Weekend Papers Summary
FINANCIAL TIMES
-The "Granolas" group, consisting of 11 companies, has boosted European stocks to a record high, resembling the "Magnificent Seven" in the US. The group, which includes pharma companies GSK and Roche, Dutch chip company ASML, Switzerland's Nestlé and Novartis, Danish drugmaker Novo Nordisk, France's L'Oréal and LVMH, the UK's AstraZeneca, German software company SAP, and French healthcare firm Sanofi, has accounted for 50% of gains on the Stoxx Europe 600 index in the past 12 months and for about half of all mergers over the past five years.
-Nvidia's sales to data center customers increased five times due to widespread use of its chips for training large language models in generative AI. After-tax profits soared from $1.4B to over $12B, exceeding even optimistic forecasts. These results pushed Nvidia to an intraday valuation of $2T, making it the third most valuable tech company after Apple and Microsoft. The earnings also triggered a wider stock market rally, pushing the S&P 500 index to a new record high.
-Goldman Sachs CEO David Solomon is facing a new wave of unrest within the Wall Street bank, threatening a fragile peace among its partners. Solomon's decision to accept a 24% pay rise last week, despite presiding over the bank's worst annual earnings for four years, has been controversial. The departure of longtime lieutenant Jim Esposito has allowed simmering tensions to boil over in Goldman's London office. The turmoil comes as Goldman's share price edges towards an all-time high. Solomon appeared to have strengthened his position after 12 months of critical coverage of his leadership style and appeared more relaxed at a partners' meeting in Miami Beach.
-Former Austrian chancellor Sebastian Kurz has been found guilty of perjury in a politically charged trial that has lasted six months. The verdict, delivered in Vienna, handed Kurz an eight-month conditional sentence with a three-year probationary period. The judgment will not have legal effect until Kurz's appeals are exhausted. The case against Kurz, which began over two years ago, revolved around statements he made in 2020 to a parliamentary investigative committee probing corruption in his government. Kurz's lawyer said he would appeal against the verdict.
-EU President Ursula von der Leyen has emphasized the EU's commitment to Ukraine's war against Russia, stating that the EU stands firmly by the country financially, economically, militarily, and morally until the country is finally free. This comes as the G7 nations prepare to hold a meeting in Kyiv. EU support for Ukraine is crucial due to the near-halt in US aid and uncertainty over the US presidential election in November. Ukraine's top general, Oleksandr Syrskyi, thanked Kyiv's western partners for their support.
-The German central bank has burned through €19.2B of provisions and €3.1B reserves to absorb losses from higher interest costs last year. The Bundesbank is expected to make another significant loss this year, exceeding €700M of remaining reserves. The downturn is embarrassing for the country's respected institution, especially due to the European Central Bank's bond-buying program, which Bundesbank officials opposed. The losses stem from a divergence between the higher interest rate the bank pays to commercial banks and returns from its vast portfolio of government bonds. The bank plans to carry forward any losses to be offset by future profits, as it did in the 1970s.
-Top Republican lawmakers have called for McKinsey to be banned from securing federal contracts in the US due to the revelation that a think-tank led by the consulting firm gave policy recommendations to the Chinese central government. Marco Rubio, the vice-chair of the Senate intelligence committee, and Michael McCaul, the chair of the House foreign affairs committee, said McKinsey had undermined US security through its role in developing Beijing's 13th five-year plan in 2015. The report also revealed that the Chinese government's central planning agency had commissioned a McKinsey-led think-tank called the Urban China Initiative to produce research for Beijing's 2016-2020 five-year plan.
-Israel has unveiled its plans for Gaza after hostilities end, presenting a proposal that contradicts the US objectives. The one-page document, released by Prime Minister Netanyahu's office, does not mention the Palestinian Authority's role and rejects unilateral international steps towards recognition of a Palestinian state. It also foresees a security buffer within the besieged enclave, which the US opposes. The Israeli document, "The Day After Hamas Principles," divides Gaza's future into near, medium, and long-term phases, indicating that Israel will continue its blockade and will remain involved in civilian life there.
-France's CMA CGM has warned of a volatile year ahead due to the Red Sea crisis, causing increased costs for container shipping companies. The crisis has caused diversions around the Cape of Good Hope, adding up to two weeks to journeys between Asia and Europe and creating extra charges. Despite a surge in freight rates since mid-November, the extra costs may outweigh the benefits. CMA CGM predicts an additional 8% in container shipping capacity will come online in 2024, similar to last year's levels. Most container ships are avoiding the route and the Suez Canal due to Houthis attacks.
-A US court ruling has re-emphasized reproductive rights, prompting Donald Trump to support access to in vitro fertilization. The Alabama Supreme Court ruled that unborn children are considered children without exception based on developmental stage, physical location, or other ancillary characteristics. Critics argue that recognizing unborn children as children threatens women's rights. At least two fertility providers in Alabama have partially halted their treatments due to the ruling, with the University of Alabama at Birmingham putting some treatments on hold.
-China's Communist party has intensified its stance towards Taiwan, putting pressure on the country as President-elect Lai Ching-te prepares to take office in May. Wang Huning, China's senior official in charge of Taiwan policy, emphasized the need for Beijing to fight separatism and achieve the complete unification of the motherland. This tougher language confirms expectations that Beijing will push Taiwan towards unification after Lai's victory in the January 13 presidential election. The ruling Democratic Progressive party, which insists Taiwan is an independent country, has won an unprecedented third term in office. Beijing claims Taiwan as part of its territory and threatens to take it if Taipei resists.
THE NEW YORK TIMES
-The war’s cost has been brutal, but many Russians feel optimistic. Two years into its invasion of Ukraine, Russia has suffered enormously by some metrics. But it is faring better than expected by others.
-In May 2023, Senator Charles E. Grassley revealed a document in the FBI's possession that could reveal a criminal scheme involving then-Vice President Biden. Grassley, an Iowa Republican, suggested that the FBI was covering up corruption allegations against Biden. This led to the Republican push to impeach Biden as a payback for Democrats' treatment of former President Donald J. Trump. The document, known as an F.B.I. Form 1023, was the central accusation of Biden taking a $5 million bribe from the executive of Ukrainian energy company, Burisma.
-Alabama lawmakers are considering legislation to protect in vitro fertilization after a State Supreme Court ruling led some clinics to halt treatments and left many women in limbo. The ruling declared frozen embryos should be legally considered children, causing a scramble among leaders to preserve access to this crucial reproductive treatment for families struggling with infertility and LGBTQ couples seeking to have children. At least three major fertility clinics in Alabama have halted treatments as doctors and lawyers assess the possible consequences of the ruling.
-Former President Donald Trump has called on the Alabama Supreme Court to protect in vitro fertilization treatments, which he believes should remain legal in every state. Trump broke his silence on the ruling, which has highlighted divisions in the Republican Party between those who believe life begins at conception and those who want to protect reproductive services like IVF. He emphasized the need to make it easier for mothers and fathers to have babies, including supporting the availability of fertility treatments like IVF in every state in America. The ruling has sparked backlash from a broad spectrum of Americans who support IVF treatments.
-A Manhattan jury has found the National Rifle Association, the nation's most prominent gun rights group, guilty of financial misconduct and corruption. The former leader, Wayne LaPierre, used NRA funds for personal expenses, while two other top executives failed to fulfill their duties. The case, brought by New York's attorney general, Letitia James, involved the group's former treasurer, Wilson Phillips, and general counsel, John Frazer. The NRA was found to have ignored whistle-blower complaints and submitted false filings to the state. The NRA has been a powerful lobbying group in American politics.
-US Secretary of State Antony J. Blinken has reaffirmed the US's stance on Israeli settlements in Palestinian territories, stating that they are "inconsistent with international law." This follows a policy change under the Trump administration, which he described as a return to a decades-long US stance on the issue. Blinken expressed disappointment at Israel's announcement of thousands of new residences in settlements, stating that such expansion weakens Israel's security.
-The first private spacecraft on the moon, Odysseus, has toppled over, according to the company that built it. The spacecraft, which was the first U.S. vehicle to land softly on the moon since Apollo 17, is in good condition but has toppled over. The spacecraft's antennas are not pointed directly at Earth, limiting the amount of information that can be sent back and forth. Odysseus has not sent back any photographs since landing, but engineers at Intuitive Machines are still trying to extract more information from the spacecraft. The landing was salvaged through serendipity and frantic work. The spacecraft was supposed to enter a circular orbit about 62 miles above the surface, but due to inaccuracies in its trajectory, it ended up in an elliptical orbit. Flight controllers turned on laser range finders to check the spacecraft's altitude during landing, but discovered that one laser had not fired and safety switches on the two range finder lasers were still enabled when Odysseus went to space.
THE NEW YORK POST
-Former Vice President Joe Biden allegedly told Russian billionaire Yelena Baturina and her husband, ex-Moscow Mayor Yuri Luzhkov, to "be good to my boy" during a 2014 speaker phone conversation. Jason Galanis, a federal inmate who defrauded an American Indian tribe, testified that Biden called into a party in Brooklyn featuring his son, Devon Archer, and the Russian power couple. Biden called his father, Hunter Biden, and put the call on speakerphone. Biden and his friends were told to gather at a restaurant to call his father. Biden called his father, and Biden said "hello" and "good luck." Biden responded with "everything is good," and Biden said he would call his father later. The House impeachment inquiry is ongoing.
-Yale University will reinstate standardized testing requirements for incoming students, joining a few elite schools that have abandoned the controversial test-optional policy during the pandemic. The Ivy League school argues that the current policy disadvantages students from low-income, first-generation, and rural backgrounds. Well-resourced high schools have substitutes like advanced courses and extracurriculars.