FirstFT: Support for Joe Biden wavers among Democratic donors

Good morning. Today we’re covering:

• Why investors are shunning risky loans

• The tottering Palestinian Authority

• How to renovate your home with style

We start, though, with Joe Biden and the parlour game that is consuming much of Washington and the rest of the world: will the president step aside or fight November’s election against Donald Trump. Biden’s performance at a high-stakes Nato press conference this evening will be his latest test.

The appearance comes as Democratic donors are warning that funding for the November election effort is “drying up” because of his refusal to pull out of the race.

The president suffered a double blow yesterday after Nancy Pelosi, the veteran Democratic lawmaker, said he had a “decision” to make about his future, and George Clooney, the actor who hosted a huge fundraiser for Biden last month in California, said he needed to be replaced as the party’s presidential candidate.

But the increasing willingness of wealthy backers to walk away from the campaign, mentioned in interviews with donors from Wall Street to Hollywood, poses a new existential threat to Biden’s re-election campaign. Here’s what longtime donors are saying.

• The poll numbers: On the day of the June 27 TV debate, national polling averages between Biden and Trump were tied. Since then, they have sharply diverged.

• The prospects for Biden’s second term: It seems one of the most poisoned chalices ever on offer to a politician and his retinue, writes Peter Spiegel.

Will Biden stay, or quit? Sign up for our US Election Countdown newsletter for the latest updates on the presidential race. And here’s what else I’m keeping tabs on today:

• Congress: Christy Goldsmith Romero, President Joe Biden’s nominee to chair the Federal Deposit Insurance Corporation, will testify before Congress.

• Economic data: US inflation is expected to have eased in June, while the statistics agency in Brazil publishes retail sales data.

• Companies: Delta Air Lines, ConAgra Brands and PepsiCo publish results.

• Monetary policy: Raphael Bostic, president of the Atlanta Fed, will take part in a moderated conversation on economic inclusion in Minneapolis, while Alberto Musalem, St Louis Fed boss, will participate in a fireside chat on monetary policy and the economy, at an event in Little Rock. Mexico’s central bank publishes minutes from its most recent monetary policy meeting.

Five more top stories

1. Investors are selling out of the riskiest US junk bonds in favour of higher-quality debt, amid a surge in bankruptcy filings and concerns over how the weakest corners of corporate America will survive a prolonged period of high interest rates. Here’s what it means for the borrowing costs of America’s weaker companies.

2. China has accused Nato of smearing the country and demanded the transatlantic alliance stay out of Asia. The comments come a day after Nato’s 32 leaders demanded that China “cease all material and political support to Russia’s war effort” in the defence alliance’s strongest-ever condemnation of Beijing.

• FT View: Nato, an organisation created in 1949 to secure lasting peace in Europe, is grappling with the largest threat to European security since its foundation.

3. Regulators have approved the biggest overhaul of rules for London-listed companies in three decades as the UK attempts to revive its capital markets, which have been pummelled by international competition and an outflow of investment. Read more about the new listing rules.

4. A New York jury has found former Wall Street trader Bill Hwang guilty of fraud and market manipulation, more than three years after the implosion of his Archegos fund management company. Here are the details of the verdict ahead of sentencing in October.

5. Citigroup will pay $135.6mn to US banking regulators for compliance failures in risk control and data management, the latest black eye for the lender and its chief executive Jane Fraser. Here’s more on the “long-standing deficiencies” at the bank.

The Big Read

As the eyes of the world have been focused on the devastation in Gaza, the Israel-occupied West Bank has been hit by a combination of surging settler violence, escalating military raids, intensified settlement expansion and stifling economic pressure. The moves have accelerated the decades-long entrenchment of Jewish settlements — which most countries consider illegal. The result has been to further undermine the tottering Palestinian Authority, just as the international community is pushing for it to administer both the West Bank and Gaza once the war between Israel and Hamas is over.

We’re also reading . . . 

• US regulation: There are multiple reasons why companies shouldn’t be cheering too loudly the Supreme Court’s decision to overturn the “Chevron deference” precedent, says Brooke Masters.

• China: China’s central bank is preparing its first direct intervention in the country’s sovereign bond market in decades. Here’s why.

• War in Ukraine: Kyiv has released thousands of convicts to bolster its forces, after being initially reluctant to copy a tactic Russia adopted early in its invasion.

Chart of the day

Private credit has never played a larger role in financial markets, with an estimated $10tn tied up in private equity and credit funds. But the messy restructuring of the debt owned by workforce technology company Pluralsight highlights one of the main risks regulators have raised about private credit.

Take a break from the news

Renovating your home? FT Weekend columnist Luke Edward Hall recommends asking yourself what stories you want your house to tell — taking into consideration its style, age and layout — then let them run wild.

Additional contributions from Tee Zhuo and Benjamin Wilhelm