US FINANCIAL MARKET
Tech Shares Power U.S. Stocks Higher
- U.S. stocks climbed toward records Monday, buoyed by a rally in shares of technology companies.
- Stocks around the world got a boost after Chinese officials called for speeding up the introduction on penalties and punitive action for infringement of patents and copyrights in a document released Sunday.
- The U.S. has indicated it wants clearer assurances that China will follow through on the commitments it has made on the issue, and on others, before negotiators will travel to Beijing for a new round of talks for a “phase one” trade deal.
- Riskier assets such as stocks rallied, with shares of technology companies among the biggest gainers in the U.S.
- A flurry of deal-making activity also drove swings among individual stocks Monday.
- Tiffany shares added 6% after LVMH said it reached an agreement to buy the U.S. jeweler for more than $16 billion.
- Charles Schwab rose 0.3% after it agreed to buy smaller rival TD Ameritrade in a stock-swap transaction valued at about $26 billion.
- EBay shares jumped 1.3% after The Wall Street Journal reported the e-commerce company was nearing a deal to sell its StubHub ticketing business to a Switzerland-based firm, Viagogo.
Charles Schwab to buy TD Ameritrade in $26-billion blockbuster brokerage deal
- Charles Schwab agreed on Monday to buy TD Ameritrade in an all-stock deal valued at $26 billion, creating a brokerage giant in a market that has been ravaged by price wars.
- The acquisition will shake up the retail brokerage industry, creating a company with $5 trillion in assets under management and putting smaller rivals under pressure to scout for tie-ups.
- The deal is expected to attract the attention of anti-trust regulators.
- As part of the deal, expected to close in the second half of 2020, Ameritrade stockholders will get 1.0837 Schwab shares for every share held, or $52.23 based on Schwab’s Friday close.
- Based on Schwab’s Friday close, the deal represents a premium of 26% to TD Ameritrade’s closing price on Wednesday.
LVMH Bets It Can Restore Tiffany’s Shine With $16 Billion Deal
- The European luxury conglomerate behind Louis Vuitton and Bulgari is taking over Tiffany in a more than $16 billion gamble that it can restore shine to the famed jeweler.
- The $16.2 billion deal gives LVMH a classic American brand that has struggled with weak demand at home and abroad.
- It is also a bet on China’s economy and its consumers, whose fast-rising incomes have made them the luxury industry’s most important customers.
- In search of growth, Tiffany is building flagship stores in several Chinese cities.
EBay to Sell StubHub to Viagogo for Roughly $4 Billion
- EBay agreed to sell its StubHub ticketing business to Swiss ticket reseller Viagogo Entertainment for $4.05 billion in cash.
- Geneva, Switzerland-based Viagogo is an online marketplace for the resale of live sports, music and entertainment tickets.
- While both companies engage in ticket resale, Viagogo is a significant player internationally, while StubHub is mostly present in the U.S.
- EBay has owned StubHub since 2007 and accounted for about 14% of the company’s revenue in the third quarter.
Uber Loses License to Operate in London
- Uber Technologies lost its license to operate in London, one of its most important markets, after regulators found widespread instances of unauthorized drivers using the ride-hailing app to pick up customers.
- The company will continue to operate in the city through an appeals process, but the unearthing of a loophole being exploited by drivers threatens to shake trust in the platform here and elsewhere.
- Transport for London, the city’s main transportation regulator, or TfL, said it had found 14,000 instances in late 2018 and early 2019, in which unauthorized drivers were able to use Uber’s software to meet and pick up riders.
- TfL said all 14,000 rides identified were uninsured and that two of 43 drivers involved were unlicensed drivers—meaning they hadn’t been vetted by the regulator for a criminal background or driving ability.
GE Taps an Outsider From Maersk for Its New Finance Chief
- General Electric said it hired an executive at A.P. Moeller-Maersk as its next chief financial officer, tapping another outsider to help the American conglomerate turn around its operations.
- Carolina Dybeck Happe, who has been the Danish shipping giant’s finance chief less than a year, will join GE in early 2020.
- The CFO change comes while GE’s accounting practices are under investigation by the Justice Department and the Securities and Exchange Commission.
‘Frozen 2’ Thaws Box-Office Cold Streak
- Walt Disney’s “Frozen 2” heated up a slumping domestic box office this weekend, opening with a record-setting $127 million in the U.S. and Canada, according to preliminary studio estimates.
- The opening set a record for Walt Disney Animation Studios.
- The original “Frozen” made its debut with $93.9 million over the long Thanksgiving weekend in 2013, eventually grossing $400 million domestically and nearly $1.3 billion world-wide.
Musk suggests Tesla has 200,000 orders for Cybertruck
- Tesla Chief Executive Officer Elon Musk indicated in a tweet on Sunday that the electric carmaker received 200,000 orders for its electric pickup truck within three days of its launch.
- In an earlier tweet, Musk said the company had received 146,000 orders for Cybertruck, and tweeted again on Sunday saying “200K” – an apparent reference to the number of orders.
- Tesla plans to start manufacturing the Cybertruck around late-2021.
U.S.-based chip-tech group moving to Switzerland over trade curb fears
- A U.S.-based foundation overseeing promising semiconductor technology developed with Pentagon support will soon move to Switzerland after several of the group’s foreign members raised concerns about potential U.S. trade curbs.
- The nonprofit RISC-V Foundation (pronounced risk-five) wants to ensure that universities, governments and companies outside the United States can help develop its open-source technology, its Chief Executive Calista Redmond said.
- She said the foundation’s global collaboration has faced no restrictions to date but members are “concerned about possible geopolitical disruption.”
- Created in 2015, the RISC-V Foundation sets standards for the core chip architecture and controls who can use the RISC-V trademark on products, as other organizations do for Wi-Fi and Bluetooth chips.
US ECONOMY & POLITICS
China Vows More Protection for Intellectual Property
- The Chinese government released a document on Sunday calling for more protection of intellectual property rights, one issue at the center of trade talks with the U.S.
- The guidelines advise “speeding up the introduction of a punitive compensation system for infringements of patents and copyrights, and strengthening the protection of trade secrets, confidential business information and their source codes.”
- In addition, it also says China needs to step up international cooperation in IPR protection and help communication between domestic and foreign rights holders and provide support in overseas IPR disputes.
China and U.S. ‘very close’ to phase one trade deal: Global Times
- China and the United States are very close to a “phase one” trade deal, the Global Times, a tabloid run by the ruling Communist Party’s official People’s Daily, said on Monday, discounting “negative” media reports.
- China also remains committed to continuing talks for a phase two and even a phase three deal with the United States, the Global Times said on its Twitter feed, citing experts close to the Chinese government.
- Trade experts and people close to the White House said last week that completion of a “phase one” deal, which had been expected in November, could slide into the new year, as Beijing presses for more extensive tariff rollbacks and Washington counters with demands of its own.
- Chinese foreign ministry spokesman Geng Shuang declined to comment specifically on the Global Times report but reiterated that Beijing would like Washington to work with it to resolve the outstanding trade issues on a basis of equality and mutual respect.
Trump Calls Hong Kong Protests ‘Complicating Factor’ in Trade Talks
- President Trump called antigovernment protests in Hong Kong a “complicating factor” in his bid for an elusive trade deal with China and didn’t say whether he would sign a bill passed by Congress supporting the protesters.
- The president, speaking on Fox News, said he supported Hong Kong, “but we are also in the process of making the largest trade deal in history and if we could do that it would be great.”
- A senior administration official said later Friday that the president hadn’t yet indicated he had made a final decision on the bill, which risks further angering Beijing at a crucial moment in the trade dispute.
- A veto from Mr. Trump could set up a possible override. The Senate bill was passed through a unanimous consent vote, meaning no one objected. The House passed the bill in a 417-1 vote.
Democrats Signal Impeachment Will Move to Next Stage as Investigation Rolls On
- House Democrats signaled they want to maintain the brisk schedule of their impeachment inquiry, saying that concerns about the integrity of next year’s elections may outweigh the need to gather additional evidence about President Trump’s conduct.
- Senior Democrats said there may be additional hearings and depositions after lawmakers return from their Thanksgiving recess in early December, but they argued the evidence for moving to the next phase of the investigation is overwhelming.
- With the Intelligence Committee’s scheduled public hearings wrapped up, it is writing a report on its findings for the House Judiciary Committee, which would then weigh articles of impeachment.
- Once the judiciary panel lays out charges against Mr. Trump, the full House could approve them, perhaps before the end of this year. It would then be up to the Senate to decide whether Mr. Trump should be removed from office.
Bloomberg Enters Crowded Democratic Race
- Billionaire Michael Bloomberg’s essentially limitless budget for his Democratic presidential bid adds uncertainty to an already crowded and unsettled race while increasing the odds of a prolonged nominating battle in a contest that has yet to produce a definitive front-runner.
- Mr. Bloomberg faces a tough path to the nomination given his late entry and lack of a campaign apparatus, though he will try to start to overcome that using a national-television ad campaign this week with a price tag that would be high even for a presidential nominee the week before a general election.
- Mr. Bloomberg, with a net worth of about $54 billion has said he would self-fund his campaign and not accept any donations. His national TV campaign this week will cost roughly $30 million.
EUROPE & WORLD
China central bank warns high financial risks amid rising economic headwinds
- China needs to resolve outstanding financial risks, and must counter risks from “abnormal” market fluctuations that stem from external shocks, said the central bank on Monday, as Beijing prioritizes financial stability amid increasing challenges.
- Bond defaults may continue, so authorities must prevent the risks of such defaults from triggering systemic risks, it said, while penalties on regulatory violations in the securities market would be increased.
- China’s household leverage ratio rose to 60.4% relative to gross domestic product (GDP) by the end of 2018, reaching the international average level and posing debt risks in some regions and low income families, according to the annual report.
- At the end of last year, 13.5% of China’s 4,379 financial institutions, mostly rural and smaller institutions, were rated as “high–risk” by the PBOC in the annual review of the industry.
Hong Kong Voters Strongly Support Pro-Democracy Candidates
- Voters delivered a resounding defeat to the government and a major show of support for the protest movement, as millions turned out for local elections that became a referendum on the mood of the city.
- Antigovernment sentiment on the streets translated to the ballot box, bringing out a record 2.9 million voters—more than 70% of those eligible.
- Voters swept away dozens of establishment and pro-China candidates vying for 452 district council seats and handed a majority to the city’s pro-democracy camp—the first time opposition parties have won control of a political body in Hong Kong.
- By noon on Monday, opposition candidates had won 390 seats, local broadcaster Radio Television Hong Kong reported, more than triple what they had in 2015.
- The camp also took a majority in at least 17 of the 18 district councils, all previously under pro-establishment control.
- The councils are low-level entities that typically handle neighborhood issues, but the elections are the only ones in Hong Kong to offer universal suffrage, and that gave them outsize importance as a statement of the public’s attitudes.
Iran Restores Internet Access as Protests Subside, but Threatens More Arrests
- Iran restored internet access in large parts of the country after a weeklong shutdown aimed at stifling nationwide protests, but threatened more arrests in a brutal crackdown that exposes the challenges of struggling to cope with harsh U.S. sanctions.
- Iran has accused the U.S. and other rivals of fomenting the unrest, as it justified using force that left more than 100 people dead, according to rights groups. Hundreds have been detained as they protested higher fuel prices.
- Iran’s internet blackout stemmed the sharing of videos and photos of the demonstrations, helping contain coverage to inside Iran, while making it difficult for those outside the country to assess the state of the protests and the brutal crackdown.
Merkel’s Coalition Government Faces Test Over Huawei Dispute
- Chancellor Angela Merkel was handed a damaging defeat at her party’s annual convention over her plans to allow China’s Huawei Technologies to build Germany’s next-generation 5G mobile network.
- Ms. Merkel is in favor of allowing Huawei to supply components for Germany’s next-generation 5G internet, but rebels within her Christian Democrats tabled a motion Saturday demanding the exclusion of bidders from countries where governments could exert influence over private companies.
- Aides to Ms. Merkel said the chancellor believed trade links to China, a rising superpower, were essential to secure Germany’s growth, especially at a time when the U.S. under the Trump administration was becoming a more assertive competitor.
- But Norbert Röttgen, a senior conservative legislator who co-drafted the motion against Ms. Merkel’s Huawei policy, said no Chinese company could be trusted with the 5G network.
TODAY in HISTORY
- The British evacuated New York City, their last military position, after the Revolutionary War. (1783)
- Iran-Contra scandal broke. (1986)
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