TheChek News Flow

Russian media has picked up on a report in Germany's Bild newspaper which highlights a German government assessment saying the country is defenseless against the Russian Oreshnik missile system.

"The Patriot is not right to combat longer-range ballistic missiles, such as the Oreshnik," Bild quoted a government document as saying, in reference to the US-supplied air defense missile system. "Any interception would be more like sheer luck."

The report further underscored that currently Germany has no effective method of intercepting an inbound ballistic missile, following decades of a 'neutral' and degraded post-WWII military.

"The order came without any specific reason, such as an upcoming trip. It is unclear why the German Foreign Ministry wanted to document this defense gap in Germany. After all, these facts are known to the Ministry of Defense, and appropriate measures have long been taken," a military expert was cited in Bild as explaining of the context of the document.

Berlin has over the last few years since the start of the Ukraine war been rapidly seeking to build its defenses and expand military spending.

The fact that Russia has already used the Oreshnik hypersonic ballistic missile in Ukraine on more than one occasion has likely put greater fear and urgency in European defense officials. Moscow was sending a big 'message'.

Russian state media sources have touted that the Oreshnik reaches speeds greater than Mach 10+, and can reach 5,500km in distance, or 3,400+ miles (as a medium-range weapon).

A retired Russian Army colonel and military analyst, identified as Viktor Litovkin, has described, "The West does not have missiles that fly at such a speed or hypersonic missiles at all."

He said further, "Although the US has repeatedly boasted that it has such missiles, it has never demonstrated a missile flight. They appeared to show missiles that flew at a supersonic speed of 5.5 times the speed of sound or Mach 5.5. However, hypersonic speed begins at Mach 6-7."

With the prior collapse of the INF treaty, which regulated Russian and US ballistic missile deployments throughout the world, Moscow is very wary of a potential US missile build-up in Europe, which it says it is ready to mirror if threatened.

Boeing 737-800 operated by Jeju Air skidded across runway and smashed into barrier after flight from Bangkok

SEOUL—A passenger plane skidded off the runway, collided with a concrete barrier and burst into flames in South Korea on Sunday, killing nearly all of the 181 people on board and leaving a trail of mystery over one of the deadliest aviation disasters in years.

Investigators were still trying to pinpoint the cause of the fiery crash of an aircraft operated by South Korea’s Jeju Air that occurred just after 9 a.m. local time. The plane was a Boeing 737-800, a narrow-body jet and a workhorse of commercial air travel. It had been attempting to land at an airport in Muan County, in the country’s southwest, local officials said.

Once the blaze was extinguished, all that remained relatively intact was the tail of the aircraft—with a single charred wing angled to the sky. Officials later detailed a six-minute window of mayhem in the final moments of the flight, which had departed from Bangkok with 175 passengers and six crew members aboard. Two were Thai nationals, with the others South Korean citizens.

Some 179 of them died, South Korean officials said, with just two survivors: a pair of flight attendants. One recalled buckling into a seat at the rear of the plane and touching ground before losing consciousness, according to South Korea’s semiofficial Yonhap News Agency, citing local hospital officials.

“What happened?” the flight attendant asked a doctor, Yonhap reported. The attendant sustained a fractured left shoulder and head injuries but is conscious and able to walk. The other flight attendant has been transferred to a hospital, though other details weren’t immediately available.

The Jeju Air flight ranks among the deadliest aviation incidents in recent years. In March 2022, a China Eastern Airlines plane slammed into a mountainside and killed all 132 people aboard, with flight data indicating the crash was caused intentionally, The Wall Street Journal reported. Some 176 people died on a Ukraine International Airlines flight in January 2020, with Iranian officials later admitting the plane had been shot down unintentionally by its armed forces outside Tehran. Boeing’s 737 MAX jets were grounded worldwide in 2019 for nearly two years, after a pair of crashes together took 346 lives.

The South Korean crash caps a tumultuous year for an airline industry that has recovered from the doldrums of the pandemic, though carriers have been left scrambling to replenish staffing and manufacturers struggling to match the bounceback in demand.

The year began with a fiery two-plane collision in Japan on Jan. 2, leaving several Coast Guard members dead. Days later, a 4-foot-long panel blew off an Alaska Airlines plane in midair. Turbulence on a Singapore Airlines flight in May left more than 100 people injured. More than 60 people died after a turboprop plane in Brazil plummeted to the ground. And a passenger jet headed for Russia crashed in Kazakhstan last week, drawing an apology from President Vladimir Putin over the “tragic incident.”

In a roughly two-minute briefing with reporters on Sunday, Kim E-bae, the CEO of Jeju Air, apologized to victims and their family members, promising the company would do its best to support them. He said the plane had no history of accidents and that no abnormalities were detected during maintenance inspections before takeoff.

Boeing said it was in contact with and stands ready to support Jeju Air. “We extend our deepest condolences to the families who lost loved ones, and our thoughts remain with the passengers and crew,” Boeing said.

The airliner tragedy comes during a period of political upheaval in South Korea. Earlier this month, President Yoon Suk Yeol made a short-lived declaration of martial law—a controversial move that led to the country’s legislature impeaching him more than two weeks ago. Then, on Friday, Yoon’s replacement as acting president, Prime Minister Han Duck-soo, was also impeached, after declining to make certain judicial appointments.

That thrust Choi Sang-mok, No. 3 in line and a deputy prime minister, into the nation’s top job. The Muan crash occurred within 48 hours of Choi becoming acting president. Visiting the crash site, he declared the region a special disaster zone, allowing the disbursement of state support funds. More than 1,500 emergency personnel have been dispatched.

“I believe no words of consolation will be enough for the families who have suffered such a tragedy,” Choi said.

Mayday call

The Jeju Air plane had descended without the apparent deployment of its landing gear or flaps, which are movable surfaces on the wings that would allow the jet to slow during a typical landing, according to footage aired on South Korean TV networks.

South Korean officials detailed six minutes of chaos before the fatal crash. At 8:57 a.m., the control tower at Muan International Airport warned of a bird strike to the plane, according to the country’s transport ministry. Two minutes later a pilot declared mayday. With control-tower permission, the Jeju Air plane sought to land on a different runway than designated. And at 9:03 a.m. it crashed.

Any issues posed by a bird strike should have been manageable, as engine damage would likely have been limited and wouldn’t preclude the lowering of landing gear, former pilots and aviation-safety experts said.

The head Jeju Air pilot had more than 6,800 hours of flight experience and had held his current role since March 2019; the co-pilot had roughly 1,650 hours in the cockpit, according to South Korea’s transport ministry. The black boxes have been recovered from the plane, though investigators are still trying to retrieve the voice-recording devices.

The Boeing 737-800—a predecessor of the 737 MAX—is one of the safest airplanes ever built, and an inability to lower the landing gear would be rare and have backstops, such as procedures or checklists to follow if there had been a deployment failure, said Jeff Guzzetti, a former senior accident investigator with the National Transportation Safety Board and the Federal Aviation Administration. Guzzetti, who is now an aviation-safety consultant, said he was puzzled by the crash.

Among the safeguards on the 737-800 is a system that would allow the pilots to let gravity lower the landing gear if other systems failed, said Guzzetti, who isn’t involved in the accident investigation. He said he wondered whether the crew mistakenly tried to land without the plane’s landing gear down, realized the mistake and attempted a “go-around” to redo the landing. That could explain why the plane was traveling so fast and so far down the runway, he said.

“If there was a failure there, why not continue to fly, burn off fuel so you don’t have a lot of fuel on board?” Guzzetti said. “You call emergency rescue crews to be ready for you. I don’t see any of that there.”

The Muan International Airport is also surrounded by various bodies of water, meaning the pilots could have opted for a safer sea landing, said Hiroshi Sugie, a former Japan Airlines pilot who has written books about aviation safety.

The pilots appear to have landed in the most dangerous way, Sugie said. “There are just too many errors here,” he said. “A belly landing isn’t something you rush into doing.”

‘Should I write a will?’

Jeju Air, named after a popular South Korean resort island, is a budget carrier that was founded in 2005. It operates roughly 40 aircraft to more than 40 destinations, and handled more than 12 million passengers in 2023, according to the company’s website.

Shares of Jeju Air have fallen about 30% this year, in the midst of growing competition between budget carriers to lower their fares. A weakened South Korean currency, the won, has caused costs to increase because fuel is generally purchased with U.S. dollars.

The Muan International Airport opened in 2007, though it had been largely serving domestic routes. But in recent weeks, it began boosting the number of daily international flights to various countries. The route to Bangkok started running regularly just this month.

Dozens of bodies were moved Sunday to a temporary morgue, where they awaited family members for identification, local authorities said. A makeshift funeral hall would be installed at a nearby sports complex by midday Monday.

At the airport, dozens of family members crowded into a conference room and the terminal’s waiting areas where they got a briefing from the local fire department and waited for further updates. Some dropped to the floor in tears.

At least one passenger had been texting with a family member in the minutes before the crash, according to local media, which took a photo of a phone that showed the exchange.

“Should I write a will?” one of the messages reads.

Footfall on Boxing Day in Britain declined by 4.9 percent across all U.K. retail destinations, while footfall on Christmas Eve rose by 18.1 percent.

LONDON — British retailers saw a boost in traffic pre-Christmas, but that might be one of the last times in a while consumers splurge as they head into the New Year.

Footfall on Thursday, known as Boxing Day in Britain, declined by 4.9 percent across all U.K. retail destinations when compared to last year, while footfall on Christmas Eve rose by 18.1 percent, according to data from MRI Software.

The results showed that the decline was apparent throughout U.K. high streets, retail parks and shopping centers on Boxing Day, but Christmas Eve numbers showed optimism with shopping centers experiencing a 26.1 percent rise, followed by the high street recording a 17.4 percent jump and retail parks increasing 11 percent.

“Christmas Eve this year fell on a weekday whereas last year it fell on Sunday, which brought with it restricted trading hours. Retail stores and destinations likely benefited from the longer trading hours hence the significant boost in footfall compared to last year,” said Jenni Matthews, marketing and insights director at MRI Software.

“Boxing Day is still perceived as a family day with many people still visiting families for a second round of Christmas Day festivities. This will ultimately impact footfall in retail destinations. Additionally, the growing presence of online shopping continues to reshape spending habits; many retailers kicked off their Boxing Day sales online on Christmas Day providing shoppers with the opportunity to grab early bargains from the comfort of their own home,” she added.

Matthews pointed out that many stores remained closed on Boxing Day this year including John Lewis, Marks & Spencer, Next and Aldi, which are favored by Britons.

According to MRI Software’s Consumer Pulse report, 53 percent of shoppers will be finishing their Christmas shopping online leading into the New Year.

As Britain heads into 2025, there are many challenging aspects ahead, which were laid out in the fall budget in October.

“[The budget] will bring with it financial challenges with rising costs anticipated and decisions will need to be made as to whether these costs are passed on to the consumers or absorbed by the business. This will no doubt impact retail stores and destinations in high streets, shopping centers and retail parks,” Matthews said.

The Consumer Pulse report showed that 51 percent of shoppers are anxious about the rising cost of living driven by higher energy and housing costs in the winter months.

“However, this is an improvement from when it was 60 percent in May 2024, suggesting growing consumer confidence heading into 2025. Retail leaders should bear these trends in mind as the pre-Christmas surge may well be the last big splurge for many consumers ahead of what may be a spending freeze heading into early 2025,” Matthews explained.

Some automakers have seen inventory jump to prepandemic levels, prompting them to spend more on promotions

Car shopping in 2024 started to get back to normal for the first time this decade, with ample choice on the dealership lot and even some bargains for shoppers.

After years of depressed inventory stemming from pandemic-era supply chain problems, U.S. dealers’ stock levels have largely recovered. That has put pressure on retailers and automakers to more aggressively price their unsold vehicles.

Car buyers received about $3,400 in discounts and other incentives on average during the busy December shopping season, up more than 25% from a year earlier, according to research firm J.D. Power. The offers have included low- and zero-percent interest rates, cash-back offers and cheap leases, especially on electric vehicles.

The increase in promotions in recent months has offered inflation-weary car shoppers some relief after several years of having to shell out sums near or even above the sticker price. The stronger promotions have helped boost overall U.S. vehicles sales.

Industrywide U.S. sales rose by about 7% in December, according to a J.D. Power forecast. Most automakers are scheduled to report their latest sales tallies Friday.

“There are good deals to be had out there,” said Geoffrey Pohanka, a Maryland-based dealer who sells Chevrolet, Jeep, Nissan and other brands.

For the year, U.S. vehicle sales are expected to rise 3%, to about 16 million vehicles sold, decelerating from 12% growth in 2023. Industry forecasters expect sales to edge slightly higher again next year.

“The current business is solid from a historical perspective,” Tom Donnelly, chief executive of Mazda’s North American operations, said of the auto industry. “I mean, years ago, 15 million, we’d be high-fiving.”

Pressures on carmakers are building though, Donnelly said, citing tightening tailpipe-emissions regulations and the need to invest in electric cars.

“You’re trying to balance the decent environment that the industry is in with this once-in-a-century transition that the industry is having to undergo,” he said.

The U.S. car market hasn’t returned to the 17-million-vehicle annual sales mark that held steady for several years before the pandemic disruptions. Analysts and car executives say that is partly because many shoppers remain priced out of the market, despite the recent return of promotions and discounts.

Higher interest rates have kept monthly payments elevated relative to prepandemic levels. Also, a dwindling number of smaller, cheaper cars for entry-level buyers has curbed overall sales.

Average discounts are currently about 8% of the sticker price, according to research firm Cox Automotive, up sharply from recent years but still below the 10% industry prepandemic norm.

The affordability problem is one of several factors clouding the outlook for the car industry heading into the new year, despite the steady pace of vehicle sales and a stable economic picture.

Lighter-than-expected demand for electric vehicles has prompted automakers to backtrack on some plans to open EV-related factories and roll out battery-powered models.

Meanwhile, President-elect Donald Trump’s administration has also floated the possibility of steep tariffs on all products imported from Mexico and Canada, threatening a major import pipeline for the industry.

Mexico has emerged in recent years as a bigger source of lower-priced U.S. models. Mary Barra, General Motors’ chief executive, in December said that Trump’s proposed tariffs could have a “very substantial impact” on the carmaker.

Some automakers have laid off workers in recent months, including GM and Stellantis, whose CEO abruptly resigned in early December.

Carmakers will need to work harder in 2025 to attract customers because the pent-up demand from several years of vehicle shortages has largely been filled, analysts say. Many car owners also face elevated interest rates, repair bills and insurance premiums.

New-vehicle prices are expected to continue easing in 2025, a benefit to car shoppers but a potential profit hit for automakers. Morgan Stanley analysts predict that car buyers on average will pay 2% to 3% less for new wheels in the coming year.

The discounts should continue to flow because of improved vehicle availability. There were about 2.7 million vehicles on U.S. dealer lots or en route to stores at the end of December, up 17% from a year earlier, according to research firm Wards Intelligence.

Supply is uneven across manufacturers, though, and some carmakers are still operating with thin inventory, meaning consumers loyal to a particular brand may not get the sweetest deal. Toyota’s inventory remains tight, and the Japanese car brand has discounted less than rivals, according to Cox Automotive.

Electric-vehicle shoppers have the best shot at finding a good offer right now, particularly for those willing to lease a vehicle instead of buying it outright.

EV sales leader Tesla recently sweetened its offers, including 0% financing on the Model 3 sedan and Model Y SUV and leases for $299 a month.

In November, consumers financed the purchase of an electric Kia EV6 with an average monthly payment of $816, according to Edmunds’ data. A lease, meanwhile, went for $471 a month on average.

“Our message to consumers is: If you want an EV, now is the time to buy,” Pohanka said.

Dealmakers say less regulation, lower interest rates and rising stock markets could fuel activity. But ‘people really don’t know,’ one banker says.

Wall Street is optimistic that a buoyant stock market, declining interest rates and Donald Trump’s lighter-regulation agenda will prompt a dealmaking rebound in 2025. But jitters remain thanks to the president-elect’s unpredictability.

Deal volume has been muted for the past few years following record volumes coming out of the pandemic. While total global deal volume is up roughly 12% in 2024 through Dec. 26 compared with the same period in 2023, the number of transactions is lower and volume remains well below the 2021 high, according to Dealogic data.

Dealmakers were encouraged when Trump in December picked Andrew Ferguson, the Republican Federal Trade Commission member, to succeed FTC Chair Lina Khan. Ferguson and Republicans are expected to dismantle Khan’s guidelines that gave the agency new legal powers to try to block deals.

Still, Jay Novak, global co-head of corporate finance at the investment bank Houlihan Lokey, said it remains to be seen exactly where the new Trump’s administration’s antitrust policy will land.

“Sentiment is certainly more positive. People don’t really know the answer, but they’re more positive about the direction,” he said.

The year featured a handful of blockbuster tie-ups, including Capital One’s $35 billion agreement to buy Discover Financial Services DFS -1.31%decrease; red down pointing triangle and Mars’s roughly $30 billion deal for the maker of Cheez-It, Kellanova. But the pace of sizable deals, especially in typically busy sectors such as technology and healthcare, has been noticeably slower.

Both Ferguson and Trump’s administration are expected to keep the pressure on large technology companies. That could include such giants as Apple and Meta Platforms, which have shied away from deals while under increased regulatory scrutiny.

Declining interest rates and frothy markets should help bring corporate CEOs and private-equity firms, which drive a large portion of merger activity, back to the table. Lower rates make it more affordable to finance deals with debt while rising stock prices embolden corporate chiefs to use their shares as currency to fund deals.

“Financing markets are way open such that you can do jumbo deals again,” said Dominic Lester, Jefferies’s head of investment banking for Europe, the Middle East and Africa.

In mid-December, the Federal Reserve reduced interest rates for the third time in 2024, while signaling another two cuts in the year ahead. If the Fed moves fall short of investor expectations, it could trigger stock-market volatility. That risks weighing on M&A by making it harder for buyers and sellers to agree on price.

The S&P 500 index has gained roughly 25% so far in 2024.

The $13 billion deal between the advertising giants Omnicom Group and Interpublic Group IPG -1.54%decrease; red down pointing triangle headlined a flurry of announcements since the election, which some interpreted as a sign that activity is already heating up. Omnicom took advantage of the elevated level of its share price to fund its deal with only stock.

Dialogue with companies globally on possible big deals is up meaningfully, suggesting potential growth of 10% to 15% in activity in 2025, said Mark Sorrell, co-head of global M&A at Goldman Sachs.

Meanwhile, pressure has continued to rise on private-equity firms to sell long-held assets and reinvest newly raised funds to generate returns for impatient investors.

“If private equity could afford to wait to sell assets, they did,” said Mahvesh Qureshi, a corporate finance partner at the law firm Hogan Lovells. “Those dynamics have shifted.”

Still, dealmakers are still trying to parse Trump’s likely moves. He has pledged to impose 25% tariffs on products coming into the U.S. from Mexico and Canada. He has also threatened to impose an additional 10% levy on products from China.

But Trump’s pick for Treasury secretary, Scott Bessent, has suggested that tariffs are a negotiating tool. Before he was selected, Bessent told investors that the “tariff gun will always be loaded and on the table but rarely discharged.”

If steep tariffs do come to fruition, they could encourage foreign companies to acquire businesses in the U.S. as a way of circumventing the levies. They could just as well force American importers to pass on the added costs to consumers, making it harder for the Fed to lower rates, some bankers caution.

The levies could also dent companies’ bottom lines by raising costs, making deals less attractive and stymieing demand. Despite the uncertainty, bankers report a mounting backlog of deals that could happen under the right conditions.

Wall Street investors entered each of the past two years brimming with optimism about U.S. Treasurys and other types of high-quality debt. Each time, they were disappointed.

Now, they are far more guarded. In recent weeks, money managers have been dumping Treasurys, while savers have been rushing out of longer-term bond funds.

All that selling has pushed Treasury yields to the upper end of their two-year range. Still, investors remain worried that a tough environment for bonds could get even worse if President-elect Donald Trump pursues inflationary policies such as new tariffs. Many are debating whether hiding out in short-term T-bills could again be the smarter play.

“Cash is yielding 4-plus percent,” said Ed Al-Hussainy, global interest-rate strategist at Columbia Threadneedle Investments. “That’s a pretty tough bogey to beat.”

Such doubts represent a big shift on Wall Street.

Just a few years ago, bonds were enjoying a decadeslong bull run and investors hardly feared higher rates. They generally assumed rates couldn’t rise much above zero without triggering a recession.

When the Federal Reserve raised rates aggressively in 2022, most investors still believed it was only a passing phase. Through 2023, they consistently bet on a quicker and sharper turn to lower rates than the Fed itself was forecasting.

Now, though, more investors have come to believe that the economy can handle higher rates and that inflation will persist as a threat.

Starting in November, investors were ahead of the Fed in betting that the central bank would reduce rates just twice next year, rather than the four times officials signaled in September. When most Fed officials also forecast two cuts in their Dec. 18 economic projections, traders immediately stepped up bets that the central bank would cut once, or not at all.

Those wagers have taken a toll on bond returns.

As of Dec. 26, an ICE BofA index of U.S. Treasurys was poised to deliver worse returns than T-bills for the fourth straight year, having returned 0.4% compared with T-bills’ 5.2%. The widely tracked Bloomberg U.S. Aggregate Index, which includes investment-grade corporate bonds and mortgage-backed securities as well as Treasurys, has returned 1.1%, after barely outperforming T-bills in 2023 and falling short the previous two years.

In the past, bonds would usually follow a bad year with a good year. That hasn’t happened recently, prompting “this reluctance to deal with the asset class,” said Brian Nick, head of portfolio strategy at NewEdge Wealth.

Investors have pulled $5.3 billion out of BlackRock’s iShares 20+ Year Treasury Bond ETF this month, according to FactSet. If that number holds to the end of December, it would be the largest monthly outflow in the fund’s 22-year history.

Tumbling bond prices pushed the yield on the benchmark 10-year U.S. Treasury note up to 4.619% as of Friday, according to Tradeweb. That was up from 4.192% at the end of November and 3.860% at the end of 2023.

Not everyone is so pessimistic. Economists at Goldman Sachs have forecast that inflation will resume its downward trajectory next year, allowing the Fed to cut rates three times. Rates strategists at the bank predicted that 10-year Treasurys would outperform bills in 2025, arguing that the market has already priced in strong U.S. growth and hefty federal budget deficits.

Rising yields create their own headwinds for the economy because Treasury yields set a floor on an array of borrowing costs. Their recent uptick has already driven average 30-year mortgage rates back up near 7%, extending a deep slump in home buying.

Pressure on bonds can also squeeze riskier assets. Stock valuations are currently lofty by most measures, but particularly so when weighed against the risk-free return investors can get by holding a 10-year Treasury note to maturity. Historically, that has meant that stocks have struggled to outperform bonds over the next 10 years, according to data compiled by the economist Robert Shiller.

Investors should own “at least as many bonds in your portfolio as you normally would, and maybe even more if you are sort of setting this and forgetting it for a very long period of time,” said Nick of NewEdge Wealth. “Bonds are offering you more value than the broad equity market is.”

Still, many others are hesitant. The 10-year yield could easily climb above 5% if Trump adds to inflation by raising tariffs and can’t curb increases in the supply of Treasurys by reducing the budget deficit, said Yung-Yu Ma, chief investment officer at BMO Wealth Management.

In hindsight, it is the low-rate world of the 2010s that is starting to look as though it was “a complete bubble” for bonds, he added.

Nvidia bets on robotics to drive future growth

US chipmaker looks to new industries amid rising competition in core AI business

Nvidia is betting on robotics as its next big driver of growth, as the world’s most valuable semiconductor company faces increasing competition in its core artificial intelligence chipmaking business.

The US tech giant, best known for the infrastructure that has underpinned the AI boom, is set to launch its latest generation of compact computers for humanoid robots — dubbed Jetson Thor — in the first half of 2025.

Nvidia is positioning itself to be the leading platform for what the tech group believes is an imminent robotics revolution. The company sells a “full stack” solution, from the layers of software for training AI-powered robots to the chips that go into them.

“The ChatGPT moment for physical AI and robotics is around the corner,” Deepu Talla, Nvidia’s vice-president of robotics, told the Financial Times, adding that he believes the market has reached a “tipping point”.

The push into robotics comes as Nvidia is experiencing more competition for its powerful AI chips from rival chipmakers such as AMD, as well as cloud computing giants such as Amazon, Microsoft and Google, who are seeking to reduce their dependence on the US semiconductor giant.

Nvidia, whose valuation has soared past $3tn on the back of huge demand for its AI chips, has positioned itself as an investor in the ‘physical AI’ space, in a bid to help grow the next generation of robotics companies.

In February, it was one of several companies, including Microsoft and OpenAI, to invest in humanoid robotics company Figure AI at a $2.6bn valuation.

Robotics has so far remained an emerging niche that has yet to generate large returns. Many start-ups in the space are struggling with scaling, reducing costs and increasing the accuracy of robot products.

Nvidia does not break out robotics product sales, but it currently represents a relatively small share of overall revenues. Data centre revenue, which includes its sought-after AI GPU chips, made up about 88 per cent of its overall sales of $35.1bn in the group’s third quarter.

But Talla said a shift in the robotics market is being driven by two technological breakthroughs: the explosion of generative AI models and the ability to train robots on these foundational models using simulated environments.

The latter has been a particularly significant development as it helps solve what roboticists call the “Sim-to-Real gap”, ensuring robots trained in virtual environments can operate effectively in the real world, he said.

“In the past 12 months . . . [this gap] has matured sufficiently that we can now carry out experiments in simulation, combining with generative AI, that we could not do two years ago,” said Talla. “We provide the platform for enabling all of these companies to do any of those tasks.”

Talla joined Nvidia in 2013 to work on its ‘Tegra’ chip, which was initially aimed at the smartphone market. However, the company quickly pivoted, with Talla overseeing the redeployment of about 3,000 engineers into “AI and autonomous training [for vehicles, for example].” This was the genesis of Jetson, Nvidia’s line of robotic ‘brain’ modules that emerged in 2014.

Nvidia offers tools at three stages of robotics development: software for training foundational models, which comes from Nvidia’s ‘DGX’ system; simulations of real-world environments in its ‘Omniverse’ platform; and the hardware to go inside the robots as its ‘brain.’

Apptronik, which uses Nvidia’s technology throughout its development of humanoid robots, in December also announced a strategic partnership with Google DeepMind to improve its products.

The global robotics market is currently valued at about $78bn, according to US market researchers BCC, and is projected to reach $165bn by the end of 2029. 

Amazon has already deployed Nvidia’s robotics simulation technology for three of its warehouses in the US, and Toyota and Boston Dynamics are among other customers using Nvidia’s training software.

David Rosen, who leads the Robust Autonomy Lab at Northeastern University, said the robotics market still faces significant challenges, including training the models and verifying they will be safe when deployed.

“As of right now, we don’t have very effective tools for verifying the safety and reliability properties of machine learning systems, especially in robotics. This is a major open scientific question in the field,” said Rosen.

French stock market on track for worst showing since Eurozone crisis

Politics and luxury goods weigh on benchmark Cac 40 index

French stocks are on course to deliver their weakest annual performance since the depths of the Eurozone crisis, as investor worries over tariffs and political turmoil combine with lacklustre demand for luxury goods.

Paris’s Cac 40 index has fallen 3 per cent this year, compared with a 6 per cent gain for the region-wide Stoxx Europe 600, after a strong start to the year driven by bumper sales for companies such as LVMH melted away.

Investors have been put off by political crisis, sluggish demand from the key export market of China and a weakening domestic economy. The prospect of a trade war after US president-elect Donald Trump threatened sweeping tariffs on goods has added to the malaise.

“So many things are happening at the same time [that] people want to stay away from French names,” said Roland Kaloyan, head of European equity strategy at the French bank Société Générale. “This downturn has been quite remarkable.”

The political turmoil has weighed heavily on the French market, analysts said, with François Bayrou becoming the country’s fourth prime minister this year.

That crisis has intensified a debate over how the country will tackle a growing budget deficit. Investor unease about the country’s fiscal situation has already pushed its 10-year borrowing costs above 3 per cent this year and the additional margin that France pays over benchmark German debt has reached its highest levels since the Eurozone debt crisis.

Earlier this month Moody’s downgraded France’s credit rating following outgoing premier Michel Barnier’s government’s vote of no confidence, citing a “materially weaker” economic outlook.

The falling price of French stocks stands in stark contrast to neighbouring Germany, where a 18.7 per cent gain in the country’s stock market this year has defied the gloom enveloping its domestic economy.

Luxury goods companies, which are a cornerstone of the Cac 40, have struggled as it has become clear that China’s economic recovery from the pandemic has stalled.

The rise of middle-class Chinese shoppers this century had transformed earnings for luxury goods companies, with consumers flocking to European and Asian capitals alike to buy designer handbags and other goods.

Covid then supercharged purchases as bored shoppers stuck at home spent furlough payments on accessories and premium alcohol. Profits at companies like LVMH as well as beauty giant L’Oréal, grew by double digits.

But Chinese shoppers have reined in their spending on concerns over a potential sharp economic slowdown. Beijing has announced sweeping plans to stimulate confidence in the economy and markets.

“The big disappointment in China has probably reached a trough,” said Caroline Reyl, head of premium brands at Pictet Asset Management, adding that she is now waiting for the Chinese government stimulus to translate into consumer activity as she “doesn’t expect a worsening of the situation”.

Still, more than one-fifth of the Cac 40’s constituents are consumer goods companies with “heavy” exposure to China, including LVMH and Kering — which are down 12 and 40 per cent this year respectively. 

Emmanuel Cau, an analyst at Barclays, said the market is “split” on whether luxury goods companies will bounce back in 2025 or earnings will weaken again. He forecasts sector growth of just 3 per cent next year, at constant currency rates. “This was a year of pain,” he added.

It is a combination that puts the Cac 40 on track to being the only major stock market worldwide to end the year in negative territory.

French banks and insurers, which make up 10 per cent of the benchmark, have fallen sharply as they are exposed to slowing economic growth and also hold substantial government debt, which investors now consider more risky.

BNP Paribas, Europe’s biggest bank and often traded by investors as a proxy for the French economy, has fallen 8 per cent this year.

Intense competition from China’s electric-vehicle makers and political turmoil has hit carmakers, including Stellantis. Shares in the company behind the Peugeot, Fiat and Jeep brands have fallen 41 per cent in Paris this year.

As the Cac 40 struggles, French companies have started to explore other capital markets. Pay TV operator Canal+ listed in London this month, although shares have slumped nearly 30 per cent since they began trading.

TotalEnergies has said it is “seriously exploring” a US listing, while fast-growing asset manager Tikehau told the Financial Times last month that it was considering moving its listing from Paris to the US.

However, France’s struggles are also reflection of the challenges the continent’s politicians are now facing, which include stimulating growth and the looming prospect of a global trade war with sweeping tariffs after Trump’s election win.

Barclays’ Cau added: “We need some kind of catalyst for Europe to take care of itself. It has been dependent on China but now the world is less globalised and China is growing less.” 

Australian asset manager sold AirTrunk business to Blackstone

Asia-Pacific infrastructure should drive more deals in 2025 despite economic challenges for the region, Macquarie said after the Australian asset manager wrapped up a A$24bn (US$15bn) data centre sale.

Ani Satchcroft, co-head of Macquarie’s infrastructure division in Asia-Pacific, said the region would offer opportunities even with the impact of a weak Chinese economy and geopolitical instability hitting growth.

Macquarie, one of the most active global investors in infrastructure investment, this month completed the sale of Australia’s AirTrunk to Blackstone in its biggest deal of 2024. It bought the company for A$3bn five years ago.

AirTrunk has since expanded into markets including Japan, Hong Kong and Malaysia.

Some of the world’s biggest tech groups are also stepping up investment in data centres in the region as demand grows for services based on artificial intelligence.

Macquarie is the biggest private sector owner of infrastructure assets in the UK but has attracted scrutiny, notably in the water sector, after it attracted criticism for almost trebling Thames Water’s debt after buying a stake in the business in 2006.

The water company has since struggled with its debt and has been the subject of proposals this month to repair its finances including emergency loans, a break up or a nationalisation.

Macquarie, which sold its last stake in the water company in 2017, has defended its record, saying it invested billions in the utility. It re-entered the British water sector when it acquired Southern Water in 2021.

In Asia-Pacific it has focused more of its investment in areas including digital infrastructure and renewable energy projects.

Macquarie had a mixed year as it missed profit expectations after it struggled to exit investments due to weak market conditions. It told investors in November that it expected deal flow to pick up in 2025. 

Satchcroft said Japan remained an attractive investment destination after Macquarie invested in telecoms company Rakuten’s mobile towers in August. “The challenge there is the ability to deploy and scale investments,” she said. 

She said the asset manager also expected to continue to deploy capital in South Korea, where it acquired the Hanam data centre business in August, despite the country’s recent political upheaval including the impeachment of the president.

Satchcroft said Australian infrastructure was in a “pretty good spot” to invest and said more public sector assets could soon come on to the market as state and the federal government deal with high levels of debt.

Macquarie has taken a broader view of the definition of “infrastructure” in recent years, pushing into markets including energy, telecoms and data centres. 

Satchcroft pointed to Macquarie’s involvement in an A$8bn deal in 2022 to take over the running of vehicle registration services in the state of Victoria. She said the number plate registry had the hallmarks of an infrastructure-style asset, as an essential service with stable cash flows that needed private capital to upgrade it. 

She said she would expect other Australian state governments to consider similar deals.

“Something that the Australian state governments have done really well is [to] think outside the box in terms of what assets can be commercialised,” she said.