| Hong Kong crackdown leaders rewarded in new cabinet. Chinese equities are back in vogue. 'Cryptoqueen' hits FBI's most-wanted list. Here's what you need to know today. On the day marking 25 years since Hong Kong was returned to Chinese rule, the city's Chief Executive John Lee will install a cabinet that retains national security hardliners and elevates officials with strong China ties. The 21-person group keeps just six members of outgoing leader Carrie Lam's team and 30% of the cabinet are women, the most in any initial pick since the city's return to Chinese rule. Meantime, President Xi Jinping said Hong Kong had been "reborn" since he last visited five years ago. He is expected to give a speech later Friday. More on 25 years of Hong Kong under China here. Stocks in Asia looked set for a cautious start on Friday as concerns about an economic slowdown bolster sovereign bonds. Futures edged up for Japan and Australia, while S&P 500 and Nasdaq 100 contracts dipped after US shares posted their worst first half since 1970. Hong Kong's markets are closed for a holiday marking the 25th anniversary of Chinese rule. Meanwhile, the nearly 60% drawdown in Bitcoin since the end of March is the largest since the third quarter of 2011. The currency fell to around $19,000 and crypto stocks dropped.  | It's official: Chinese equities are back in vogue. A Bloomberg survey of 19 fund managers and analysts predicts that benchmark indexes in China and Hong Kong will post gains of at least 4% by year-end, outperforming global peers. Chinese stocks listed in the US have staged their best month since early 2019. The Nasdaq Golden Dragon China Index closed up 16% in June following its 2.6% gain in May, marking its first two-month winning streak since February 2021. In other news, China's housing slump eased in June for the first time in 2022. Tokyo this week saw its second major power crunch of the year, but the worst may be yet to come, as temperatures soar above 36 degrees Celsius (96.8 degrees Fahrenheit) — the worst heatwave for this time in June in more than 100 years. Tight power supply, coupled with surging overseas fuel costs, threatens higher electricity bills for households and businesses in Japan, while the specter of outages will require widespread sacrifices to save energy. That means Japan is in for a summer of higher inflation as well as economic and social disruption. Ruja Ignatova, the woman also known as 'Cryptoqueen,' is being added to the FBI's list of Ten Most Wanted fugitives for allegedly swindling millions of investors into sending her at least $4 billion in the OneCoin cryptocurrency company she founded. US authorities on Thursday said Ignatova was the mastermind behind OneCoin, which they called one of the largest pyramid schemes in history. US stocks just suffered their worst first half since the 1970s, but then again they were due a tumble. Monetary and fiscal stimulus deployed to mitigate the economic impact of the pandemic helped set off a truly massive rally that took the S&P 500 to a record and included the best 12-month surge since the 1930s. The drop back puts the S&P well on the way to the 3,500 area where the post-pandemic rally really kicked off. It's also putting it closer to the Shanghai Composite as Chinese stocks climb back up. They had struggled under the impact of regulatory crackdowns and Covid zero shutdowns, but optimism is increasing that those headwinds have just about blown themselves out. The dynamics set up a fascinating third quarter. If China stocks can keep climbing that would argue it's time for a bottom in US equities, but then can China sustain a rebound if the S&P 500 tanks further? Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney. | 
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