‘This market is setting up to be one of the great short opportunities of all time. Trouble’s coming, I don’t know when, but it’s coming.’ — Jim Chanos

1. U.S. Orders China to Close Houston Consulate — the U.S. ordered China to shut its consulate in Houston, with officials accusing it and other Chinese diplomatic missions of economic espionage and visa fraud. FBI agents have interviewed Chinese researchers suspected of being undeclared members of the People’s Liberation Army in more than 25 cities, according to some U.S. officials. In some instances, staff at Chinese consulates helped instruct some researchers on security, reminding them to delete information from their electronic devices. The Chinese retaliates with Beijing set a 72-hour limit for the Chengdu Consulate to shut down, according to people briefed on the matter, the same amount of time Washington gave Chinese diplomats to vacate the Houston Consulate. U.S. diplomats at the Chengdu Consulate were given 30 days to leave China, the people said.
2. Weekly Unemployment Rises for First Time in Nearly Four Months — initial unemployment claims rose by a seasonally adjusted 109,000 to 1.4 million for the week ended July 18, the Labor Department reported, halting what had been a steady descent from a peak of 6.9 million in late March, when the pandemic and business closures shut down parts of the U.S. economy. Last week’s increase in applications came after several states imposed new restrictions on businesses such as bars and restaurants when coronavirus cases rose.
3. Pfizer, BioNTech Get $1.95 Billion Covid-19 Vaccine Order From U.S. Government — the U.S. has agreed to pay Pfizer Inc. PFE -2.47% and BioNTech SE nearly $2 billion to secure 100 million doses of their experimental Covid-19 vaccine to provide to Americans free of charge. No Covid-19 vaccine in development has proven to work safely yet, although dozens are being studied. The U.S. and other governments are spending billions of dollars to secure potential Covid-19 vaccines and treatments should they prove safe and effective.
4. Senate Republicans Prepare to Unveil Their Coronavirus Relief Package — Senate Republicans prepared to roll out their opening offer for a fifth coronavirus relief package after ironing out differences with the White House. The plan will include $16 billion in new funding for testing, a compromise between Senate Republicans who had sought more money and the White House, which had opposed any new funding. More than $100 billion will go toward schools, with some of that money only available to K-12 schools that plan to physically reopen. It wasn’t immediately known if a payroll-tax cut would be included in the GOP plan. Lawmakers are racing to reach an agreement before a $600 weekly supplement to the unemployment benefits expires on July 31. Republicans were looking at several options, including continuing the federal supplement at a lower flat rate until states can scale the benefit based on previous income.

The week ahead — Economic data from Econoday.com: