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The World
The Pentagon has convinced more than a half dozen allies to join a strengthened naval task force in the Red Sea amid mounting attacks by Iran-backed rebels on commercial shipping that have driven oil prices higher. The announcement of what Lloyd Austin, US defence secretary, called Operation Prosperity Guardian came just hours after UK oil supermajor BP said it was halting all shipments through the waterway, citing the “deteriorating security situation”. BP is a large producer of oil in Iraq and gas in Oman. More than 9mn barrels a day of oil shipments, or almost a tenth of global demand, pass through the Red Sea, making it one of the world’s busiest energy chokepoints. (Financial Times)
In its 12th round of sanctions against Russia since the invasion of Ukraine, the European Union targeted “the lucrative diamonds industry, more than 140 officials and organizations, and closing loopholes that Moscow has used to bypass previous punitive measures.” (Associated Press)
EU leaders are “brainstorming ways to stop Viktor Orbán from blunting Brussels’ support for Kyiv, officials and diplomats said, after the Hungarian leader’s intransigence over Ukraine aid marked a new low in his relations with the bloc.” (Financial Times)
“The prospects for passing legislation to speed military aid to Ukraine this year are fading, as Republicans balk at striking a quick deal on immigration policy changes they have demanded in exchange for allowing the bill to move forward.” (New York Times)
Taiwan said two Chinese balloons flew north of its territory as China “increases pressure on the self-ruled territory it claims as its own ahead of a presidential election in January. The balloons crossed the sensitive Taiwan Strait separating the island from China and” were detected about 110 nautical miles northwest of Keelung on Sunday. It was the second time this month that Taiwan reported a Chinese balloon near its territory. (Associated Press)
Seven European nations pledged “to eliminate CO2-emitting power plants from their electricity systems by 2035.” Taken together, the seven — Austria, Belgium, France, Germany, Luxembourg, the Netherlands, and Switzerland — “account for nearly half of EU power production.” (Reuters)
Pope Francis “formally approved letting Catholic priests bless same-sex couples, the Vatican announced, a radical shift in policy that aimed at making the church more inclusive while maintaining its strict ban on gay marriage.” While the action “was heralded by some as a step toward breaking down discrimination in the Catholic Church, some LGBTQ+ advocates warned it underscored the church’s idea that gay couples remain inferior to heterosexual partnerships.” (Associated Press)
In a Gallup poll on satisfaction with key players in the U.S. medical system, “nurses receive the best rating by far, with 82% saying they provide excellent or good medical care, and doctors rank second at 69%.” At the bottom were “pharmaceutical or drug companies (33%), health insurance companies (31%), and nursing homes (25%).” (Gallup)
College enrollment among young Americans has been declining gradually over the past decade, and “most of the decline is due to fewer young men pursuing college. About 1 million fewer young men are in college but only 0.2 million fewer young women. As a result, men make up 44% of young college students today, down from 47% in 2011.” (Pew Research Center)
Economy
A Federal Reserve official said it is appropriate for the central bank to begin looking ahead to lowering interest rates in 2024 because of how inflation has improved this year. San Francisco Fed President Mary Daly said her outlook for interest rates and inflation was “very close” to the median of projections from 19 Fed officials last week. Most of them penciled in at least three rate cuts next year amid a faster decline in inflation than they anticipated. “We’re acknowledging progress when progress is there,” Daly said in an interview Monday. (Wall Street Journal)
Nippon Steel will buy U.S. Steel for $14.9 billion, meaning that “one of America’s most iconic companies will be owned by a foreign entity, despite domestic interest earlier this year.” The $55 per share offer by the Japanese company “represents around a 40% premium to where Pittsburgh-based U.S. Steel shares ended trading on Friday,” and is “substantially higher than the rebuffed bids from American rivals Cleveland Cliffs and Esmark.” (Axios)
BP will halt all oil shipments through the Red Sea, “in the latest sign of an escalation in the crisis caused by Yemeni rebels’ attacks on vessels in the area that is threatening a key route for global trade.” The decision “came hours after the UK’s maritime authority said it had received reports of ‘incidents’ in the Red Sea and advised vessels to proceed in the region with ‘caution.’” (Financial Times)
“Higher interest rates are choking off construction of warehouses that feed America’s growing e-commerce appetite, putting an end to a building boom that remade vast swaths of the country.” Industrial property construction starts were 48% in the first nine months of the year compared with the same period in 2022. (Wall Street Journal)
President Biden has quietly shelved plans for an economic partnership with the UK “that could have led to a free-trade deal before the next election.” The agreement, “which covered 11 areas, had indicated negotiations would begin before the end of 2023 and finish before elections on both sides of the Atlantic next year.” (Times of London)
Technology
OpenAI “laid out its plans for staying ahead of what it thinks could be serious dangers of the tech it develops, such as allowing bad actors to learn how to build chemical and biological weapons.” The company’s new Preparedness team “will hire AI researchers, computer scientists, national security experts and policy professionals to monitor the tech, continually test it and warn the company if it believes any of its AI capabilities are becoming dangerous.” The team “sits between OpenAI’s ‘Safety Systems’ team, which works on such existing problems as infusing racist biases into AI, and the company’s ‘Superalignment’ team, which researches how to ensure AI doesn’t harm humans in an imagined future where the tech has outstripped human intelligence completely.” (Washington Post)
A song of hype and fire: The 10 biggest AI stories of 2023 (Ars Technica)
X is the first tech company “to face an investigation under Europe’s tough new regulations designed to clean up social media and protect people from toxic online content.” European Commissioner Thierry Breton announced that “formal infringement proceedings” against had begun under the Digital Services Act. In response, Elon Musk “questioned whether the EU would also scrutinize other social media sites.” (Associated Press)
Tesla rival Nio has secured $2.2 billion “from Abu Dhabi-backed CYVN Holdings in a boost for the Chinese electric vehicle maker as Middle East groups and Beijing increasingly join forces in the clean tech transition.” The deal will give CYVN 20% of Nio’s shares “and is intended to ease worries among some analysts over the lossmaking company’s finances.” (Financial Times)
Carl Icahn plans to oust directors at gene-sequencing company Illumina, “laying the groundwork for a second board challenge” just months after shareholders elected one of his director candidates. Icahn “disclosed his plans without offering details in a letter to other shareholders less than 24 hours after Illumina said it will divest blood test maker Grail.” (Reuters)
On Thursday, Apple will pause sales of the Apple Watch Series 9 and Apple Watch Ultra 2. The move “comes as the products are facing a potential import ban until August 2028, due to rulings that the watches infringe on patents from Masimo.” (Ars Technica)
Apple, just days away from a US ban of its smartwatches, is plotting a rescue mission for the $17 billion business that includes software fixes and other potential workarounds. Engineers at the company are racing to make changes to algorithms on the device that measure a user’s blood oxygen level — a feature that Masimo Corp. has argued infringes its patents. They’re adjusting how the technology determines oxygen saturation and presents the data to customers, according to people familiar with the work. (Bloomberg)
“A trio of super PACs backed by cryptocurrency executives and investors said Monday that they’ve raised $78 million as part of a major new push to influence the 2024 elections.” The campaign, “which has support from venture capital giant Andreessen Horowitz, U.S. crypto exchange Coinbase and Cameron and Tyler Winklevoss, marks of a revival of the digital asset industry’s political operations, following the downfall of crypto megadonor Sam Bankman-Fried.” (Politico)
“Last year at this time, Meta was navigating a crisis of confidence that had pushed its stock price to its lowest since 2016.” But as of Friday’s close, Meta shares “are up 178% for the year, on pace for their best year ever, topping the 105% jump in 2013, which was the year after Facebook’s IPO.” Among S&P 500 companies, only Nvidia has had a better year, up 235% as of Friday. (CNBC)
Smart Links
Dealmakers Unveil $40 Billion M&A Flurry in Year’s Last Hurrah. (Bloomberg)
Adobe and Figma call off $20 billion acquisition after regulatory scrutiny. (CNBC)
Foxconn rockets into satellites in search of life beyond iPhone. (Nikkei Asia)
Inside Amazon’s Effort to Challenge Musk’s Starlink Internet Business. (Bloomberg)
The VIX Index—the stock market’s “fear gauge” that tracks market volatility, is at its lowest level since before the pandemic. (Axios)
About 58% of U.S. households owned stocks in 2022, up from 53% in 2019. (Wall Street Journal)
The minimum wage will increase in 22 states on New Year’s Day. New York’s will rise to $15 per hour, California $16, and the District of Columbia $17. (Axios)