US FINANCIAL MARKET
Wall Street slips from record levels on profit-taking
- Wall Street’s major indexes slipped on Monday as investors booked profits on the penultimate day of the decade after improving global sentiment fueled a U.S. market rally this month.
- Last week, the Dow Jones Industrial Average ended with another record, and the S&P 500 finished with its third closing high in the four sessions interrupted by the Christmas break.
- Tech stocks largely led the decline on the S&P, with Microsoft and Apple dragging the sector.
- The information technology sector is the best performing among the 11 S&P 500 sectors this year.
- Tesla fell 3.5% despite the company making its first deliveries of cars built in China.
- Walt Disney fell 0.8%, even though the latest installment of its Star Wars movies was the top box-office draw for a second straight week.
Tesla’s First Made-in-China Model 3s Hit the Road
- Electric-car maker Tesla says it has hit its early production target of 1,000 vehicles a week at its China plant—less than a year after breaking ground at a 210-acre field in Shanghai.
- Tesla now has 36 retail stores in China and about 300 charging stations nationwide.
- It plans to increase its after-sales staff in the country to about 1,500 people in 2020 from around 600 now, an executive said.
- Tesla still relies on costly imported components to make its Model 3 in China.
- About 30% of its supply chain is now local and Tesla is aiming to fully localize its supply chain by the end of 2020.
‘Do Not Sell My Info’: U.S. retailers rush to comply with California’s new privacy law
- U.S. retailers including Walmart will add “Do Not Sell My Info” links to their websites and signage in stores starting Jan. 1, allowing California shoppers to understand for the first time what personal and other data the retailers collect, sources said.
- Large U.S retailers are rushing to comply with a new law, the California Consumer Privacy Act (CCPA), which becomes effective at the start of 2020 and is one of the most significant regulations overseeing the data collection practices of U.S. companies.
- In addition to retailers, the law affects a broad swath of firms including social media platforms, advertisers, app developers, mobile service providers and streaming TV services, and is likely to overhaul the way companies benefit from the use of personal information.
- It lets shoppers to opt out of allowing retailers and other companies to sell personal data to third parties.
- Draft regulations around the law were only released in October.
YouTube to Limit Data Collection on Children’s Videos
- YouTube will soon limit the data it collects on videos designed for children to comply with a federal privacy clampdown, pleasing advocates but delivering a potential financial blow to creators of free children’s content on the video platform.
- The unit recently began requiring the makers of videos to designate whether the content they post is targeted at children or a broader audience.
- YouTube will limit data collection on videos geared toward children starting in early January.
- A failure to properly designate videos could lead to Federal Trade Commission fines for creators.
- Most significantly, kid-targeted videos won’t carry personalized ads based on Google’s data about the viewer.
‘The Rise of Skywalker’ Fuels Hearty Holiday Box Office
- Walt Disney’s “Star Wars: The Rise of Skywalker” held the top position at the box office for the second consecutive weekend, with an estimated $72 million in the U.S. and Canada.
- Earlier in the week, “The Rise of Skywalker” amassed the second-best Christmas-day showing of all time at the domestic box office, with $32.2 million.
- “The Rise of Skywalker” has made an estimated $361.8 million in the U.S. and Canada since opening on Dec. 19.
- With 52 additional international territories, world-wide the film has earned $724.8 million, according to media-measurement company Comscore.
UPS, FedEx Fees on Heavy Packages to Hit Consumers and Merchants
- FedEx and UPS are escalating their war on bulky items by levying $24 fees on packages weighing more than 50 pounds.
- Previously, packages weighing more than 70 pounds triggered additional handling surcharges.
- But the carriers are lowering their thresholds as part of an annual round of rate increases that could cause millions of packages to be hit by the fee—or force customers to change their shipping practices to avoid it.
- Neither company responded to questions about the revenue the new fees would generate, but Shipware, a shipping consulting firm, estimates that 14.5% of packages sent by its 100 largest clients would be hit by the $24 fee, up from 8.4%.
US ECONOMY & POLITICS
U.S. pending home sales rise in November
- Contracts to buy previously owned U.S. homes rose in November, driven by a surge in new contracts being signed in the country’s West, the National Association of Realtors said on Monday.
- The NAR’s pending home sales index, based on contracts signed last month, increased 1.2% to a reading of 108.5.
- The previous month’s reading was revised upward.
- Compared with one year ago, pending sales were up 7.4%.
- Compared to the prior month, contracts increased 5.5% in November in the West. They also increased in the Midwest but were lower in the South and Northeast.
Rank-and-File Workers Get Bigger Raises
- Wages for rank-and-file workers are rising at the quickest pace in more than a decade, even faster than for bosses, a sign that the labor market has tightened sufficiently to convey bigger increases to lower-paid employees.
- Pay for the bottom 25% of wage earners rose 4.5% in November from a year earlier, according to the Federal Reserve Bank of Atlanta.
- Wages for the top 25% of earners rose 2.9%.
- Similarly, the Atlanta Fed found wages for low-skilled workers have accelerated since early 2018, and last month matched the pace of high-skill workers for the first time since 2010.
More Workers Eligible for Overtime Pay in 2020
- More workers will qualify for overtime in the new year under the first federal overhaul of requirements in more than 15 years, an update businesses are taking in stride but that is leaving some workers frustrated they won’t see bigger paychecks.
- An additional 1.3 million U.S. workers will be eligible for overtime pay, or one-and-a-half times their hourly rate when they log more than 40 hours in a week, starting Jan. 1, the Labor Department said.
- The annual salary threshold—below which nearly all workers qualify for overtime—will rise to $35,568 from $23,660.
- That figure hasn’t changed since 2004.
- The Labor Department said the threshold needed to be increased to reflect the higher cost of living, and essentially adjusted the 2004 level for inflation.
China’s Liu He to sign Phase 1 trade deal in U.S. this week: report
- Chinese Vice Premier Liu He will visit Washington this week to sign a “Phase 1” trade deal with the United States, the South China Morning Post reported on Monday.
- Representatives for the Office of the U.S. Trade Representative and the White House could not be immediately reached for comment on the report, which said the Chinese delegation was likely to stay in the United States until the middle of next week.
- U.S. Trade Representative Robert Lighthizer said this month that representatives from both countries would sign the pact during the first week of January.
- Neither side has released many specific details of the agreement, and no text has been released.
Warren’s Presidential Campaign Says It Faces Fundraising Decline
- Sen. Elizabeth Warren’s campaign has raised $17 million since October, putting her on pace to bring in $5 million less in the final quarter of the year than she did in the previous quarter, her campaign told supporters in an email.
- The email warned that without sufficient resources, the Massachusetts Democrat’s campaign would have to pull back its plans to organize in more states.
- The slower fundraising pace comes as Ms. Warren’s support has fallen in national and early state polls, following concerns expressed by her rivals and some Iowans about her health-care proposal.
- Ahead of the first nominating contest in Iowa in about five weeks, she has tried to return to a message focused on fighting corruption and highlighting her populist economic proposals.
EUROPE & WORLD
Higher EV demand drives Tesla-rival Nio’s quarterly sales beat, shares rise
- Tesla-rival Nio beat quarterly revenue estimates on higher demand for its electric vehicles, sending the company’s U.S.-listed shares up more than 13% in trading before the bell.
- Revenue jumped nearly 22% to 1.7 billion yuan from a year earlier on sales of 4,196 units of ES6 model in the quarter and 603 units of pricier ES8- a seven-seater sport-utility electric vehicle widely seen as a rival to Tesla’s Model X.
- The company said that it delivered 4,799 vehicles in the quarter compared with 3,553 deliveries in the second quarter of 2019.
- Nio posted a loss off $2.52 billion RMB in the quarter, compared to a loss of $2.81 billion RMB a year ago.
- It expects to deliver over 8,000 units in the fourth quarter.
U.S. sanctions block hurry-up work on Russian gas pipeline: officials
- Any companies that rush to finish building a Russian natural gas export pipeline to Germany that came under U.S. sanctions this month risk being penalized, senior U.S. officials said on Sunday.
- President Donald Trump signed a bill late this month imposing sanctions on the Nord Stream 2 gas pipeline project led by Gazprom, Russia’s state-controlled gas company.
- senior U.S. officials, who spoke on condition of anonymity, rejected the notion that the “good faith” wind-down period granted companies time to rush to finish Nord Stream 2.
- There is room for the Trump administration to determine what “good faith” means, but the wind-down period is meant to allow time for companies to straighten up financial arrangements and safely remove equipment, one official said.
- Despite U.S. sanctions, Russia says the pipeline will be finished.
EU seeks reset in trade talks with U.S. – trade chief Hogan
- The European Union’s new trade commissioner, Irishman Phil Hogan, was quoted on Monday as saying he would seek a reset of EU/US trade relations on a number of contentious issues when he meets his U.S. counterpart for the first-time next month.
- The Trump administration imposed tariffs on European steel and aluminum in mid-2018.
- It has done the same to $7.5 billion worth of EU products over a dispute about subsidies for European planemaker Airbus, and is threatening action against France over a digital services tax.
- The two sides are in theory trying to forge a deal to remove overall import duties, but are stuck over farm products, which Washington says must be included and Brussels says cannot feature.
- The European Commission has said the bloc will act as one over the planned U.S. tariffs on French goods, and that a threat this month to increase EU-wide tariffs in relation to the Airbus dispute would make a settlement more difficult to achieve.
TODAY in HISTORY
- Sun Yat-sen was elected the first president of the Republic of China. (1911)
- California’s first freeway (1940)
- President Nixon halted the heavy bombing on North Vietnam. (1972)
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