WSJ : A Miami Financier Is Quietly Trying to Buy Nord Stream 2 Gas Pipeline

A Miami Financier Is Quietly Trying to Buy Nord Stream 2 Gas Pipeline
Stephen P. Lynch, who prefers to stay under the radar, says a deal for the Russian pipeline would serve long-term U.S. interests

An American investor with a history of dealmaking in Russia has asked the U.S. government to allow him to bid on the sabotaged Nord Stream Pipeline 2 if it comes up for auction in a Swiss bankruptcy proceeding.

Stephen P. Lynch spent two decades doing business in Moscow and now wants to buy the natural-gas pipeline that runs from Russia to Germany. He has argued to U.S. officials and lawmakers that American ownership of the pipeline would provide leverage in any peace negotiations with Russia to end the war in Ukraine and serve U.S. long-term interests.

“The bottom line is this: This is a once-in-a-generation opportunity for American and European control over European energy supply for the rest of the fossil-fuel era,” Lynch said in a rare interview.

Lynch, who lives in Miami and was a large contributor to Donald Trump’s presidential campaign, has told people “he wants to be the richest guy you’ve never heard of,” but his audacious plan would thrust the former Peace Corps volunteer into public view.

The 765-mile-long pipeline had been a crown jewel of Russia’s petro economy linking its vast gas fields to Europe. It was completed before Russia’s full-scale invasion of Ukraine in 2022 and never became commercially operational. It is owned by a subsidiary of Russia’s state-owned gas giant Gazprom, a unit that filed for bankruptcy in Switzerland days after the invasion. In September 2022, subsea explosions destroyed one of the pipeline’s two trunks. The other remains intact but unused.

The Wall Street Journal previously reported that a team of Ukrainians was behind the sabotage.

Lynch sought a license from the U.S. Treasury Department in February, according to a letter written by his lawyers at WilmerHale and viewed by The Wall Street Journal. The license would allow him to negotiate for the pipeline with entities currently subject to U.S. sanctions.

The letter said there is a hard deadline in January in the Swiss bankruptcy proceeding for Nord Stream 2 to either restructure its debt—which the letter says is unlikely—or face liquidation. Lynch argues that once the war is over it will be tempting for both Russia and its former customers in Germany and Europe to turn on the pipeline, regardless of who owns it.

Lynch has had success buying Russian assets on the cheap, earning him a reputation as one of the few U.S. investors able to navigate the country’s fraught business and political scenes. He was given a license by the Treasury Department to complete the acquisition of the Swiss subsidiary of Russia’s Sberbank in 2022, after the U.S. sanctioned the parent company.

Questions have been raised about Lynch’s ties to the Russian government.

A civil-fraud suit alleged that Lynch and a group of foreign investors participated in a rigged auction in 2007 for assets belonging to the former oil giant Yukos, which was broken up by Russia after the company was charged with tax evasion. Managers of Yukos’s Dutch subsidiary alleged that the investors conspired with Russian state officials to predetermine the sale of their company at a fixed price. Lynch and the other investors denied the allegations.

A U.K. judge dismissed the charges against Lynch and the other investors in 2019, writing that the defendants didn’t “indicate any dishonesty” during a 25-day court proceeding.

Lynch has told people that he thinks he can buy Nord Stream 2, which has been valued at around $11 billion, for pennies on the dollar, according to people familiar with matter. He has said many investors won’t bid because of the complex geopolitics tied to the conduit, and the other bidders are likely to include Russian proxies, Chinese entities or others at odds with U.S. interests.

A group of U.S. senators as well as officials at the Treasury and State departments have been briefed or informed about Lynch’s plan, the people said.

A representative of the Treasury Department didn’t immediately respond to a request for comment. A spokesman for the State Department declined to comment.

Business people and former government officials with experience in Russia said Lynch’s plan faces significant hurdles but could gain momentum if it can be used as a chip to negotiate peace in Ukraine once Trump is in office. The president-elect has promised to end the war quickly.

Lynch gave more than $300,000 to Trump-aligned committees and the Republican National Committee during the recent election.

Lynch, 57 years old, lived in Moscow for two decades, remaining there after many foreigners left as Russian President Vladimir Putin consolidated power. Lynch, his husband and their children moved to Miami in 2019 because of concern about Moscow’s social environment and the increasing challenges for U.S. citizens to do business as sanctions tightened, a person familiar with the matter said.

After two years with the Peace Corps in Russia, Lynch got his master of business administration degree from the Wharton School in 1998. When Russia fell into a financial crisis that year, Lynch founded Monte Valle Partners to acquire distressed real-estate assets there.

He got one of his first big breaks when he bought a large project next to the Moscow airport from the billionaire Alfred Taubman. He sold most of his stake in that to his Russian business partners in 2007, just as the Yukos liquidation began unfolding.

The billionaire Mikhail Khodorkovsky built Yukos into an oil-and-gas giant following the dissolution of the Soviet Union, but the empire was dissolved after Khodorkovsky fell out with Putin.

The idea to bid on Yukos assets came to Lynch as a “spontaneous combustion idea,” he said in a 2018 deposition taken in connection with the U.K. court case. Many would-be bidders stayed away from the auction, believing only those with political connections could win. Lynch said in the deposition that he believed the bidding would be competitive and fair and that assets could be bought cheaply.

Lynch and his partners ultimately purchased more than $2 billion of Yukos assets at a steep discount, and sold virtually all of it to Deutsche Bank for a profit. The state-owned giant Rosneft eventually swallowed up most of Yukos’s assets.

Some of Lynch’s friends said that he has cultivated relationships with Russian officials, and that it would have been impossible to be a successful and openly gay businessman in Moscow without them. But the friends added they aren’t aware of anything to suggest Lynch has worked to further the interests of Putin or his inner circle.

Lee Wolosky, a former special counsel to President Biden and a friend of Lynch, said Lynch’s proposal to negotiate the purchase of Nord Stream 2 is in the strategic interest of the U.S. and its allies.

“The Biden administration and incoming Trump administration should be able to agree on this,” said Wolosky, who is co-chair of Jenner & Block’s litigation department. “His background as an American investor who has navigated Russia adeptly makes him well-suited to lead the effort.”

WSJ : DirecTV to Scrap Merger With Rival Dish

DirecTV to Scrap Merger With Rival Dish
A tie-up meant to help struggling satellite-TV companies is falling apart after creditors balked at a proposal to cut into their holdings

DirecTV has decided to walk away from its proposed merger with rival Dish Network, abandoning a tie-up that the two satellite-TV companies have attempted several times.

DirecTV said that it informed Dish owner EchoStar SATS 0.60%increase; green up pointing triangle it plans to scrap the deal at 11:59 p.m. ET Friday. The decision came after a rebuke from bondholders representing about $10.7 billion of debt in Dish and its DBS subsidiary. The broader tie-up depended on the creditors’ approval.

In September, DirecTV agreed to buy Dish from EchoStar for a nominal $1, plus the assumption of debt. The deal started to break apart last week after the companies failed to secure concessions from the key creditor group.

The merger’s failure poses another setback for the satellite companies and their respective owners, EchoStar and TPG. Executives had banked on saving both satellite operators’ flagging fortunes by pooling their resources to negotiate better rates for the TV programming they carry.

Private-equity firm TPG is still set to buy the remainder of DirecTV it doesn’t already own from AT&T but now faces the prospect of managing a debt-laden business without the benefit of future cost savings to lift its trajectory. TPG bought a 30% stake in DirecTV in 2021.

EchoStar Chairman Charlie Ergen had planned to shed Dish and its SlingTV service to focus on building a new wireless network operator. The company has said it plans to move forward with those plans regardless of the satellite merger’s outcome.

Weeks before a November debt payment threatened to push EchoStar into bankruptcy, Ergen struck the deal to sell Dish to DirecTV. TPG also arranged $2.5 billion in new financing to keep EchoStar going.

Holders of Dish’s DBS bonds rebuked the offer, which would have forced them to take a roughly $1.5 billion haircut on their holdings in exchange for more secure debt in the soon-to-be-merged satellite-TV company.

DirecTV slightly sweetened the offer last month to get bondholders on board, to no avail. Ergen’s company hadn’t offered the creditor group any more concessions as of Thursday evening.

The bondholder group sued several EchoStar subsidiaries earlier this year, alleging that entities controlled by Ergen siphoned off billions of dollars in assets and put them out of creditors’ reach. The group amended its complaint Thursday after EchoStar raised more than $5.6 billion of new financing this month. In court papers, Dish and EchoStar denied wrongdoing and said that the asset transfers complied with debt contracts.

WSJ : China’s Plan B to Save the Economy: A Crusade Against Busywork

China’s Plan B to Save the Economy: A Crusade Against Busywork
While growth stutters, a vast communist bureaucracy tries to liberate its workers from drudgery

When China’s top leaders pledged this summer to act more aggressively to stimulate economic growth, they rounded off their remedies with a political order: Slash red tape.

There were promises to revitalize the world’s second-largest economy by boosting household incomes, consumption and bank lending to businesses. But plans will be hobbled, the Communist Party’s elite Politburo warned in July, if front-line officials remain bogged down by busywork.

In the months since, policymakers have avoided unleashing a massive stimulus to get the economy roaring back to life, disappointing economists and investors who had hoped for more. The call for a renewed crusade against red tape had offered a clue. Chinese leader Xi Jinping is committed to his master plan and wants the party to unshackle its roughly 100 million members to make it work.

The directive to supervisors: Hold fewer meetings and make them shorter. Cut superfluous paperwork. Don’t burden the “grassroots”—local-level government workers—with cumbersome and unproductive tasks. Stop using phone apps to track staff and bombard them with instructions. Don’t overwhelm them with performance reviews, lest they focus on pleasing their bosses rather than getting work done.

Many local bureaucrats are required to submit weekly, monthly and quarterly reports, sapping their time and energy, according to the official Xinhua News Agency, which took up the campaign. “The job must be done well, but more important, the reports must be written beautifully!” one official lamented. “If the word counts in the documents are lower than that of other departments, we can’t showcase our achievements!” another said.

Excessive inspections were also cause for complaint. Government workers are often tied up preparing for appraisals, to the extent of setting aside their day-to-day work, according to a social-media post from the Henan provincial government. Then, some supervisors “visit multiple locations a day, shake hands, say a few words, take a few photos, and then leave,” a Xinhua report said. “They are also picky about their food and accommodation, and even ask for special cars and traffic clearance.”

Then there is the overreliance on digital devices to monitor workers. Officials are often glued to their phones, replying to their bosses and submitting reports on countless apps.

In the rural county of Huzhu in western China, officials had to use a dedicated mobile app to clock into work by 9 a.m. and upload daily logs of their activities, according to a party office. These requirements, the office said, left workers “exhausted and affected their enthusiasm for work.”

In other words, as one municipal party office put it, officials encumbered by busywork are “stepping hard on the accelerator without shifting into gear.”

Communist leaders since Stalin and Mao have fretted over how excessive bureaucracy saps their governments’ ability to execute edicts. Xi has called “formalism and bureaucratism”—party speak for box-ticking behavior that favors form over substance—a “major enemy” of the party and the people.

“The grassroots represent the ‘last kilometer’ in implementing the party center’s decisions and deployments, and shouldn’t be constrained by formalism and bureaucratism,” the Politburo said in July. Party members should be encouraged “to take responsibility and act, and devote more energy to implementation,” it said.

Xi has taken swings at the problem before. In 2019, Beijing launched a national campaign to ease bureaucratic burdens on local officials and free them to do real work. But formalism, the Politburo said, remains a stubborn scourge that requires great efforts to eradicate.

Xi’s leadership style hasn’t helped, with centralized decision-making and demands for fealty from the party’s rank and file. Under Xi, the party has punished officials deemed to have deviated from, or neglected, Beijing’s goals—often discouraging the economic experimentation that had powered China’s rapid growth in past decades.

Some front-line officials don’t adapt Beijing’s directives to suit local conditions for fear of being punished for missteps, said Li Daokui, an economics professor at Beijing’s Tsinghua University and a former adviser to China’s central bank.

“They spend too much energy pretending they are implementing policies,” Li said. “Centralization is good for political decisions. However, for economics, you do need certain kinds of chaos.”

To reinforce the message, the party’s Central Commission for Discipline Inspection has ramped up a crackdown on bureaucracy-related offenses this year. It also named and shamed some officials, including those accused of perpetuating a problem that represents one of China’s economic challenges: wasting money on prestige projects to score political points.

In September, the CCDI rapped a municipal tourism official in the eastern province of Shandong for rushing out a project under Xi’s campaign to develop rural areas.

The official got three villages to invest 2.4 million yuan, equivalent to about $332,000, in grape cultivation, skipping feasibility tests and defying residents’ wishes, according to the CCDI. But the soil and groundwater proved to be unsuitable—something the official should have checked—and the project failed. In July, the official was censured and demoted.

Such punishments have shot up since May, when party authorities disciplined 12,369 personnel for bureaucracy-related offenses, roughly twice the April total and nearly triple the number from a year earlier, according to CCDI. The numbers have continued to climb, hitting the highest levels since the party started releasing such data in 2020.

Personnel can be punished with warnings, probation, dismissal from their jobs or even expulsion from the party.

In August, the party codified its crackdown with new regulations. When drafting documents and convening meetings, officials should abide by the principles of “short, practical and new,” authorities said in summarizing the new rules. Meetings should only be attended by personnel directly involved in the matters being discussed. Another provision forbids improperly delegating duties to local officials—a tactic some superiors use to shirk responsibility for executing Beijing’s edicts.

Party and government agencies across China have started running seminars to teach the regulations to staff. Many have published accounts of these sessions—complete with photographs—to show they are complying.

State media weighed in by calling out alleged violators, such as the state-owned China Oil and Gas Pipeline Network, which summoned representatives from its affiliates to Beijing headquarters for more than 800 meetings in 2022, or more than three meetings each workday, according to Xinhua.

The Politburo followed up in September with a bid to help bureaucrats feel more at ease about taking initiative. The 24-member body reiterated a directive from Xi that calls for distinguishing between officials who err because of inexperience or well-meaning experimentation, and those who act willfully or selfishly.

“The Politburo is now signaling to lower-level officials that they will not be punished for taking decisions to support economic growth, even if those later prove misguided—a contrast to its occasional earlier message to ‘strictly observe political discipline,’ ” Christopher Beddor, a China analyst at research firm Gavekal Dragonomics, wrote in a note to clients.

The “formalism” way of life often reaches beyond bureaucracy. Some Chinese social-media users recently expressed bewilderment about a rise in online sales of empty milk cartons and dry pen-ink chambers. A cottage industry had emerged, it appeared, catering to parents who wanted to help their children meet recycling quotas set by their schools.

State-run magazine China Comment denounced the practice, calling it “an example of a good thing going sour.”

FT : EU shift to electric cars still riddled with obstacles

EU shift to electric cars still riddled with obstacles
French scheme shows demand at right price but image problems and infrastructure are hampering adoption

The medieval villages perched above France’s Côte d’Azur are an unlikely setting for one of Europe’s latest experiments in expanding the use of electric vehicles. 

But a car-sharing scheme launched last year has become a hit with residents of their cobblestoned lanes, including some sceptical first-time users — the type of customers carmakers need to court as their EV sales stutter.

“People have a lot of misgivings at first. Then after five minutes that’s all forgotten,” said the programme’s local manager Clarisse Savorat on a recent afternoon in Fayence, where one of its cars was parked below a shady esplanade full of elderly pétanque players. 

As Europe races to end the sale of petrol cars by 2035, heaping pressure on manufacturers as their investments in new technology spiral and stricter emissions rules loom, the road to mass-adoption of EVs remains riddled with obstacles.

Recent months have been especially torrid after several years of rising EV sales went into reverse, sparking profit warnings and job threats from the likes of Volkswagen and Peugeot-maker Stellantis.



EV sales in the year to September were down 6 per cent against a year earlier across the EU, according to the European Automobile Manufacturers Association, with those in Germany slumping 28 per cent after the government scrapped purchasing subsidies at the end of 2023.

Consumers are flinching at high prices or flirting with cheaper alternatives from China that cost as little as half the average €40,000 price tag that had prevailed until recently.

But persistent image problems and customers’ wariness are also proving a problem — be it in France, with an EV market share of about 17 per cent of new car sales, or Spain and Italy, two of the big European laggards where it still hovering at 5 per cent or less.

Under-developed charging networks remain a deterrent, particularly in southern Europe, which lags far behind best-in-class nations such as the Netherlands. Even in France, with roughly four times the charging stations of Spain, confidence in the infrastructure is only growing slowly.

“There’s a difference between perception and reality. And communication around the sector has not been especially positive,” said Alexandre Marian of consultancy AlixPartners, adding that electric cars remained “stressful to understand” for those who had never used them.

But the EU’s ever more stringent stance on emissions means there is a pressing need to adapt to an EV future.

French bank Crédit Agricole, which launched the car-share programme on the southern coast, picked the spot because local leaders were concerned that rural enclaves such as theirs would one day get cut off.

Nice, a 40-minute drive from Fayence and the nearest hub for major hospitals or high schools, is one of a dozen big French cities to have brought in low-emission zones that will increasingly restrict access to more polluting cars — a tactic being deployed across the continent and in Britain. Bus services in the area, meanwhile, are sparse.

“People have cars to get around, and it means that tomorrow, with that car, I can’t go to the city any more,” said Jean-Yves Huet, mayor of the picturesque hilltop village of Montauroux. 

For carmakers, expanding beyond the first generation of EV adopters — typically higher-income, youthful tech fans — will also be crucial. Even including petrol cars, manufacturers in Europe are expected to sell about 2mn fewer vehicles in 2024 than in 2019.

“In cities it’s becoming more and more difficult to use cars,” said Mikaël Le Mouëllic of consultancy BCG in Paris. “For the past 10 years, you’re also seeing more young people not even getting their licence, a trend that didn’t exist as much before.”

Olivier Rossinelli, the head of the Agilauto Partage scheme that Crédit Agricole wants to expand to between five and 10 locations in France next year, said the small-scale programme had had a big impact.

“It broke down a lot of psychological barriers,” he said. “With this project, we saw there could be real demand.”

A typical day for Savorat in Fayence includes helping users worried about how to locate charging stations, or telling them how the cable works for the small fleet of 15 cars and vans.

Some people are so used to the cars now they take them for regular short trips to Ikea or the rubbish dump, while a football club has booked out the fleet’s minivan on a repeat basis. 

Whether this enthusiasm can convert into EV sales is another matter. 

A heavily subsidised €100-a-month EV leasing scheme aimed at 50,000 low-income families across France and trumpeted by President Emmanuel Macron was oversubscribed in 2023, showing demand is there at a certain price. 

The programme appears on track for renewal in 2025 but at a time of strained public finances and budget cuts, industry executives fear that purchasing subsidies may not last. 

Marc Mortureux, chief executive of French car lobby group PFA, said incentivising more companies to add EVs to their business fleets was also an issue.  

“There are still people who say ‘if you force me to go electric I’ll resign’,” Mortureux said. 

Places like Fayence might even hold some adoption advantages over cities, where densely packed apartment blocks with layers of permissioning make complicate the installation of the necessary infrastructure. 

Serge Billard, the 83-year-old head of a local pétanque club, has no need for a new car — he has three of varying ages — but were he to buy one, he would maybe go electric. 

“It would cost less to charge at home, I have a garage,” Billard said. 

Even fans of the cars have doubts about whether now is the right time to take the leap, or whether European manufacturers can meet their needs.

Florist Lucile Harmand uses the electric rentals to deliver bouquets to weddings, and her banker has come up with decent financing options for a battery-powered van to equip a second store she plans to open. 

But Harmand is concerned about the hassle of recharging and battery life.

“There’s still a range issue — if I go to Nice to get stocks, come back, do three deliveries, that’s it, there’s no more juice,” she said. 

“It’s all well and good, taxing Chinese cars,” Harmand added, referring to escalated EU tariffs on EV imports from China. “But Chinese cars, today — they have some 900 kilometres of range.”

>>> US After Hours Summary: ESTC +22.1%, GAP +15.1%, ROST +7.3%, NTAP +5.7% high

After Hours Summary: ESTC +22.1%, GAP +15.1%, ROST +7.3%, NTAP +5.7% higher on earnings; INTU -5.4% lower on earnings; TPL +5.6% on news it will join S&P 500

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ESTC +22.1% (also CFO and COO Janesh Moorjani to depart), GAP +15.1%, MATW +11.1%, ROST +7.3%, NTAP +5.7%

Companies trading higher in after hours in reaction to news: REPL +21% (receives Breakthrough Therapy Designation for RP1 and submits RP1 BLA), AESI +7.5% (to join S&P SmallCap 600), TPL +5.6% (to join S&P 500), ORN +4.2% (three contract awards valued at $111 mln), DDS +2.3% (declares special dividend of $25/sh), MYE +2% (names new CEO), AMRX +2% (resubmits DHE Autoinjector NDA and receives FDA approval of exenatide), NGNE +2% (participant in Phase 1/2 trial for Rett syndrome who was previously reported to be in critical condition, has died), PTGX +1.9% (announces nomination of PN-881 as development candidate), SF +1.7% (reports Oct data), ZVRA +1.3% (US commercial availability of MIPLYFFA), MDU +0.9% (to make capital investments totaling $3.1 bln from 2025-29), CBRE +0.5% (authorizes new $5 bln share repurchase program), BN +0.4% (The Kolter Group introduces a strategic partnership between Kolter's land business and Brookfield Residential's Land development group), OII +0.3% (names new COO), NOA +0.2% (NOA JV won a civil construction contract), LDOS +0.2% (awarded $670 mln U.S. Army contract), WULF +0.1% (names new COO), JNJ +0.1% (Health Canada authorizes CARVYKTI for multiple myeloma)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: LGTY -12.5%, INTU -5.4%, UGI -1.6%, NGVC -0.8% (also increases dividend)

Companies trading lower in after hours in reaction to news: BTDR -9.3% (proposed private placement of $360 mln convertible notes), ABL -4.8% (12.5 mln share offering), PGY -1.4% (stock offering by selling shareholders), SLG -1.1% ($400 mln share offering; also files mixed shelf securities offering), MLI -1% (to move to S&P MidCap 400 from S&P SmallCap 600), GOOG -0.6% (OpenAI (MSFT) mulls battling Google with its own browser, according to The Information), STEL -0.1% (increases dividend), BA -0.1% (awarded $2.39 bln U.S. Air Force contract modification; also awarded $1.68 bln U.S. Navy contract modification; Bell Boeing Joint Project Office awarded $600 mln US D.L.A. modification)

The Information : OpenAI Considers Taking on Google With Browser

OpenAI Considers Taking on Google With Browser

The Takeaway
• OpenAI hired key developers of Chrome from Google
• ChatGPT has 300 million weekly active users and has become a quasi-rival to Google Search
• OpenAI pitched apps and websites on ‘natural language’ search product to help change how customers and readers interact with the sites

OpenAI is preparing to launch a frontal assault on Google.

The ChatGPT owner recently considered developing a web browser that it would combine with its chatbot, and it has separately discussed or struck deals to power search features for travel, food, real estate and retail websites, according to people who have seen prototypes or designs of the products. OpenAI has spoken about the search product with website and app developers such as Condé Nast, Redfin, Eventbrite and Priceline, these people said.

OpenAI also has discussed powering artificial intelligence features on devices made by Samsung, a key Google business partner, similar to a deal OpenAI recently struck with Apple, according to people who were briefed about the situation at OpenAI.

OpenAI could decide not to launch the browser, though earlier this year it hired two people who were instrumental in the development of Google's Chrome browser.

If OpenAI launches some or all of these products, it would become an even bigger competitor to Google, which dominates the browser market with Chrome and the search market with Google Search, and powers Samsung’s phones with its Android software. More recently, Google’s Gemini AI began powering features on Samsung devices, such as providing a text summary of a voice recording or using image-generating technology to edit photos.

The state of talks between Samsung and OpenAI couldn’t be learned, but Google has been preparing for the possibility of competing with OpenAI to power such features, said a person with knowledge of the situation. For Samsung, it makes sense to have more than one potential provider of such technology as it negotiates the terms of deals.

A Google spokesperson said companies using Android can work with other technology providers. Spokespeople for OpenAI and the companies that OpenAI is talking to about search features either didn’t immediately respond to a request for comment or didn’t have a comment on the record.

Google has been scrambling to catch up to OpenAI on the AI chatbot front. Last year it launched its Gemini chatbot and made search results more conversational, mimicking ChatGPT.

ChatGPT generates billions of dollars a year in revenue from subscriptions and has added searchlike features that show real-time information from the web, in part with the help of Microsoft’s search technology. But ChatGPT hasn’t visibly hurt Google search yet, even if some people are using it as a partial replacement for Google.

Still, ChatGPT is growing quickly and currently dominates the nascent market for AI chatbots. Making a web browser could help OpenAI have more control over a primary gateway through which people use the web, as well as further boost ChatGPT, which has more than 300 million weekly users just two years after its launch. It isn’t clear how a ChatGPT browser’s features would differ from those of other browsers.

In a signal of its interest in a browser, several months ago OpenAI hired Ben Goodger, a founding member of the Chrome team at Google.

But OpenAI isn’t remotely close to launching a browser, multiple people said. Launching a browser is timely and complicated because browser providers need to ensure people’s data doesn’t leak to websites, and the browser needs to work with various types of extensions to adequately compete with incumbent browsers, among other things.

>>> US Close Dow +1.06% S&P +0.53% Nasdaq +0.03% Russell +1.65%

Closing Stock Market Summary
The session started a little shaky, but stocks quickly shifted into rally-mode as investors digested NVIDIA's (NVDA 146.67, +0.78, +0.5%) Q3 earnings report. Shares of NVDA initially traded lower due to profit-taking activity and due to a slight deceleration in its revenue growth rate. The report was solid overall, though, and the company said demand for its Blackwell chip is "staggering."

There was a positive bias under the index surface through the entire session despite the early weakness in NVDA. Other mega caps were weak through the entire session as money rotated away from those names into other areas of the market.

The S&P 500 (+0.5%), Dow Jones Industrial Average (+1.1%), and Russell 2000 (+1.7%) closed near their best levels of the session. The Nasdaq Composite trailed its peers, closing fractionally higher than yesterday.

Broad buying activity left the Invesco S&P 500 Equal Weight ETF (RSP) 1.3% higher today and left nine out of the 11 S&P 500 sectors higher. Five sectors were higher by 1.0% or more, led by utilities (+1.8%), financials (+1.3%), consumer staples (+1.2%), and industrials (+1.2%).

The industrial sector was boosted by an earnings-related gain in Deere & Co. (DE 437.54, +32.58, +8.1%). Meanwhile, the communication services sector was the worst performer by a wide margin, dropping 1.7%, due to a sizable decline in Alphabet (GOOG 169.24, -8.09, -4.6%) after reports that the DOJ is pushing for a forced sale of Chrome and potentially Android.

The Treasury market closed with losses after a stronger-than-expected Existing Home Sales report for October (3.96 mln; Briefing.com consensus 3.90 mln), which followed another decrease in weekly jobless claims (to 213,000 form 219,000), and a disappointing Philadelphia Fed Survey (-5.5; Briefing.com consensus 7.0).

The 10-yr yield settled three basis points higher at 4.43% and the 2-yr yield settled four basis points higher at 4.35%.
  • Nasdaq Composite: +26.4%
  • S&P 500: +24.7%
  • S&P Midcap 400: +18.2%
  • Russell 2000: +16.6%
  • Dow Jones Industrial Average: +16.4%

Reviewing today's economic data:
  • Weekly Initial Claims 213K consensus 221K); Prior was revised to 219K from 217K, Weekly Continuing Claims 1.908 mln; Prior was revised to 1.872 mln from 1.873 mln
    • The key takeaway from the report is that the rising trend for continuing jobless claims connotes a softening labor market whereby it has become more challenging to find a new job after being laid off.
  • November Philadelphia Fed Index -5.5 (consensus 7.0); Prior 10.3
  • October Existing Home Sales 3.96 mln ( consensus 3.90 mln); Prior was revised to 3.83 mln from 3.84 mln
    • The key takeaway from the report is that more inventory is becoming available, but with the ongoing increase in the median home price and mortgage rates remaining elevated, affordability constraints will persist, capping total sales potential.
  • October Leading Home Sales -0.4% (consensus -0.3%); Prior was revised to -0.3% from -0.5%

Friday's economic lineup features:
  • 9:45 ET: Flash November S&P Global U.S. Manufacturing PMI (prior 48.5) and flash November S&P Global U.S. Services PMI (prior 55.0)
  • 10:00 ET: Final November University of Michigan Consumer Sentiment (consensus 73.0; prior 73.0)

>>> MicroStrategy completes $3,000,000,000 offering of 0% convertible senior not

MicroStrategy completes $3,000,000,000 offering of 0% convertible senior notes due 2029
  • The net proceeds from the sale of the notes were approximately $2.97 billion, after deducting the initial purchasers' discounts and commissions and estimated offering expenses payable by MicroStrategy.
  • MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes.

The Information : The Electric: Does Tesla Really Stand to Prosper From the Trum

The Electric: Does Tesla Really Stand to Prosper From the Trump Presidency?

Since Donald Trump won reelection as president, many investors have assumed that the chief beneficiaries would include businesses run by Elon Musk, his biggest financial backer and recently his frequent companion. Investors have pushed up the share price of Musk’s one listed business—Tesla—36% since the Nov. 5 election.

But the Tesla ventures that Wall Street investors most expect to prosper from White House favor—artificial intelligence plays such as self-driving Robotaxis—are long-shot bets that rely more on technological breakthroughs than on friends in government. The Trump administration can loosen federal oversight of autonomous vehicles, but experts say Tesla’s far bigger obstacle is getting its self-driving technology ready for the road.

“Any supposed regulatory hurdles are remote and trivial compared with Tesla's technical hurdles,” said Bryant Walker Smith, a law professor at the University of South Carolina who studies autonomous vehicles. “Or, to phrase it differently, any imminent regulatory hurdles are because Tesla does not have and cannot show a reasonably safe automated driving system.”

Musk himself appears to have a range of political reasons to seek proximity to Trump, beyond advantageous government treatment of Tesla, SpaceX and other businesses he controls. As for investors, their current fervor for Tesla shares may simply reflect a desire to invest in Musk’s relationship with Trump in the only way they can, and not a firm conviction of how or even whether Trump will help Tesla.

Either way, Tesla shares rose almost 8% on Monday after Bloomberg reported that Trump seemed likely to propose straightforward federal regulations for self-driving vehicles that would supersede current state-by-state rules. At the moment, the only federal rules for self-driving vehicles are safety regulations and a 2,500-car limit on the number of vehicles without steering wheels or pedals a company can deploy each year.

If the Department of Transportation issued a single set of rules for driverless cars, that could make it easier for Tesla to catch up with Waymo, owned by Alphabet, and General Motors’ Cruise, whose driverless cars already ply roads in cities including San Francisco, Los Angeles, Phoenix, Dallas and Austin, Texas. Waymo also takes paying passengers in Los Angeles, Phoenix and San Francisco. With federal rules, Tesla would no longer have to seek permission of regulators in those same states, as Waymo and GM did.

Last month, Musk said he would deploy self-driving Teslas in two stages: Next year, he said he would release Tesla Model 3s and Ys powered by Tesla’s autonomous Full Self Driving software; those would be capable of driving without human supervision—motorists could drive hands-free and not have to watch the road—but would still come equipped with pedals and steering wheels. In 2026, he said he plans to deploy driverless Tesla Robotaxis with no steering wheels or pedals.

One big Musk gamble is that Tesla can achieve nearly risk-free driving using just cameras and AI; almost all of Tesla’s rivals in the West and China use sensors such as radar and lidar in addition to cameras.

Analysts appear reluctant to say flatly that there is a chance that Musk’s bet on cameras and AI does not pan out and that he has to add other sensors onto Tesla vehicles. Musk himself has repeatedly urged investors who don’t believe Tesla will solve self-driving to take their money elsewhere, though last month he admitted that, in terms of timing for delivering on his promises, “I tend to be a little optimistic.”

A number of analysts are giving him latitude. In a Nov. 14 note to clients, Tom Narayan, an auto industry analyst with RBC Capital Markets, said he had just returned from a visit to Tesla’s Austin gigafactory. FSD still “has a ways to go,” he wrote. Even so, he added, the tour “gave us increasing confidence in Tesla’s ability to achieve its autonomy goals.” Narayan attributes 76% of Tesla’s value to FSD and Robotaxis. “In our view, Tesla FSD is the most robust autonomy software on American roads today,” he wrote.

Other analysts aren’t so sure. In a note to clients on Monday, Morgan Stanley analyst Adam Jonas said he does not expect mass deployment of Tesla’s autonomous vehicles until the mid-2030s. Musk winning federal regulatory oversight of self-driving technology will “not magically catapult Tesla FSD efficacy to the 99.999% (reliability) threshold where Teslas can drive themselves unsupervised,” tweeted Gary Black, managing director of the Future Fund and a Tesla investor.

Even if Musk does get there on his timeline over the next two years, it won’t be like the 2010s, when Tesla—once it got through production hell—profited handsomely because it was virtually the only electric vehicle on the road. In autonomous cars, he will face stiff competition here in the U.S. and also in China.

“Right now there are real automated vehicles carrying real people on real roads. None of them are Teslas,” said Smith, the University of South Carolina professor.