FT : ‘Bar is high’ for China deals, says EQT’s Asia private equity chair

‘Bar is high’ for China deals, says EQT’s Asia private equity chair
Jean Salata, who oversees €40bn in assets, says dealmaking opportunities are better in India and Japan

The “bar is high” for investing in China and there are greater deal opportunities in India and Japan, the chair of private equity firm EQT’s Asia business said after raising a regional buyout fund.

Jean Salata, the founder of Barings Private Equity Asia, which Stockholm-based EQT bought in 2022, said that as it considered potential deals in mainland China, it was not clear how easily it might later sell or list those companies.

“I think the bar is high for new deals in China at the moment . . if you invest today, how easy will it be to get liquidity on those investments five years from now?” he told the Financial Times.

Although falling valuations in the country are “making that market more interesting”, Salata said his firm was “finding more companies that we want to invest in — and a higher concentration of those deals — in markets like India, Japan and Australia”.

Salata’s comments come as Asia-focused private capital groups are eschewing China for other markets amid slowing growth, rising geopolitical tensions and Beijing’s regulatory crackdown on overseas listings, once a crucial source of returns for foreign investors.

Foreign direct investment in China fell last year to its lowest level since the 1990s, while the total value of private equity deals plummeted from a high of $47.6bn in 2021 to $4.5bn last year, figures from Dealogic show. Overseas listings have tumbled after a regulatory crackdown in 2021. Last year, Beijing introduced rules requiring Chinese companies to get regulators’ approval before listing outside the country.


EQT’s private equity business in Asia has €40bn under management. Nine per cent of its invested cash is in China deals, according to a presentation to investors in March. Its deals in the country include ecommerce giant JD.com’s healthcare unit, in which it took a minority stake in 2019.

It closed a $1.6bn mid-market Asia growth fund last week and said it raised more than twice its original $750mn target. It has a separate $11.2bn Asia fund, which was raised in 2022. Salata said his firm tends to take majority stakes in target companies, whereas many private equity deals in China involve the sale of minority stakes.

Salata, who said his firm had been investing in India since 1997, said he had “never felt as positive or confident about the outlook in India as I do today”. He added that the country’s young population, growing middle class and infrastructure expansion were among the reasons to invest. Almost 40 per cent of EQT Private Capital Asia’s invested funds are in India, according to the investor presentation.

“It does really remind me of the golden period that China went through between 2005 and 2015, that sort of 10-year period,” he said. “It feels like India is in the middle of that right now.”

Salata said the country’s prime minister, Narendra Modi, “has provided some clarity and continuity for financial investors and business investors into the economy . . . and this has created a really favourable backdrop”.

There is “real fundamental support” for the hefty corporate valuations often seen in the country, he added.

Salata said corporate governance reforms and rising shareholder activism in Japan had created “a sea change, a mindset change” in the country.

“You’re seeing companies that previously would have been resistant to any approach or to engage with private equity actually embracing or at least being open-minded about what private equity could bring,” he said.

“There are companies that have sold divisions to private equity firms and have done so successfully. They didn’t get embarrassed, the company wasn’t sort of torn apart and highly levered.”

Private equity dealmaking globally has slowed in recent years, partly as a result of higher interest rates.

Salata said the industry, particularly in the US, had benefited from “market dynamics that led to a lot of multiple expansion and essentially a lot of market beta which drove returns”. He warned that those favourable conditions were unlikely to be repeated.

FT : UAE seeks ‘marriage’ with US over artificial intelligence deals

UAE seeks ‘marriage’ with US over artificial intelligence deals
Gulf state’s AI minister says recent investment deal between Microsoft and G42 is part of strategy to reshape its economy

The United Arab Emirates is seeking a “marriage” with the US over artificial intelligence as the Gulf state hopes to use its petrochemical wealth to become a global superpower in developing the cutting-edge technology.

The UAE’s AI minister Omar Sultan Al Olama told the Financial Times that a recent deal with Microsoft to acquire a $1.5bn stake in Abu Dhabi’s commercial AI champion G42 was only the start of greater tech collaboration between the two countries.

That deal, which followed months of negotiations between US and UAE officials, led to G42’s promise that it would dump Chinese systems as the US seeks to maintain dominance over AI.

“Now you’re going to see the outcomes of that marriage, if I may use that word, between both G42 and Microsoft, but also the UAE and the United States,” said Al Olama. “When you look at the frontier technology, at the most cutting edge, that needs to be in co-ordination with the US players and there needs to be reassurances that are given to the US.”

Fuelled by sovereign wealth funds worth about $2tn, the UAE’s AI ambitions have emerged into sharper focus this year as it tries to lower its economic dependence on fossil fuels in part by positioning itself as a global AI hub.

Abu Dhabi has created the investment vehicle MGX, expected to be worth billions of dollars, chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan.

MGX has been in talks with San Francisco-based OpenAI over its chip development plans, the Financial Times has reported, and Sheikh Tahnoon has spearheaded discussions between the UAE and US on AI.

The UAE is building AI capabilities in key sectors from healthcare to defence and believes that AI can help its biggest enterprises become more efficient. Abu Dhabi’s national oil company said the use of AI-tools helped to generate $500mn in cost savings last year through increasing production capacity and making operations more streamlined.

The UAE is up against stiff global competition. The US and China are battling to take a technological lead over AI, while start-ups in the UK, France and across Asia are attracting multibillion-dollar investment from international investors.

However, the UAE’s advantage is being able to provide unparalleled access to capital. Expectations that Abu Dhabi will invest heavily in AI projects overseas has also attracted industry leaders to the nation in recent months, from OpenAI’s Sam Altman to Nvidia’s Jensen Huang.

The UAE has stockpiled chips needed to power large language models, with Al Olama estimating the country had amassed a backlog that would serve its needs for two years. However, US officials are also seeking to slow the shipment of some AI chips to the Middle East, including the UAE, according to Bloomberg.


Some observers worry about the autocratic UAE having access to advanced AI technology.

Marietje Schaake, international policy fellow at Stanford University’s Institute for Human-Centered Artificial Intelligence, said US policy around AI had so far been pragmatic, narrowly focused on combating China. 

“The singular focus on China means other countries can claim to be part of a like-minded coalition, and the US administration gladly turns a blind eye to their human rights violations in the meantime,” said the former European parliament member.

This month, Abu Dhabi’s Advanced Technology Research Council released its latest large language model, Falcon 2, which it said has been assessed by outside evaluators as performing as well or better than rival LLMs made by Meta and Google.

ATRC has also spun out a commercial AI company, AI71, to build models based on UAE government data from health authorities and the judicial system.

The government data gives the UAE a “very strong critical advantage in this game, where there are very few players that have a lot of proprietary data”, said Faisal Al Bannai, ATRC’s secretary-general.

Abu Dhabi also opened Mohamed bin Zayed University of Artificial Intelligence, the world’s first AI dedicated university, in 2019.

The institute has helped establish a pipeline for talent in the UAE, a major challenge for the country of only 10mn, most of whom are expats. Though a fifth of the university’s graduate students are from the UAE, 22.5 per cent are from China, said the university’s provost Tim Baldwin.

While Abu Dhabi focuses on building AI technologies, its neighbouring emirate Dubai wants to apply them.

Dubai plans to increase its data centre capacities to host the cloud computing needed for AI and wants to foster AI “clusters” of companies around established industries such as finance.

“There is a belief, across all of the leadership levels in the UAE, that AI is a technology that we are going to focus on,” said Al Olama. “The decisions we take today [ . . .] are going to shape how the UAE is for future generations.”

FT : Meloni and Le Pen: the relationship at the heart of European politics

Meloni and Le Pen: the relationship at the heart of European politics
How Italy’s prime minister and France’s opposition leader work together — or not — will help determine the EU’s future direction

Campaigning at a crowded Sunday market in northern France, far-right leader Marine Le Pen was quizzed by journalists about her strategy for Europe if, as expected, she secures a big win in European parliamentary elections this weekend.

In response, Le Pen suggested that it might depend on another populist nationalist leader: Italian prime minister Giorgia Meloni.

After recent friction between the two, Le Pen issued a conciliatory, almost plaintive appeal to the Italian leader to unite their respective political forces into a single far-right group that could end what she called European Commission president Ursula von der Leyen’s “disastrous policies”.

“This is the moment for us to join forces; it would be truly useful,” Le Pen told Italian newspaper Corriere della Sera. “If we succeed, we could become the second-biggest group in the EU parliament. I don’t think we should miss such an opportunity.”

Just how Meloni answers that appeal could be decisive for Europe’s future. The two powerful women — whose parties belong to separate nationalist, anti-immigration blocs in the European parliament — are set to emerge as the biggest winners in the elections taking place on June 6-9, the twin figureheads of a rightward swing across the 27-member bloc.

The elections could tilt EU policy to the right on contentious issues ranging from the energy transition and agriculture to immigration. The ballot will also help determine the next commission president — whoever the 27 member states nominate must win the support of a majority of MEPs.

Meloni and Le Pen have much in common. Both women have thrived in the male-dominated ranks of far-right political movements historically rooted in fascism. Both have pursued a strategy of detoxifying their parties to make them more acceptable to a wider swath of their electorates. They share ideological ground, including the belief in a Europe of nation states rather than a more closely integrated federal union.

“There is a convergence and I would say competition between Meloni and Le Pen in terms of their ambitions,” says Marc Lazar, a professor at Sciences Po university in Paris and Luiss university in Rome. “Both of them are seeking to become the reference figure for national populist movements in the region”.

Yet on some issues their differences are stark — on relations with Nato, on arming Ukraine, on immigration, and most of all, on the question of whether to work within the EU system and its mainstream leaders, or whether to fight them.

Meloni is governing as a pragmatist “within the system”, says Lazar. Le Pen, a more radical opposition figure gunning for the French presidency in 2027, “is against the system and outside it”.

Since her own election as Italy’s prime minister in late 2022, Meloni, once a Eurosceptic firebrand, has surprised friends and foes alike with her collaborative and constructive approach to Brussels as it dispenses €200bn to Italy for its post-pandemic recovery, reform and investment programme.

Meloni sees herself as a “bridge-builder” between the mainstream right and the EU’s nationalist Eurosceptic forces such as Hungarian prime minister Viktor Orbán, says Catherine Fieschi, a visiting fellow at the European University Institute and an expert on populism. She is also an ideologue “who can see a path to true conservatism within Europe”, she adds.

The question now is what role Meloni decides to play after an election: the pragmatist eager to convene the forces of the right and centre-right, or a radical disrupter who wants to overhaul the EU to hand power back to nations. Von der Leyen’s future may rest on the former, while Le Pen and her allies are hoping for the latter.

“The future of the sovereigntist camp in Europe today lies in the hands of two women,” Orbán told Le Point magazine on May 30. “Everything will depend on the capacity of Marine Le Pen in France and Giorgia Meloni in Italy to co-operate.”

A decade ago, Meloni expressed strong admiration for Le Pen as a role model, given their shared hostility to EU integration. But in those days, Meloni was a political irrelevance, and Le Pen struck up a friendship and alliance with the more powerful Matteo Salvini, leader of the far-right League. That alliance is still in place.

As Meloni emerged from Salvini’s shadow, her ardour for Le Pen cooled, as did her once fiery anti-Europe rhetoric. In the European parliament her party, Brothers of Italy (Fdl), is in the European Conservatives and Reformists grouping originally founded by David Cameron; its partners include Poland’s Law and Justice party and Spain’s Vox. Le Pen and Salvini’s parties are in the harder right Identity and Democracy group.

Both of their parties are set to gain in the European elections next week. The National Rally (RN) is now polling at 33 per cent, up from 23 per cent in 2019, while FdI is on course for 27 per cent, up from only 6 per cent. As a result, polls suggest the ID grouping could win around 66 seats, while ECR should get some 74 seats, with another 16 for potential new members. Von der Leyen’s centre-right European People’s party (EPP) is again set to win the most seats, but will need coalition partners to form a majority.


Just as Meloni’s domestic political strategy has been to take power by uniting the Italian right, so has she set out to do the same in the EU — by implication, working with both the EPP and ID. “We want to do in Europe exactly what we did in Italy,” Meloni told her FdI party conference in April. “Create a majority that brings together the forces of the centre-right and finally sends the left into opposition in Europe too.”

Yet such a coalition is highly unlikely to be replicated at the European level. The EPP has ruled out working with Le Pen or her allies in the ID group on the basis that they are too extreme and have pro-Russia sympathies.

Among ID’s historical members are the extremist Alternative for Germany (AfD), whose lead candidate recently downplayed the role played by SS soldiers in the Holocaust. In the ensuing furore, AfD was kicked out of the ID parliamentary group after Le Pen’s party said it could no longer sit alongside it.

Le Pen herself has already ruled out any coalition in Brussels that involves von der Leyen. “Her time is up,” Le Pen said in late May. “As far as we are concerned, we will never, I repeat never, vote for Ursula von der Leyen.”

Instead, the ECR grouping, of which Meloni is president, is being wooed by both the mainstream centre-right and the hard-right.

Von der Leyen, who has worked closely with Meloni, especially on the migration issue, may need the Italian premier’s support in a potentially tight parliamentary vote on her sought-after second term. That would put the Italian leader in a powerful kingmaker position.

The EU’s liberal and centre-left leaders have become so alarmed at the prospect of von der Leyen forming a pact with Meloni that they have threatened to vote against re-electing her.

The hard-right is just as opposed to such an agreement. Back in March, Le Pen made a combative video demanding that Meloni tell “the truth to Italians” about whether she would support von der Leyen’s re-election, which the French leader said would “aggravate the policies that are causing so much suffering to the people of Europe”.

More recently, Le Pen’s tone has shifted markedly as she has invited Meloni to merge ECR and ID into a hard-right “supergroup”, which would have more power within the assembly than as two entities. So far, the Italian premier has been ambiguous. Instead, she has talked publicly of co-operating on selected issues of mutual concern.

As long as Meloni sticks to her moderate path, that scope for co-operation appears limited.

She has of late pursued mainstream conservative goals, depicting herself as a serious leader able to fulfil Italy’s commitments to unlock its share of EU recovery funds and reassuring markets that she is a safe pair of hands.

She has largely accepted the basic tenets of EU economic policy: the rules of the single market, deficit and debt limits, and economic and administrative reforms in return for securing this economic support.

On foreign policy, Russia’s invasion of Ukraine in February 2022 put a new focus on geopolitical issues. Though Meloni had previously expressed admiration for Russian president Vladimir Putin, she came down quickly and unambiguously in support of Kyiv. As prime minister, Meloni continued sending weapons to Ukraine and backed its accession to the EU.

“The world changed in February 2022 and she understood she had to take a position and not move from that position,” says Ernesto Di Giovanni, co-founder of the Rome-based political consultancy, Utopia.

“This is one of the things she is doing to normalise the party, and let Brothers of Italy not be seen as a far right party, but a conservative right party, as the Tories, as others around western countries.”

Le Pen has also moderated her Euroscepticism somewhat, especially since losing the 2017 presidential election. She no longer calls for France to leave the EU or abandon the single currency — a position seen as unpopular after Brexit.

But RN’s proposals to drastically cut immigration and give French companies preference in public procurement would, say the party’s opponents, break EU law and amount to a soft “Frexit”.

Unlike Meloni, Le Pen wants to gain power not by working with mainstream conservatives but by supplanting them, while also appealing across the political spectrum, especially to the young and working class, with more radical, populist and often left-leaning economic positions.

“She has a totally different approach,” says Lazar, the Sciences Po professor.

Privately, many of Le Pen’s closest allies are critical of Meloni, suggesting the Italian prime minister has been forced into a position of subservience to Brussels because of her country’s fragile public finances.

“When you have a recovery plan to get €190bn as Italy does, you cannot bite the hand that feeds you,” says Renaud Labaye, secretary-general of the RN group in the French parliament.

RN leaders were also unhappy with Meloni giving more work permits to migrants and her role in securing agreement for an EU migration pact, which introduced a system for EU members to share the burden of asylum-seekers arriving in frontline border states like Italy, an approach they staunchly opposed. “Meloni’s policies on immigration are baffling and horrifying,” says one Le Pen ally, who asked not to be identified.

Meloni’s position on Ukraine and European defence puts her at some distance from Salvini and Le Pen, who both had personal, political and financial ties with Putin and his United Russia party.

Le Pen, whose party was once financed by a Russian bank loan, also switched to denouncing Putin for breaking international law. However, the French opposition leader, who has a long history of anti-Nato statements, is against arming Kyiv and says there should be immediate peace talks even if that means accepting Russian territorial gains.

These fissures are emblematic of the wider splits between the main pan-European populist and far-right political parties — and indeed divisions within them — that, say analysts, demonstrate why nationalists are inherently bad at the kind of international co-operation needed to wield power in the EU.

“I expect the far right to remain electorally successful but politically marginal, mostly because of its internal divisions,” says Cas Mudde, professor of international affairs at the University of Georgia and an expert on populism.

Despite this, some hard right politicians on both sides of the Alps see the differences as bridgeable. They suggest that prospects for collaboration — or even a broader reconfiguration of the party groups — are greater than the pre-electoral positioning would suggest, especially after Le Pen’s split with the more extreme AfD made her less toxic by association.

“We are in a moment of real evolution in European politics,” says Jean-Paul Garraud, an MEP for Le Pen’s RN. “And these two women of stature truly embody this change. The possibility of working together really does exist.”

One sign was Le Pen’s appearance at a conference in Madrid last month hosted by Vox and involving Meloni and other nationalist leaders, such as Hungary’s Viktor Orbán, who may also play a key role in any recomposition. In an online campaign event, Meloni also said last week that she felt Le Pen was “on an interesting path”.

I expect the far right to remain electorally successful but politically marginal, mostly because of its internal divisions

Claudio Borghi, an Italian senator who is running in the European elections for the League, says historic differences over Russia are no longer so relevant, since most of the parties that could form a new unified “rightwing euro-critical” party had condemned Putin’s invasion. “This subject is not on the table anymore,” he says.

Borghi also predicted that relations between Rome and Brussels would become more fraught this year when the commission starts to enforce EU fiscal rules that had been suspended during the pandemic. Italy’s public deficit stands at 7.4 per cent of GDP, the highest in the Eurozone.

Most of the populist and far-right parties could join a bigger, broader group “that will not be monolithic,” says Garraud, but would instead “understand and deal with” divergent national interests.

As for Meloni, “we see her as an ally in terms of ideas and we have lots of political points in common, but there are differences in approach,” Garraud continues. “Madame Meloni is confronted with the realities of power. We know very well that the Italian situation is complicated, including with regard to finances.”

Le Pen feels no such pressure in opposition, however, and her allies say she will not become any less radical in her push to win the presidency. Meloni “fit into the mould since she had to do so,” says Labaye, “and we will not”.

FT : World falling short on renewable energy goal for 2030, IEA warns

World falling short on renewable energy goal for 2030, IEA warns
UN talks kick off as countries fall behind the curve on targets and global warming heads for 2.7C since pre-industrial times

The world’s clean energy plans still fall almost a third short of what is needed to reach a renewable energy goal for 2030 agreed at UN climate talks last year, the International Energy Agency warned, as delegates from almost 200 countries meet again in Bonn this week.

Haggling over a new climate finance deal, and upgraded national pledges to cut greenhouse gas emissions, will take place over 10 days at the UN talks to lay the groundwork for the COP29 climate summit in Baku in November.

Negotiations will also focus on how to make sure the plans agreed at COP28 in Dubai last year are met, including the aim of tripling global renewable energy generation capacity to at least 11,000 gigawatts by 2030.

Data released by the IEA on Tuesday shows that countries’ existing policies and estimates imply 8,000GW of renewable energy will be installed by the end of the decade. Almost 40 per cent of this capacity, or 3180GW, is made up by China’s plans for solar, wind and hydroelectric power.

The global renewable energy goal was “ambitious but achievable — though only if governments quickly turn promises into plans of action”, the agency’s executive director Fatih Birol said. 

Annual renewable capacity additions had tripled since the 2015 Paris Agreement to limit global warming, the IEA said, as the cost of solar and wind energy fell by 40 per cent. Nearly half of countries it assessed have plans to double renewable energy installation by 2030.

Against this progress, permitting delays, under-investment and grid infrastructure problems still dog most energy systems.

The pace of deployment of clean energy needed to accelerate in most regions including the EU, the US and India, the IEA said.

“You’re talking huge obstacles that have to be overcome in terms of finance, grid integration, critical minerals access, workforce development,” said Alden Meyer, a senior associate at the climate-focused think-tank E3G. “It’s a daunting goal and it’s great there was political consensus that we need to get there, but now [negotiators] are down to the hard part.”

Updated national decarbonisation plans that countries are due to submit to the UN by early 2025 should include more details of their renewable energy ramp-up goals, the IEA report recommended.

Kicking off the meetings in Bonn that mark the halfway point to COP29 on Monday, UN climate chief Simon Stiell said the planet was on track for the “ruinously high” rise in the global temperature of 2.7C in the industrial era.

The discussions began against a downbeat backdrop. The German government’s climate adviser, the Council of Experts on Climate Change, said it was unlikely to hit its target to cut emissions 65 per cent by 2030 compared with 1990 levels. This is despite a slowdown in manufacturing that has contributed to the country’s lower emissions in the past year.

Flood warnings have also been issued for many parts of Germany this week and the Rhine was closed to shipping where water levels were too high. Areas of the country have experienced periods of extreme rainfall since the start of the year, in line with global trends.

The first day of talks was interrupted by protesters holding a Palestinian flag, and also held up by a Russian delegation complaint about access to German visas.

>>> US After Hours Summary: FGEN +27.6% surging on a couple of announcements; HQ

After Hours Summary: FGEN +27.6% surging on a couple of announcements; HQY +4.6% up on earnings; GTLB -3.1% slips despite upbeat guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: HQY +4.6%

Companies trading higher in after hours in reaction to news: FGEN +27.6% (FDA clearance of investigational NDA; clinical trial supply agreement with Regeneron), CSGS +3.8% (acquires iCheckGateway.com for $17.0 mln), SRRK +3.4% (presents new data), GPCR +2.9% (stock offering), DXCM +2.1% (Nova Scotia residents coverage for Dexcom G6 and G7), DAVE +1.4% (extends partnership with Drew League), BNL +1.2% (provides update on business activity), BRAG +0.3% (appoints interim CFO), FANG +0.2% (JV acquires Lagoon Operating)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: GTLB -3.1%

Companies trading lower in after hours in reaction to news: BLD -5.2% (acquires Texas Insulation), ELDN -2.5% (presents updated data), ASND -1.9% (presents new data), OSK -1.5% (CFO appointed President of a segment), SHIP -1.5% (issues statement on Seanergy), PNM -1.1% ($500 mln convertible notes offering), META -0.9% (testing un-skippable ads on Instagram, according to The Verge), LMT -0.5% (awarded $1.93 bln U.S. Army contract mod), SB -0.4% (to acquire dry-bulk vessel), ASUR -0.4% (new agreement with Vensure Employer Solutions), RLGT -0.3% (acquires operations Cascade Transportation), CWH -0.2% (President to retire; CFO to retire), JNJ -0.1% (results from subgroup analysis of Phase 3 study)

WSJ : New York Set to Restrict Social-Media Algorithms for Teens

New York Set to Restrict Social-Media Algorithms for Teens
Parental consent would be needed to serve automated feeds and late-night notifications to minors

ALBANY, N.Y.—New York plans to prohibit social-media companies from using algorithms to steer content to children without parental consent under a tentative agreement reached by state lawmakers, people familiar with the matter said.

The legislation is aimed at preventing social-media companies from serving automated feeds to minors, with such feeds facing criticism for leading children to violent and sexually explicit content. The bill, which is still being finalized but expected to be voted on this week, would also prohibit platforms from sending minors notifications during overnight hours without parental consent.

Gov. Kathy Hochul, a Democrat, has said the measure would make social media less addictive, adding that heavy usage by teens has contributed to higher instances of mental illness. Industry groups have raised questions about the constitutionality of the proposal and said media literacy would have a more immediate impact. They have successfully won court injunctions blocking regulations in other states from taking effect.

New York would become the first state to enact restrictions on how content is delivered, though similar legislation is also advancing in California. Lawmakers in Minnesota and South Carolina considered but didn’t act on similar measures in their legislative sessions this year.

Florida Gov. Ron DeSantis in March signed a law prohibiting people under 14 years of age from having social-media accounts, regardless of parental consent, one of the most restrictive laws aimed at curbing social-media access for minors.

The continued march of state regulation is happening as the issue is stalled in Congress. While federal lawmakers in both parties grilled tech CEOs earlier this year, they haven’t coalesced around a specific legislative plan.

“It does call for a federal response,” Hochul said during a Monday morning interview on National Public Radio. “I, as the leader of this state, cannot ignore the signs of distress and trauma among our young people. And it’s definitely correlated to what is happening with these social media feeds.”

Lawmakers in New York and California said they hoped their approach would pass legal muster because it regulates how feeds are assembled but doesn’t restrict any particular kind of content.

Under these proposals, underage users could choose to follow whatever account they wished, but feeds would be presented in chronological order. An executive at NetChoice, a trade group whose members include Facebook-parent Meta and X, said this would still violate the First Amendment because it restricts content organization.

“It is less unconstitutional. Unfortunately, when it comes to constitutionality, close doesn’t count. You either are or you aren’t,” said Carl Szabo, NetChoice’s vice president and general counsel. “This legislation continues to violate free speech protections granted to New York citizens.”

Before reaching an agreement Monday, aides to Hochul and Democrats who dominate the state legislature spent weeks tweaking the legislation as lobbyists working for tech companies pushed back. Language allowing parents to sue companies over infractions was dropped from the final version, according to people briefed on the agreement.

Enforcement would instead be delegated to New York Attorney General Letitia James, a Democrat who has lobbied for the bill. Her office would also be tasked with issuing regulations about methods for platforms to determine whether a user is a minor.

Julie Samuels, president and chief executive of the trade group Tech:NYC, whose members include Google and Meta, said she was glad the right to private legal action was dropped from the bill. She said she was concerned about implementing an age-verification system that is “effective, efficient and workable.”

“To get this right takes more than just legislation,” Samuels said.

The Democratic-controlled New York state Senate and Assembly will vote on the measure before their scheduled adjournment this week, legislative officials said. Last month, the California state Senate approved a bill similar to the New York measure with a bipartisan 35-2 vote. It must now be taken up by the state’s lower chamber before its scheduled August adjournment.

“We’ve had to go back to the drawing board and very carefully construct our legislation to try and anticipate how a court would react,” said Nancy Skinner, a Democrat who sponsored the California bill. “Republicans and Democrats—we’re universally concerned about the impact of social media on our kids.”

California in 2022 enacted a law requiring makers of social-media apps to study products and features that are likely to be accessed by minors and mitigate any potential harm before releasing them to the public.

That law was set to take effect in July but was put on hold in response to a lawsuit filed by NetChoice.

WSJ : Hamas Took More Than 200 Hostages From Israel. Here’s What We Know.

Hamas Took More Than 200 Hostages From Israel. Here’s What We Know.
Israel says 120 hostages abducted on Oct. 7 remain in captivity, including the bodies of at least 41

The Palestinian militants who raided Israel in the Hamas attacks on Oct. 7 killed over 1,200 people, mostly civilians, according to Israel, and abducted more than 240 civilians and soldiers, bringing them back to the Gaza Strip. Israel responded with a military campaign that it said was aimed at destroying Hamas and recovering the hostages. Hamas released dozens of the hostages under a weeklong series of temporary cease-fire agreements that ended on Dec. 1. International efforts to reach a cease-fire and hostage-release deal have continued and repeatedly stalled.

How many hostages does Hamas have?
Over 240 hostages were taken by Hamas and other attackers on Oct. 7. Israel says there are 120 hostages abducted that day remaining in Gaza, most of them Israeli, including dual nationals. That total includes hostages whom Israel has concluded are no longer alive.

A total of 60 hostages have died either on Oct. 7 or in the months since, according to Israel, including 19 whose bodies have been brought back from Gaza.

Israel says officially that 41 of the hostages abducted on Oct. 7 who remain in Gaza are dead, but Israeli officials estimate privately that the number could be much higher. On June 3, the official total jumped by four, based on new intelligence; all four had been seen alive in Gaza since Oct. 7 by other hostages who were subsequently released, and appeared in hostage videos from Gaza released by Hamas.

Separately, Israel said Hamas is holding the bodies of two Israeli soldiers killed in the 2014 Gaza war. Two other Israelis were captured by Hamas before Oct. 7, bringing the total number of known hostages, dead or alive, to 124, according to Israel’s count.

Hamas, a group that the U.S. designates as a terrorist organization, said in April that it didn’t know if it could deliver 40 living civilian captives to satisfy the cease-fire proposal at the time, according to officials familiar with the negotiations.

The number of hostages who are alive and dead has been central to cease-fire proposals, which feature the exchange of hostages for Palestinian prisoners held by Israel. “The state wants to know if it is working to bring back bodies or [living] hostages,” said Ofer Merin, who is director general at Shaare Zedek Medical Center in Jerusalem and a member of the committee that determines hostage deaths.

In the months since the Hamas attack, Israel has adjusted its estimate of the number of remaining hostages as some were freed, investigators identified victims of the attacks and the Israeli military recovered bodies from Gaza.

Hamas transferred some of its own hostages to other factions in Gaza, according to Israel, complicating efforts to secure their freedom. Palestinian Islamic Jihad, a Hamas ally that the U.S. has designated a terrorist organization, said in October that it was holding more than 30 people abducted on Oct. 7, and in late May the group released a video of one of its captives, an Israeli-Russian dual citizen.

Israeli officials said on Dec. 3 that at least three civilian women and two children were being held by militants outside Hamas, citing their latest intelligence. That group included Israeli-Argentinian citizen Shiri Bibas and her two sons, Ariel, 4, and Kfir, 10 months, who were kidnapped by Hamas and later handed over to another faction.

Hamas has said that Bibas and her sons were dead, but Israel hasn’t confirmed that. A hostage reported by Palestinian Islamic Jihad to have died in captivity, Hanna Katzir, was released under the Israel-Hamas cease-fire deal.

When will the hostages be released?
Talks on the release of hostages and a temporary cease-fire have repeatedly stalled. Families of captives have banded together to keep hostage recovery at the top of Israel’s agenda.

Hamas had released 109 hostages as of the end of November when a cease-fire agreement that included hostage-prisoner exchanges expired. Of those, 105 were returned during the pause in fighting that began on Nov. 24, including 81 Israeli or Israeli dual nationals, 23 citizens of Thailand and one from the Philippines.

The exchanges involved only women and minors. Hamas regards Israeli men of fighting age as soldiers and a more valuable commodity.

In October, Hamas released four civilians, and the Israeli military reported the recovery of a soldier during ground operations in Gaza.

What was the Israel-Hamas hostage deal?
Israel and Hamas began a temporary cease-fire agreement on Nov. 24 under which civilian hostages abducted by Hamas were released in exchange for Palestinian prisoners in Israel. The agreement ended when Israel said Hamas was unable to produce a new list of hostages, prompting Israel to resume its military campaign. Talks to resume the exchanges have since stalled.

Hamas released additional hostages during the cease-fire under separate agreements with other countries.

Under the cease-fire pact, Israel also agreed to allow the delivery of fuel to Gaza from Egypt and to pause drone surveillance in northern Gaza for six hours a day.

During the first phase of the cease-fire, Hamas released 50 civilian hostages in exchange for 150 Palestinian prisoners over a period of four days, in addition to hostages released under separate agreements. Israel and Hamas extended the agreement for a total of three days, continuing a pattern of three Palestinian prisoners to be exchanged for each Israeli hostage. The releases under the deal involved only women and minors on both sides, though Hamas released men from Thailand and a Russian hostage under separate agreements.

Prime Minister Benjamin Netanyahu said the recovery of hostages remains one of Israel’s war goals along with the elimination of Hamas.

What does Hamas want in exchange for hostages?
Hamas has demanded an Israeli cease-fire, the release of Palestinian prisoners held in Israeli jails and, in recent negotiations, the free movement of displaced Palestinians to northern Gaza. Israel has rejected the unconditional return of Palestinians to the north. An estimated 1 million Palestinians have been pushed to the south of the Gaza Strip by the war.

Prisoner exchanges have figured prominently in the long-running Israel-Palestinian conflict. In 2011, militants in Gaza released the Israeli soldier Gilad Shalit after more than five years in captivity, in a swap for 1,027 Palestinians—including a senior Hamas leader, Yahya Sinwar, who is a primary target of Israel’s military campaign in Gaza.

Who are the hostages?
The people taken captive in Gaza come from 29 nations including Israel, with women, children and the elderly among them. Many hold dual nationalities. They include dozens of workers from Asia or Africa, many of them Thai farmers.

Some of the hostages were attending a music festival in southern Israel near the Gaza Strip; some were residents or visitors at kibbutzim, the farming communities in the area, where many people were slaughtered in terrorist attacks.

The captives remaining in Gaza include 17 women and two of the 39 children abducted on Oct. 7, according to Israel. Some of the remaining women are members of the Israeli military. Foreign citizens still held captive include eight from Thailand, two of whom were determined in mid-May to have died.

The White House said in mid-December that eight Americans, including three male soldiers, remained hostage. Three have since been declared dead, their bodies held by Hamas, including husband and wife Gad Haggai, 73 years old, and Judi Weinstein, 70, and Itay Chen, a 19-year-old Israeli sergeant. Haggai and Weinstein were killed on the day of the attack, according to a spokesman from their kibbutz. Chen was also killed by Hamas on Oct. 7, President Biden said in a statement marking his death.

Who were the two hostages rescued in Rafah?
The Israeli military rescued two hostages, Fernando Simon Marman and Louis Har, in a raid in the southern Gaza city of Rafah on Feb. 12. The two men had been abducted from Kibbutz Nir Yitzhak, near the Gaza border, on Oct. 7. In the rescue operation, military forces and a police SWAT team broke into a house in Rafah and engaged in a gunfight with Hamas militants while shielding the hostages before evacuating them, the Israel Defense Forces said.

Where are the hostages in Gaza being held?
Early in the war, Hamas said the hostages were kept in locations across Gaza to impede Israeli military operations in the crowded Palestinian enclave. The remaining hostages are believed to be held in sections of Hamas’s extensive tunnel network that the Israeli military has yet to clear. In a tunnel raid in the city of Khan Younis, in southern Gaza, the Israeli military said it found evidence that about 20 hostages had been there. The two hostages rescued on Feb. 12 were being held in Rafah.

Tamar Metzger, 78 years old, who was released after 53 days, was held in tunnels in Khan Younis. She described to The Wall Street Journal enduring her time in captivity in an underground room with a group of other hostages, under the watch of four captors. Yocheved Lifshitz, one of four hostages released in October, also described being held underground in what she described as a spiderweb of deep, wet underground tunnels.

What signs of life have emerged from Gaza?
Hamas released a video on April 24 of American-Israeli hostage Hersh Goldberg-Polin, in which the 23-year-old said he was nearing his 200th day in captivity, suggesting it had been filmed shortly beforehand. Goldberg-Polin’s fate had been uncertain after witnesses and video from Oct. 7 indicated that Hamas attackers had blown off his left arm. Appearing with the stump of one arm, he pressed for Netanyahu to strike a deal with the group to free the remaining captives.

Noa Argamani, a 26-year-old university student whose abduction to Gaza on the back of a motorbike was seen in a widely shared video, appeared in a video released by Hamas on Jan. 15. A released hostage said that she had been held with Argamani for four days in an apartment under Hamas’s watch.

Eitan Gonen, father of Romi Gonen, 23, who was kidnapped from the Nova music festival, was told by released hostages that his daughter was wounded but alive.

How has Hamas treated the hostages?
The hostages released by Hamas endured grueling conditions that health experts said would have lasting psychological, if not physical, effects—especially for the children.

Their captors provided inadequate food and water and refused to provide medication, according to accounts from family, friends and doctors who treated some of those who were released.

A hostage released in November described older captives spending days lying on mattresses and said their captors took away glasses and hearing aids when they were abducted, making it difficult for some to see or hear. Hostages were held in small groups, moved around Gaza and separated from loved ones, sometimes just before being released. Some have been forced to make propaganda videos.

The released hostages struggled to adjust to light and suffered from a lack of vitamin C and physical exercise after being held in cramped conditions underground for weeks, according to a doctor. Some were treated for injuries sustained during their abduction or captivity. Most were in stable or good condition, doctors said, though an 84-year-old woman was released in critical condition.

Most of the child hostages released in November had lost between 10% and 15% of their body weight, doctors said. Many had rashes from being held in unsanitary conditions and wounds that had become infected.

Many of the children spoke in whispers after their release and ate little, saying they had to save food for later, a doctor said, a reflection of the conditions under which they were held. Some had trouble sleeping, a sign of drug withdrawal after their captors drugged them to keep them quiet and induce sleep, a psychiatrist said.

WSJ : E*Trade Considers Kicking Meme-Stock Leader Keith Gill Off Platform

E*Trade Considers Kicking Meme-Stock Leader Keith Gill Off Platform
Morgan Stanley’s trading platform discusses concerns about possible manipulation in GameStop

E*Trade is considering telling meme-stock leader Keith Gill he can no longer use its platform after growing concerned about potential stock manipulation around his recent purchases of GameStop GME 21.00%increase; green up pointing triangle options, according to people familiar with the matter.

Shortly before Gill reignited a meme-stock craze in May, he bought a large volume of GameStop options on E*Trade, the people said. This past weekend, Gill posted a screenshot of an E*Trade account showing he owns stock valued at $115.7 million and a new set of options that expire later this month. His total gains on the position were at $6.86 million.

The stock of GameStop surged again on his posts, showing the power Gill, also known as Roaring Kitty and DeepF—Value, has as an influencer. GameStop shares rose 31% on Monday and are now up more than 70% since he reappeared.

At E*Trade and its owner Morgan Stanley MS -0.44%decrease; red down pointing triangle, that power created concerns he can pump up a stock for his own benefit. Their debate includes whether his actions amounted to manipulation and whether or not the firm is willing to risk drawing the attention of his meme army by removing him, according to people familiar with their internal discussions.

No decision has been made and the firm could decide no action is needed.

Gill couldn’t immediately be reached for comment.

Gill, who has described himself as a deep-value investor to The Wall Street Journal, has become the face of one of the biggest momentum trades in recent memory, with many individuals piling into GameStop with no regard for its fundamentals.

He has long been eager to vocalize his love of GameStop. He studied the company and bought the shares in 2019 while telling his group of online followers about the stock in lengthy YouTube videos. He told his mom about the stock, and told her to tell her friends, too, she told the Journal in a 2021 interview.

Today, millions of people are watching. His followers on X have swelled to more than one million. Tom Bruni, head of market research at Stocktwits, said visits to the GameStop symbol page on the platform have surged more than 20-fold this year.


Gill isn’t solely an amateur investor: He holds several securities-industry licenses and was previously a registered broker with a unit of Massachusetts Mutual Life Insurance, or MassMutual. MassMutual agreed to pay a $4 million fine in 2021 to settle an inquiry by state regulators for failing to supervise Gill’s social-media and trading activity.

The debate about him as a client inside Morgan Stanley began about three weeks ago.

On Sunday, May 12, an X account associated with Gill posted a picture of a man leaning forward in his seat, the first post in three years.

The following day, just as demand for GameStop and other meme stocks surged, E*Trade’s systems crashed. The trading platform was down for most customers for several hours that day. During that time, E*Trade turned to “emergency trading procedures” that involved taking orders over the phone and writing them on paper or on email, according to people familiar with the matter. The platform experienced internal issues and the crash wasn’t related to surging volumes, one of the people said.

Morgan Stanley employees, knowing that Gill is a customer, looked at his E*Trade account, according to people familiar with the matter. That sort of monitoring of clients is routine.

The employees saw he had purchased call options before the tweet, the people said. A call option gives a trader the right to buy the stock by a certain date at a stated price. At least some of those options expired that week, one of the people said. That meant Gill’s trades likely generated profits thanks to the stock move his tweet generated.

Morgan Stanley’s global financial-crimes unit and external counsel began discussing whether Gill’s actions were legal and whether the firm should cancel his E*Trade account, the people said.

Some Morgan Stanley employees have been concerned that closing Gill’s account could result in the firm losing E*Trade clients, the people said. Gill’s messages have been able to command a large following, one reason GameStop and other meme stocks have soared. Morgan Stanley employees have worried what would happen if Gill posted on social media that he had been ditched by E*Trade and whether that might prompt many people to shut down their E*Trade accounts in solidarity, the people said.

The Securities and Exchange Commission has also been reviewing trading in GameStop call options around the time of Gill’s social-media posts, according to people familiar with the agency’s efforts. The options trades sparked internal discussions at the SEC over whether they could be considered manipulation, one of these people said.

On Sunday, Gill posted a screenshot showing that Gill owned five million shares of GameStop and 120,000 call options tied to the stock expiring this month. The positions, alongside roughly $29 million in cash, were valued at more than $200 million.

That marks a mammoth jump from 2021, the last time the DeepF—Value account posted on Reddit. A screenshot from that period showed a roughly $30 million position in GameStop.

Brokerages generally have wide latitude to shut down customers’ accounts at their discretion. Morgan Stanley can restrict or close a customer’s account at any time, according to E*Trade’s client agreement for self-directed accounts. When Morgan Stanley restricts or closes an account, the company may cancel all open orders and stop all services. The customer would instruct Morgan Stanley on what to do with the remaining assets.

If Morgan Stanley doesn’t receive instructions “after a reasonable period of time,” it may sell the remaining assets and send the customer the net proceeds, or transfer any remaining securities or cash to the client.

Morgan Stanley faces a delicate choice. When the meme-stock rally was in its heyday in early 2021, Robinhood and other brokerages had restricted trading in GameStop, which enraged the Reddit trading crowd that hails Gill as a leader.

>>> US Close Dow -0.30% S&P +0.11% Nasdaq +0.56% Russell -0.50%

Closing Stock Market Summary
Stocks experienced mixed action on the first session of the new month. The S&P 500 (-0.1%) and Dow Jones Industrial Average (-0.5%) settled lower while the Nasdaq Composite logged a 0.3% gain.

A solid gain in NVIDIA (NVDA 1150.00, +53.67, +4.9%), which introduced new products, limited downside moves in the major indices, but concerns about economic growth kept the broader market in check.

The aforementioned concerns were stirred by this morning's release of the ISM Manufacturing Index for May, which reflected a faster pace of contraction than the market expected (actual 48.7%; expected 49.6%). A reading below 50% indicates a contraction in activity.

Yields moved lower in response. The 10-yr note yield fell 11 basis points to 4.40% and the 2-yr note yield fell seven basis points to 4.82%. Dropping market rates had been a source of support for equities recently, but worries about an economic slowdown that could affect earnings prospects drove stock market action today.

On a related note, the Atlanta Fed GDPNow model estimate for Q2 real GDP growth is now 1.8%, down from 2.7% on May 31, in response to the soft data.

WTI crude oil futures ($74.29/bbl, -2.79, -3.6%) settled sharply lower in another manifestation of slowdown concerns, which could translate to weaker demand for oil.

This price action contributed to the selling in the S&P 500 energy sector. It was the worst performing sector by a decent margin, dropping 2.6%. The utilities (-1.2%) and industrial (-1.3%) sectors were the next worst performers.

Meanwhile, the information technology sector (+1.0%) led the pack by a decent margin, followed by the health care sector (+0.7%).

Separately, there was some speculative buying activity in the meme stock space after "Roaring Kitty" posted a screenshot showing a big position in GameStop (GME 28.00, +4.86, +21.0%).
  • Nasdaq Composite: +11.8% YTD
  • S&P 500:+10.5% YTD
  • S&P Midcap 400: +6.4% YTD
  • Dow Jones Industrial Average: +2.1% YTD
  • Russell 2000: +1.6% YTD

Reviewing today's economic data:
  • May S&P Global US Manufacturing PMI - Final 51.3; Prior 50.0
  • May ISM Manufacturing Index 48.7% (consensus 49.6%); Prior 49.2%
    • The key takeaway from the report is that it showed a faster pace of contraction in manufacturing activity that will stir worries about the economy missing its mark with a soft landing.
  • April Construction Spending -0.1% (consensus 0.2%); Prior -0.2%
    • The key takeaway from the report is that nonresidential spending was down in both private and public construction markets, which will be a drag on Q2 GDP growth.

Tuesday's economic calendar features:
  • 10:00 ET: April Factory Orders (consensus 0.6%; prior 1.6%) and April job openings (prior 8.488 mln)