* UK Prime Minister Johnson’s leadership is hanging by a thread
* Demand for US workers still robust, according to private-sector estimates
* New covid outbreaks in China put millions under lockdown In China
* Will today’s release of Fed minutes support another 75-basis-point rate hike?
* US dollar’s international status remains unchallenged, Fed study finds
* Chinese automaker BYD overtakes Tesla world’s largest electric vehicle seller
* Oil fell below $100 on Tuesday for first time in almost two months
* US factory orders rose more than expected in May:

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Diversifying an equity portfolio based on risk factors has paid off this year, but only in relative terms, according to a set of ETF proxies. Across-the-board losses for equities have hammered portfolios in 2022, but the degree of red ink varies dramatically, depending on how you carved up factor exposure.

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* Macro outlook remains uncertain due to Ukraine war and inflation risks
* China economic activity rebounds sharply in June via PMI survey data
* Eurozone still posting modest economic growth in June via PMI survey data
* Germany reports first trade deficit in over 30 years
* Euro at 20-year low vs. US dollar as Eurozone recession risk rises
* Slower but still healthy growth expected for US payrolls in June

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So replied Benjamin Franklin, when asked, as he walked out of Independence Hall after the Constitutional Convention in 1787, to the question: “Doctor, what have we got? A republic or a monarchy?” Fast forward 235 years and the answer — and its caveat — remain no less germane.

● The Illusion of Control: Why Financial Crises Happen, and What We Can (and Can’t) Do About It
Jon Danielsson
Review via Foreign Affairs
“Not another book about financial crises!” one is tempted to exclaim. Fortunately, this is an exceptionally provocative and original addition to an ample literature. Drawing on the historical record, Danielsson explains why regulators have not been more successful at limiting financial instability. They tend to focus excessively on exogenous risks (shocks coming from outside the financial system) while neglecting endogenous risks—the destabilizing responses of the participants in financial markets to those same exogenous shocks and, no less, to regulatory action. Having been encouraged in the wake of past crises to develop numerical measures of financial risks, regulators tend to place excessive confidence in the accuracy of those numbers, which are better at predicting the last crisis than the next one, given the ever-changing nature of the financial system.

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As risk-off messages go, the markets couldn’t be any clearer in June. Losses weighed on every slice of the major asset classes, based on a set of proxy ETFs. Even cash took a hit, albeit a fractional one.

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* Supreme Court limits EPA rules for curbing power plant emissions
* US consumer spending growth slowed in May, raising concerns for economy
* US jobless claims hold steady, suggesting upbeat labor market outlook
* Eurozone mfg activity continues to slow, weakening to 22-month low in June
* Eurozone inflation hits record pace in June
* US dollar bucks the trend vs. most assets with a Q2 gain
* Atlanta Fed’s revised nowcast for US GDP turns negative for Q2:

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The answer depends on how you define “safe.” That’s a long conversation because every investor has a unique risk tolerance, time horizon and investment objective. What appears “safe” to you could frighten the hell out of your neighbor. Despite the caveats, we can at least start to think about how the odds stack up when the market takes a dive by crunching some numbers.

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* Putin says Russia will respond in kind to Nato expansion
* US economy shrank slightly more than previously estimated
* Fed Chair Powell reaffirms plans to combat inflation
* China mfg sector expands in June–first increase since Feb via PMI survey data
* US considers releasing more oil from the nation’s Strategic Petroleum Reserves
* Grayscale sues SEC over its rejection of firm’s bitcoin ETF
* US stock market still appears to be in bear market as Q2 winds down:

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No one knows, of course, but history can offer some perspective for what’s possible and so it’s useful to compare the current regime shift with previous runs of tighter policy.

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