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Treasury Secretary Janet Yellen kicks off her trip to China this week. Wall Street will be watching closely for any indication of where things stand on President Joe Biden’s widely anticipated executive order on outbound investments.

Administration officials have been fine tuning the order for months. They have already said the final product will allow American regulators to review and deny U.S. financing for Chinese advanced microchips, artificial intelligence and quantum computing.

“Until they come out with the specific guidance, it’s going to be difficult to understand what’s covered by this. I could see this being dangerous if it’s these amorphous categories rather than specific examples,” Daniel Tannebaum, a partner and global anti-financial crime practice leader at management consulting firm Oliver Wyman, told MM. The order could be vexing for certain firms if it’s broadly contoured to “amorphous categories rather than specific examples.”

That’s particularly true for buyout and venture capital firms whose investments in private companies are much harder to sell than a stock or a bond. Major private equity firms like General Atlantic, Blackstone Group and Warburg Pincus raised billions from state retirement systems and endowments to invest in Chinese companies during the previous decade.

And while U.S. investment in China slowed amid mounting tensions between the two governments, the pending order has alarmed investors — including California State Teachers’ Retirement System CIO Christopher Ailman — who are wary of their capital getting stuck in a geopolitical limbo.

For now, many Wall Street lobbyists are taking a wait-and-see approach before publicly airing their concerns. While they’re happy to talk about the potential unintended consequences — including, as House Financial Services Chair Patrick McHenry (R-N.C.) has argued, further diminishing U.S. influence over Chinese companies — “they’re not going to spend a lot of political capital defending investment in China,” one lobbyist said.

Moving too aggressively could agitate China hawks on either side of the aisle. And with Congress set to work on the $886 billion National Defense Authorization Act after the recess, it’s likely lawmakers will use that process to pressure Biden on his outbound order. (To wit, Reps. Rosa DeLauro (D-Conn.), Bill Pascrell (D-N.J.) and Brian Fitzpatrick (R-Pa.) filed an amendment to the NDAA last week that would establish a committee to review investments for national security risks.)

Still, given how long it’s taken for the White House to finalize the outbound E.O., and the degree to which its scope has already been narrowed, holding fire might prove effective.

“The bark may be more significant than the bite,” said Tannebaum. “The way in which something is messaged — versus how it lands when you get into the black and white — isn’t always the same.”

IT’S WEDNESDAY — We hope you had a great Fourth of July and aren’t feeling the effects of beer, dip and dogs this morning. That might not be the case for your host (he’ll survive). Send tips, gossip and suggestions to [email protected] and to Zach at [email protected].

Factory orders will be released at 10 a.m. … The Fed will release its June meeting minutes at 2 p.m. … New York Fed President John Williams speaks at 4 p.m.

Backdrop on Yellen’s China visit — The WSJ’s James Areddy and Sha Hua: “China set export restrictions on two minerals the U.S. says are critical to the production of semiconductors, missile systems and solar cells, a show of force ahead of economic talks between two rivals that increasingly set trade rules to achieve technological dominance.”

— The restrictions “will hit key sectors in the European Union’s effort to decarbonize its economy, and demonstrates the limits of western aspirations to shift supply chains,” write Bloomberg’s Ewa Krukowska, Bryce Baschuk and Richard Bravo

— Meanwhile, The WSJ’s Yuka Hayashi and John McKinnon report that Biden “is preparing to restrict Chinese companies’ access to U.S. cloud-computing services.”

— Prior to takeoff, Yellen and Chinese Ambassador Xie Feng had a “frank and productive discussion” about the importance of working together on macroeconomic and financial issues, according to a readout from Treasury.

Americans haven’t bought Biden’s economic message. Wall Street might. — From Sam: “President Joe Biden is telling the American people that the economy is in better shape than they think. As inflation starts to fade, some on Wall Street are starting to believe it.”

— From Eleanor Mueller, Victoria Guida and Sam: “Top 3 takeaways from POLITICOPro’s briefing on the economy”

Wow — Reuters: “U.S. property catastrophe reinsurance rates rose by as much as 50% at a key July 1 renewal date, broker Gallagher Re said in a report on Monday, with states such as California and Florida increasingly hit by wildfires and hurricanes.”

Whickety, Whickety, Whickety SPAC — Our Declan Harty: “A blank-check company seeking to merge with Donald Trump’s social media venture has struck a preliminary settlement with the SEC that could open the door for the deal to be completed if the former president’s side still wants in, according to a new regulatory filing.”

Supreme Court to weigh in on SEC’s in-house courts — From Sam: “The case, SEC vs. Jarkesy, will be heard by the court this fall to determine if statutes granting the agency the ability to pursue administrative enforcement proceedings for civil penalties violate the constitutional right to a jury trial. The outcome could weaken the agency’s ability to impose penalties and pursue enforcement actions against investment firms and traders.”

Stress test drama — Bloomberg’s Katherine Doherty: “Two of Wall Street’s largest lenders are questioning the Federal Reserve’s projections for their future income, the latest sign of tension around the central bank’s annual stress tests. Bank of America Corp. and Citigroup Inc. said Monday they are in discussions with the central bank after their own estimates differed from those of the Fed.”

UBS’s wealth management push — Reuters’s Tatiana Bautzer: “UBS has gone on a U.S. recruiting drive for wealth managers catering to rich Americans even as it considers culling 30% of its combined global workforce after the takeover of Credit Suisse.”

Trouble with the curve — Reuters’ David Randall and Davide Barbuscia: The inverted yield curve on Treasury securities — often cited as a predictor for the recession — “may be a result of leveraged positions by hedge funds and other institutional investors as issuance by the Treasury Department surged since the passage in early June of a Congressional plan to raise the debt ceiling.”

Andrew Rothe is now policy director for the House Small Business Committee. He most recently was VP for federal government relations at JPMorgan Chase and is a Mike Rounds alum. — Daniel Lippman

Alejandro Molina is now senior policy adviser at the National Economic Council at the White House. He is a recent MBA graduate of Harvard and was a policy fellow at the NEC last summer. — Lippman

Shadow banks — The FT’s Laura Noonan: “Ireland and Luxembourg have intensified calls for tougher global rules on shadow banks in a bid to curb the risk of further financial turmoil erupting from a sector that spans everything from hedge funds to crypto firms.”