FirstFT: Democratic governors back Biden

Good morning.

Democratic state governors said they backed Joe Biden after talks at the White House yesterday despite a string of bleak polls for the president and calls from some lawmakers for him to exit the US presidential race.

Biden met more than 20 influential governors in an effort to assure them that he was committed to his re-election campaign amid reports that several governors had privately expressed concern about his candidacy.

The president has earlier held a one-on-one meeting with vice-president Kamala Harris as speculation swirled that she could replace him as the Democratic nominee.

Harris has gained support among Democrats in recent days and betting markets yesterday shifted sharply in her favour, giving her better odds of winning the election than Biden. Here’s more on a frenetic day in Washington that also saw a second lawmaker call on Biden to step aside.

• Is this Kamala Harris’s moment? As Biden’s support in the party leaks away, the vice-president is the leading contender to replace him.

• Jeffrey Katzenberg: The media mogul and Biden’s chief fundraiser is facing blowback from Hollywood donors who accuse him of downplaying the president’s declining health.

Here’s what else is happening today:

• EU-China trade: The bloc’s tariffs on electric vehicle imports from China come into force.

• UK general election: Polls suggest Rishi Sunak’s Conservative party is heading for a historic defeat to Sir Keir Starmer’s Labour party. Voting ends at 10pm UK time, with exit polls published shortly afterwards.

• Independence Day: US markets are closed for the public holiday.

Five more top stories

1. Saks Fifth Avenue’s parent company is nearing a $2.65bn deal to buy its luxury department store rival Neiman Marcus with the backing of tech giants Amazon and Salesforce. The deal, which follows months of complex negotiations, is set to combine two of the leading players in luxury retail under one roof.

2. Federal Reserve officials thought that US inflation was cooling but still needed “greater confidence” before they agreed to cut interest rates from their 23-year high, according to minutes of their most recent meeting. However, the record shows some policymakers’ concerns that unemployment could rise too quickly if rates remained too high for too long.

• More central bank news: The European Central Bank’s annual conference this week was dominated by talk of the rise of far-right politics in Europe after Marine Le Pen’s Rassemblement National won the first round of France’s parliamentary election.

3. Goldman Sachs faces long odds in getting the Federal Reserve to reconsider its disappointing grade in this year’s bank stress tests, according to regulatory experts. Last week, Goldman’s chief executive David Solomon took the rare step of criticising this year’s stress test. Here’s what’s at stake.

4. SoftBank is determined to prioritise investments in artificial intelligence and has no plans for an immediate share buyback despite pressure from activist investor Elliott for a $15bn capital return programme. Read the full interview with Yoshimitsu Goto.

5. Amazon’s cloud services division has won a A$2bn ($1.3bn) contract with the Australian government to build three data centres for secure sharing of information with allies. The contract means Australia will have greater ability to share intelligence and military information and use artificial intelligence for data analysis.

Today’s big read

Nato’s 2018 summit marked the biggest turning point in the history of the western military alliance that has guaranteed European security since 1949. This is the inside story of that fateful Brussels summit based on conversations with more than two dozen leaders, officials and advisers who were present when Donald Trump told America’s allies that he would no longer protect Europe “carte blanche”.

We’re also reading . . . 

• Iranian election: The presidential race between a reformist and a hardliner will be decided tomorrow by the silent majority who boycotted the first round of voting.

• Preqin deal: Founder Mark O’Hare has been catapulted into the ranks of Britain’s wealthiest people after the sale of the UK data group for £2.5bn to BlackRock.

• AI market hype: The mood is still fragile as investors struggle to shake the feeling that things are simply dusted in glitter, writes Katie Martin.

Chart of the day

Most investors think of passive equity strategies, such as index trackers, when they think of ETFs — such as those made popular by SSGA, Vanguard and BlackRock, which comprise the bulk of the market. But active ETFs and bond ETFs, in particular, have been capturing a growing share of new money and have enjoyed record inflows this year.

Take a break from the news

From traditional styling in The Hamptons to a high-design compound in Montauk, here are five very expensive homes for sale on Long Island, New York.

Additional contributions from Tee Zhuo and Benjamin Wilhelm