%, further evidence that investors are questioning the strength of the US economy.

While business stocks like Caterpillar and JPMorgan fell, tech stocks rose. Amazon, Apple and Microsoft were higher.

Amazon surged nearly 3% and became technology leaders when Andy Jassy officially took over as CEO on Monday. Jeff Bezos is now Executive Chairman of the Board.

Still, after a strong first half performance amid a historic economic reopening, many on Wall Street expect smaller and more troubled gains for the remainder of the year. The S&P 500 is up nearly 16% since the start of the year.

“The US economy is booming, but we know it by now and the asset markets reflect it. Which is no longer so clear what price this growth will come at, “said Michael Wilson, chief strategist for US equities at Morgan Stanley, in a note. “Higher costs mean lower profits, another reason the stock market has narrowed overall … Stock markets will likely pause this summer as things heat up.”

Wall Street’s consensus year-end target for the S&P 500 is 4,276, a loss of nearly 2% from current levels of 500 stocks, according to the CNBC Market Strategist Survey, which rounds up the forecasts of 16 top strategists.

“Everything is perfect and that worries me,” said Sarat Sethi, portfolio manager at DCLA, in CNBC’s “Squawk Box” on Tuesday. “We’ve had a 5% correction since October, that’s it. I think we’re in a little bit of euphoria in the short term. We have to be careful and I think you want to be in secular growth.” Companies, don’t just chase the market because I think the market will be very picky about which sectors will do well. “

U.S. shares in Chinese ride-hailing giant Didi plummeted as much as 25% after China said new users would not be able to download the app until a cybersecurity clearance was conducted. The announcement surprised the markets as Didi only made his US debut on the NYSE last week.

West Texas Intermediate crude oil rose to a six-year high after an important meeting between the oil producing group OPEC and its partners on crude oil exploration policy was canceled. The postponement came when the United Arab Emirates rejected a proposal to extend oil production increases for a second day. At some point on Tuesday, WTI crude oil hit as high as $ 76.98, the highest price since November 2014 after pulling back before the opening bell.

Investors await the release of the June Federal Open Markets Committee’s minutes of the June meeting for clues to the central bank’s behind-the-scenes discussions on the abolition of its quantitative easing program.

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A French Teenager’s Anti-Islam Rant Unleashed Demise Threats. Now 13 Are on Trial.

PARIS – The 16-year-old French woman shared very personal details about her life, including her attraction to women, on a livestream on Instagram. Just no black or Arab women, she said.

When in January 2020 her Instagram account received insults and death threats in response to her comments, some of which said it was an affront to Islam, teenage Mila dug in and quickly posted another video.

“I hate religion,” she said. “The Koran is a religion of hatred.” She also used profanity to describe Islam and the crudest of images to refer to God.

The subsequent onslaught of threats after the video went viral brought 13 people to justice for online harassment.

The case has put the spotlight on the heated French debate over freedom of expression and blasphemy, especially when it comes to Islam. It is also a landmark test of recent legislation expanding France’s definition of cyber-harassment in relation to attacks on the internet, where vitriol is abundant but less modulated debate.

“We set the rules for what is acceptable and what is not,” said Michaël Humbert, the presiding judge, at the hearing.

Some looked back into history to capture the brutality of what Mila was witnessing online. Mila’s attorney said she had been digitally stoned. The prosecutor spoke in the case of a “Lyncherei 2.0”.

More than a year after Mila – the New York Times withholds her last name for being the subject of harassment – posted her videos, her life remains in a turmoil. She lives under police protection and no longer goes to school in person.

The 13 accused, some of whom are teenagers themselves, are on trial in Paris, most of them charged with death threats. You face jail time. The verdict is expected on Wednesday.

Most defendants have regretted the tone of their online comments – but the case has taken on a life of its own.

It exposed the deep polarization in French society over freedom of expression following the terrorist attacks on Charlie Hebdo, the satirical newspaper that published the cartoons of the Prophet Muhammad, and the decapitation last year of a teacher who showed similar cartoons during a class Discussion about freedom of expression.

Some of the defendants said they had no intention of harassing or threatening Mila. They were just kidding, venting, or trying to attract followers, they said.

But many of the comments were extremely snappy. The process only affects messages sent in November after Mila posted another video describing her continued online harassment – and reiterating some of her own crude imagery that sparked a flurry of new digital attacks.

When the presiding judge read some of them out loud at the trial, they made them gasp.

One of an 18-year-old psychology student named N’Aissita said: “It would be a real pleasure for me to tear your body apart with my finest knife and let it rot in the forest.” Another of a 19-year-old aspiring customs officer named Adam said, “Someone is going to come to your home, someone is going to tie you up and torture you.”

(A court clerk refused to fully identify the defendants to the Times; it is customary in France, especially in cases involving juveniles, not to publish the names of defendants unless they are public figures. )

Mila has repeatedly said that she does not want to be co-opted by politicians of any ideology. But many conservatives have stood up for her cause, and she says she feels abandoned by feminist and LGBTQ advocacy groups, accusing them of being afraid to defend their right to criticize religions for fear of offending Muslims.

“I am being abandoned by a fragile and cowardly nation,” she said.

For Mila’s defenders, the virulence directed against them shows that France’s model of secularism and freedom of expression is under attack.

“We went crazy,” said President Emmanuel Macron in an interview last year when asked about Mila. In France any religion could be criticized, “and because of this criticism we must not tolerate violence”.

Mr Macron himself was at the center of the violent tug-of-war over French values ​​and the treatment of its Muslim citizens. He has vowed to defeat Islamist “separatism” or the undermining of French values ​​of secularism and freedom of expression. Several terrorist attacks in the past year have hardened the mood in French society towards extremists in their midst and aroused fear among some French Muslims that they would be unjustly stigmatized.

In a television interview several weeks after her first video, Mila said that she was targeting Islam as a religion, not those who practice it in peace, and she apologized for hurting these people with her comments.

That’s an important difference in France, which criminalizes some hate speech but doesn’t prohibit blasphemy. The law distinguishes between ridiculing a religion and vilifying its believers. On this basis, prosecutors quickly closed an investigation they had opened against Mila on suspicion of incitement to racial hatred.

Instead, based on the Cyber ​​Harassment Act passed in 2018, the police opened an investigation into those who followed them online. The law allows prosecutors to seek convictions against molesters who knew they were contributing to a wider wave of abuse, even if they didn’t coordinate with each other and even if they only posted or sent a comment.

In a recent book, Mila went back on some of her regrets, saying that at the time of the television interview, she was desperate to calm the situation but should not apologize for the legal use of her freedom of speech.

The defendants were charged with online harassment, which resulted in a prison sentence of up to two years and a fine of € 30,000, or nearly $ 36,000. Those charged with death threats face up to three years in prison and a fine of 45,000 euros.

Defense lawyers asked why these 13 were chosen when thousands of people attacked Mila online.

The prosecutor said he expected to hold others accountable as well.

“Social media is not a lawless wild west,” said prosecutor Grégory Weill, who heads a new office that deals with hate speech and online harassment across France.

Nevertheless, Mr. Weill requested only short suspended sentences for 12 of the defendants, all of whom were first-time offenders. (He recommended that the charges against the 13th be dropped.) The court could be more severe in all of the sentences it imposes.

For two long days last month, the case against the 13 unfolded in a crowded courtroom.

Mila’s mother said her daughter experienced an endless “tsunami” of news that caused nightmares, depression and trauma. Mila fought vigorously against critics, but also in tears.

“I feel like I have rows of knives in my back all the time,” she said.

She turned down suggestions to leave social media, where she still clashes with critics, but also posts typical teenage content, like videos of herself lip-syncing songs.

“I see it like a woman who was raped on the street and who is told not to go out again so that she doesn’t get raped again,” said Mila. She added that she doesn’t like all religions, not just Islam.

Richard Malka, Mila’s attorney, castigated the defendants as easily offended, but slow to realize the consequences of their actions.

“You made them all radioactive,” said Mr. Malka. “You condemned her to loneliness.”

Although some of the defendants claimed to be Muslim, some of them claimed to be atheists. Some said Mila’s comments pissed them off because they had Muslim friends or found their videos disrespectful, which made them stop thinking.

“I reacted in the heat of the moment,” said Axel, a 20-year-old from southwest France, in court. “I don’t pay attention to religion, but all religions should be equal and respected.”

One of the defendants, Corentin, a 23-year-old school observer, said he could not understand religious intolerance. In his Twitter post wishing Mila would die, Corentin said he was not a criminal offense because he was “knowledgeable and an unbeliever”.

And when Mila’s attorney argued that religions deserve no respect and that respecting religious beliefs “leads to horror,” disagreed with N’Aissita, the psychology student who wrote about Mila’s knife.

“If religious beliefs had been respected, we wouldn’t be here,” she replied.

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Asia-Pacific shares edge increased; Australia central financial institution’s fee choice forward

SINGAPORE — Shares in major Asia-Pacific markets edged higher on Tuesday morning as investors look ahead to the Australian central bank’s interest rate decision.

The Nikkei 225 and Topix index in Japan both rose fractionally in morning trade. Over in South Korea, the Kospi gained 0.24%.

Meanwhile, stocks in Australia climbed as the S&P/ASX 200 advanced 0.22%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.08% higher.

Looking ahead, the Reserve Bank of Australia is set to announce its interest rate decision at 12:30 p.m. HK/SIN on Tuesday.

Stock picks and investing trends from CNBC Pro:

US crude futures jump

U.S. crude futures jumped in the morning of Asia trading hours on Tuesday, rising 1.57% to $76.34 per barrel. International benchmark Brent crude futures were fractionally higher at $77.19 per barrel.

Shares of Asia-Pacific firms in the oil space rose in Tuesday morning trade, with Australia’s Beach Energy rising 1.57% while Santos gained 1.44%. Shares of Inpex in Japan also jumped 1.19%.

Oil prices surged to multiyear highs on Monday after talks between OPEC and its oil-producing allies, known as OPEC+, were postponed indefinitely following a failure by the group to reach on agreement on production policy for August and beyond.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.241 — off levels above 92.4 seen late last week.

The Japanese yen traded at 110.86 per dollar after touching levels around 110.8 against the greenback yesterday. The Australian dollar changed hands at $0.7541, above levels below $0.752 seen yesterday.

Here’s a look at what’s on tap:

  • Australia: Reserve Bank of Australia’s interest rate decision at 12:30 p.m. HK/SIN

— CNBC’s Pippa Stevens contributed to this report.

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Covid-19 and Vaccine Information: Reside Updates

Here’s what you need to know:

Credit…Pool photo by Frank Augstein

Prime Minister Boris Johnson said Monday that the government will likely lift most remaining Covid restrictions in England on July 19, and that he would likely leave it up to people to decide whether to keep wearing masks in subways, buses, and other confined spaces.

Mr. Johnson detailed plans for lifting the restrictions and loosening some travel rules at a news conference on Monday evening, stressing that a final decision on ending most pandemic limits would be made on July 12.

The announcement was met with both hope and trepidation. Although emerging variants have caused the number of infections in the country to rise in recent weeks, so far that has yet to be followed by a commensurate rise in hospital admissions or deaths — a sign Mr. Johnson and his advisers said that the vaccines are working.

“There’s only one reason why we can contemplate going ahead to Step 4 in circumstances where we’d normally be locking down further and that’s because of the continuing effectiveness of the vaccine rollout,” Mr. Johnson said.

Ahead of his address, Mr. Johnson had said people in the country had to “learn to live with this virus.”

And Monday evening, Mr. Johnson said beginning the July 19, the government will “move away from legal restriction and allow people to make their own decisions on how to manage the virus.”All businesses will be allowed to open. Social distancing and face coverings will no longer be mandatory, though, Mr. Johnson said there would be guidance for people who may wish to wear masks. Working from home guidance will no longer be in place.

The full reopening had been scheduled to take place last month, but was delayed because of worries over the more contagious Delta variant. The number of infections in the country has risen in recent weeks — primarily among younger people, who have only recently become eligible for vaccination. But 86 percent of adults in England have received at least one vaccine dose, among the highest rates in the world.

Organizers of nightlife and live events, which have largely fallen silent during the pandemic, had lobbied against further delays. Though many venues remain closed, Wembley Stadium will host the semifinals and finals of the European Championship soccer tournament in the coming days, with as many as 60,000 people allowed to attend if they show proof of vaccination or a negative virus test.

There are concerns, however, that the large gatherings will lead to further outbreaks. More than 2,000 people in Scotland tested positive for the virus last week after watching a Euro 2020 game at a stadium, fan zone or pub, according to National Health Scotland — nearly two-thirds of which were linked to a Euro 2020 game in London.

With England’s full reopening, restaurants and pubs will be able to serve more patrons, and limits on gatherings like weddings will be removed.

Britain reported over 24,000 new daily cases on Sunday, the highest number since early February, though the rates of hospitalizations and deaths remain low. And medical experts had urged officials to maintain some regulations, including mandatory face coverings and guidance on social distancing.

“It’s not a binary decision of all or nothing,” said Dr. Chaand Nagpaul, the chair of the British Medical Association Council, adding that such measures would minimize the impact of rising infections.

England has accelerated efforts to vaccine younger people in recent weeks, and officials said they were working on a program to offer booster shots to people over 50 and other vulnerable people this coming winter.

Scotland, Wales and Northern Ireland are working on separate, though similar timelines to also fully reopen the economy in their nations.

President Biden said on Sunday that getting vaccinated against the coronavirus was “the most patriotic thing” that Americans could do. In remarks addressed to a crowd attending a Fourth of July party on the White House’s South Lawn, and broadcast nationally, he said the United States was emerging from the darkness of the pandemic but stressed that the country was not yet fully clear of it.

He singled out the Delta virus variant as a particular threat.

Mr. Biden had hoped to turn the Fourth of July into a celebration not just of the nation’s independence, but also of reaching his administration’s ambitious goal to have 70 percent of adults at least partly inoculated against the coronavirus before the holiday.

He didn’t quite make it. As of Friday, about 67 percent of people in the country 18 and older had gotten at least one vaccine dose, according to a New York Times tracker. Almost 60 percent of adults were fully vaccinated, and the highly contagious Delta variant was creating hot spots, particularly in states with low vaccination rates, like Missouri.

The shortfall did not dampen the White House’s outlook. The president had pressed ahead with an optimistic message, signaling that this year’s July Fourth celebration would be about “independence from the virus” and a return to some semblance of normal life.

On Saturday, Mr. Biden visited Traverse City, Mich., as part of what the White House called the “America’s Back Together” celebration. On Sunday, he and his wife, Jill Biden, hosted a party whose invitation list included 1,000 military personnel and essential workers, on whom Mr. Biden lavished thanks during his speech.

A sense of a new day seems to be shared by many Americans, who returned to prepandemic Fourth of July rituals in droves, flocking to the roads and the skies in the stiffest test yet for the nation’s travel infrastructure since the pandemic mostly shut it down in March 2020.

The Transportation Security Administration screened 2.197 million people on July 3, the most since March 5, 2020, about a week before the World Health Organization declared a pandemic.

Despite the new variant’s spread, reports of new cases across the country have been holding steady at 12,000 a day, the lowest since testing became widely available. The U.S. average of fewer than 300 daily deaths from Covid-19 is a decline of 23 percent over the past two weeks. Hospitalizations are also dropping.

Some public health experts cautioned, however, that scenes of celebrations might send the wrong message when wide swaths of the population remain vulnerable.

The continuing threat was brought into sharp focus on Saturday when the authorities announced that six emergency medical workers helping with rescue efforts at the site of a collapsed condo in Surfside, Fla., had tested positive.

On Friday, Mr. Biden urged people who have yet to get vaccinated to “think about their family” and get a shot as the Delta variant spreads.

“I am concerned that people who have not gotten vaccinated have the capacity to catch the variant and spread the variant to other people who have not been vaccinated,” he said. “Don’t just think about yourself.”

An employee wearing a mask at a restaurant in New York last month while patrons were free to go without face coverings..Credit…Sara Messinger for The New York Times

In the weeks since the Centers for Disease Control and Prevention revised its mask guidelines to allow fully vaccinated people to take their masks off in most indoor settings, a stark divide has emerged, particularly in wealthier enclaves where services are at a premium.

Those still wearing masks tend to be members of the service class — store clerks, waiters, janitors, manicurists, security guards, receptionists, hair stylists and drivers — while those without face coverings are often the well-to-do customers being wined and dined.

Employers are hesitant to discuss their mask policies, but there are sensible reasons for requiring staffers to keep their masks on.

Just under 50 percent of people in the United States are fully vaccinated. And coronavirus variants, some of which are highly infectious and may be more resistant to vaccines, are on the rise, said Dr. Lisa Maragakis, an epidemiologist and associate professor at Johns Hopkins University.

Food servers, retail clerks, grocery cashiers and other public-facing workers interact all day with customers, which can put their health (and the health of their customers) at risk. This creates not only potential liability issues for employers, but also could hamstring a business at a time of worker shortages.

Even at establishments that give vaccinated employees the choice to take their masks off, many are keeping them on. “Who knows who has had their shot and who hasn’t,” said Michelle Booker, a store clerk from the Bronx who works at a Verizon store in Midtown Manhattan.

An overnight vaccination drive for people on the margins of society, called Open Night, in Rome on Saturday.Credit…Giuseppe Lami/EPA, via Shutterstock

Nearly 900 people tried to take advantage of an overnight vaccination drive, called Open Night, over the weekend in an inoculation effort organized by the health authorities in the Lazio region of Italy, which includes Rome.

The initiative, organized in a cloister of the Santo Spirito hospital, near the Vatican, was targeted at “people on the margins of society, the most fragile,” said Angelo Tanese, the director general of ASL Roma 1, the region’s largest local health unit.

To help draw in the crowds, a jazz pianist serenaded those present on Saturday night, while free espresso and cornetti — Italian croissants — were offered on Sunday morning.

Doctors and nurses administered the Johnson & Johnson vaccine to homeless people, undocumented migrants, foreign students and foreigners who legally work in Rome but are not registered with the national health service.

Johnson & Johnson’s vaccine, which requires only one dose — unlike the two-shot regimens made by AstraZeneca, Moderna and Pfizer-BioNTech — is especially useful for inoculating people who may be harder to reach or may not return for a second dose. About 80 percent of the people at the Santo Spirito clinic were undocumented migrants, Mr. Tanese said.

As of Sunday, nearly 20 million people in Italy had been fully vaccinated — about 32 percent of the total population.

A protest including stagehands in front of he Metropolitan Opera in New York in May.Credit…Angela Weiss/Agence France-Presse — Getty Images

The Metropolitan Opera has reached a tentative agreement for a new contract with the union that represents its stagehands, increasing the likelihood that the company will return to the stage in September after its longest shutdown ever.

The company’s roughly 300 stagehands were locked out late last year because of a disagreement over how long and lasting pandemic pay cuts would be. But the opera house is in desperate need of workers to prepare its complex operations if it is to reopen in less than three months.

Pressure on the talks had increased as the two sides negotiated for nearly four weeks.

The Met, which says it has lost more than $150 million in revenue since the pandemic forced it to close in March 2020, has asked for significant cuts to the take-home pay of union members.

Peter Gelb, the company’s general manager, has said that in order to survive the pandemic and prosper beyond it, the company must cut payroll costs for those unions by 30 percent, effectively cutting take-home pay by about 20 percent. Union leaders have resisted the proposed cuts, arguing that many of its members already went many months without pay.

The discount carrier BoltBus is folding because of low ridership during the pandemic.Credit…Eduardo Munoz/Reuters

BoltBus, the bus service known for offering its passengers Wi-Fi and $1 lottery seats, is shutting down operations indefinitely after months of low ridership during the pandemic, according to Greyhound, its parent company.

The discount bus operator said last month that it was transferring most of its routes to Greyhound in order to “undergo renovations.” BoltBus had suspended service earlier in the pandemic, but its parent company said last week that the operator had no plans to put its buses back on the road.

“Currently there is not a timeline to return BoltBus operations,” Emma Kaiser, a Greyhound spokeswoman, told The Seattle Times.

Greyhound, which operates the largest intercity bus fleet in North America, teamed up with Peter Pan Bus Lines in 2008 to start BoltBus. The companies wanted to offer an affordable ride to people put off by grubbier alternatives.

At least one seat on every BoltBus ride sold for $1 plus a booking fee. Passengers could reserve seats, unlike on Greyhound. BoltBus offered passengers Wi-Fi, individual power outlets and extra legroom, according to its website.

Other cheap intercity bus operators that are still running, including FlixBus, Peter Pan and Megabus, may see a surge in riders, because domestic travel is on the rise as pandemic restrictions loosen.

Credit…Trisha Krauss

Millions of Americans decided that this past year was an opportune time to rip out some walls and build a new kitchen, bathroom or addition.

For those who muscled through and stayed in their homes while the work was underway, the experience was of a 24-7 construction site. With offices closed, conference calls took place against a noisy backdrop of hammering and sanding. So much for Zoom school when the Wi-Fi goes down without warning. Need a quick meal because the kitchen is gutted down to the studs? It’s not so easy when restaurants are closed for indoor dining.

Rajiv Surendra, a calligrapher and actor in his early 30s who is best known for his role in the 2004 movie “Mean Girls,” renovated the kitchen in his Upper West Side one-bedroom last year. He installed wainscoting, sanded cabinets, and made bracket shelves and a peg rail by hand. With his entire apartment turned into a work site, he had almost no space that felt like his own.

So he found something that could mentally take him away from a space he rarely left. Every night, he would spend two hours practicing the harp and the piano, teaching himself Chopin’s Nocturne Op. 9 No. 2. “That was a very good thing, for me to get my mind away from that stuff,” he said.

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PM Boris Johnson to disclose England’s lockdown-lifting plan at 5pm

England fans celebrate after winning 4-0 in the UEFA EURO 2020 quarter-final soccer match between Ukraine on July 3, 2021 in London, United Kingdom.

Anadolu Agency | Anadolu Agency | Getty Images

LONDON – UK Prime Minister Boris Johnson will detail the final steps to ease UK lockdown rules on Monday.

New guidelines on the 1-meter social distancing rule, face covering, visiting nursing homes and working from home will be announced, the government said on Sunday. A government minister told the BBC over the weekend that some rules, such as wearing masks, would become a personal choice if restrictions were relaxed.

Johnson is expected to reiterate that Covid will become “a virus that we are learning to live with as we already do with the flu,” Downing Street said in a statement released on Sunday evening.

“Freedom Day” – or “Step 4” in the government’s long-term plan to ease restrictions – will take place on July 19, when the government’s “four tests” to ease Covid restrictions are met, Johnson will also note.

The tests include examining data to confirm that vaccine delivery is continuing successfully and that infection rates do not risk an increase in hospital admissions. These will be assessed on July 12, the government said after reviewing the latest data.

The lifting of restrictions in England was previously slated for June 21, but was delayed as the highly transferable Delta variant spread across the UK

While infection rates have increased, hospitalizations and deaths have not increased, suggesting that coronavirus vaccines are helping to prevent serious infections.

The UK government has previously signaled reluctance to maintain restrictions longer than strictly necessary. This is despite some concerns among medical professionals and opposition politicians that the restrictions could be lifted too quickly if the variant spreads across the UK, Europe and beyond.

In comments posted on Sunday, Johnson admitted that “the pandemic is not over yet and that cases will continue to increase in the coming weeks”.

“We must all continue to be careful with the risks of Covid and use judgment in our lives,” he said, adding that “thanks to the successful launch of our vaccination program, we are carefully following our roadmap (to lift the lockdown). . Today we are going to set out how we can restore people’s freedoms. “

The UK’s Covid vaccination program was one of the fastest in the world, with 86% of the adult population now receiving a first dose of a vaccine and 63.8% two doses, government data shows.

The Prime Minister will announce the details of the lifting of lockdown rules in England in a press conference on Monday afternoon, due to begin around 5 p.m. London time. At the same time, Health Minister Sajid Javid will present the plans to parliament.

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The Tech Chilly Warfare’s ‘Most Difficult Machine’ That’s Out of China’s Attain

SAN FRANCISCO — President Biden and many lawmakers in Washington are worried these days about computer chips and China’s ambitions with the foundational technology.

But a massive machine sold by a Dutch company has emerged as a key lever for policymakers — and illustrates how any country’s hopes of building a completely self-sufficient supply chain in semiconductor technology are unrealistic.

The machine is made by ASML Holding, based in Veldhoven. Its system uses a different kind of light to define ultrasmall circuitry on chips, packing more performance into the small slices of silicon. The tool, which took decades to develop and was introduced for high-volume manufacturing in 2017, costs more than $150 million. Shipping it to customers requires 40 shipping containers, 20 trucks and three Boeing 747s.

The complex machine is widely acknowledged as necessary for making the most advanced chips, an ability with geopolitical implications. The Trump administration successfully lobbied the Dutch government to block shipments of such a machine to China in 2019, and the Biden administration has shown no signs of reversing that stance.

Manufacturers can’t produce leading-edge chips without the system, and “it is only made by the Dutch firm ASML,” said Will Hunt, a research analyst at Georgetown University’s Center for Security and Emerging Technology, which has concluded that it would take China at least a decade to build its own similar equipment. “From China’s perspective, that is a frustrating thing.”

ASML’s machine has effectively turned into a choke point in the supply chain for chips, which act as the brains of computers and other digital devices. The tool’s three-continent development and production — using expertise and parts from Japan, the United States and Germany — is also a reminder of just how global that supply chain is, providing a reality check for any country that wants to leap ahead in semiconductors by itself.

That includes not only China but the United States, where Congress is debating plans to spend more than $50 billion to reduce reliance on foreign chip manufacturers. Many branches of the federal government, particularly the Pentagon, have been worried about the U.S. dependence on Taiwan’s leading chip manufacturer and the island’s proximity to China.

A study this spring by Boston Consulting Group and the Semiconductor Industry Association estimated that creating a self-sufficient chip supply chain would take at least $1 trillion and sharply increase prices for chips and products made with them.

That goal is “completely unrealistic” for anybody, said Willy Shih, a management professor at Harvard Business School who studies supply chains. ASML’s technology “is a great example of why you have global trade.”

The situation underscores the crucial role played by ASML, a once obscure company whose market value now exceeds $285 billion. It is “the most important company you never heard of,” said C.J. Muse, an analyst at Evercore ISI.

Created in 1984 by the electronics giant Philips and another toolmaker, Advanced Semiconductor Materials International, ASML became an independent company and by far the biggest supplier of chip-manufacturing equipment that involves a process called lithography.

Using lithography, manufacturers repeatedly project patterns of chip circuitry onto silicon wafers. The more tiny transistors and other components that can be added to an individual chip, the more powerful it becomes and the more data it can store. The pace of that miniaturization is known as Moore’s Law, named after Gordon Moore, a co-founder of the chip giant Intel.

In 1997, ASML began studying a shift to using extreme ultraviolet, or EUV, light. Such light has ultrasmall wavelengths that can create much tinier circuitry than is possible with conventional lithography. The company later decided to make machines based on the technology, an effort that has cost $8 billion since the late 1990s.

The development process quickly went global. ASML now assembles the advanced machines using mirrors from Germany and hardware developed in San Diego that generates light by blasting tin droplets with a laser. Key chemicals and components come from Japan.

Peter Wennink, ASML’s chief executive, said a lack of money in the company’s early years had led it to integrate inventions from specialty suppliers, creating what he calls a “collaborative knowledge network” that innovates quickly.

“We were forced to not do ourselves what other people do better,” he said.

ASML built on other international cooperation. In the early 1980s, researchers in the United States, Japan and Europe began considering the radical shift in light sources. The concept was taken up by a consortium that included Intel and two other U.S. chip makers, as well as Department of Energy labs.

ASML joined in 1999 after more than a year of negotiations, said Martin van den Brink, ASML’s president and chief technology officer. Other partners of the company included the Imec research center in Belgium and another U.S. consortium, Sematech. ASML later attracted big investments from Intel, Samsung Electronics and Taiwan Semiconductor Manufacturing Company to help fund development.

That development was made trickier by the quirks of extreme ultraviolet light. Lithography machines usually focus light through lenses to project circuit patterns on wafers. But the small EUV wavelengths are absorbed by glass, so lenses won’t work. Mirrors, another common tool to direct light, have the same problem. That meant the new lithography required mirrors with complex coatings that combined to better reflect the small wavelengths.

So ASML turned to Zeiss Group, a 175-year-old German optics company and longtime partner. Its contributions included a two-ton projection system to handle extreme ultraviolet light, with six specially shaped mirrors that are ground, polished and coated over several months in an elaborate robotic process that uses ion beams to remove defects.

Generating sufficient light to project images quickly also caused delays, Mr. van den Brink said. But Cymer, a San Diego company that ASML bought in 2013, eventually improved a system that directs pulses from a high-powered laser to hit droplets of tin 50,000 times a second — once to flatten them and a second time to vaporize them — to create intense light.

The new system also required redesigned components called photomasks, which act like stencils in projecting circuit designs, as well as new chemicals deposited on wafers that generate those images when exposed to light. Japanese companies now supply most of those products.

Since ASML introduced its commercial EUV model in 2017, customers have bought about 100 of them. Buyers include Samsung and TSMC, the biggest service producing chips designed by other companies. TSMC uses the tool to make the processors designed by Apple for its latest iPhones. Intel and IBM have said EUV is crucial to their plans.

“It’s definitely the most complicated machine humans have built,” said Darío Gil, a senior vice president at IBM.

Dutch restrictions on exporting such machines to China, which have been enforced since 2019, haven’t had much financial impact on ASML since it has a backlog of orders from other countries. But about 15 percent of the company’s sales come from selling older systems in China.

In a final report to Congress and Mr. Biden in March, the National Security Commission on Artificial Intelligence proposed extending export controls to some other advanced ASML machines as well. The group, funded by Congress, seeks to limit artificial intelligence advances with military applications.

Mr. Hunt and other policy experts argued that since China was already using those machines, blocking additional sales would hurt ASML without much strategic benefit. So does the company.

“I hope common sense will prevail,” Mr. van den Brink said.

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France’s structural issues have been uncovered by the pandemic

A couple, one of them on their smartphone, is enjoying the view of the Eiffel Tower at sunset in Paris on February 23, 2021.

Ludovic Marin | AFP | Getty Images

France may still be in the middle of the coronavirus pandemic as the Delta variant is spreading rapidly, but officials and business leaders are looking to a period of recovery and reflecting the broader prospects for France’s political and economic future.

“The recovery is very steep, but even steeper than last year. So we are very happy with it,” said Agnès Bénassy-Quéré, chief economist at the French finance ministry, to CNBC on Sunday, pointing out that the national statistics office is raising its growth forecast for France to 6% in 2021.

“The official forecast for 2021 is still 5% because we are still cautious about autumn. As you said, there is a Delta variant and we kept some restrictions until the end of the year. So already in spring, when this forecast was made, it contained some restrictions, slight restrictions of the second half of the year. So far we haven’t changed that forecast, then we’ll see what happens when we have to do the 2022 budget, “he said, speaking with CNBC’s Charlotte Reed while attending an economic forum in Aix-en-Provence.

Of course, the Covid-19 pandemic has left a lot of devastation and no less in France, where over 5.8 million infections and over 111,000 deaths have so far been recorded, according to Johns Hopkins University.

Like other countries, France put in place emergency measures to support the economy, businesses and employment during the pandemic, and there are now some concerns that reducing that support could lead to job losses and the closure of some businesses.

Bénassy-Quéré said the government has been “very cautious” but the labor market is currently resilient.

“There is a rejuvenation, a gradual phasing out of support, the emergency aid, which comes gradually over the course of the summer. And there will still be some support, for example [the] Long-term unemployment scheme, which also applies in the fall for activities like [the] Aircraft industry where we really want to keep the skills in the industry and so there will be some retraining programs. “

However, he found that while activity in some industries was above pre-crisis levels, some lagged behind, such as tourism. In addition to the uneven recovery, another problem for the government is that France’s mountain of debt has soared to a record high due to huge borrowing. At the beginning of the year, the French statistical office Insee reported that the national debt was 115.7% of GDP at the end of 2020, compared to 97.6% in 2019.

How France will pay off this mountain of debt is uncertain for now, as the government under President Emmanuel Macron will raise taxes just 10 months before the presidential elections. Whether Macron will undertake ambitious (and unpopular) reforms to modernize and simplify France’s sluggish pension system is also uncertain, given the pandemic situation.

So far, two rounds of regional elections in the last few weeks have dispelled expectations that the far-right National Rally – formerly known as the Front National – could do well in the national vote next year after a poor showing in the regions. Turnout was low on both rounds, leading some analysts to express concern about the level of voter dissatisfaction in France.

Valérie Rabault, President of the Socialist Group in the National Assembly, who also attended the Economic Assembly in Aix-en-Provence, told CNBC on Sunday that “French society has broken”, as evidenced by the low turnout in regional votes.

“We had local elections and less than 35% of the people voted, so that’s very low. This was the first time in France that so few people vote in local elections. For me it reflects … a kind of indifference on the part of the population to build a common project for France, for society, and that is the great challenge for us as politicians to be able to and have to tackle this issue [a] more positive message after the crisis, “she said, adding,” We have to define something, a common project that can unite people. “

Structural problems

Business leaders who attended the Aix-en-Provence Economic Forum told CNBC that there were structural problems in France that would not be easy to fix.

“The rifts that existed in French society are still there, be it the territorial divide, the generational divide and the very low percentage of voters as we saw in the last elections,” Pierre-André de Chalendar, Chairman of French building materials group Saint-Gobain, said CNBC on Saturday.

“The priorities are clear, (they are) the energy transition, reindustrialization – which is the best way to overcome this territorial gap – and to place more emphasis on the youth, on education. The question is how do we do it, and I think the problem in France is that the state as a whole is too big and not efficient enough. “

Ross McInnes, Chairman of Safran, agreed that “two important structural issues” should be addressed in France, the most important being the quality of education in France.

“When it comes to education, our school system has let us collectively,” he told CNBC. “Hundreds of thousands of young French people … drop out of secondary school with no good math, you know, the three ‘Rs’ of reading, writing, and arithmetic. And we urgently need to fix that in order to be able to recruit talent for good jobs. “

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Philippine Navy Airplane Crashes With 96 Folks Aboard

MANILA – A Philippine Air Force aircraft with 96 soldiers and crew on board crashed on the southern island of Jolo on Sunday, officials said. At least 31 people were killed, including two civilians on the ground, and it was feared that the number would rise.

The chief of the Philippine Armed Forces, General Cirilito Sobejana, said the plane missed a runway while attempting to land and crashed near a village called Bangkal in the city of Patikul, a stronghold of the Abu Sayyaf militant group.

Major General William Gonzales, the commander of Joint Task Force Sulu, said 50 people have been hospitalized and that “29 bodies have already been recovered from the scene of the accident.”

“We remain confident that we can find more survivors,” General Gonzales said in a statement. “Our search and rescue operations are still ongoing, 17 people are not known.”

Military officials said that in addition to the two civilians killed on the ground, four others were injured.

In addition to the 96 people on board the aircraft, a C-130 Hercules, there were also five military vehicles, officials said. The C-130, a US-built turboprop, is used by the military around the world and is sometimes kept in service for decades.

Defense Minister Delfin Lorenzana said he had “ordered a full investigation to get to the bottom of the incident once the rescue and recovery operation is complete”.

The plane, which crashed on Sunday, first flew in 1988 and was used by the United States Air Force until it was sold to the Philippines in January, according to the Philippine Air Force and a website that tracks C-130s around the world.

The Filipino military has tried to modernize its aging fleet. Last month, a newly acquired Black Hawk helicopter crashed during a night training flight, killing six people on board.

This crash occurred about two months after another helicopter, an MG-520 attack helicopter, crashed in the central Philippines, killing its pilot. And in January, a refurbished Vietnam War-era UH-1H helicopter crashed in the south, killing seven soldiers.

In 2008, a Philippine Air Force C-130 crashed into the sea shortly after taking off from Davao City on the southern island of Mindanao, killing nine crew members and two passengers on board.

The soldiers on the plane that crashed on Sunday were flown to Jolo to support the military’s operations against Abu Sayyaf, a small Islamist group that the Philippine government regards as a terrorist organization.

A faction of Abu Sayyaf sworn allegiance to the Islamic State has been blamed for the January 2019 bombing of a cathedral on Jolo, carried out by an Indonesian couple that killed at least 23 people. Filipino authorities believe a similar attack near the cathedral in 2020, killing 14, was carried out by the same Abu Sayyaf faction. Its leader, Hatib Hajan Zavadjaan, has reportedly been killed since then, and the military has stepped up operations against the group in hopes of eliminating them.

Austin Ramzy contributed the coverage from Hong Kong.

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Newport Wafer Fab set to be acquired by Chinese language-owned Nexperia

A close up image of a CPU socket and motherboard laying on the table.

Narumon Bowonkitwanchai | Moment | Getty Images

LONDON – Newport Wafer Fab, the U.K.’s largest chip producer, is set to be acquired by Chinese-owned semiconductor company Nexperia for around £63 million ($87 million) next week, according to two sources close to the deal who asked to remain anonymous because the information is not yet public.

Nexperia, a Dutch firm that is 100%-owned by China’s Wingtech Technology, told CNBC on Friday that the deal talks are ongoing.

Located in Newport, South Wales, privately-held NWF’s chip plant dates back to 1982 and it is one of just a handful of semiconductor fabricators in the U.K.

Nexperia is set to announce the takeover as soon as Monday or Tuesday, the sources said.

“We are in constructive conversations with NWF and Welsh Government about the future of NWF,” a Nexperia spokesperson said. “Until we have reached a conclusion we cannot further comment.”

NWF and Wingtech Technology did not immediately respond to CNBC’s request for comment.

I must stress again that having the U.K.’s leading 200mm silicon and semiconductor technology development and processing facility being taken over by a Chinese entity – in my view – represents a significant economic and national security concern.

Tom Tugendhat

chairman, Foreign Affairs Select Committee

The deal comes during a global chip shortage that has led countries to try and become more independent when it comes to semiconductor production. The vast majority of today’s chips are manufactured in Asia, with Taiwan’s TSMC, South Korea’s Samsung and China’s SMIC among the largest chip producers in the world.

Tom Tugendhat, leader of the U.K. government’s China Research Group and chairman of the Foreign Affairs Select Committee, said he was concerned about a potential takeover of NWF in a letter to U.K. Business Minister Kwasi Kwarteng in June.

“I must stress again that having the U.K.’s leading 200mm silicon and semiconductor technology development and processing facility being taken over by a Chinese entity – in my view – represents a significant economic and national security concern,” Tugendhat said.

He urged the U.K. government to review the deal under the National Security and Investment Act, which was introduced in April as part of an effort to protect the nation’s technology companies from overseas takeovers when there’s an economic risk or a security threat.

“This is the largest last remaining advanced semiconductor factory in England being sold to the Chinese and the British government aren’t doing s*** about it,” a source said, adding that they should at least try and get $1 billion for it.

A U.K. government spokesperson told CNBC: “We are aware of the expected takeover by Nexperia of Newport Wafer Fab. While we do not consider it appropriate to intervene at this time, we will continue to monitor the situation closely and will not hesitate to use our powers under the Enterprise Act should the situation change.”

They added: “We remain committed to the semi-conductor sector, and the vital role it plays in the UK’s economy.”

The £63 million price tag for NWF is much lower than the $900 million that Texas Instruments announced it will pay for a vacant Micron fab in the Utah this week.

NWF has several outstanding debts, including £20 million with HSBC and £18 million with the Welsh government, one of the sources said, adding that these will be paid off following the sale. Meanwhile, Drew Nelson, the CEO who became NWF’s majority shareholder after he acquired the business from Germany’s Infineon four years ago, will receive around £15 million, according to one person familiar with the terms.

NWF makes silicon chips that are used in power supply applications for the automotive industry, which has been hit particularly hard by the chip shortage. The company has also been developing more advanced “compound semiconductors,” which are faster and more energy efficient.

Under the deal, Nelson is being permitted to spin off the compound semiconductor part of NWF and he plans to reinvest his proceeds into this new venture, according to this person. He is also being permitted to keep the Newport Wafer Fab name.

Democracies scrutinize China takeovers

The deal comes after Cambridge chip designer Arm, often thought of as the jewel in the crown of the U.K. technology industry, agreed to be acquired by U.S. chip giant Nvidia for $40 billion. The takeover, however, is being probed by regulators around the world after rival Qualcomm and others objected.

With tensions mounting between China and the world’s democracies, other countries are investigating Chinese tech takeovers before they’re approved.

Earlier this month, South Korea launched a review after Beijing-based Wise Road Capital agreed a deal to buy semiconductor firm MagnaChip, saying it is a “national core technology.” The U.S. Department of Treasury also requested that parties involved in the transaction file notice with The Committee on Foreign Investment in the United States.

In March, the Italian government blocked Chinese firm Shenzhen Investment Holdings from acquiring a controlling stake in LPE, a Milan-headquartered semiconductor company, hailing it as a sector of “strategic importance.”

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A whole bunch of Companies, From Sweden to U.S., Affected by Cyberattack

Hundreds of businesses around the world, including one of Sweden’s largest grocery chains, grappled on Saturday with potential cybersecurity vulnerabilities after a software provider that provides services to more than 40,000 organizations, Kaseya, said it had been the victim of a “sophisticated cyberattack.”

Security researchers said the attack may have been carried out by REvil, a Russian cybercriminal group that the F.B.I. has said was behind the hacking of the world’s largest meat processor, JBS, in May.

In Sweden, the grocery retailer Coop was forced to close at least 800 stores on Saturday, according to Sebastian Elfors, a cybersecurity researcher for the security company Yubico. Outside Coop stores, signs turned customers away: “We have been hit by a large IT disturbance and our systems do not work.”

Mr. Elfors said a Swedish railway and a major pharmacy chain had also been affected by the Kaseya attack. “It’s totally devastating,” he said.

Asked about the cyberattack after he landed in Michigan on Saturday on a trip to celebrate Covid-19’s retreat in the United States, President Biden said he had been delayed in getting off the plane because he was being briefed about the attack. He said he had directed the “full resources of the federal government” to investigate. “The initial thinking was it was not the Russian government, but we’re not sure yet,” he said.

Victims of the breach were hit through a Kaseya software update, Kevin Beaumont, a threat researcher, said. Instead of getting Kaseya’s latest update, they received REvil’s ransomware. Kaseya was initially breached through a previously unknown vulnerability in its systems — known as a “zero day” because when such vulnerabilities are discovered, software makers have zero days to fix it. In the meantime, cybercriminals and spies can use the vulnerability to wreak havoc.

Mr. Beaumont said the attack marked a serious escalation in the tactics of ransomware gangs. In previous attacks, REvil was known to break in through a combination of phishing, stolen passwords or a lack of multifactor authentication.

Dutch researchers said they had reported the vulnerability to Kaseya, but the company was still working on a patch when it was breached and its software updates were compromised, according to people briefed on the timeline.

The attack became public on Friday, when Kaseya said that it was investigating the possibility that it had been the victim of a cyberattack. The company urged customers that use its systems management platform, called VSA, to immediately shut down their servers to avoid the possibility of being compromised by attackers.

“We are experiencing a potential attack against the VSA that has been limited to a small number of on-premise customers only,” Kaseya posted on its website, referring to organizations that keep their software at their own sites rather than housing it with a cloud provider. “We are in the process of investigating the root cause of the incident with the utmost vigilance.”

Fred Voccola, Kaseya’s chief executive, said in a statement on Saturday that less than 40 customers had been affected by the attack, but those customers include so-called managed service providers, which can each provide security and tech tools to dozens or even hundreds of companies.

That has magnified the attack’s severity, said John Hammond, a researcher at the cybersecurity company Huntress Labs.

“What makes this attack stand out is the trickle-down effect, from the managed service provider to the small business,” Mr. Hammond said. “Kaseya handles large enterprise all the way to small businesses globally, so ultimately, it has the potential to spread to any size or scale business.”

Some of the affected companies were being asked for $5 million in ransom, Mr. Hammond said. Thousands of companies were at risk, he said.

The United States Cybersecurity and Infrastructure Security Agency described the incident in a statement on its website on Friday as a “supply-chain ransomware attack.” It urged Kaseya’s customers to shut down their servers and said it was investigating.

Hackers have carried out a slate of prominent cyberattacks against U.S. companies in recent months, including JBS and Colonial Pipeline, which moves fuel along the East Coast. Both were ransomware attacks, in which hackers try to shut down systems until a ransom is paid. The video game company Electronic Arts was also recently hacked, but its data was not held for ransom.

Nicole Perlroth and David E. Sanger contributed reporting.