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The World
U.S. stocks fell in a volatile trading session, dragged down by news that the first known case of the Omicron variant was identified in the U.S. The Dow Jones lost 461.68 points, erasing an intraday rally of nearly 521 points. The S&P 500 fell 1.2%; its 3.1% loss for Tuesday and Wednesday is the benchmark index’s largest two-day percentage decline in more than a year. The Nasdaq fell 1.8%. (Wall Street Journal)
The federal government could be heading for a temporary shutdown starting Friday at midnight, with Republicans poised to stall a must-pass funding bill to force a debate on rolling back the Biden administration’s COVID-19 vaccine mandates for some workers. Conservative Republicans in the House and Senate who are opposed to Biden’s vaccine rules want Congress to take a hardline stand against the mandated shots, even if it means shutting down federal offices. “We’re opposed to the mandate,” said Sen. Ron Johnson (R-Wis.). “We don’t want the federal government to be able to fund them in any way shape or form.” (Associated Press, Washington Post)
China and the U.S. are preparing for a meeting between their top military officials amid rising tensions over Taiwan and an arms race over the most lethal hypersonic weapons. Following last month’s virtual call between presidents Xi and Biden, the two militaries have been in touch to discuss the possibility of U.S. Defense Secretary Lloyd Austin holding talks with Xu Qiliang, vice-chairman of the Central Military Commission, and Defense Minister Wei Fenghe. (South China Morning Post)
Beijing summoned Japan’s envoy to complain about former Japanese prime minister Shinzo Abe’s remarks on Taiwan. Abe said Japan would treat a Chinese invasion of Taiwan as a crisis for its own security, the latest indication that Tokyo would take part in any armed defense of the self-governed island. (South China Morning Post, The Times)
Women’s Tennis Association chair and chief executive Steve Simon decided to suspend all tournaments in China, including Hong Kong, effective immediately. "In good conscience, I don’t see how I can ask our athletes to compete there when Peng Shuai is not allowed to communicate freely and has seemingly been pressured to contradict her allegation of sexual assault," Simon said. The WTA has 10 events scheduled in China for 2022, including the Finals. (Sports Illustrated)
The U.S. is delaying a deal to remove Trump-era tariffs on UK steel and aluminum because of Washington’s concerns about London’s threats to change post-Brexit trading rules in Northern Ireland. Brussels and Washington have repeatedly warned London that unilaterally changing the EU-UK accord that sealed Britain’s exit from the bloc in 2020 could threaten peace on the island of Ireland. In a communication seen by the FT, a US commerce department official stated that talks with the UK on easing metals tariffs could not move ahead. (Financial Times)
The world’s trust in science and scientists is rising amid the pandemic: More than four in 10 people worldwide in 2020 expressed "a lot" of trust in science (41%) and the scientists in their respective nation (43%). Both figures are up nine percentage points from the last Wellcome Global Monitor study in 2018. (Gallup)
The U.S. ranks as the world’s leading contributor of plastic waste and needs a national strategy to combat the issue, according to a congressionally mandated National Academy of Sciences report. The U.S. generates about 287 pounds of plastics per person. Overall, the U.S. produced 42 million metric tons of plastic waste in 2016 — almost twice as much as China, and more than the entire European Union combined. (Washington Post)
Most American adults younger than 30 are concerned about the U.S. and its democracy. Young adults say, 55% to 44%, that they're more fearful than hopeful about the future of America -- a shift from earlier this year, when most said they were hopeful. Only about one-third now describe the US as a healthy or even "somewhat functioning" democracy, with 52% saying it's a "democracy in trouble" or that it's failed altogether. Young Republicans are especially pessimistic: 70% say American democracy is in trouble or failed, compared with 45% of young Democrats who say the same. Young Americans place the chances of a second civil war occurring in their lifetimes at 35%. They also place the chances that at least one state secedes at 25%. Mental health remains a struggle for young Americans, with nearly 25% grappling with thoughts of self-harm. (CNN, Harvard Youth Poll)
Economy
Turkey’s finance minister has resigned and been replaced by a loyalist to President Recep Tayyip Erdogan amid a sharp plunge in the lira. Lutfi Elvan, who was seen as the last remaining voice of economic orthodoxy in the Turkish leader’s cabinet, asked to be relieved of his duties. The former technocrat was replaced by Nureddin Nebati, who last week made a fulsome public defense of Erdogan’s policy of cutting interest rates despite rising inflation. (Financial Times)
China is planning to ban companies from going public on foreign stock markets through variable interest entities, closing a loophole long used by the country’s technology industry to raise capital from overseas investors. The ban, intended in part to address concerns over data security, is among changes included in a new draft of China’s overseas listing rules that may be finalized as soon as this month, said the people, asking not to be identified discussing private information. Companies using the so-called VIE structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval. (Bloomberg)
U.S. junk bonds fell in November by the most in more than a year on fears the spread of the Omicron coronavirus variant will hinder the ability of low-rated companies to repay their debts. A high-yield bond index compiled by Ice Data Services dropped just over 1% in November, marking only the second month this year in which the gauge has posted a negative total return and its worst showing since September last year. (Financial Times)
Amazon revenue from third-party sellers will reach $121B in 2021, up from $60B in 2019, as seller fees reach 34%, up from 30% in 2018 and 19% in 2014. (Institute for Local Self-Reliance)
Venture capitalists have bet big on crypto start-ups in 2021, investing more than $27 billion globally as of late November, more than the previous 10 years combined. Many of the investments were made by the venture capital arms of crypto companies, businesses whose continued growth will depend on the ecosystem expanding. (DealBook)
Technology
Microsoft is creating its first standalone version of Microsoft Teams for small businesses. Microsoft Teams Essentials will be priced at $4 per user per month and provide access to the core meeting features of Teams without the typical Office app bundling that requires a more expensive Microsoft 365 plan. This standalone version makes Teams even more of a Zoom competitor, as Microsoft is dropping its Slack-like channels functionality in favor of a more simplified chat interface and a focus on meetings and video calls. (The Verge)
While most streaming services are still trying to scale up, a fresh challenge is emerging for companies hoping to be viable players in the market: large-scale churn. Deloitte predicts that more than 150 million people will cancel a paid streaming subscription in 2022, with a global churn rate of 30%. In the U.S., the churn rate is 38%. The growth in churn is driven by Gen Z, who make up a majority of so-called churn and return subscribers. Deloitte research suggests that some 25% of consumers have engaged in that habit. (The Hollywood Reporter)
Facebook took down disinformation networks tied to a broad swath of political actors and events around the world, including militant group Hamas, Chinese state groups and the immigration crisis along the Belarus-Poland border. The company also removed accounts run by anti-vaccine groups that were using evolving tactics to attack doctors in Europe. Together, the cat-and-mouse game described in the company’s latest threat report continues to demonstrate how social media is an active battlefield where governments and motivated parties attempt to manipulate public opinion. It also shows the might of the global platform, which has recently come under renewed fire for its role in spreading societal harms. (Washington Post)
Meta selects AWS for its cloud expansion and AI collaboration. (Protocol)
TikTok is introducing new ways for its creators to make money from their content. While the short-form video platform already allows creators to accept virtual gifts from fans during TikTok LIVE videos, new features will allow creators to accept payments and gifts when they’re not livestreaming through the addition of Tips and Video Gifts. The company is additionally expanding access to its Creator Marketplace, which helps brands connect with creators for sponsored content and recommendation videos. (TechCrunch)
Square is changing its name to Block, effective December 10, and renaming Square Crypto to Spiral, as its business shifts toward technologies like blockchain. Jack Dorsey’s payments giant said the new name “acknowledges the company’s growth” and “creates room for further growth.” (CNBC)
Smart Links
Apple tells suppliers demand for iPhone 13 lineup has weakened. (Reuters)
Capital One drops overdraft fees. (Wall Street Journal)
KPMG expects auditors back in offices four days a week in future. (Financial Times)
1 in 3 people around the world have never used the Internet, U.N. estimates. (Washington Post)
Instacart plans 15-minute delivery trial as rival startups grow. (The Information)
Foldable smartphone shipments reached a record 2.6M units in 3Q21, up 480% YoY, with Samsung accounting for a 93% share. (Display Supply Chain)