The Overnight News Roundup
PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.
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MACRO:
Trump named longtime VC David Sacks as the White House's AI and Crypto Czar, signalling the growing influence of tech leaders and loyalists in the new administration. (WSJ)
Trump said he would nominate former Georgia Sen. David Perdue to be the U.S. ambassador to China. Perdue has styled himself as being tough on Beijing amid simmering bilateral tensions, while playing down his personal connections to China. (WSJ)
Chevron will cut capital spending next year for the first time since the pandemic oil crash, dialling back its shale expansion plans just as Donald Trump enters office with a pledge to “drill, baby, drill”. (FT)
Investors have pumped almost $140bn into US equity funds since last month’s election, according to EPFR, as traders bet Donald Trump’s administration will unleash sweeping tax cuts and reforms in a boon to corporate America. (FT)
Bitcoin dropped almost 7% for a short while a day after an historic surge past $100,000 led some traders to hedge for a retreat. (BBG)
Some of Wall Street’s top junk-bond strategists say 2025 is when the trend toward tighter spreads on high-yield US corporate bonds begins to turn. (BBG)
Chinese and Hong Kong shares gained as traders added wagers on stronger growth stimulus. (BBG)
The confidence of Chinese companies is recovering despite a number of headwinds including weak domestic demand and cutthroat competition, state media said before key meetings of top economic decision-makers. (BBG)
PBoC is expected to deliver the biggest interest-rate cuts in a decade next year, in the view of a number of Wall Street banks. Goldman Sachs and Morgan Stanley are among those projecting cuts of 40bps to the RRR in 2025, the largest reduction in a calendar year since 2015. (BBG)
Chinese regulators will raise the financing ratio of stock buyback loans to as high as 90%. (Securities Times)
China’s domestic investment in areas like infrastructure and manufacturing will continue to rise next year, helping reach the target of its latest five-year economic planning that wraps in 2025. (Securities Times)
Corporate earnings in China may continue to underwhelm as the measures taken by Beijing so far are insufficient to reverse the deflationary trend gripping the economy, according to Morgan Stanley. (BBG)
Base salaries for regular workers in Japan rose by a record, supporting rate hike speculation. However, household spending continued to fall from last year’s levels, indicating that the follow through from wages into consumer spending still remains patchy. (BBG)
Japanese companies will find it easier to gain approval for U.S. acquisitions under the incoming Trump administration, the vice chairman of Citigroup C.N in Japan said, even as Trump opposes Nippon Steel's attempted buyout of U.S. Steel. (RTRS)
Japanese Foreign Minister Takeshi Iwaya said Tokyo intends to pick up trade talks with President-elect Donald Trump with an understanding that the elimination of tariffs on cars and auto parts will be on the agenda. (BBG)
The long-held precept that a weak yen is a good thing for Japanese stocks may finally be put to rest, as the breakdown in their correlation accelerates amid divergence in global monetary policy. (BBG)
Japan's biggest opposition party (CDPJ) leader said the BoJ must raise interest rates and continue phasing out its controversial stimulus programme. (RTRS)
The ECB will cut rates more rapidly than previously envisaged to perk up an economy facing weaker growth and inflation, a Bloomberg survey showed. Respondents predict a quarter-point reduction next week and at every policy meeting through June. (BBG)
German industrial production fell by 1% M/M in October from -2.5% M/M in September. On the year, industrial production is down by almost 5%. This is a very weak start to the fourth quarter, increasing the risk of a winter recession in Germany. (ING)
Britain’s balanced trade with the US should reduce the risk that Donald Trump slaps fresh tariffs on its products, business secretary Jonathan Reynolds has claimed. (FT)
Australia's central bank will hold interest rates steady on Tuesday as a resilient labour market keeps inflation elevated, according to economists polled by Reuters who pushed forecasts for the first cut to the second quarter of next year. (RTRS)
The Australian government has increased its financial backing for the construction of the country’s first rare earths refinery as it looks to break China’s stranglehold on the critical minerals supply chain. (FT)
South Korean assets saw choppy trade after initial pressure on comments from the head of the ruling party, who suggested martial law could be declared for a second time, were unwound after the defence ministry downplayed the comments. (BBG)
BoK Governor Rhee says Trump tariffs a bigger concern than martial law crisis. (FT)
RBI held its benchmark repurchase rate at 6.50%, but reduced the cash reserve ratio to ease liquidity pressure. Said it would take steps to attract more inflows amid a weakening in the rupee, pushing the currency slightly higher against the greenback. (BBG)
Turkey removed a ban on short-selling top stocks, a long-awaited move that eases investor concerns over market accessibility.
Mexico’s leader surprised Donald Trump in a phone call by speaking in fluent English, an ability he’s rarely encountered with Latin American leaders. The move eliminated a barrier between the pair by removing the need for a translator. (BBG)
Argentina’s central bank cut its benchmark interest rate by 300 basis points to 32% as inflation expectations fall. It’s the central bank’s eighth rate cut and the smallest since President Javier Milei took office a year ago when borrowing costs were 133%. (BBG)
Chevron Corp. and Shell Plc are in talks to join Argentina’s signature project to ramp up crude exports from its booming shale patch. (BBG)
EQUITIES:
Hewlett Packard Enterprise beat Wall Street expectations for fourth-quarter revenue and profit on Thursday, as it benefits from strong demand for its servers used to power AI applications. Next quarter guidance was in line. (RTRS)
Lululemon beat expectations on top and bottom line, offering holiday guidance that was in line with expectations. The company’s sales have started to slow in the Americas, its largest market, but are growing internationally. (CNBC)
Ulta Beauty beat sales expectations for the fiscal third quarter, fending off fears of heightened competition with rivals and cooling demand for makeup and skincare items. Co. hiked its full-year outlook slightly to reflect better-than-anticipated results. (CNBC)
Docusign surged after Q3 results beat Wall Street estimates. (RTRS)
Amazon Web Services has ceased development of its Inferentia line of AI chips in favor of focusing on Trainium chips. Trainium will be used for both training and inference going forward. (Nikkei)
As New York City hotel rooms reach record nightly rates, city lawmakers are proposing a bill that would walk back some restrictions on hosts of Airbnb properties and other short-term rentals. (WSJ)
City Brewing Co., which makes alcoholic drinks such as White Claw and Pabst Blue Ribbon, is seeking a new loan to boost cash while it explores a potential restructuring that could include a bankruptcy filing. (BBG)
UniCredit could sweeten its spurned all-stock proposal to acquire Italian domestic peer Banco BPM by tacking on a cash component, according to analysts. (CNBC)
Aviva and Direct Line agree outline takeover deal. (FT)
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This Week’s Major Economic Data
That's all for today's digest. Happy trading, and keep it tight!
Team PiQ