The Overnight News Roundup

Dec 02, 2024

PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.

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MACRO:

CAC and the Euro are underperforming and French yields are rising after France's National Rally party said they view the government as having ended talks about making concessions on the social security budget, setting the stage for a no-confidence vote on Monday. (AFP)
France Finance Minister Armand said France won’t accept artificial budget deadlines from Le Pen even as she gave her strongest indication yet that she’s prepared to push forward a no confidence vote this week. (BBG)
France had its rating maintained by S&P on Friday evening, which also maintained its outlook at stable amid political and budget uncertainty. (RTRS)
Trump has been telling friends he denied Robert Lighthizer — his pro-tariff, China-hawk U.S. trade representative in the first term — a Cabinet role because he's "too scared to go big." He's loyal but too timid to take big, risky swings, Trump contends. (Axios)
Elon Musk has been relentless in pushing "radical reform" of almost everything. As he sits next to Trump discussing administration picks, Musk often asks if the person embodies "radical reform" — massive cuts and blow-it-up-to-rebuild instincts. (Axios)
Trump on Saturday threatened tariffs of 100 per cent against the so-called Brics countries unless their governments agree not to create a new currency as an alternative to the US dollar. (FT)
Trump said he discussed the border, trade and energy with Canadian PM Trudeau in a "very productive" meeting. Trudeau promised Trump that Canada would toughen controls over the long undefended joint border, a senior Canadian official said. (RTRS)
Republicans like Biden’s Inflation Reduction Act as it funnels money into red states and as a result, it likely will not get enough votes in Congress for it to be repealed. Industry executives think the CHIPS Act will survive too. (WSJ)
Top House and Senate lawmakers are deeply divided over what, if anything, to do about the hit to the budget that would come by renewing the slew of Trump tax cuts benefiting millions of Americans that are set to expire at the end of next year. (Politico)
Trump has chosen Kash Patel to be FBI director, moving to force out the bureau’s current leader, Christopher Wray, before the end of his 10-year term in favor of a fierce loyalist who has promised to upend the nation’s premier law-enforcement agency. (WSJ)
A handful of more moderate Republican senators, including Mitch McConnell, could stymie Trump's legislative agenda, and even block the confirmation of some of his most controversial cabinet nominees. (FT)
President Biden pardoned his son Hunter Biden on Sunday, wiping away his criminal convictions on tax and gun charges despite saying earlier this year he wouldn’t grant such a reprieve. (WSJ)
Black Friday spending in U.S. retail stores was muted this year in contrast to a more robust rise online, as bargain-hungry Americans skipped stores in favor of their phones and laptops, according to data from Mastercard and other data providers. (RTRS)
Roughly one-third of small-business owners cited tariffs as the policy change most likely to affect them under the second Trump administration, according to a Vistage Worldwide survey, second only to tax policy. (WSJ)
SNB's Schlegel warned on Saturday Switzerland is feeling economic weakness spilling over from its key trading partner Germany. Said that if they were in crisis the SNB would lower rates and look after the Franc not getting too strong. (BBG)
ECB's Lane said while inflation had fallen close to the ECB’s target of 2%, there is a little bit of distance to go. Said policy decisions at some point in the future need “to be driven by upcoming risks rather than being backward-looking.” (FT)
ECB's Kazaks said in his view rate cuts must continue. (BBG)
Japan’s government bond yields rose after Bank of Japan Governor Kazuo Ueda said interest rate hikes are “nearing” as economic trends develop in line with the central bank’s forecasts. (BBG)
Japanese companies increased investments in the three months through September, pointing to stronger-than-expected resilience in corporate confidence and supporting views that the BoJ may raise rates sooner rather than later. (BBG)
The Japanese government proposed a higher investment return target for the nation’s largest pension fund, a move that may open the way for it to increase purchases of stocks. (BBG)
China's factory activity expanded modestly for a second straight month in November, the official NBS PMI survey showed, adding to a string of recent data suggesting a blitz of stimulus is finally trickling through. (RTRS)
China’s manufacturing activity expanded for a second straight month, according to the private Caixin survey. (BBG)
China's Politburo, that President Xi leads, appeared to have missed its huddle last month, the first time the group failed to publicly convene since May 2023. It’s unclear whether the Politburo failed to convene in November, or if the group discussed sensitive matters it didn’t want to reveal. (BBG)
China’s residential market sales fell again in November, suggesting the property sector still has some ways to go before it can show a sustained recovery. (BBG)
China has established a fault tolerance and exemption mechanism as an incentive to encourage companies owned by the central government to invest more boldly. (Securities Daily)
China's 10-year government bond yield fell on Monday to its lowest level in 22 years. (RTRS)
Australian retail rose strongly in October, suggesting consumers are opening their wallets ahead of the holiday season, which could further dent hopes of an interest-rate cut from the RBA by early next year. (WSJ)
New Zealand home prices are forecast to rise around 5% in the next two years as lower interest rates boost demand again following a 19% correction in the market following the pandemic, according to a Reuters poll of housing experts. (RTRS)
New Zealand has halted all poultry exports after confirming its first case of bird flu on an egg farm in the southern region of Otago. (BBG)
Some UK policymakers express concerns about whether Elon Musk will complicate Labour’s bid to build ties with the new US president, as well as efforts to strengthen tech regulation. (FT)
UK house prices rose in November at the fastest annual pace since November 2022, according to data from mortgage lender Nationwide, adding to signs of resilience in the property sector despite higher borrowing costs. (RTRS)
Britain's Institute of Directors said on Sunday that optimism among its members had fallen to the lowest since the onset of the COVID-19 pandemic, following tax rises in finance minister Rachel Reeves' first budget on Oct. 30. (RTRS)
British business confidence ticked downwards in November to a five-month low but remained healthy overall, with companies still feeling upbeat about their trading prospects, a survey from Lloyds Banking Group showed. (RTRS)
Britain’s banks may be putting extra money aside to cover bad loans due to confusion around the country’s faulty labor market data. (BBG)
The UK is expected to decide early in the new year whether it will continue to release key economic data before financial markets open. (BBG)
Russia’s exclusion from uranium fuel supply chains has made the case for restarting one of the UK’s biggest nuclear power plants more compelling, the facility’s joint owner, Cameco, has said.
South Korean President Yoon Suk Yeol faces another test of his leadership as the main opposition party vies to control the annual budget, an outcome that would cast further doubt on his ability to enact policy as the nation braces for Donald Trump’s return. (BBG)
South Korea’s top financial regulator opposes proposed changes to corporate law sought by investors as a way to address undervaluation of the nation’s stock market. (BBG)
South Korea's trade minister said the country needs to purchase more US energy, which is competitive in cost with Middle East imports. The comments suggest South Korea will seek to encourage US energy imports through government-run firms and private refiners. (BBG)
The Indian rupee declined to a new all-time low after data showed a sharp slowdown in the economic growth. Bonds extended gains on bets the central bank may cut interest rates sooner than anticipated. (BBG)
European gas traders expect prices next summer to be higher than the following winter, an unusual bet that reflects the steep cost of refilling the continent’s storage facilities as it tries to wean itself off Russian supplies. (FT)
The Norwegian government’s plans to open up for mining on the sea floor have been shelved as part of a deal to get its budget through parliament. (BBG)
Coinbase policy chief expects speedy approval of crypto laws following Trump’s victory. (CNBC)
XRP, a token linked to Ripple Labs Inc., has vaulted rivals to become the third-largest cryptocurrency in a $100 billion rally. (BBG)
US ETFs investing directly in Bitcoin and Ether are enjoying unprecedented demand, where the groups of Bitcoin and Ether ETFs each posted record monthly net inflows in November. (BBG)
A quartet of asset managers have filed with US regulators to create ETFs that invest in bitcoin, but use derivatives to minimise or completely protect against potential losses. (FT)

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GEOPOLITICS:

China has been studying the impact of western sanctions on Russia, visiting Moscow periodically, to draw lessons on how to mitigate them, particularly in the case of a conflict over Taiwan. (WSJ)
Syrian rebels’ advance breaks war’s fragile stalemate. Islamist group Hayat Tahrir al-Sham has advanced from its Idlib stronghold in lightning raid on Aleppo. (FT)
Egypt is in talks with Israel to reopen the Rafah border crossing with Gaza as part of a new effort that could allow more aid to flow into the enclave and create movement toward a broader deal to halt the fighting there. (WSJ)
Ukraine PM Zelenskyy has suggested a ceasefire deal could be struck if Ukrainian territory he controls could be taken "under the NATO umbrella" - allowing him to negotiate the return of the rest later "in a diplomatic way". (Sky News)
More Ukrainian soldiers have deserted in the first 10 months of this year than in the previous two years of the war, highlighting Kyiv’s struggle to replenish its frontline ranks as Russia captures more territory in eastern Ukraine. (FT)
The US Navy has just tested a prototype machine called TRAM to safely load missiles on warships at sea, saving critical time to reload ships amid rising China tensions. (WSJ)

EQUITIES:

Microsoft has cut Nvidia GB200 AI server orders by 40% due to a problem with the backplane interconnect design that could delay mass production until March 2025, according to a CTEE report, citing unnamed supply chain sources, and adding the problem is with a cartridge connector module made by a US company. (CTEE)
Nvidia is expected to launch the next-generation GB300 platform in mid-2025 with better performance than GB200 AI servers and fully liquid cooled, where a number of thermal solutions firms, including Auras Tech and Asia Vital Components, are expected to benefit.
OpenAI is betting on a suite of new AI products, building its own data centres and a crucial partnership with Apple to supercharge its next phase of growth, as it targets reaching 1 billion users over the coming year. (FT)
Since the election, people close to Elon Musk have said he despises OpenAI's Sam Altman. Meanwhile, executives at Facebook and Google are concerned that Musk could push to regulate their companies more aggressively. (WSJ)
Nvidia has approached several Taiwan-based machine tool and component makers, including Hota Industrial, Chieftek, and Hiwin, to join its humanoid robot supply chain. Rumors suggest NVIDIA may also establish a robot assembly base in Taiwan as part of its plans. (UDN)
JPMorgan and Tesla have mutually agreed to drop their legal battle over a $162M stock warrant dispute linked to Elon Musk's 2018 "funding secured" tweet about taking Tesla private at $420/share. (RTRS)
Chinese EV maker BYD has also become a top iPhone manufacturer, assembling more than 30% of Apple's tablet. (WSJ)
Consumers are reading the fine print of return policies, and some have stopped buying altogether from retailers that charge for returns. (WSJ)
Stellantis shares are pressured after chief executive Carlos Tavares resigned abruptly on Sunday. (RTRS)
Volkswagen workers will go on warning strikes on Monday at plants across Germany, labour union IG Metall said, marking the first large-scale walkouts at Volkswagen's domestic operations since 2018. (RTRS)
Prosus NV reported an 89.5% jump in core headline earnings during its half year, driven by accelerated growth and improved profitability of its e-commerce businesses and China's Tencent.
Unilever CEO said the company is looking to sell several food brands that have combined sales of around EUR 1bln, FD reports. (Newsquawk)
Direct Line Insurance CEO Adam Winslow urged shareholders to support his turnaround plan amid Aviva's GBP 3.3bln takeover bid, The Times reports. (Newsquawk)
Nikkei heavyweight Fast Retailing shares declined after a spokesperson said the company is concerned about Chinese demand following comments from its chairman that the retailer is not using cotton from Xinjiang. (BBG)
Samsung Electronics’ plans to cut more than 100 executives from its semiconductor division, an unprecedented downsizing of senior leadership in the division. (Chosun)
Baidu has received a licence to test autonomous vehicles with its Apollo Go robotaxi service in Hong Kong as it expands its footprint outside the Chinese mainland. (RTRS)
Sales of Huawei Technologies’ latest flagship Mate 70-series smartphones are expected to fall short of the demand generated by the Mate 60, according to analysts, citing the new model’s weaker processor performance and heightened supply chain risks amid geopolitical tensions. (SCMP)
Macau’s gaming revenue rose 14.9% in November, exceeding analysts’ expectations in a month that’s typically slow due to a lack of holidays. (BBG)
Adani investor GQG’s shares plunge over 15% after UBS downgrades stock, cuts target price. (CNBC)
Two of Australia’s largest gold miners have agreed a A$5bn ($3.2bn) takeover deal as the booming price for the commodity continues to drive consolidation in the sector. Northern Star Resources has agreed to take over rival De Grey Mining in an all-share deal. (FT)