The Overnight News Roundup

Nov 18, 2024

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

Visit PiQ Suite

WASHINGTON:

Trump’s advisers are weighing a new slate of contenders for Treasury secretary amid the messy fight over the position, with former policy advisor and Fed governor Kevin Warsh, Apollo's Marc Rowan, and former policy advisor Bill Hagerty all now in the running alongside Lutnick and Bessent. (WSJ)
Trump's advisers have sought assurances from top contenders for the job of Treasury secretary that they are committed to his tariff plans. (FT)
Trump chose Liberty Energy Chief Executive Chris Wright to lead the Energy Department and picked Brendan Carr to chair the FCC. (WSJ)
Trump’s incoming administration is planning to undermine two core functions of Congress: confirming cabinet officials and controlling spending. (WSJ)
Trump’s consistent campaign pledge to impose sweeping tariffs on products imported into the U.S. is likely to face stiff challenges in court and potentially pushback from Congress. (NBC)
Majority of Senate Republicans have reportedly said privately that Matt Gaetz has no path to be confirmed as Attorney General. (Politico)
Trump is pressing forward with his decision to put Matt Gaetz as attorney general, despite widespread unease on Capitol Hill. (CNN)
Trump's team were caught off guard and “stunned” by Hegseth sexual assault allegation and while it is sticking by him for now, there is speculation the Fox anchor could pull his own nomination. (CNN)
Lobbyists expecting a more conventional pick to lead the government’s health agency than Robert F. Kennedy Jr. are plotting how to stop the Senate from confirming him. (Politico)
The Trump administration’s plans to implement strict border measures, including detentions and deportations, are underway and starting to come into focus, with measures likely to be put in place soon after inauguration. (CNN)
The Biden administration is weighing a last-ditch push for an international agreement that would restrict financial support for foreign oil and gas projects before critical talks start in Paris. (BBG)

MACRO:

US 10yr Treasury note “appears cheap,” but the valuation is still not compelling enough to present a buying opportunity, JPMorgan strategists led by Jay Barry wrote in a note last week. They “prefer to be patient in fading these recent moves.” (BBG)
Morgan Stanley sees 10-year Treasury yields falling to 3.75% by mid-2025 and to just above 3.50% by the end of next year, expecting 75bps of cuts in the first half of 2025. (WSJ)
Asset managers' net long on 2-year T-note futures hit record high, CFTC data showed. Basis trades likely in effect with hedge funds also at new record shorts. (RTRS)
Investors Are Betting on a Market Melt-Up. They have flocked to stock funds at a pace rarely seen since 2008, but some warn that shares look expensive historically. (WSJ)
Some of the bullish trades put on in the days around the US presidential election are being unwound as the prospect of slower interest-rate cuts have helped halt the stock rally. (BBG)
Wall Street analysts are quickly scaling back their forecasts for Corporate America’s earnings growth over the next year, which could pump the brakes on the blistering stock market rally before long. (BBG)
JGB yields fluctuated in narrow ranges on Monday, while USD/JPY faded initial strength, as the closely watched speech and conference by BoJ Governor Ueda failed to provide fresh clues on the pace of rate hikes.
BoJ Governor Ueda said keeping real rates low for too long could cause excessive inflation and force the central bank into hiking interest rates rapidly. Ueda also repeated that the BoJ would keep raising rates if economic and price developments move in line with its forecasts. (RTRS)
Japan's core machinery orders unexpectedly fell in September from the previous month, although they are expected to grow in the current quarter of the year. (RTRS)
The likelihood of a series of rate hikes from the BoJ and further cuts from the Fed will drive the Japanese currency’s recovery to as far as 130 against the dollar, according to some analysts. (BBG)
Equities in China and Hong Kong rebounded from last week’s selloff (albeit have faded through the session) as traders reassess an outlook for further stimulus and the country’s guidance on boosting corporate valuation from Friday. (BBG)
Chinese leader Xi Jinping told President Biden that Beijing remains committed to stable relations with the U.S., an expression of hope for continuity in ties before Donald Trump returns to the Oval Office in the midst of promises to squeeze Beijing over trade. (WSJ)
China will fight back if President-elect Donald Trump follows through on his promise to impose a 60% tariff on Chinese imports, according to Zhu Min, a former top official at the PBoC. (BBG)
Morgan Stanley and Goldman Sachs have turned more cautious on Chinese stocks as persistent deflationary pressures and geopolitical tensions cloud the outlook for earnings in the world’s second-largest equity market. (BBG)
Over 70 firms listed on the Shanghai Stock Exchange have announced plans to use special loans to either buy back shares or for their largest shareholders to boost their stakes. (Shanghai Securities News)
China will likely raise its deficit ratio next year to above 3% of its GDP after Finance Minister Lan Fo’an pledged to implement more “forceful” fiscal policies. (CSJ)
China’s cancellation of tax relief on exports has left the aluminum industry scrambling to assess the impact on supply flows, with Chinese companies suffering steep stock declines while their international peers rally. (BBG)
Gasoline exports from China sank to the lowest since April as refiners scale back operations and a holiday boosted local demand. (BBG)
ECB's de Guindos said the ECB is confident inflation will converge with its 2% target next year, even if some questions over price pressures in services remain. (BBG)
ECB is debating whether to publish sensitive research showing capital requirements for big EU lenders would rise by a double-digit percentage if they had the same rules as large Wall Street rivals. (FT)
Revenue at European companies failed to recover in the third quarter, triggering cuts to earnings expectations into next year. (BBG)
European stocks lag US by record margin as ‘Trump trade’ bites. (FT)
UK inflation probably surged back above the Bank of England’s target in October, reinforcing the case for policymakers to act cautiously when cutting interest rates. (BBG)
UK workers are getting a bigger slice of the economic pie than before the pandemic, signaling a shift in the balance of power away from employers after chronic labor shortages delivered unprecedented bargaining power over wages. (BBG)
UK government has left the door open to forcing pension schemes to invest more in British assets if reforms fail to drive savings into domestic infrastructure and companies. (FT)
Asking prices for UK houses fell more than usual in November after the budget disappointed prospective buyers and affordability remained stretched, according to Rightmove. (BBG)
New Zealand producer prices rose at a faster pace in Q3 vs Q2, with input prices up 1.9% (prev. +1.4%) and output prices up 1.5% (prev. +1.1%). (RTRS)
RBA's Kent said the bank has found no evidence that monetary policy is more potent in the country than elsewhere given households have ways to manage interest rate risks, even though they have more debt exposed to variable rates. (RTRS)
Russian gas flows to Austria were suspended for a second day on Sunday because of a pricing dispute but other buyers in Europe stepped in to snap up unsold volumes, companies and sources said and data showed. (RTRS)
Goldman sees gold rallying to a record next year on central-bank buying and US rate cuts, which listed the metal among top commodity trades for 2025 and said prices could extend gains during Donald Trump’s presidency, reaffirming their $3k/oz 2025-end target. (BBG)
Money managers’ bullish wagers on gold fell to the lowest in more than three months as Donald Trump’s decisive election victory reduced haven demand for the precious metal. (BBG)
The South Korean won, the second-worst-performing currency in Asia this year, looks poised to weaken further as Trump’s tariff threat clouds the export-reliant country’s economic outlook. (BBG)
Thailand’s economy expanded faster than expected in the third quarter on improving exports and spending by the government, which is likely to maintain pressure for rate cuts to tackle slowing private consumption. (BBG)

Visit PiQ Suite

GEOPOLITICS:

The Biden administration has lifted restrictions that had blocked Ukraine from using U.S.-provided weapons to strike deep into Russian territory, in a significant change to U.S. policy in the conflict. Ukraine expected to conduct its first long-range attack in the coming days. No further details available. (RTRS)
Trump's push for peace in the Russia/Ukraine conflict is finding increasing acceptance with many European officials recognizing that an off-ramp to the Russia/Ukraine conflict appears increasingly necessary. (WSJ)
The Trump transition team is increasingly confident that Ukraine is more amenable to holding peace talks with Russia than it acknowledges in public. (WSJ)
Trump's advisers have come up with various Ukraine peace plans. The proposals could require Ukraine to refrain from joining NATO for 20 years while it accepts more weapons to deter a renewed Russian invasion. (WSJ)
Russia unleashed its largest wave of airstrikes on Ukraine in almost three months on Sunday, firing 120 missiles and 90 drones in a sweeping attack that killed at least seven people and caused "severe damage" to the power system. (RTRS)
All Ukrainian regions will experience temporary restrictions on power on Monday following Russia's massive air strike on the energy system, the national grid operator said. (RTRS)
German Chancellor Scholz said his conversation with Putin, which marked the first resumption of direct talks between Putin and the West, had given no indication of a shift in the Russian President's thinking on the war in Ukraine. (RTRS)
Trump’s new administration will revive its “maximum pressure” policy to “bankrupt” Iran’s ability to fund regional proxies and develop nuclear weapons, with new sanctions including on oil exports expected straight after inauguration. (FT)
North Korea May End Up Sending Putin 100,000 Troops for War. (BBG)
Chinese President Xi Jinping and Prime Minister Shigeru Ishiba agreed to strengthen communication at all levels during their first meeting since the Japanese leader took office in October. (BBG)
Taiwan's Lai, in a carefully plotted first trip as president, plans to visit Taipei’s official allies in the Pacific and is expected to pass through some U.S. territories, something Beijing would likely see as a provocation. (WSJ)

EQUITIES:

Nvidia's new Blackwell AI chips, which have already faced delays, have encountered problems with accompanying servers that overheat, causing some customers to worry they will not have enough time to get new data centers up and running. (The Information)
Michael Dell posted on X that the 1st in the world Nvidia GB200 NVL72 server racks are now shipping. "We are thrilled to deliver our liquid-cooled PowerEdge XE9712 to CoreWeave. The AI rocket just got a massive boost!". (X)
Elon Musk’s startup xAI has transferred US$6 billion in AI server orders to Dell from Super Micro Computer, with Dell’s Taiwan partners, Wistron, and Inventec stand to benefit from the orders, according to rumours in Asian press. (UDN)
Three key Nvidia and Apple suppliers from Taiwan (Foxconn, Pegatron, and Quanta) are prepared to boost investments in the US quickly if trade policy changes under incoming President Trump. (Nikkei)
T-Mobile's network was among the systems hacked in a damaging Chinese cyber-espionage operation that gained entry into multiple U.S. and international telecommunications companies. (WSJ)
TikTok parent ByteDance is valuing itself at about $300 billion, one of its highest valuations ever, even as the Chinese tech giant’s popular TikTok app faces the prospect of a looming ban in the U.S. (WSJ)
Hasbro says it is negotiating with suppliers and considering design changes ahead of potential new tariffs. (WSJ)
Rolls-Royce is in early-stage talks with potential commercial customers for its planned micro nuclear reactor, a technology it hopes will also provide power for space missions. (FT)
Hargreaves Lansdown is being sued by more than 5000 Woodford investors, who claim that the broker continued to recommend the Woodford equity fund even as it faced issues. (City AM)
UK government considers ‘flexibilities’ to help carmakers hit electric targets. (FT)
Shein is gearing up to launch its planned London IPO in Q1 2025 subject to pending regulatory approvals and is preparing to hold an investor roadshow in the coming weeks. (The Times)
Kering may appoint Balenciaga CEO Cedric Charbit to lead its Yves Saint Laurent unit, succeeding Francesca Bellettini, who assumed broader responsibilities in 2023. (BBG)
Enel said it plans to increase investment in electricity grids as it seeks to grow shareholder returns under its strategic plan for 2025-27. (WSJ)
TSMC will have a record high 10 semiconductor plants under construction worldwide next year and capex will likely hit US$34-38bn (vs its guidance of "slightly higher" than $30bn), according to analysts. (UDN)
Alibaba has hired banks to sell dollar and yuan bonds that will be used to pay back offshore debt and buy back shares, following the issuance of a record convertible bond earlier this year. (BBG)
Tencent Cloud is increasingly leveraging the WeChat ecosystem to set itself apart from other cloud service competitors such as Microsoft, Amazon, and Google, CEO Dowson Tong said. (CNBC)
China’s top two memory chip makers, CXMT and Fujian Jinhua, are selling mainstream DDR4 DRAM memory chips at nearly half the price of Samsung, SK Hynix and Micron. Samsung and SK Hynix have already cut DDR4 production in response and have focused on higher margin chips. (DigiTimes)
Samsung shares climb more than 7% after surprise $7 billion buyback plan. (CNBC)
South Korea’s antitrust regulators are scrutinizing AI-related M&As, amid concerns companies are looking to dominate the AI semiconductor sector, with Synopsis' acquisition of Ansys under review. (Business Korea)
BHP Group’s Australia chief said the nation can’t rely on its traditional mining export markets and is unprepared for a new era of lower-cost competitors. (BBG)