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The World
Global inflation is showing signs of having peaked, although a likely slow retreat from multi-decade highs means it will remain a bugbear for central banks into 2023. Key inflation gauges released in the US and euro area this week both weakened, while factory-gate prices and inflation expectations among investors are also ebbing. For policymakers, the recent peak “doesn’t mean the worst is over,” said Tom Orlik, Bloomberg’s chief economist. “Even as they edge down, consumer price readings will remain way above the comfort zone for central banks, necessitating further tightening even as recession risks loom.” (Bloomberg)
Mortgage Rates Have Biggest Three-Week Drop Since 2008: The average rate on a 30-year fixed rate mortgage was 6.49% this week, down from a peak of 7.08% on Nov. 10, according to Freddie Mac. (Wall Street Journal)
U.S. consumer spending increased solidly in October, while inflation moderated, giving the economy a powerful boost at the start of the fourth quarter as it faces rising headwinds from the Federal Reserve's aggressive monetary policy tightening. (Reuters)
The economy is expected to have added 200,000 jobs in November, a slower pace than the 261,000 in October. Economists expect the pace of job growth to continue to slow and turn negative at some point next year. Announcements of layoffs and hiring freezes have increased, but economists do not expect to see much impact in the November report when it is released at 8:30 a.m. ET today. (CNBC)
The European Union called for the creation of a special tribunal to hold President Vladimir Putin accountable over his invasion of Ukraine, as more than nine months of war continue to inflict a devastating humanitarian toll on the country’s civilian population. “Russia must pay for its horrific crimes, including for its crime of aggression against a sovereign state,” European Commission President Ursula von der Leyen said in a statement. “We are proposing to set up a specialized court, backed by the United Nations, to investigate and prosecute Russia’s crime of aggression.” (Foreign Policy)
President Biden said he would talk with Putin if the Russian leader expresses a desire to end his invasion of Ukraine, but Biden said he would only do so in consultation with NATO allies. “I’m prepared if he’s willing to talk to find out what he’s willing to do,” Mr. Biden said during a news conference at the White House following a three-hour meeting with President Emmanuel Macron of France. “But I’ll only do it in consultation with my NATO allies. I’m not going to do it on my own.” (New York Times)
Olaf Scholz has suggested that Europe should go back to its pre-war “peace order” with Russia and resolve “all questions of common security” after the war in Ukraine if President Putin is willing to renounce aggression against his neighbors. The German chancellor said he would ultimately like to restore the patchwork of security arrangements stitched together during and after the Cold War, so long as Moscow was ready to honor them. (The Times)
Spanish security forces are investigating a spate of letter bombs sent to political, military and diplomatic targets. Devices were sent to the U.S. embassy and the prime minister’s office, as well as four other destinations, triggering a security alert. On Thursday, security personnel at the U.S. embassy in central Madrid discovered an incendiary device sent by mail. The nature of the targets of the packages has raised suggestions of a link with Russia. Spain has been a vocal supporter of Ukraine’s President Volodymyr Zelenskyy and on November 19, the defense ministry announced it was about to send a new shipment of military aid to the country to help it repel Russian forces. (Politico)
Russia is now using nuclear-capable missiles with non-explosive warheads to exhaust Ukraine's air defenses, the Ukrainian military said. (BBC)
The U.S. is working with Middle Eastern countries to move a handful of their air defense systems to Ukraine, according to the CEO of Raytheon Technologies. The goal is to send National Advanced Surface-to-Air Missile Systems to Ukraine in the next three to six months, CEO Greg Hayes said in an interview. The U.S. would then backfill those systems with new NASAMS in the Middle East over the next 24 months. (Politico)
Chinese cities ease COVID curbs as top virus official hails 'new situation'. After protests, Guangzhou and Chongqing roll back dining and travel restrictions. Meanwhile, China’s top leaders will likely signal a more pragmatic approach toward Covid controls at a key upcoming meeting while putting more focus on boosting economic growth, economists say. (Nikkei Asia Review, Bloomberg)
China accuses UK lawmakers visiting Taiwan of 'gross interference'. (Reuters)
The FDA ended its emergency authorization for the only remaining Covid-19 antibody therapy cleared for use, saying variants that render it ineffective are now dominant in the U.S. (STAT News)
The Supreme Court agreed to hear Joe Biden’s attempt to reinstate his plan to cancel billions of dollars in student debt after it was blocked by a lower court in a challenge by six states that have accused his administration of exceeding its authority. The justices deferred taking action on the president’s request to lift an injunction issued on 14 November by the St Louis-based eighth US circuit court of appeals blocking the program, but said in a brief order that they would hear oral arguments in the case in their session that runs from late February to early March. (The Guardian)
Florida will replace BlackRock as the manager of $2bn in state Treasury funds, part of a spreading Republican backlash against sustainable investing. The move comes after Florida governor Ron DeSantis, a potential Republican US presidential candidate in 2024, led a resolution to stop the state’s pension funds from considering environmental, social and governance principles to guide investment. (Financial Times)
Cyril Ramaphosa’s position as South African president is in jeopardy after an investigation into a stash of cash stored in his sofa found he may have broken rules that could lead to his impeachment. The findings of an independent parliamentary panel that investigated the theft of a large sum of US dollars from his private game farm threaten his bid to be re-elected leader of the ruling African National Congress (ANC) in two weeks. He is expected to address the nation imminently. (Semafor)
Economy
The European Commission has asked the bloc’s 27 member states to approve a price cap on Russian oil of $60 a barrel. The cap by the EU’s executive body would set Russian crude prices significantly below the international benchmark, called Brent, which traded at about $88 a barrel Thursday. (Wall Street Journal)
The average cost for a gallon of gas in the U.S. has dropped below the price it was before Russia invaded Ukraine earlier this year. It is the first time since February that gas prices cost less than $3.50 per gallon, a significant decrease from record prices in the summer. (Axios)
Electric Vehicles Cut US Gas Consumption by a Measly 0.54%: A new report shows that national gasoline usage barely changed in 2021, despite increasing EV adoption. (Wired)
UK house prices fall at fastest pace since June 2020: Drop of 1.4% in November comes as rising borrowing costs weigh on sentiment. (Financial Times)
The European Central Bank says bitcoin is on an “artificially induced last gasp before the road to irrelevance”, in a scathing intervention arguing against giving regulatory legitimacy to the cryptocurrency. (The Guardian)
Walt Disney Co. was working with consulting firm McKinsey & Co. in recent months on an effort to centralize control of major spending decisions, triggering an uproar from top creative executives at the entertainment giant. Discussions regarding the plan were under way in the weeks leading up to Nov. 20, when Disney’s board of directors fired Bob Chapek as chief executive and replaced him with his predecessor, Robert Iger. (Wall Street Journal)
Meme Stocks Are Taking Off Again. Following Wednesday’s monster rally in equities after Federal Reserve Chairman Jerome Powell made comments that were interpreted as potentially pivot-ish, some meme stocks are spending the first day of December joining in the celebrations. AMC, Bed Bath & Beyond, Robinhood and Blackberry are among those that surged after Powell made comments interpreted as a rate pivot. (Bloomberg)
By prematurely celebrating a victory over inflation, investors are making it more likely that the Federal Reserve will keep rates higher for longer. (New Yorker)
A coordinated trial of a four-day work week with no pay reduction in Ireland, the U.S. and a few other countries, including Australia and New Zealand, was a resounding success, with highly satisfied employees, increases in revenue and hiring, and fewer resignations and sick days. All the companies involved in the trial are opting to make the program permanent. (Semafor)
Technology
Neuralink Corp. has yet to achieve its primary goal of implanting a computing device into the brain of a human. And yet, in typical fashion for an Elon Musk venture, the company is already bounding ahead, aiming implants at other body parts. Musk revealed work on two major products in addition to the brain-computer interface, which would need to be drilled into a person’s skull and would initially be used to treat traumatic brain injuries. Neuralink is also developing implants that can go into the spinal cord and potentially restore movement in someone suffering from paralysis. And it has an ocular implant meant to improve or restore human vision. (Bloomberg)
Elon Musk says he’s going to install one in himself when they are ready. Musk said two of the company’s applications will aim to restore vision, even for people who were born blind, and a third application will focus on the motor cortex, restoring “full body functionality” for people with severed spinal cords. (CNBC)
Tesla CEO Elon Musk kicks off first Semi truck deliveries. (CNBC)
AWS announced the launch of AWS Application Composer, a new low-code tool for visually designing and building serverless applications. The service provides developers with a visual canvas and a simple drag-and-drop interface to create the application architecture, connect their resources and design their functions. (TechCrunch)
Opendoor CEO Eric Wu is stepping down from the helm of the company as it grapples with the fallout of a housing market slowdown. Wu is becoming president of the marketplace business at the company he founded. He’s being replaced as CEO by Carrie Wheeler, a TPG Global veteran who has served as Opendoor’s chief financial officer since 2020. (Bloomberg)
An AI that binged on 70,000 hours of people playing Minecraft has learned how to play the game better than any AI before. The bot, created by OpenAI, showcases a powerful new technique that could be used to train machines to carry out a wide range of tasks by binging on websites like YouTube, a vast and untapped source of training data. How they did it: The Minecraft AI learned to perform complicated sequences of keyboard and mouse clicks to complete tasks in the game. It’s the first bot that can craft so-called diamond tools, a task that typically takes good human players 20 minutes of high-speed clicking. Why it matters: The result is a breakthrough for a technique known as imitation learning, in which neural networks are trained how to perform tasks by watching humans do them. Imitation learning can be used to train AI to control robot arms, drive cars or navigate websites. (MIT Technology Review)
Two new papers from AI powerhouses DeepMind and Meta describe how AI systems are notching wins against human players in complex games involving deception, negotiation and cooperation. Machine contenders have struggled with games where information is incomplete or hidden from players — similar to the intentions of humans in daily life and interactions. Driving the news: Researchers from DeepMind outline a new autonomous agent called "DeepNash" that learned to play the game Stratego in a paper published today in Science. (Axios)
Smart Links
The FT’s 25 most influential women of 2022. (Financial Times)
Tesla Delivers Semi Trucks to PepsiCo, Expanding Beyond Passenger Vehicles. (Wall Street Journal)
Austan Goolsbee, Obama’s former chair of the Council of Economic Advisers, tapped to lead Chicago Fed. (Politico)
China tries to keep Europe in play as U.S. seeks united front. (Nikkei Asia Review)
Why central banks are stockpiling gold. (The Economist)
Nintendo’s revenue from mobile games has been dropping all year and remains a miniscule part of its business. (Axios)
Your Creativity Won’t Save Your Job From AI. (The Atlantic)
Xi Jinping in His Own Words: What China’s Leader Wants—and How to Stop Him From Getting It. (Foreign Affairs)
World Cup frenzy puts strain on Qatar’s camels (Associated Press)