>>> US After Hours Summary: Quiet session; ACAD +9.5% jumps on S&P SmallCap 600

After Hours Summary: Quiet session; ACAD +9.5% jumps on S&P SmallCap 600 inclusion; DAVE -6.8% down on FTC referring its case to DOJ

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: VSTM +18.8% (FDA Acceptance and Priority Review of New Drug Application for Avutometinib), ACAD +9.5% (replacing Independent Bank Group (IBTX) in the S&P SmallCap 600), CMPO +8.6% (to spin off Resolute Holdings Management), SGML +7.7% (exceeds fourth-quarter production target), AIV +6.1% (to sell properties in Miami for $520 mln), FTAI +3.6% (launches Strategic Capital initiative), GTN +0.7% (to change company name), ADCT +0.3% (completes enrollment of Phase 3 confirmatory clinical trial of ZYNLONTA), PSN +0.1% (selected for $7 billion Austin Light Rail project)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: SGMO -56.8% (to regain full rights to Hemophilia A Gene Therapy Program), DAVE -6.8% (FTC refers case to DOJ), RR -5.5% (to delay 10-K filing), CORT -0.3% (submits new drug application to FDA)

The Information : ByteDance Planned to Spend $7 Billion on Nvidia Chips Next Yea

ByteDance Planned to Spend $7 Billion on Nvidia Chips Next Year

The Takeaway
• ByteDance is talking to data center operators about accessing Nvidia Blackwell chips
• ByteDance operates the top consumer AI chatbot in China
• Its co-founder said capital expenditures for AI would surpass those of other Chinese tech giants

ByteDance continues to use Nvidia’s most advanced artificial intelligence chips despite U.S. efforts to block Chinese companies from using them.

The Chinese owner of TikTok recently told suppliers it planned to spend up to $7 billion to access Nvidia chips outside China in 2025, according to a person who has been involved in the plan. The effort, led by co-founder Zhang Yiming, would make ByteDance one of the world’s biggest consumers of such hardware.

Taking advantage of loopholes in the U.S. restrictions, ByteDance has been using Nvidia’s Hopper AI chips, which cannot be exported to China under the rules, at data centers outside China. And Zhang recently has been in talks with data center operators in Southeast Asia and elsewhere to access Nvidia's next-generation Blackwell chips when they become available next year, according to two people who have been involved in the company’s plans.

ByteDance’s moves show how difficult it’s been for the Biden administration to cut off China’s access to critical hardware for AI, as Chinese companies including ByteDance have accessed such chips outside China—including by renting them in the U.S.—without violating the U.S. restrictions. They also reflect the seriousness of Zhang’s push to make ByteDance a global AI powerhouse on par with rivals such as Meta Platforms, despite a looming TikTok ban in the U.S.

The U.S. is now working on new rules restricting the sale of advanced AI chips to countries in Southeast Asia and the Middle East, which could impact ByteDance’s efforts.

Hopper chips became available in late 2022 and quickly became a hot commodity, leading to shortages as AI developers including OpenAI, Anthropic and ByteDance began using them. Anticipation has been building for Blackwell chips, set to launch en masse next year, as AI firms develop bigger and bigger clusters of AI chips to train and run large language models and video models.

Capex Commitments

Zhang has been involved in some of the negotiations with suppliers for AI-focused data centers, which the company is leasing or building. Zhang told some suppliers ByteDance intends to spend more than any other Chinese tech giants on capital expenditures for AI—hardware, land and building construction—in the next two years.

He also said he will personally oversee these development projects while making sure the company has enough computing power to train and run its AI models, according to one person who is involved in the conversations. (American AI developers such as OpenAI from time to time have struggled to get enough servers to develop and power their products.)

A ByteDance spokesperson said some information in this article was “not correct,” without elaborating. An Nvidia spokesperson declined to comment.

Like Meta, ByteDance was taken aback by the leap OpenAI made two years ago with the conversational AI models that power ChatGPT. ByteDance has been developing its own models and applications, including video-generating ones, and now operates China’s biggest AI chatbot app by active users, Doubao, which is similar to ChatGPT.

The Doubao mobile app drew 60 million monthly active users last month, according to Aicpb.com, a Chinese website that tracks AI products. (OpenAI says ChatGPT has 300 million weekly users across web and mobile devices.) ByteDance has also been developing versions of its AI for markets outside China.

ByteDance has told some data center suppliers and banks it expects to spend more than $20 billion next year on AI chips, data centers and other kinds of hardware such as undersea cables, according to one of the people working with ByteDance and another person who’s involved in financing these projects. The company hasn’t yet finalized its 2025 budget for such spending, the two people said.

Nearly $7 billion of that budget is allocated to overseas cloud services giving the company access to Nvidia chips for AI, according to one of the people working with ByteDance. In comparison, Google has ordered over 400,000 GB200 chips, which are part of the upcoming Blackwell series and could cost more than $10 billion including server hardware. Similarly, Meta has made a substantial order for GB200s that would also cost at least $10 billion, including servers.

TikTok’s Billion Users

Chinese spending on AI hardware pales in comparison to spending by U.S. firms. Meta, which generates roughly the same revenue as ByteDance, projected $38 billion to $40 billion of capital expenditures this year, including for data centers and servers, or nearly a quarter of its projected revenue.

ByteDance leaders won’t hesitate to boost spending if the company’s rivals do, said one of the people working with ByteDance on data centers.

ByteDance is a major customer for a number of global data center operators, and those operators are planning to build new data centers in Southeast Asia and Europe in anticipation of strong AI computing demand from the Chinese tech giant over the next decade. TikTok has more than 1 billion monthly active users outside China.

ByteDance, for example, is the biggest customer of Chindata Group, a China-based data center operator backed by Bain Capital that is working on a $3 billion project to build new data centers in Malaysia—mainly to serve TikTok, according to a person involved in financing the project. Chindata didn’t respond to a request for comment.

Multiple European data center operators are also discussing plans to build new facilities whose main customers would include ByteDance, this person said. The talks with European data center operators are part of ByteDance’s plan to store TikTok’s European user data in local data centers.

>>> US Gapping down

Gapping down
Other news:
  • AXSM -8.3% (Announces Completion and Results of Phase 3 Clinical Program of AXS-05 in Alzheimer's Disease Agitation)
  • WKEY -6.2% (Subsidiary SEALCOIN 2025 Roadmap: Leading Machine-to-Machine Transactions Through Blockchain and Space Innovation)
  • STGW -3.5% (acquires Create. Group)
  • UAMY -2.6% (files for $100 mln mixed securities shelf offering)
  • CANF -1.9% (Recognition of the American Society of Clinical Oncology (ASCO) of the Liver Protective Effect of Can-Fite's anti-Cancer Drug Namodenoson)
  • DJT -1.8% (President-elect Donald J. Trump transfers 114,750,000 shares of Common Stock to Trust)
  • SNAP -1.3% (President-elect Trump urged Supreme Court to pause ban on TikTok, which goes into effect January 19)

>>> US Gapping up

Gapping up
Other news:
  • CMRX +4% (submits Dordaviprone NDA for Accelerated Approval to FDA)
  • PSIX +3.5% (uplisted its common stock to the Nasdaq Stock Market and began trading on that market; will continue to trade under the symbol PSIX)
  • IDYA +3.3% (enters exclusive license with Hengrui Pharma for SHR-4849)
  • MHLD +3.2% (Maiden Holdings and Kestrel Group enter combination agreement)
  • AR +3.1% (positive Barron's article)
  • TC +3% (files for 761,719 ADS offering by selling shareholder)
  • EQT +2.9% (positive Barron's article)
  • SLND +2.9% (announces $20 million conversion of promissory notes due to management to common stock)
  • RLX +1.4% (MSCI ESG Rating Upgraded to "AA", Achieving the Highest Rating in the Global Tobacco Industry)
  • ERJ +1.4% (announces a firm order for six A-29 Super Tucanos from an undisclosed customer)
  • HALO +1.3% (announces FDA approval of Bristol Myers Squibb's (BMY) Opdivo Qvantig with Enhanze for subcutaneous use in most previously approved adult solid tumor Opdivo indications; announces argenx's VYDURA with ENHANZE was granted regulatory approval in Japan for chronic inflammatory demyelinating polyneuropathy; announces Takeda (TAK) received regulatory approval for HYQVIA 10% subcutaneous injection set with ENHANZE in Japan for patients with agammaglobulinemia or hypogammaglobulinemia)
Analyst comments:
  • ARTV +5.2% (initiated with a Buy at H.C. Wainwright)
  • NUVL +0.7% (initiated with a Buy at H.C. Wainwright)
  • AAL +0.6% (upgraded to Outperform from Mkt Perform at Raymond James)

FT : US credit card defaults jump to highest level since 2010

US credit card defaults jump to highest level since 2010
Consumers are ‘tapped out’ after years of high inflation and as pandemic-era savings have evaporated

Defaults on US credit card loans have hit the highest level since the wake of the 2008 financial crisis, in a sign that lower-income consumers’ financial health is waning after years of high inflation.

Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024, up 50 per cent from the same period in the year prior and the highest level in 14 years, according to industry data collated by BankRegData. Write-offs, which occur when lenders decide it is unlikely a borrower will make good on their debts, are a closely watched measure of significant loan distress.

“High-income households are fine, but the bottom third of US consumers are tapped out,” said Mark Zandi, the head of Moody’s Analytics. “Their savings rate right now is zero.”

The sharp rise in defaults is a sign of how consumers’ personal finances are becoming increasingly stretched after years of high inflation, and as the Federal Reserve has left borrowing costs at elevated levels.

Banks have yet to report their fourth-quarter numbers but the early signs are that more consumers are falling significantly behind on what they owe. Capital One, the US’s third-largest credit card lender, after JPMorgan Chase and Citigroup, recently said that as of November its annualised credit card write-off rate, which is the percentage of its overall loans that are marked as unrecoverable, hit 6.1 per cent, up from 5.2 per cent a year ago.


“Consumer spending power has been diminished,” said Odysseas Papadimitriou, head of consumer credit research firm WalletHub.

US consumers exited pandemic-era lockdowns flush with cash and ready to spend. Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because their bank accounts were flush with cash.

Credit card balances soared, rising a combined $270bn in 2022 and 2023, and pushing the total US consumers owed on credit cards above $1tn for the first time in mid-2023.

That spending along with coronavirus-induced supply chain bottlenecks led to a burst of inflation, prompting the Fed to boost borrowing costs starting in 2022.

Higher balances and interest rates have left Americans who cannot pay off their credit card bills in full paying $170bn in interest in the past 12 months ending in September.

That sucked up a portion of the excess cash that was in consumers’ bank accounts, particularly those of low-income consumers, and as a result, more of those borrowers are struggling to pay back their credit card debts.

Hopes that the US central bank will rapidly slash interest rates in 2025 after cuts this year were dashed last week, when officials predicted only half a percentage point of rate cuts next year, compared with a forecast of 1 percentage point three months earlier.

In a sign of how consumers are struggling, even after writing off nearly $60bn in consumer credit card debt in the past year, another $37bn remains in consumers’ cards that is at least one month overdue.

Credit card delinquency rates, which are seen as a precursor to write-offs, peaked in July, according to data from Moody’s, but have only fallen slightly and remain nearly a percentage point higher than they were on average in the year before the pandemic.

“Delinquencies are pointing to more pain ahead,” said WalletHub’s Papadimitriou.

US president-elect Donald Trump’s threat of wide-ranging tariffs, which could increase inflation and interest rates, would be “two problematic things for the consumer in 2025”, he added.

FT : EU plans hot weather ‘stress test’ on railways and power grids

EU plans hot weather ‘stress test’ on railways and power grids
Bloc seeks to respond to growing number of disasters expected as a result of climate change

Railways and electricity grids across Europe may be “stress tested” for hot weather under plans being drawn up by the EU to prepare critical infrastructure for the demands of a warming planet.

The stress testing would be part of a broader policy, due to be presented next year, to respond to the growing number of disasters expected as a result of climate change, said three EU officials with knowledge of the proposal.

Brussels is weighing whether to require EU governments “to do stress testing across energy, health [etc] for a four-degree warmer scenario”, a senior EU official said. “It’s something we believe would be a sensible effort from member states.”

Another official described the move as a “no brainer” that should, if enacted, prompt more resilient infrastructure to be built and “further debate about what needs to be done”.

Temperatures in Europe are expected to increase at least 3C by 2050 compared with pre-industrial levels, according to assessments by the European Environment Agency.

The EEA in March said Europe faced high risks of “heatwaves and prolonged droughts”, even at marginally higher temperatures. “This can lead to acute crises, such as widespread wildfires, critical infrastructure failures, blackouts, and major health and economic impacts,” it said.

The EU has suffered billions of euros worth of damage in the past two years from significant forest fires and floods. Floods in Slovenia in 2023 were estimated to have cost the country 16 per cent of its GDP.

“​​It is a good question for what the kind of extremes we should start to prepare, especially if we have this more longer-term perspective,” said Leena Ylä-Mononen, executive director of the EEA, told the Financial Times. “We are talking about infrastructure or really major industrial installations — they are meant to last for decades.”

She added whether stress testing against a 3C warmer scenario should be “explored” as that would “already have devastating impacts in Europe”.

France is the first member state to have started stress testing nationally. In October it opened consultations on a plan to look at how critical infrastructure fared if temperatures were 4C higher.

In the 2015 Paris climate agreement, countries agreed to limit global temperature rises to well below 2C and ideally to 1.5C above pre-industrial levels.

The global average temperature is expected to surpass 1.5C above pre-industrial levels for an annual year for the first time this year. This is distinct from the Paris agreement target, which is measured over decades rather than in a single year.

Europe is warming faster than other continents because of its geography and surrounding ocean currents.

“What is clear is that whatever scenario for the globe is assumed there has to be an add-on applied [in Europe] because the effects are expected to be worse here than anywhere else,” an EU official said.

Concerns around the readiness of EU countries for the effects of climate change were exemplified in November when devastating floods hit the Spanish region of Valencia, killing at least 231 people.

Other elements of the EU plan are likely to include strengthening early warning systems and providing a framework to provide incentives to private investment into projects to improve the bloc’s resilience against extreme weather.

FT : UK admissions of overseas tax evasion jump 22%

UK admissions of overseas tax evasion jump 22%
HMRC disclosures rise as agency clamps down on tax evasion with cross-border data exchange

The number of people in the UK who admitted not paying tax on their overseas assets jumped by nearly a quarter in 2023-24, according to government data.

A total of 5,643 people admitted not paying enough tax on their foreign assets to HM Revenue & Customs, up from 4,630 in 2022-23 — a rise of 22 per cent — data obtained under a freedom of information request showed.

The government has promised to raise billions of pounds by clamping down on tax evasion and avoidance, with HMRC given funding for 5,000 extra compliance officers in the Budget.

Tax experts said the surge in evasion disclosures had been driven by several factors. These included HMRC sending out a greater number of warning letters, receiving data from more countries on people’s offshore affairs and an increase in public awareness about its data sharing.

“HMRC’s aggressive pursuit of tax avoiders now leaves very few places to hide,” said Graham Caddock, tax investigations director at Lubbock Fine, the advisory firm that issued the FOI request.

He added that the tax authority was “making good use of the information it receives from overseas jurisdictions, checking tax return entries and . . . its database to look for those who are avoiding HMRC altogether”.

Since 2018, international rules have led to the automatic exchange of information on financial accounts between tax authorities. These agreements, developed by the OECD and known as the Common Reporting Standard (CRS), have been signed by 120 countries.

Participant nations include popular tax havens such as Switzerland, Bermuda, the British Virgin Islands and the Cayman Islands. Meanwhile, from 2027, the information sharing programme will be extended to include crypto asset exchanges.

HMRC uses algorithms to identify anomalies between the offshore data records and its data on UK residents. The system then generates “nudge letters” that are sent to individuals when discrepancies are detected.

Dawn Register, tax dispute resolution partner at BDO, an accountancy firm, said she suspected the information HMRC is now receiving is “more accurate and subject to greater analysis . . . using sophisticated AI technology”.

This greater analytic power was likely to be one of the factors driving an increase in tax disclosures.

“Awareness and education around CRS and tax reporting has encouraged more people to come forward and bring their UK tax affairs up to date,” she added.

Individuals can disclose unpaid tax on foreign assets using HMRC’s online worldwide disclosure facility.

The maximum penalty for failing to disclose offshore income can be up to 200 per cent of tax owed and in the most serious cases carries a prison sentence.

Coming forward to make a disclosure after receiving a nudge letter, “significantly reduced” the risk of penalties, said Caddock.

HMRC’s estimates that the tax gap — the difference between what it expected to collect in tax and what is paid — was £39.8bn in 2022-23, with about £5.5bn likely to have been lost specifically to evasion.

HMRC estimated, in data published earlier this year, that the under-declared tax liability of UK-resident individuals with foreign income was about £300mn in 2018-19. The analysis found that about 4 per cent of this group had under-declared their tax liability to HMRC.

FT : The Lex 2024 hits and misses: Stellantis’s fender bender

The Lex 2024 hits and misses: Stellantis’s fender bender
The car in front is no longer a Stellantis — but Ferrari’s performance shows betting on billionaires is here to stay

The end of the year is a time for reflecting on one’s successes and failures, and mining them for insights to apply in the future. The Lex version of this ritual navel-gazing involves sifting through the calls that we made over the past year: those stocks we thought would race ahead and those we touted as set to crash. There are always, inevitably, some hits and misses.

Seen in the rear-view mirror, some of our positions look uncomfortably ill-judged. Take our endorsement of Stellantis, formed from the combination of Italy’s FCA and France’s PSA. In February, we admired chief executive Carlos Tavares’s post-merger axe-wielding, which had driven the carmaker’s 2023 margins to 12.5 per cent, almost double those at Volkswagen.

Since then, the wheels have totally come off the Stellantis story. It has missed expectations, warned on profits and, finally, ejected its chief executive — and its stock has very nearly halved. 


For sure, life has been hard for all European carmakers. Sluggish demand, competition from Chinese automakers and a bumpy transition to electric vehicles have sent the Euro Stoxx Automobiles and Parts index down about 16 per cent since February.  

But much of Stellantis’s skid is of its own making. In the post-pandemic period, it raised forecourt prices so much that its market share eventually cratered. Those plush margins that so enraptured Lex? Bit of a warning signal, as it turns out. Rising margins in consumer-facing businesses are the equivalent of an amber light. As Nestlé’s recent history teaches, what looks like pricing power or efficient marketing spend can just as easily signal a predilection for short-term profit over long-term growth. 

Not all our favoured car stocks have gone off track this year. Lex has long been a fan of Italy’s Ferrari. We called out its better prospects in comparison to Porsche in 2023 — referencing its model of restricted supply and exorbitant pricing — and have continued to highlight its strengths since then. 


And there has been some decent mileage out of this one: Ferrari’s shares are up nearly 30 per cent this year. That is all the more remarkable given the pile-up in European autos and the fact that the luxury sector has wilted.

Clearly, the uber-wealthy who can afford to shell out up to $10mn for a personalised Ferrari are in a different class from the merely very, very affluent. Ferrari has even outperformed Hermès, its functional equivalent in leather goods, to trade at 48 times next year’s earnings. Lex thinks this is a trade that has further to run. Betting on billionaires is here to stay.

>>> Stoxx 600 Pre-Market Indications

  • HSBC (HBC1 TH) +1.7%
  • Var Energi (J4V TH) +1.3%
  • Rio Tinto (RIO1 TH) +1.2%
  • Evolution (E3G1 TH) +1.1%
  • Unilever (UNVB TH) -1.3%
  • Telefonica (TNE5 TH) -1.4%
  • NIBE Industrier (NJB TH) -1.4%
  • Coloplast (CBHD TH) -1.4%
  • Novo (NOV TH) -1.4%
  • Carl Zeiss Meditec (AFX TH) -1.5%
  • K+S (SDF TH) -1.6%
  • UMG (0VD TH) -1.7%
  • Siemens Healthineers (SHL TH) -2.3%
    • Siemens is reviewing its majority stake in Siemens Healthineers: HBT
  • Bavarian Nordic (BV3 TH) -3.9%