Tech stocks record, Detroit 50 years on, song of the summer

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US tech stocks have surged past their dotcom bubble peak. Investor demand sent shares of companies including Facebook, Microsoft and Oracle into virgin territory. The S&P 500 information technology index, which measures the largest companies in the industry, rose for the ninth consecutive day, closing up 0.6 per cent at 992.29. That compares with the previous record of 988.49 on March 27 2000. The rally means all eyes will be on Microsoft today, when the world’s largest software company reports earnings.

It is 17 years since the crash of tech stocks after dotcom mania and the long, subsequent crawl back by the sector. “It’s not your father’s market. This is not what it was in Y2K,” one expert said. “Earnings are a lot more solid now.” But money managers are still hesitant on the sector. Banks have overtaken tech stocks as the most overweighted sector, according to Bank of America Merrill Lynch’s most recent fund manager survey. (FT, CNBC, Bloomberg)

In the news

US and China talk trade
The US ramped up talks with China on its trade deficit and steel imports. The intensified deliberations are part of the “Comprehensive Economic Dialogue” between Donald Trump’s team and their Chinese counterparts in Washington this week. Wednesday’s talks were “quite tough” one insider said, especially after the US was criticised for being outplayed by Beijing earlier this year. (FT)

Trump and Russia latest
Donald Trump has halted the covert arming of Syrian rebels, a move that is likely to please Russia. In the US, Mr Trump blasted his attorney-general Jeff Sessions for recusing himself from the Russia investigation in a wide-ranging interview with the New York Times. Finally, Donald Trump Jr, along with the former Trump campaign chairman Paul Manafort and son-in-law Jared Kushner, have been asked to testify in the Russia probe. Separatelyy, frequent Trump critic and US senator John McCain has been diagnosed with brain cancer. (WaPo, NYT, Guardian)

Poland and EU on collision course
Brussels warned it was “very close” to demanding that member states take unprecedented action against Warsaw for its moves to muzzle the country’s highest courts. Asking member states to issue a warning under Article Seven would be seen as highly confrontational — it is only one step short of stripping Poland of its EU voting rights. (FT)

Jaroslaw Kaczynski, leader of Poland’s ruling Law and Justice party, in parliament. Brussels and Warsaw have been at loggerheads since the party came to power in 2015 © EPA

Frankfurt’s latest Brexit win
Morgan Stanley has become the latest global bank to pick Frankfurt for its new EU trading headquarters after Brexit. The US headquartered bank will move 200 jobs to Frankfurt and another 100 to other EU cities. (Bloomberg)

Planet Plastic
More than 9bn tons of plastic has been produced since 1950, and the vast majority of it is still around according to a new US study. It’s as heavy as 25,000 Empire State Buildings in New York, or 1bn elephants, and there’s more than a tonne for every human on earth. (WaPo, BBC)

Turkish schools drop Darwin 
Turkey’s new school curriculum drops the theory of evolution and adds the concept of jihad as patriotic in spirit. The move has fuelled fears that populist President Recep Tayyip Erdogan is subverting the republic’s secular foundations. (Independent)

Wanted: US ambassadors in Europe
The Trump administration’s slow pace in appointing ambassadors, which has left major posts vacant around the world, is hampering the ability to carry out US policy. “Now is a bad time not to have an ambassador in Germany,” the top US Army commander in Europe said. (Politico)

The day ahead

ECB policy meeting
The European Central Bank’s governing council meets to discuss the strength of the region’s economic recovery. While no radical changes are expected to the central bank’s monetary policy, even the slightest shift in president Mario Draghi’s rhetoric could cause big movements in financial markets. The bank is buying €60bn-worth of bonds a month as part of its quantitative easing programme. (FT)

May meets CEOs
UK Prime Minister Theresa May hosts the first meeting of a new business council intended to increase the involvement of UK business in the government’s Brexit strategy. She will attempt to allay their concerns about the impact of Britain leaving the single market and customs union. (BBC)

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

How the developed world is losing its place (in seven charts)
Martin Wolf breaks down how the gap between rich and poor nations is narrowing as the sources of dynamism in high-income economies slow. (FT)

Corporate Japan’s final frontier 
Japanese companies are spending some of their $2bn cash reserves in space. From start-ups that clear space debris to companies launching micro-satellites, corporates are looking to the skies to invest their money. (NAR)

Saudi palace intrigue 
It was billed as a seamless transition. But new reports show that Mohammed bin Salman’s promotion to crown prince of Saudi Arabia last month was in fact a plot that involved Prince Mohamed’s uncle and predecessor being held in a palace and pressured to relinquish his title. There are fears that the young prince’s rapid rise could threaten stability in the volatile Gulf region. (NYT)

Song of the summer 
“Despacito” by Puerto Rican singer Luis Fonsi has become the most-streamed song of all time. The Spanish-language single has been played 4.6bn times across all streaming services. Its popularity confirms the importance of Latin America in the fast growing digital streaming industry. (FT)

Detroit 50 years on
It was the riot that helped change US race relations forever. And yet America is arguably more divided along racial lines now than at any time since 12th Street went up in smoke. The FT’s Patti Waldmeir goes back to her hometown to see what has — and has not — changed. (FT)

Hello Kitty maker goes anti-capitalist
Hello Kitty once represented the height of consumer culture. Now the Japanese consumer goods brand Sanrio, which debuted the catlike cartoon with infantile feminine charm in 1974, has a new character. Aggretsuko “is a symbol and expression of the pent-up stress and irritation that is rife in the world today”. Oh and she chugs beers and performs death metal karaoke. (NYT)

Video of the day

Robots and the world of work
Start-ups are redoubling efforts to disrupt the manufacturing process of textiles, as politicians push to bring factory jobs back to the US. Anna Nicolaou reports from New York. (FT)

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