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The World
US Year-Ahead Inflation Views Drop to Lowest Since April 2021: US consumers’ near-term inflation expectations dropped in November to the lowest level since April 2021, according to a Federal Reserve Bank of New York survey released Monday. Median year-ahead inflation expectations declined for a second month to 3.4%, down from 3.6% in October. Expectations for what inflation will be at the three-year and five-year horizon held steady at 3% and 2.7%, respectively. (Bloomberg)
China’s cyber army is invading critical U.S. services: The Chinese military is ramping up its ability to disrupt key American infrastructure, including power and water utilities as well as communications and transportation systems, according to U.S. officials and industry security officials. Hackers affiliated with China’s People’s Liberation Army have burrowed into the computer systems of about two dozen critical entities over the past year, these experts said. Among the victims are a water utility in Hawaii, a major West Coast port and at least one oil and gas pipeline, people familiar with the incidents told The Washington Post. The hackers also attempted to break into the operator of Texas’s power grid, which operates independently from electrical systems in the rest of the country. (Washington Post)
China's Xi visits Vietnam after Biden, seeks 'shared future' with Hanoi: Major powers vie for influence in the Southeast Asian nation. The trip, Xi's first in six years, has been months in planning and was even briefly considered to take place days before Biden's visit, according to officials. (Reuters)
Beijing has officially accepted the Afghan Taliban’s ambassador to China, “making it the first country to recognize an envoy from Kabul since the Islamist group seized power in August 2021.” (Nikkei Asia)
Poland's new parliament elected Donald Tusk prime minister “nearly two months after national elections won by a coalition of parties ranging from left-wing to moderately conservative.” Earlier in the day, “the parliament rejected the proposed conservative government of acting Prime Minister Mateusz Morawiecki, a widely expected outcome that paved the way for the rival alliance to form the next government.” (DW)
Guyana President Irfaan Ali said there is “‘absolutely no slowing down’ in production plans” for oil majors operating in Guyana’s waters despite Venezuela’s threats to take over the Essequibo region. Ali said Guyana’s troops “are prepared to defend the nation’s territory after Venezuela’s Nicolas Maduro revived a long-dormant dispute” over the region. (Bloomberg)
A draft agreement from COP28 “has dropped references to the phase out of fossil fuels after opposition from oil and gas-producing countries led by Saudi Arabia. The document — which will have to be agreed by almost 200 countries — sets out a range of actions that countries ‘could’ take to cut emissions to net zero by 2050.” (Financial Times)
“When President Biden signed the Inflation Reduction Act into law last year, he set an ambitious goal of making half of all new cars sold in the U.S. fully electric by 2030. In real terms, that amounts to roughly 7 million electric vehicles a year, at least at today’s sales figures.” One million EVs were sold in the U.S. this year, “a new and significant milestone, but one that falls severely short of the kind of growth that the White House had been hoping to see.” (Intelligencer)
Russian opposition leader Alexei Navalny is missing, according to his supporters who said that they “had lost contact with him and that they have been unable to ascertain his whereabouts for almost a week.” His spokeswoman said Navalny was no longer in the prison colony “about 140 miles east of Moscow where he had been held in recent month.” (Washington Post)
Senate Appropriations Chair Patty Murray is warning of a possible government shutdown. She said Democrats “would not agree to a bill that slashes spending any further than the debt ceiling deal Congress reached earlier this year,” and “directly criticized House Speaker Mike Johnson for ‘refusing to live with the agreement that’s been signed into law negotiated by his party with the President.’” If no deal is reached early next year, a shutdown could come in February. (Semafor)
“Despite negative headlines and growing concerns about social media’s impact on youth, teens continue to use these platforms at high rates — with some describing their social media use as ‘almost constant,’ according to a new Pew Research Center survey of U.S. teens.” (Pew Research Center)
Economy
“Nearly all of the job growth in the economy in November came from just three sectors: health care, government employment, and leisure and hospitality.” (Axios)
Hasbro Is Cutting About 1,100 Jobs, Citing Weak Holiday Sales. (Bloomberg)
Occidental Petroleum will acquire shale oil producer CrownRock in a deal valued at about $12 billion. Oxy “beat competition from rival bidders that had also tried to snap up CrownRock’s shale assets.” (Financial Times)
“Bitcoin posted its steepest drop in almost four months as traders moved to lock in profits following a more than 150% rally this year, triggering large liquidations of bullish bets.” (Bloomberg)
Boeing is elevating Stephanie Pope to become its new chief operating officer, “setting her up as the heir apparent to Chief Executive David Calhoun as the plane maker prepares for its next leadership transition.” Boeing extended Calhoun’s retirement age in 2021, and he “expects to remain in the top job at least one more year.” (Wall Street Journal)
The United Auto Workers has filed unfair labor practice charges with the National Labor Relations Board against Honda, Hyundai, and Volkswagen, “accusing the automakers of unlawfully interfering with worker organizing” at facilities in Indiana, Alabama, and Tennessee, respectively. The UAW “alleges the activities range from surveillance of workers at Honda to confiscating, destroying, and prohibiting ‘pro-union materials in non-work areas during non-work times’ at Hyundai.” (CNBC)
Technology
Epic win: Jury decides Google has illegal monopoly in app store fight. Three years after Fortnite-maker Epic Games sued Apple and Google for allegedly running illegal app store monopolies, Epic has a win. The jury in Epic v. Google has just delivered its verdict — and it found that Google turned its Google Play app store and Google Play Billing service into an illegal monopoly. After just a few hours of deliberation, the jury unanimously answered yes to every question put before them — that Google has monopoly power in the Android app distribution markets and in-app billing services markets, that Google did anticompetitive things in those markets, and that Epic was injured by that behavior. They decided Google has an illegal tie between its Google Play app store and its Google Play Billing payment services, too, and that its distribution agreement, Project Hug deals with game developers and deals with OEMs were all anticompetitive. (The Verge)
The Commerce Department, in “the first of many coming federal investments in computer chip production,” said that it will provide $35 million from the bipartisan CHIPS and Science Act “to increase production at a New Hampshire factory making chips for military aircraft.” (Associated Press)
New York State and partners including Applied Materials, IBM, and Micron Technology will invest $10 billion “in a semiconductor research facility at the University at Albany that is set to include some of the most advanced chip-making equipment in the world. NY Creates, a nonprofit that oversees the Albany NanoTech Complex where the facility is to be built, will coordinate its construction.” (Wall Street Journal)
Intel, Samsung, and Taiwan Semiconductor Manufacturing Company are competing to make “2 nanometer” processor chips that will power the next generation of devices and AI. TSMC “remains the analysts’ favourite to maintain its global supremacy in the sector, but Samsung Electronics and Intel have identified the industry’s next leap forward as a chance to close the gap.” (Financial Times)
Nvidia has participated in almost six times as many venture capital investments this year than in 2022, becoming “one of the most prolific investors in artificial intelligence start-ups.” Nvidia said it had “invested in ‘more than two dozen’ companies this year, from big new AI platforms valued in the billions of dollars to smaller start-ups applying AI to industries such as healthcare or energy.” (Financial Times)
TikTok will invest more than $1.5 billion and to take a 75% stake in Tokopedia, “the Indonesian superapp GoTo’s e-commerce unit, the companies announced on Monday. The move provides a lifeline to the globally popular short video app that was hit by a local ban on online shopping sales on social media platforms.” (Nikkei Asia)
A security tester discovered that Grok, the AI language model created by Elon Musk’s xAI, denied a query “with the statement, ‘I’m afraid I cannot fulfill that request, as it goes against OpenAI’s use case policy.’ That made ears perk up online since Grok isn’t made by OpenAI — the company responsible for ChatGPT, which Grok is positioned to compete with.” (Ars Technica)
Investing[dot]com, “one of the most highly-trafficked financial news websites in the world,” is using AI to generate articles “that bear an uncanny resemblance to stories published just hours earlier by other competitors.” The Tel Aviv-based site “has been relying on AI to create its stories, which often appear to be thinly-veiled copies of human-written stories written elsewhere.” (Semafor)
Smart Links
India overtakes Hong Kong to become the world’s 7th largest stock market. (Reuters)
What’s Next for Interest Rates? An Era of ‘Peak Uncertainty.’ (New York Times)
Citi Explores New Deal Structures in Battered CO2 Offsets Market. (Bloomberg)
SpaceX set to launch mysterious X-37B space plane for US military. (CNN)
Humanoid robots are doing some lifting in Amazon's warehouses. But is the human form the ideal shape for the task? (Insider)
Inside the World Excel Championships (Yes, You Read That Right). (Wall Street Journal)