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 Here is what you need to know. Puerto Rico is set to default. Puerto Rico is expected to miss its bond payments due on Friday. On Wednesday, the governor of the commonwealth, Alejandro García-Padilla, wrote an article for CNBC saying Puerto Rico would miss more than $1 billion in general obligation bonds. The commonwealth is estimated to have defaulted on $562 million of debt service payments since August, according to Moody's data. The default will come despite President Obama signing the Puerto Rico Oversight, Management, and Economic Stability Act, or Promesa, into law on Thursday. Promesa will help Puerto Rico restructure its $70 billion of debt. Bond yields are making record lows. Heavy overnight buying pushed longer-dated US yields down to record lows. The 10-year yield touched 1.378% and the 30-year yield hit 2.204% as money rushed into government debt amid further speculation of more easing by the world's biggest central banks. Additionally, Japan's 10-year yield sank to a record low of -28 basis points and the UK's 10-year yield fell to its own all-time low of 78.1 basis points. China's manufacturing sector is contracting. China's Caixin manufacturing PMI fell to 48.6 in June, down from 49.2 in May. The decline pushed China's manufacturing sector further into contraction and made for the weakest reading since January. Additionally, China's manufacturing PMI slipped to 50.0 from 50.1, suggesting the sector is neither expanding nor contracting. Notably, China's yuan settled down 0.2% at 6.6603 and is near its weakest level since 2010. Japan's deflation is intensifying. Consumer prices in Japan fell 0.4% in May, a bit faster than the 0.3% decline experienced in April. The May reading was the third straight monthly decline, and it marked the biggest single-day drop since May 2013. Additionally, prices in Tokyo fell 0.5%, matching the previous month's decline. The inability to lift pricing pressure has many expecting that the Bank of Japan will increase its already massive stimulus program at its next meeting on July 16. The Japanese yen is stronger by 0.5% at 102.69 per dollar. 2 of the UK's biggest banks say they will stay in the UK despite Brexit. HSBC and Barclays say they will keep their headquarters in the UK despite the outcome of Brexit vote. The Financial Times reports that HSBC chairman Doug Flint told attendees at an event on Thursday that moving the company's headquarters wasn't subject to a review. Likewise, Barclays CEO Jes Staley told the BBC that Barclays would stay "anchored in Great Britain." Tesla's Autopilot system is being investigated. Federal authorities are looking into the connection between Tesla's Autopilot system and a fatal crash. Tesla has confirmed that its Autopilot system was active during a fatal crash that took place on May 7 in Williston, Florida. In an emailed statement to Business Insider, National Highway Traffic Safety Administration spokesman Bryan Thomas wrote, "NHTSA's Office of Defects Investigation will examine the design and performance of the automated driving systems in use at the time of the crash." Phil Knight is stepping down from Nike's board. Nike cofounder and chairman of the board Phil Knight says he plans to step down at some point during 2016, the AP reports. Knight reportedly wants Nike president and CEO Mark Parker to slide into the role of chairman upon his own departure. Knight has been a director for Nike since 1968, the AP says. Apple is reportedly in talks to buy Tidal. People familiar with the matter told The Wall Street Journal that Apple is in talks to buy rap mogul Jay Z's music-streaming service. The amount of money was not revealed. An acquisition would help Apple further penetrate the music-streaming business, as Tidal has a catalog of 40 million songs and a subscription base of 4.2 million users, according to The Journal. Jay Z purchased Tidal back in March 2015 for $56 million. Stock markets around the world are mostly higher. Japan's Nikkei (+0.7%) led the advance in Asia and Britain's FTSE (+0.3%) paces the gains in Europe. S&P 500 futures are down 5.25 points at 2,085.00. US economic data flows. Markit US manufacturing PMI will be released at 9:45 a.m. ET, while both ISM manufacturing and construction spending will cross the wires at 10 a.m. ET. US auto sales will be released throughout the day. | 
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