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The World
Federal Reserve sparks market rally as it signals interest rate cuts in 2024: Federal Reserve chair Jay Powell sent his clearest signal yet on Wednesday that the US central bank was done with two years of tightening monetary policy and would begin cutting rates in 2024, sending Wall Street’s benchmark index closer to a record high as investors celebrated the prospects of lower borrowing costs. The Fed held interest rates at a 22-year high, but the decision came alongside new forecasts from central bank officials pointing to 75 basis points worth of cuts next year — a more dovish outlook for rates than in previous projections. (Financial Times)
Dow Jumps 512 Points, Tops 37000 for First Time: The S&P and Nasdaq rose 1.4% and bond yields slid after the Fed signaled rate cuts. Ten-year Treasury yields settled at 4.032%, falling below 4.1% for the first time since August. (Wall Street Journal)
Gold price jumps as dovish Fed sends dollar sliding. (Financial Times)
Top defense officials from US and China meet after Taiwan rift: The Pentagon’s most senior China official has met his Chinese counterpart for the first time since he flew to Taiwan in February on a secret trip that derailed top-level military talks between the two men. Michael Chase, the top US defence official for China policy, recently met Major General Liu Zhan, the Chinese defence attaché in Washington. The meeting occurred before the summit between presidents Joe Biden and Xi Jinping in San Francisco last month. The meeting suggests the US and China are making some progress towards improving relations between their militaries after Beijing closed formal communication channels in August 2022 after then-House Speaker Nancy Pelosi visited Taiwan. (Financial Times)
Analysts say the “risk of an ‘armed clash’ erupting on the Korean peninsula in the coming months has reached a critical level” with the partial suspension of a military accord and “the provocative launch of anti-Pyongyang leaflets” by defectors living in South Korea. (South China Morning Post)
Japan Wants a Stronger Military. Can It Find Enough Troops? (New York Times)
How the COP28 deal was won but the battle for 1.5C may be lost: Fossil fuel economies resist pressure from vulnerable countries needing financial assistance to deal with climate change. (Financial Times)
“COP28 defied the pessimists.” For the first time, “the world has agreed to move away from the coal, oil and natural gas that are the principal causes of global warming. The 198 parties to the UN Framework Convention on Climate Change agreed on a text that called for a transition away from fossil fuels ‘in energy systems, in a just, orderly and equitable manner.’” (The Economist)
COP28 President Sultan al-Jaber “claimed the goal ‘aligns more countries and companies around the North Star of keeping 1.5 degrees Celsius within reach than ever before,’ referring to the Paris Agreement target for limiting global warming.” (Politico)
In the End, an Oil Man Won a Climate Summit Deal on Quitting Oil (New York Times)
BP says ex-CEO Bernard Looney “will lose out on as much as $40.6 million in compensation as the result of his abrupt resignation over past relationships with colleagues.” The amount “includes the maximum potential value of salary, pension payments, deferred bonuses and other compensation he might have received, before taxes.” (Wall Street Journal)
The European Commission will let Hungary start claiming reimbursements on projects worth up to $11 billion “after finding it had fulfilled conditions on the independence of its judiciary. The European Union had frozen the money over concerns that Prime Minister Viktor Orban's government was doing too little to uphold the rule of law and combat corruption.” (DW)
Guyana President Irfan Ali “vowed there will be ‘absolutely no overstepping into the sacred space’ of his country” before talks on Thursday with Nicolás Maduro, “who declared last week that two thirds of Guyana’s land should be annexed by Venezuela.” Ali said “the border, which was agreed in 1899 when Guyana was a British colony, was not negotiable.” (Times of London)
Education Dept. Is Investigating Six More Colleges Over Campus Discrimination: Stanford, Rutgers and U.C.L.A. were among those being looked into as accusations of hateful rhetoric on campuses have led to a spike in inquiries by the agency. (New York Times)
Economy
More CEOs at big American companies plan to add workers than just three months ago, according to a new Business Roundtable survey. The results “are consistent with a slow but steadily growing economy — one that looks likely to avoid the oft-predicted recession in coming months.” (Axios)
The producer price index, which tracks wholesale inflation before it impacts consumers, “was flat from October to November after having fallen 0.4% the month before. Measured year over year, producer prices rose just 0.9% from November 2022, the smallest such rise since June.” (Associated Press)
The World Bank is warning that “surging interest rates are saddling the world’s poorest countries with record levels of debt.” Low- and middle-income countries “paid $443.5 billion toward principal and interest in 2022. That is the highest level in history and a 5 percent increase from 2021.” The World Bank expects that total to rise by nearly 40% this year. (New York Times)
The SEC will require hedge funds and brokerages “to centrally clear far more of their U.S. Treasuries trades in a major structural overhaul for the $26 trillion market.” The SEC says the new requirements will “serve as a backstop by sitting between buyers and sellers. In a partial win for hedge funds, they would be exempt from having to centrally clear their cash Treasuries trades.” (Bloomberg)
Washington’s NBA and NHL teams are expected to move “to a new arena in Northern Virginia as soon as 2028, potentially upending the regional sports landscape.” Ted Leonsis, who owns the Wizards and the Capitals, and Virginia Gov. Glenn Youngkin “appeared together Wednesday at an event in Alexandria’s Potomac Yard neighborhood where the terms of the framework were detailed.” (Washington Post)
The Tipping Backlash Has Begun: As of November, service-sector workers in nonrestaurant leisure and hospitality jobs made $1.28 an hour in tips, on average, down 7% from the $1.38 an hour they made a year prior. The data is according to an analysis of 300,000 small and medium-size businesses by payroll provider Gusto. The tipping slowdown is a gloomy development for all types of workers who rely on holiday tips as a chunk of their annual income. It reflects a broad frustration with the proliferation of tip requests at dry cleaners and bridal boutiques and even self-checkout machines that have sprung up since the pandemic. (Wall Street Journal)
However, “most Americans are planning to be as generous in holiday tipping this season as they were last year — if not more.” According to Bankrate, 15% of U.S. adults will increase how much they tip this holiday season compared with last year, 44% plan to tip the same amount, and 13% say they are decreasing holiday tips this year. (Axios)
Technology
The U.S. is leading a “push at the United Nations to mobilize all governments to support ‘AI for good and for all,’” according to UN Ambassador Linda Thomas-Greenfield. The US “wants the UN to explicitly affirm that AI will be deployed consistent with the UN's founding documents — the U.N. Charter, which aims to rid the world of war, and the Universal Declaration of Human Rights.” (Axios)
Axel Springer, OpenAI strike "real-time news" deal for ChatGPT (Axios)
ASML and Samsung will invest $760 million “to build a research center in Seoul's metropolitan area as the partners look to develop next-generation memory chip equipment” that uses extreme ultraviolet lithography technologies. The deal “comes as global chipmakers compete to develop advanced semiconductors using ASML's EUV equipment.” (Nikkei Asia)
Support for a TikTok ban “has crumbled this year, even among Republicans, further undermining a Republican-led push to outlaw the popular video app nationwide.” A Pew Research Center poll found that 38% of U.S. adults support a federal TikTok ban, down from 50% in March. “While GOP leaders have furiously campaigned this year to ban the app, their constituents remain unsure.” Republicans’ rate of support for a ban dropped from 60% to 50%. (Washington Post)
“Big U.S. companies including Walt Disney and Comcast increased advertising spending on Instagram after pausing commercials on X last month.” Disney’s spending on Insta was up by 40% in the two weeks following November 20. Meanwhile, Paramount tripled its spending on Snapchat. (Reuters)
SpaceX has hit a $180 billion valuation, a 20% increase from its previous high of $150 billion. SpaceX’s latest valuation “ranks the company above the market value of any of the top U.S. defense contractors — including Boeing (about $150 billion), Lockheed Martin (about $112 billion) and Northrop Grumman (about $73 billion),” as well as AT&T and Verizon. (CNBC)
More than two million Teslas with the Autopilot feature are being recalled. According to the recall notice, in certain circumstances when the feature is engaged “and the driver does not maintain personal responsibility for vehicle operation and is unprepared to intervene as necessary,” there may be an increased risk of a crash. Tesla will release a free software update to resolve the issue. (USA Today)
Smart Links
Apple now requires a judge's consent to hand over push notification data. (Reuters)
Citigroup Offers Partial Early Bonuses to Encourage Staff Departures. (Bloomberg)
Two former Department of Energy staffers warn we’re doing carbon removal all wrong. (MIT Technology Review)
Humans could use black holes as batteries, physics paper claims. Here's how. (LiveScience)
More than 10,000 research papers were retracted in 2023 — a new record. (Nature)