FINANCIAL TIMES
-Donald Trump has appointed Scott Bessent as his US Treasury secretary, a top economic official for his second administration. Bessent will oversee Trump's economic pledges, including tax cuts, while maintaining the stability of the world's largest economy, bond market, and the dollar. Trump's economic philosophy aims to bridge traditional free-market conservatism with populism. Bessent has defended Trump's threat of raising tariffs against accusations of upending relations with allies and raising consumer prices. Trump described Bessent as a respected international investor and geopolitical strategist. Trump praised Bessent for helping usher in a new golden age for the US, strengthening its position as the world's leading economy, center of innovation, and capital destination. Trump also emphasized the importance of reinvigorating the private sector and curbing federal debt.
-Elon Musk's criticism of the federal government's inefficiency is echoed by many, but most presidents have struggled to streamline the administrative state. The proposed government department, Doge, will be more of an advisory committee than a government department. Musk faces significant administrative and legislative hurdles, but the biggest obstacle may be maintaining his reformist zeal. The business of government is dull compared to launching rockets, which Musk dislikes bureaucracy and has a short attention span. However, if anyone can solve the problem, perhaps Elon Musk can. In 2017, after statewide power failures in South Australia, Musk promised Tesla to build the world's largest lithium-ion battery, which he completed in 63 days, beating his own deadline.
-US President-elect Donald Trump's strong dollar could negatively impact emerging market bonds, leading to further outflows from the sector. Investors have pulled nearly $5B from funds investing in dollar and local currency denominated bonds this month, bringing this year's total net outflows to over $20B. Global markets have been dominated by Trump trades, with expectations that his tax cuts and tariffs will fuel inflation and push the dollar and Treasury yields higher. Analysts and investors warn that US tariffs could exert downward pressure on emerging market currencies, as demand for their exports falls, wiping out debt investors' returns in dollar terms. Emerging market debt managers at fund firm GAM believe that all of this is going to be negative for emerging markets.
-Israeli military and Hezbollah are engaged in intense fighting in Chamaa, a hill village near Lebanon's southern border. The village is known for the ruins of a crusader citadel and a significant religious shrine. UN peacekeeping force UNIFIL reported that four Italian peacekeepers were admitted to hospital after two rockets hit its base in Chamaa for the third time this week. This marks some of the deepest known advances of Israeli forces into Lebanon since the ground invasion. Israeli Prime Minister Benjamin Netanyahu admitted to parliament that there has been a "certain expansion" of the ground campaign, suggesting that troops are now extending beyond the "first belt" of Lebanese villages closer to the border.
-The Federal Reserve has attributed the sudden increase in market volatility in August to highly leveraged hedge funds selling down their positions to meet internal volatility targets, rather than margin calls from bank lenders. The sell-off in US equities was a result of concerns over the US economy and rising interest rates in Japan, which turned against investors who had borrowed cheaply in yen in a popular trade known as the yen carry. The Fed blamed the liquidity deterioration in the Treasury market and other markets on these hedge funds, stating that measures of leverage averaged across hedge funds in the first quarter of 2024 were at or near the highest level since 2013.
-Italian producers of Parmesan cheese, olive oil, and other delicacies are rushing to ship their products to the US before President-elect Donald Trump can impose new tariffs on imports. The US imported €4.4bn worth of Italian food, wine, and spirits in 2023, but producers fear price hikes following any new levies will curtail American appetite for their products. Michele Buccelletti, a family business producer of olive oil and wine in Tuscany and Umbria, says that producers are rushing to stock up their warehouses before Trump arrives. However, a shortage of cargo space in the run-up to Christmas is constrained, making it difficult to find refrigerated containers. Buccelletti aims to have 50,000 liters en route this month.
-Jaguar Land Rover, owned by Tata Motors, has defended its bold rebranding after a backlash over a new corporate logo and promotional video that did not feature cars. The 30-second clip on X and Instagram featured models dressed in brightly colored outfits to unveil a new company logo that did not feature the iconic "leaper" big cat. The Jaguar campaign drew over 160M views on social media but also angered car enthusiasts, activists, and influencers who were angered that the 90-year-old brand was "going woke" and "throwing away heritage." Jaguar managing director Rawdon Glover said the intended message had been lost in "a blaze of intolerance" on social media and denied that the promotional video was intended as a "woke" statement. He emphasized the need to re-establish the brand and move away from traditional automotive stereotypes.
-A wealthy Italian businessman, Alessandro Bazzoni, was placed on the US Treasury's sanctions list in January 2021 for allegedly trading Venezuelan oil. The US Treasury described him as a "core facilitator" of a network attempting to evade sanctions against PDVSA, Venezuela's state-owned oil company. Despite being listed, Bazzoni continued to run an "important organization" in English polo, acting as patron of two professional teams. He played against Prince William, now Prince of Wales, in a charity polo tournament in July 2022.
-Cuba's annual visitor numbers have nearly halved in six years, dropping from 4.7M in 2017 to 2.4M last year. The country's economy is severely impacted by sanctions, particularly tourism, which is Cuba's third-biggest source of scarce foreign exchange. Last year, tourism generated $1.3B out of total hard currency earnings of $8.4B, well behind the $4.4B earned from exporting state employees, mainly doctors, on contract to friendly countries. Tour operators have experienced significant cancellations from worried tourists during the high season, which stretches from November through March. The country's economy has been strained by a US trade embargo and a new wave of sanctions imposed since 2017. European and US tour companies have attributed the difficulties to regular power cuts and logistical issues, making it increasingly difficult to operate on the island.
NEW YORK TIMES
-President-elect Donald J. Trump has chosen Scott Bessent as the Treasury secretary, a hedge fund manager, to lead the Trump administration's tax plans through Congress. Bessent will be responsible for raising tariffs and cutting taxes. In addition to Bessent, Trump made several other appointments, including Russell T. Vought as the Office of Management and Budget, Lori Chavez-DeRemer as labor secretary, Dr. Martin A. Makary as the Food and Drug Administration, and Dr. Dave Weldon as the director of the Centers for Disease Control and Prevention. A New York judge postponed Trump's sentencing in his Manhattan criminal case, confirming that he would not receive his punishment on Tuesday as planned.
-At a conference in Paris, corporate chiefs, finance ministers, and top politicians called for a "Europe First" policy to counter Donald Trump's protectionist agenda. European business leaders have been watching as Trump doubled down on an "America First" economic policy, putting protectionism and business-friendly tax and regulatory pledges high on the agenda. With the U.S. presidential inauguration less than two months away, they are furiously lobbying policymakers in Brussels with an appeal of their own: Put Europe First. The prospect of a second Trump presidency has galvanized the European business community, as Trump wields bolder promises to disrupt the global economic order, threatening to leave Europe lagging even further behind.
-US officials have been summoned to the White House to discuss strategies for overhauling the security of the nation's telecommunications networks amid growing alarm at the scope of a Chinese hack. The hack was considered so severe that President Biden took it up directly with President Xi Jinping when they met in Peru last weekend. The meeting in the Situation Room came after weeks of officials grew increasingly alarmed by what they had uncovered about the hack. They now believe hackers from a group called "Salt Typhoon," closely linked to China's Ministry of State Security, were lurking undetected inside the networks of the biggest American telecommunications firms for more than a year.
-New York City has been granted federal approval for a congestion pricing plan, the first of its kind in the nation, which will require most drivers to pay $9 to enter the heart of Manhattan. The Federal Highway Administration approved the plan on Friday, but it could still be stopped by lawsuits. President-elect Donald Trump is also opposed to the plan. The plan will join a small club of global capitals around the world that have installed similar tolling restrictions around their gridlocked centers and seen traffic and air quality improve. New York will now join a small club of global capitals that have installed similar tolling restrictions around their gridlocked centers. The plan is expected to be implemented in January 2024.
-Elon Musk, the founder of Tesla, has built businesses in high-tech manufacturing sectors that are now targeted by Beijing for Chinese dominance. His company, Tesla, makes half its cars in China, selling more cars in China than anywhere except the United States. However, Chinese regulators have not yet allowed Tesla to offer its latest assisted-driving and self-driving car technology, while allowing Chinese automakers to race ahead with similar systems. Musk has personally appealed to China's premier, Li Qiang, for permission to proceed with what Tesla calls Full Self-Driving as the company's market share in China has dwindled. Some experts suggest that Beijing may be able to turn Musk into an influential ally in trying to persuade President-elect Donald Trump to take a more conciliatory approach on trade. Musk has strong business ties in China, and his company's market share in China has dwindled, making it difficult for Tesla to compete with Chinese automakers.
-The terms of a potential cease-fire agreement between Israel and Hezbollah in Lebanon are beginning to take shape, according to officials from Lebanon, Israel, neighboring countries, and the United States. The officials cautioned that critical details around implementation and enforcement needed to be worked out, and that disagreements could still scuttle or delay any deal. However, some officials cited reasons for cautious optimism. The proposed agreement calls for a 60-day truce, during which Israeli forces would withdraw from southern Lebanon and Hezbollah fighters would pull back to the north of the Litani River, which runs roughly parallel to the Lebanon-Israel border. The officials from Lebanon, Israel, neighboring countries, and the United States spoke on condition of anonymity to discuss sensitive and evolving negotiations.
-Prime Minister Narendra Modi's party has been accused of using "resort politics" to take over Indian state governments. A lawmaker in Maharashtra, India, Nitin Deshmukh, was detained and pressured to join rebel politicians in an uprising. Deshmukh, who represented a district 350 miles away, planned to take an overnight train but was thwarted by an invitation to have dinner in the suburbs with a senior official from their party. Deshmukh was then kidnapped and held in a hotel behind locked gates. The car was heading across state lines, where he would be restrained and drugged after trying to flee. The incident highlights the power dynamics in Modi's India, where cash, kidnappings, and luxury resorts are used as a means to gain power.
-Alcohol deaths have more than doubled in two decades, with Americans dying of illnesses related to alcohol at roughly twice the rate seen in 1999. Alcohol was involved in nearly 50,000 deaths among adults aged 25 to 85 in 2020, up from just under 20,000 in 1999. The biggest spike was observed among adults aged 25 to 34, whose fatality rate increased nearly fourfold between 1999 and 2020. Women are still far less likely than men to die of an illness caused by alcohol, but they also experienced a steep surge, with rates rising 2.5-fold over 20 years. The rate of alcohol-related deaths has been a significant concern for the health and well-being of Americans.
-A recent study by researchers at the University of Southern California and Cleveland Clinic found that a Covid-19 infection doubled the risk of a major cardiovascular event for up to three years afterward. The study also found that infections severe enough to require hospitalization increased the likelihood of cardiac events as much as or more than having previously had a heart attack did. This has led to a growing body of research suggesting that this risk can last until well after the infection has cleared. Dr. David Goff, director for the cardiovascular sciences division at the National Heart, Lung and Blood Institute, said that many people are at even greater risk of heart attack than they were before. Heart disease is already the leading cause of death on our planet before the pandemic, making this situation concerning.
-The Environmental Protection Agency (EPA) has proposed a rule to update emission limits for nitrogen oxides, harmful air pollutants from burning fossil fuels. These gases can contribute to asthma and respiratory infections, especially in children, older people, and those who are immuno-compromised. The rule, for the first time in almost two decades, would update emission limits for nitrogen oxides. The rule aims to better protect communities against pollution from natural gas plants and ensure that the power sector has shown that additional pollution controls can be affordably and reliably implemented. Joseph Goffman, the EPA's assistant administrator for air and radiation, stated that these stronger standards are necessary to better protect nearby communities' health.
NEW YORK POST
-A new report by taxpayer-transparency group OpenTheBooks reveals that President Biden's administration spent $267M on studying "misinformation" since his presidency, as President-elect Donald Trump pledges to remove the term from the federal lexicon and make significant spending cuts. The funding was directed towards universities, nonprofits, and companies, peaking at $126M in 2021. The scope of the "misinformation" grant-making emerged as Trump's advisory Department of Government Efficiency (DOGE) seeks to trim wasteful spending. Entrepreneur Vivek Ramaswamy, who leads the DOGE with billionaire Elon Musk, said that the truth is often stranger than fiction when it comes to government spending. OpenTheBooks does not account for the cost of in-house efforts by the Biden White House and executive branch agencies to fight alleged incorrect speech, including pressuring social media companies to censor content.
-TJ Maxx CEO Ernie Herrman has suggested that the discount retailer may benefit from Trump's proposed tariffs. Under the proposals, a universal 10%-20% tariff could be imposed on imports from all foreign countries, and an additional 60%-100% tariff could be imposed on imports specifically from China. This could create additional availability of goods at advantageous prices for TJ Maxx, as manufacturers could bring in goods early. Herrman declined to speculate on what will happen with tariffs but said that the company is "set up to ensure that we maintain our value gap" between its competitors. No matter what happens with tariffs, the company will ensure its values are proportionately below them as they always have been. TJ Maxx also owns Marshalls, HomeGoods, HomeSense, and Sierra.