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The World
Hungary has blocked an €18bn package of EU financial support for Ukraine, deepening a rift between prime minister Viktor Orbán and Brussels and placing more financial pressure on the war-ravaged country. Budapest told a meeting of EU finance ministers on Tuesday that it would not support a European Commission proposal for loans aimed at helping to plug Kyiv’s 2023 budget gap. Brussels in turn put on hold a decision over Budapest’s own access to €5.8bn worth of Covid-19 recovery funds. (Financial Times)
Russia's second-largest bank, VTB, is hit with a large DDoS attack causing its apps and website to go offline; “IT Army of Ukraine” claims credit for the attack. (Bleeping Computer)
Two months after snubbing US President Joe Biden’s pleas for oil, Saudi Arabia is rolling out the red carpet for his Chinese counterpart, Xi Jinping. Xi will visit Saudi Arabia for several days starting today, during which he will take part in a regional summit with Saudi Crown Prince Mohammed bin Salman and other Arab leaders, promising agreements worth some $30 billion. Energy and infrastructure deals will top the agenda, according to two people briefed on the plans. (Bloomberg)
Russia is seeking to build up a “shadow fleet” of oil tankers to boost exports to Asia and help compensate for western sanctions aimed at crippling President Putin’s war machine. (The Times)
China’s reopening is a bigger driver for oil prices than cap on Russian crude, Singapore foreign minister says. (CNBC)
One million Chinese people are at risk of dying from Covid-19 during the coming winter months if President Xi Jinping pursues his pivot to remove strict pandemic controls, new modeling shows. In a stunning reversal after protests against Xi’s zero-Covid policy, Chinese officials have over the past week started dismantling the pandemic control system of lockdowns, mass testing, state quarantine and electronic contact tracing. Removal of the restrictions risks sparking an unparalleled “winter wave” of Covid infections that would rapidly overwhelm China’s healthcare system, according to projections by Wigram Capital Advisors, an Asia-focused macroeconomic advisory group that has provided modeling to governments during the pandemic. (Financial Times)
China to aim for ‘overall improvement in economic performance’ in 2023 as top-level Politburo sets tone. China will officially lay out its economic priorities for next year at the central economic work conference later this month. Beijing will aim to stabilise growth, employment and prices next year after beginning to ease its strict zero-Covid policy. (South China Morning Post)
Australia’s economy expanded at a slower than expected pace in the three months through September as imports jumped, reflecting ongoing strength in household spending and resilience to the Reserve Bank’s interest-rate increases. Gross domestic product advanced 0.6%, down from 0.9% in the second quarter and just below economists’ estimate of 0.7%, official data showed Wednesday. From a year earlier, the economy expanded 5.9% versus a forecast 6.3%. That was still stronger than the five-year average annual GDP growth of 4.2% prior to the pandemic. (Bloomberg)
The global auto industry remains heavily exposed to the Xinjiang region of China for raw materials, components and other supplies, a new report has found, despite a recent U.S. law intended to restrict purchases from the area, where the Chinese government has committed human rights abuses against mostly Muslim minorities. The report, from a team of researchers led by Laura T. Murphy, a professor of human rights and contemporary slavery at Britain’s Sheffield Hallam University, details the links between Chinese companies with deep ties to Xinjiang and the automakers that use their supplies, such as metals, batteries, wiring and wheels. (New York Times)
Economy
The leaders of some of Wall Street’s biggest banks have issued wary outlooks for the global economy, as consumers spend savings and clients lower their expectations for 2023. Top executives at Goldman Sachs, Bank of America and JPMorgan Chase offered their views at an industry conference on Tuesday. “When I talk to clients, they sound extremely cautious. Many CEOs are watching the data and waiting to see what happens,” said David Solomon, Goldman’s chief executive. Solomon said clients seemed “fatigued after a very volatile year”. (Financial Times)
Goldman Sachs CEO David Solomon signaled that the firm will likely have to trim its operations as it deals with a slowing economy. (Wall Street Journal)
Morgan Stanley Cuts 2% of Global Work Force as Deal-Making Slows: The Wall Street firm had paused layoffs during the pandemic, as deal activity spiked industrywide. The layoffs will affect workers across all divisions. (New York Times)
‘We don’t lay off people’: This is how Bank of America’s CEO plans to reduce employee levels. (CNBC)
Big and small investors are queuing up to pull money out of real-estate funds, the latest sign that the surge in interest rates is threatening to upend the commercial-property sector. Blackstone last week said it would limit the amount of money investors could withdraw from its $69 billion flagship real-estate fund following a surge in redemption requests. Starwood Capital Group shortly after notified investors that it was also restricting withdrawals in a $14.6 billion fund. Other private real-estate funds in the U.K. targeting institutions managed by companies including BlackRock and CBRE Investment Management recently took similar steps to stem outflows. Some U.S. pensions are also starting to yank money out of real-estate funds. (Wall Street Journal)
Goldman Sachs on hunt for bargain crypto firms after FTX fiasco: Goldman Sachs plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange hit valuations and dampened investor interest. (Reuters)
Hong Kong home prices drop to the lowest in nearly five years — and the worst may not be over. Hong Kong’s home price index for the month of October fell 2.4% to 352.4 compared to the previous month, marking the index’s lowest level since November 2017. (CNBC)
Yili Group, China's largest dairy company, has been aggressively expanding abroad and at home as economic growth boosts global demand for dairy products. The company acquired a New Zealand producer in October, and recently opened a new factory in its home region. Sales and nets profit for the January-September period were both record figures, and it is now the fifth-largest dairy company in the world. (Nikkei Asia)
A spreadsheet SBF used in November lists nearly 500 alleged VC investments by Alameda, including in Circle, Genesis, Sky Mavis, Paxos, StarkWare, and Anchorage. As well as running a crypto exchange that didn’t exchange crypto and owning a hedge fund that didn’t hedge, Sam Bankman-Fried had a venture capital fund that didn’t venture its own capital. The VC division, in contrast to the rest of the FTX group, can now provide some insight into where some of the money went. (Financial Times)
Technology
The state of AI in 2022—and a half decade in review: A survey finds that while 50% of businesses have adopted AI in 2022, 2.5x higher than in 2017, AI adoption has plateaued between 50%-60% for the past few years. (McKinsey)
First, AI adoption has more than doubled. Meanwhile, the average number of AI capabilities that organizations use, such as natural-language generation and computer vision, has also doubled—from 1.9 in 2018 to 3.8 in 2022.
Second, the level of investment in AI has increased alongside its rising adoption.
Third, the specific areas in which companies see value from AI have evolved.
Lastly, one thing that has remained concerningly consistent is the level of risk mitigation organizations engage in to bolster digital trust.
European Union privacy regulators ruled that Meta shouldn’t require users to agree to personalized ads based on their online activity, a ruling that could limit the data that Meta can access to sell such ads. The board approved a series of decisions ruling that EU privacy law doesn’t allow Meta platforms, such as Instagram and Facebook, to use their terms of service as a justification for allowing such advertising. (Wall Street Journal)
Apple, AMD, and Nvidia have all indicated plans to buy chips from TSMC's planned Arizona fabs. The chip factories will be owned and operated by Taiwan Semiconductor Manufacturing Company, the biggest foundry company with over half of the global market share. (CNBC)
In a significant victory, Apple has successfully challenged patents at the center of a high-profile dispute with medical device company AliveCor. The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board, or PTAB, on Tuesday ruled that three AliveCor patents covering heart monitoring technologies for wearable devices were unpatentable. AliveCor alleged in federal court and before the International Trade Commission that Apple had copied the technologies with its Apple Watch, and over the summer an ITC judge found that Apple had infringed on two of three patents AliveCor asserted in its complaint. (STAT News)
Smart Links
KPMG staff cheated on professional tests, US regulator says. (Financial Times)
Netflix co-CEO Sarandos says streamer likely to offer multiple ad-supported tiers. (CNBC)
Apple Scales Back Self-Driving Car and Delays Debut Until 2026. (Bloomberg)
Computer Science Students Face a Shrinking Big Tech Job Market. (New York Times)
GE buys out entire NYT print paper in historic first. (Axios)
Germany confronts a broken business model. (Financial Times)