US FINANCIAL MARKET

US Yields Rise, Stocks Fall After Waller’s Remarks: Markets Wrap – Bloomberg, 1/16/2024

• Bond yields rose and stocks fell on speculation Wall Street’s bets on aggressive Federal Reserve rate cuts have gone too far.
• Wall Street remained on the lookout for comments from policymakers, with Fed Governor Christopher Waller saying officials can reduce rates absent a rebound in inflation — but he emphasized the central bank should be methodical and careful with the pace of easing.
• His comments also appeared to push back against market expectations for as many as six rate cuts this year.
• That’s more than twice as much as Fed officials signaled in December in their last round of quarterly forecasts.
• Since then, evidence of easing in labor-market tightness and inflation has ginned up traders to remain locked into bets for aggressive easing this year — though the exact degree of total reduction has ebbed and flowed around key data releases.
• The S&P 500 lost traction, following last week’s advance.
• The S&P 500 fell 0.3%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average fell 0.5%.
• Goldman Sachs Group topped earnings estimates as its equities-trading unit posted a jump in revenue, while Morgan Stanley’s traders fell short again, dragging down profit at the firm.
• The yield on 10-year Treasuries advanced 10 basis points to 4.04%.
• The Bloomberg Dollar Spot Index rose 0.8%.
• Optimism over lower rates has spurred investors to up their exposure to US equities to the highest in over two years, according to a Bank of America fund-manager survey.
• Meantime, earnings estimates have been slashed so much over the past three months that Wall Street strategists now expect most companies will easily beat analyst forecasts this season.
• The US Supreme Court refused to consider Apple’s appeal in an antitrust suit challenging its lucrative App Store, a decision that will likely affect billions of dollars in revenue for the iPhone maker.
• Donald Trump’s victory at the Iowa caucuses lifted Digital World Acquisition Corp., the blank-check firm working on taking his media company public.
• PNC Financial Services Group reported profits that missed analyst estimates, as it continued to grapple with declining deposits and tepid loan growth.
• The Stoxx Europe 600 fell 0.3%.
• West Texas Intermediate crude fell 1.1% to $71.91 a barrel.
• Spot gold fell 1% to $2,036.29 an ounce.

Goldman Sachs Reports Sharply Higher Earnings, Helped by Asset and Wealth Management – Wall Street Journal, 1/16/2024

• Goldman Sachs reported sharply higher profit for the fourth quarter, bolstered by a strong performance in its asset and wealth management business.
• Overall, Goldman’s revenue was $11.32 billion, up 7% from a year ago.
• That beat the $10.8 billion expected by analysts.
• Its investment-banking revenue fell 12%, while revenue for all its big rivals, including JPMorgan and Morgan Stanley was up.
• Goldman’s trading revenue was down 3%, while most rivals eked out small gains.
• Asset and wealth management, where Goldman has pinned much of its hopes, increased revenue by 23%, thanks in part to a much stronger stock market.
• Separately, revenue from lending to institutional clients was up.
• Revenue in equities financing, which includes lending to hedge funds that want to borrow for stock purchases, increased 15%.
• Revenue in FICC financing, where a swath of loans are made to private-equity firms and other companies, rose 4%.
• The bank on Tuesday said quarterly profit was $2.01 billion, up 51% from a year ago.
• It finished the year with 45,300 employees, down 1% from the end of September and 7% from the end of 2022.

Morgan Stanley’s posts big revenue beat with boost from fixed-income underwriting but its stock falls – Market Watch, 1/16/2024

• Morgan Stanley’s fourth-quarter revenue beat forecasts by a wide margin with a boost from its fixed-income underwriting, as the bank’s new Chief Executive Ted Pick took the reins of the storied Wall Street name.
• Pick said the bank’s return on average tangible equity for 2023 of 12.8% was “solid against a mixed market backdrop and a number of headwinds.”
• Revenue grew 1.2% to $12.9 billion, to beat the FactSet consensus of $11.93 billion.
• Investment banking revenue increased 5%, as fixed income underwriting revenue jumped 25% while advisory and equity underwriting revenue were flat.
• Elsewhere, equity, fixed income and wealth management revenue were “essentially unchanged.”
• Morgan Stanley’s fourth-quarter profit dropped by 35% and fell short of Wall Street estimates when including one-time items.
• The latest quarter includes a one-time charge of 28 cents a share related to the bank’s shares of the Federal Deposit Insurance Corp.’s special assessment for last year’s bank failures.
• Morgan Stanley fell short of the FactSet consensus estimate of $1.07 a share.
• Breaking out the one-time charge, earnings would have been $1.13 a share, ahead of the analyst mark.

PNC Profit Drops Over 40% – Wall Street Journal, 1/16/2024

• Regional bank earnings kicked off with PNC Financial Services Group, which reported a sharp decline in profit.
• Revenue slid 7% to $5.4 billion.
• Analysts had expected $5.3 billion.
• The results were dragged down by a $515 million charge to replenish a Federal Deposit Insurance Corp. fund used to make uninsured depositors whole, after the failure of Silicon Valley Bank and Signature Bank in early 2023.
• PNC also reported $150 million in workforce reduction charges.
• More loans started to go bad, including in PNC’s commercial real estate book.
• The bank said net charge-offs in this area rose to $54 million, more than doubling from a year earlier.
• Net income fell 43% from a year earlier to $883 million in the fourth quarter.
• That amounted to $1.85 per share, below the $2.12 that analysts polled by FactSet had forecast.

Apple to Remove Blood-Oxygen Sensor From Watch to Avoid U.S. Ban – Wall Street Journal, 1/16/2024

• Apple is removing a blood-oxygen sensor from some of its smartwatches to get around a patent dispute related to the technology, a step likely to avoid further sales disruptions but one that may raise questions about the company’s push into health.
• The company halted sales of some watch models briefly last month after a U.S. import ban went into effect stemming from an October ruling by the U.S. International Trade Commission.
• Sales resumed temporarily in recent weeks pending a legal review.
• The U.S. Customs and Border Protection agency, which is responsible for enforcing import bans, on Friday approved technical changes to the watches, including the removal of the blood-oxygen sensor, according to a Masimo filing on Monday.
• A decision on Apple’s request for a permanent stay on the U.S. ban during its appeal is expected in the coming days.

Elon Musk Seeks Greater Control Over Tesla Ahead of AI Advancements – Wall Street Journal, 1/16/2024

• Elon Musk said he feels uncomfortable making Tesla a leader in artificial intelligence and robotics without having about 25% voting control of the electric-car maker.
• Musk said late Monday in a post on X that he wants enough control at Tesla to be influential, but not so much that he couldn’t be overruled.
• “Unless that is the case, I would prefer to build [AI] products outside of Tesla,” Musk wrote on the social-media platform.
• The billionaire currently controls about 13% of Tesla, according to FactSet, having previously sold some of his holding in the company to fund his purchase of what was then called Twitter.
• Musk, who serves as chief executive of Tesla, said in another post on X that he would be fine with a dual-class voting structure to gain greater control of the automaker but that he was told it was impossible after its initial public offering.

Synopsys Buys Ansys for $35 Billion in Biggest Tech Deal of Year So Far – Barron’s, 1/16/2024

• Synopsys, the largest provider of electronic design automation software, agreed to buy Ansys for $35 billion in cash and stock in the biggest technology deal of 2024 so far.
• Synopsys is an artificial intelligence stock that hasn’t received as much attention as its customers such as Nvidia, Advanced Micro Devices, or Intel.
• Ansys provides simulation software that helps engineers predict how their products will work.
• Ansys shareholders will receive $197 in cash and 0.3450 a share of Synopsys for each share they own, the companies said.
• That represents a 29% premium to Ansys’s stock price on Dec. 21, before the deal was first mooted.
• The deal is expected to close in the first half of 2025, subject to shareholder and regulatory approvals.

Restaurant Brands To Acquire Largest Burger King Franchisee In U.S. For $1 Billion – Wall Street Journal, 1/16/2024

• Burger King-owner Restaurant Brands International will acquire Carrols Restaurant Group for about $1 billion in cash.
• Toronto-based RBI said it would pay $9.55 per share for Carrols, the largest Burger King franchisee in the U.S.
• Carrols operates over 1,000 Burger King restaurants and owns and operates 60 Popeyes restaurants.
• RBI said plans to “significantly accelerate Carrols’ current rate of remodels” over the next five years, investing about $500 million in capital from Carrols’ operating cash flow to remodel about 600 restaurants.
• The deal will be financed with cash on hand and is expected to be completed in the second quarter.
• RBI expects the acquisition to be neutral to adjusted earnings per share, while net leverage will increase minimally.

Closing of Kroger, Albertsons, C&S Deal Postponed – Wall Street Journal, 1/16/2024

• The proposed merger of U.S. grocery giants Kroger and Albertsons, and sale of assets to C&S Wholesale Grocers, will be later than previously anticipated as the companies continues discussion with regulators.
• In a joint statement on Monday, the companies said that due to continued discussions with the Federal Trade Commission and individual state Attorneys General, they now expect the deal to close in the first half of Kroger’s fiscal 2024.
• Previously, the companies expected to close the transactions early in the calendar year.
• The companies said they remain in active and ongoing dialogue with the regulators regarding the proposed merger and divestiture plan.

US ECONOMY & POLITICS

New York Factory Index Slumps to Lowest Level Since May 2020 – Bloomberg, 1/16/2024

• New York state factory activity deteriorated sharply at the start of 2024 on declining orders and shipments, consistent with persistent struggles for manufacturers across the US.
• The Federal Reserve Bank of New York’s general business conditions index decreased 29.2 points in January to minus 43.7.
• New orders slumped more than 38 points to minus 49.4, the weakest since April 2020, while shipments dropped by the most since August.
• The index of current employment showed a slower rate of contraction.
• At the same time, the six-month outlook for overall activity improved to a three-month high, suggesting manufacturing will stabilize at a weak level.
• The measure of the outlook for capital expenditures increased to the highest since April 2023, suggesting a pickup in investment.
• An index of prices paid for materials increased to a three-month high, while a gauge of prices received by state manufacturers showed slightly slower growth.

Having Conquered Iowa, Trump Sets Sights on New Hampshire and Haley – Wall Street Journal, 1/16/2024

• Fresh off a record-setting victory in Iowa, Donald Trump shifted attention to his next target in the GOP nomination hunt: a New Hampshire primary that Nikki Haley hopes will stall the front-runner’s momentum.
• Haley was edged out for second place in Iowa by Ron DeSantis, who once predicted he would win there.
• She is seen as stronger in New Hampshire and will seek to tap in to this state’s more-centrist electorate in the Jan. 23 primary.
• Her argument: Trump did a good job as president, but the controversies that surround him hurt the GOP’s chances of defeating President Biden in November.
• Trump allies quickly argued the race should be over so he can focus on Biden, who has minor primary opposition and is building a massive war chest.
• Haley congratulated Trump, but quickly touted her prospects in New Hampshire.
• “I can safely say tonight Iowa made this Republican primary a two-person race,” she said.
• DeSantis has faced questions about how long he would continue his campaign, given how intently he focused on Iowa.
• “We’ve got our ticket punched out of Iowa,” he said.
• And Trump stands to gain from the exit Monday of Vivek Ramaswamy, who continuously praised Trump on the campaign trail and endorsed him on the way out.
• Given Trump’s dominant performance in Iowa, a solid win in New Hampshire could effectively knock out the competition, though his campaign estimates he wouldn’t collect the required delegates for the nomination until March.

Fed Posts Largest-Ever Annual Operating Loss – Wall Street Journal, 1/16/2024

• The Federal Reserve ran an operating loss of $114.3 billion last year, its largest ever, a consequence of its campaign to aggressively support the economy in 2020 and 2021, then jacking up interest rates to combat high inflation.
• The losses added to already large federal deficits that have required bigger auctions of Treasury debt.
• The central bank’s losses could continue for as long as short-term interest rates remain near current levels.
• That has the potential to fuel new political attacks on the Fed, though there have been no signs of that so far.
• The central bank paid more to financial institutions on interest-bearing deposits and securities than it earned from securities that it bought when interest rates were lower.
• That’s a result of it raising its benchmark short-term interest rate to a two-decade high, above 5%, last year.
• The losses don’t affect the Fed’s day-to-day operations and won’t require the central bank to ask for an infusion from the Treasury Department.

Bipartisan Tax Deal Would Provide Boost to Businesses, Families – Wall Street Journal, 1/16/2024

• Top U.S. lawmakers unveiled a bipartisan tax agreement that would revive expired breaks for businesses and increase the child tax credit for low-income families, and they are aiming to push the $78 billion in tax breaks through Congress in the next few weeks.
• The deal comes from Sen. Ron Wyden (D., Ore.) and Rep. Jason Smith (R., Mo.), ideological opponents who found common ground after months of talks but face challenges in advancing the plan further.
• Their proposal would retroactively reverse several business-tax changes that had been set in motion by Republicans in the 2017 tax law and took effect over the past few years.
• Companies with interest costs, capital expenses and research spending would all benefit.
• Smith, chairman of the House Ways and Means Committee, and Wyden, chairman of the Senate Finance Committee, would also provide low-income households with more money from the child tax credit.
• That expansion would start with the 2023 tax returns that people will begin filing Jan. 29.
• The Smith-Wyden plan would also cut off new claims for the employee retention tax credit, the pandemic-era program that the Internal Revenue Service says is riddled with fraud.
• Under the plan, the deadline to file claims for the credit would be Jan. 31 instead of as late as April 2025.

Winter Storms and Dangerous Cold Hammer Much of the U.S. – Wall Street Journal, 1/16/2024

• More than 93 million people were under windchill advisories Monday, as Arctic cold and winter storms hammered much of the country.
• Brutally cold weather from a cold front spilling out of Canada continued across many parts of the country.
• Snow and freezing rain spread to the Mid-Atlantic and stretched over the Southern U.S. before the arrival of yet another arctic blast forecast later this week.
• Freezing rain was expected as far south as the Gulf Coast of Texas and Louisiana on Monday, while heavy snow could stretch from Tennessee to the Mid-Atlantic, according to the National Weather Service.
• More than 2,600 flights were canceled within, into or out of the U.S. on Monday as of 5 p.m. ET, according to flight-tracking service FlightAware.
• More than 7,000 flights were delayed.
• Weather-related problems snarled traffic at most major airports.

Fed’s Christopher Waller advocates moving ‘carefully’ with rate cuts – CNBC, 1/16/2024

• Federal Reserve Governor Christopher Waller acknowledged Tuesday that interest rate cuts are likely this year, but said the central bank can take its time relaxing monetary policy.
• The comments, delivered during a speech in Washington, D.C., seemed to counter market anticipation for aggressing easing this year.
• “As long as inflation doesn’t rebound and stay elevated, I believe the [Federal Open Market Committee] will be able to lower the target range for the federal funds rate this year,” Waller said in prepared remarks for an audience at the Brookings Institution.
• “When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” he added.
• “In many previous cycles … the cut rates reactively and did so quickly and often by large amounts. This cycle, however, … I see no reason to move as quickly or cut as rapidly as in the past.”
• “For a macroeconomist, this is almost as good as it gets. But will it last?” Waller said.
• “Time will tell whether inflation can be sustained on its recent path and allow us to conclude that we have achieved the FOMC’s price-stability goal. Time will tell if this can happen while the labor market still performs above expectations.”
• Waller said he thinks the Fed is “within striking distance” of achieving its 2% inflation goal, “but I will need more information” before declaring victory.

EUROPE & WORLD

ECB Cut Very Probable in 2024 But Timing Open, Villeroy Says – Bloomberg, 1/16/2024

• The European Central Bank is likely to start lowering borrowing costs this year but the exact timing will depend on data, according to Governing Council member Francois Villeroy de Galhau.
• The ECB’s next move will be a cut as it’s so far delivered disinflation in the euro area while avoiding a recession, the Bank of France governor told Bloomberg Television.
• “It’s too early to cry victory, but when you looked at what monetary policy achieved in last 12 months, we can be rather confident,” Villeroy said Tuesday.
• “Expect very probably a rate cut this year but the question of a season is a premature one.”
• “I will not qualify market expectations at present,” he said.
• “We are probably be a bit more patient.”
• “We must have the inflation outlook anchored around 2% — solidly and durably,” Villeroy said.
• “Solidly means we look at effective data including core inflation and wages; durably means we look at forecasts but also inflation expectations.”
• On Monday, Robert Holzmann, one of the ECB’s top hawks, warned that cuts aren’t guaranteed this year, while Bundesbank President Joachim Nagel said it’s premature to discuss the topic now.
• “We still have a very high core inflation rate in Europe, in Germany, and that’s why it would be good to wait for the data,” he said during a panel discussion broadcast by n-tv.

Houthis Turn Their Sights on U.S. Ships, Vow to Keep Attacking Red Sea Targets – Wall Street Journal, 1/16/2024

• Fresh attacks targeted American ships in the Middle East, days after the U.S. led a round of strikes meant to blunt the capability of Iran-backed Houthi rebels to hit ships transiting the Red Sea.
• Late Monday, Iran’s Islamic Revolutionary Guard Corps claimed an attack targeting what it called Israeli spy bases in Iraq in retaliation for Israel’s killing of its commanders and allies, adding to tensions in the region about the potential for the war in Gaza to trigger a broader regional conflict.
• Earlier, a Houthi missile struck the Gibraltar Eagle, a U.S. bulk carrier, off the coast of Yemen without causing injury or significant damage on Monday, said the U.S. Central Command, which oversees U.S. military operations in the Middle East.
• The Houthis later claimed responsibility for the attack.
• They vowed again Monday to continue their campaign against U.S. and international targets in the region in response to Israel’s actions in Gaza.

Chinese Premier Makes Surprise Economic Growth Reveal – Wall Street Journal, 1/16/2024

• Chinese Premier Li Qiang gave global business elites a big hint on highly anticipated growth figures, as he sought to reassure them that investing in China is an opportunity—not a risk.
• Li delivered the message in an address at the World Economic Forum in Davos, Switzerland, as Chinese leaders seek to stem an exodus of foreign investment with growth slowing and relations deteriorating with the U.S.-led West.
• In doing so, he made an unusual early disclosure, saying that China’s growth last year is expected to be about 5.2%.
• The number cited by Li would put the country’s growth just above the government’s target of around 5% that was set at the beginning of last year.
• “The Chinese economy can handle ups and downs in its performance. The overall trend of long-term performance will not change,” Li said, according to a live translation of his remarks.
• He sought to address some specific concerns head on, saying China intends to continue a process of easing restrictions on foreign investment in manufacturing and is working on policies around handling data and government procurement.

Apple Goes on the Offensive as iPhone Sales Slip in Its Biggest Overseas Market – Wall Street Journal, 1/16/2024

• Apple is offering rare discounts in China, including on its latest iPhones, in a bid to beat back growing competition in the high-end market.
• The tech giant is running a promotion from Thursday through Sunday in China in which it is cutting the price of iPhones by the equivalent of up to $70.
• Other products will be discounted by up to $110.
• The promotion comes ahead of the weeklong Lunar New Year holiday beginning Feb. 10, a customary gift-giving season in China.
• The discount comes with some conditions, including the use of certain payment methods and limited quantity available at Apple’s 46 retail stores in China, according to the company.

China Sees Record Nine Billion Trips Over This Lunar New Year – Bloomberg, 1/16/2024

• China is gearing up for a record number of trips during Lunar New Year and has vowed efforts to ensure safety as hundreds of millions of people take to the skies, roads and rails.
• “According to our estimation, a record high 9 billion trips will likely be made during the 40-day holiday travel period,” Vice Transport Minister Li Yang said at a briefing in Beijing on Tuesday.
• The next Lunar New Year, the Year of the Wood Dragon, is officially celebrated in mid-February but the holiday rush will start from Jan. 26 and last more than a month as workers in the cities travel home to visit family and friends.
• Driving will be the most popular form of transport, according to Li, with some 7.2 billion self-driving trips expected and 1.8 billion trips made via other forms of transport, including water.
• As one of the most traditional travel methods, China’s railway system is expected to see 480 million passenger trips during the holiday period, an increase of 38% from 2023, when people were still getting back to travel after Covid, and 18% from 2019, Huang Xin, a senior official with China State Railway Group, said.

BYD Says It Plans to Invest $14 Billion Into Smart Cars – Bloomberg, 1/16/2024

• BYD, the world’s largest maker of electric vehicles, will invest 100 billion yuan ($14 billion) to develop smart car features, its founder and Chief Executive Officer Wang Chuanfu said Tuesday.
• Wang didn’t give a specific time frame for the investment or more details.
• BYD plans to introduce a feature it calls Navigation on Autopilot that will allow drivers to take their hands off the wheel and feet off the pedals in certain scenarios.
• The system requires drivers to touch the steering wheel every 15 seconds.
• It will come installed in cars that cost more than 300,000 yuan and will also be available as an upgrade option for vehicles priced at over 200,000 yuan.

Stellantis Wins Order for 250,000 Cars After Renter Drops Tesla – Bloomberg, 1/16/2024

• Stellantis will supply as many as 250,000 vehicles to Sixt in a deal struck within weeks of Europe’s biggest car-rental company dropping Tesla vehicles from its fleet.
• First deliveries as part of the multi-billion euro order will start this quarter with a mix of combustion-engine, plug-in hybrid and electric cars to supply Sixt’s rental fleet across Europe and North America over the next three years, the companies said Tuesday.

China Weighs More Stimulus With $139 Billion of Special Bonds – Bloomberg, 1/16/2024

• China is considering 1 trillion yuan ($139 billion) of new debt issuance under a so-called special sovereign bond plan, only the fourth such sale in the past 26 years, as authorities seek more money to finance intensifying efforts to shore up the world’s second-largest economy.
• The proposal under discussion by senior policymakers would involve the sale of ultra-long sovereign bonds to fund projects related to food, energy, supply chains and urbanization, people familiar with the matter said.
• The discussions are ongoing and the plan could be changed, the people familiar said.
• Unlike last year, the 2024 proposal would use special debt, which in the past has been counted in addition to the normal budget and hasn’t contributed to the headline deficit ratio.
• The ultra-long bond design means proceeds will be repaid over several decades, thus lowering the pressure to make payments in the short term.

Shell Suspends Red Sea Shipments Amid Fears of More Houthi Attacks – Wall Street Journal, 1/16/2024

• British oil major Shell suspended all shipments through the Red Sea indefinitely after U.S. and U.K. strikes on Yemen’s Houthi rebels triggered fears of further escalation, according to people familiar with the decision.
• The West’s targeting of the Iranian-ally militia came after the Houthis launched dozens of missiles and drones at commercial vessels around the Red Sea and the nearby Bab el-Mandeb.
• Around 12% of total global seaborne oil trade goes through the Red Sea.

Kim Jong Un Has a New Enemy No. 1—and It Isn’t the U.S. – Wall Street Journal, 1/16/2024

• North Korean leader Kim Jong Un said the country would rewrite its constitution to label South Korea as its principal enemy, opening a new and perilous chapter as tensions rise between the two countries.
• The change would break with decades of North Korean doctrine, under Kim’s father and grandfather, that sought to unify with the South through peaceful means, even while signaling a readiness for war.
• Pyongyang’s policy pivot thrusts inter-Korean ties into unfamiliar territory as militarization accelerates across the region.
• North Korea has drawn closer to Russia, supplying its war effort in Ukraine, and revived trade with China.
• In a Monday speech, Kim said he had concluded that peaceful reunification was no longer possible and accused South Korea of seeking the collapse of the North Korean regime.
• The 40-year-old dictator ordered the abolishment of three government agencies working on inter-Korean affairs and vowed to tear down a reunification arch that had been built by his father, Kim Jong Il.

Divisions in Israel’s War Cabinet Emerge as Gaza Conflict Enters Pivotal Stage – Wall Street Journal, 1/16/2024

• Rifts among Israel’s war cabinet are spilling into public view, threatening to undermine the country’s military strategy in Gaza at a crucial stage in the conflict.
• The small collection of wartime decision makers—Prime Minister Benjamin Netanyahu, Defense Minister Yoav Gallant and former head of the Israeli military, Benny Gantz—is diverging publicly on the two biggest dilemmas they face: whether Israel should negotiate to end the conflict and free the hostages, and who should govern the bombed-out strip once the war is over.
• But as pressure has mounted from the Biden administration to limit Palestinian civilian deaths in Gaza, and the government has failed to return all the hostages, divisions between the leaders have re-emerged.
• Gallant on Monday said that “political indecision” about who would take responsibility for postwar Gaza would hurt the military campaign.
• In a plan he articulated this month, Gallant has called for Palestinian self-governance and a multinational task force led by the U.S., with European and Middle Eastern partners, to oversee the rehabilitation of the strip.

Delayed U.S. Weapons Raise Taiwan’s Vulnerability to Invasion – Wall Street Journal, 1/16/2024

• Taiwan has ordered some $19 billion in American missiles, rocket launchers and other weapons to help it defend itself against threats from Beijing.
• The only problem: U.S. delivery on many of those orders is years away.
• The delays increase Taiwan’s vulnerability to a Chinese invasion or blockade, say military analysts and former Taiwanese defense officials, since the island’s own weapons industry remains small.
• President-elect Lai Ching-te says he will continue beefing up Taiwan’s military.
• “I am determined to safeguard Taiwan from continuing threats and intimidation from China,” Lai said after his election victory Saturday.
• One of the largest deals—a $2.37 billion contract for 400 Harpoon antiship missiles and related equipment—was signed in 2020 without a delivery date specified at the time.

Global Battery Race Heats Up With Billions for Europe’s Northvolt – Wall Street Journal, 1/16/2024

• One of the world’s most valuable battery startups is raising $3.4 billion in debt from the European Union and a group of banks including JPMorgan, accelerating a race to build more batteries outside China and take advantage of a tidal wave of clean-energy subsidies.
• Europe’s Northvolt plans to use the funding to grow battery production at a factory in northern Sweden for customers such as Volkswagen and BMW.
• It also plans to expand a recycling facility next door that will convert scrap metal and old batteries into reusable battery materials.

Planes Come Into Contact at Snowy Japan Airport – Wall Street Journal, 1/16/2024

• A Korean Air jet that was moving away from the gate in heavy snow touched a Cathay Pacific plane at an airport in northern Japan on Tuesday, the airlines said. No one was hurt and there was no fire, officials said.
• Korean Air said the incident happened about 5:35 p.m. at New Chitose Airport near Sapporo on the northern island of Hokkaido.
• The Korean Air Airbus A330, scheduled to fly to Seoul with 276 passengers and 13 crew aboard, had just departed the gate and was in pushback, meaning it was getting into position to head to the runway with help from a ground handler vehicle.
• The ground vehicle slipped because of heavy snow, causing the Korean Air jet to come into contact with a Cathay plane that was empty at the time, Korean Air said.
• Officials said no one was hurt, and the fire department said it didn’t send firefighters to the scene because there was no fire and no leakage of fuel.
• A fire department official said the left wing of the Korean Air plane and the vertical stabilizer of the Cathay Pacific plane made contact.
• The Korean Air passengers got off the plane and the airline said it would send a replacement plane to the Japanese airport so they could fly to Seoul.

Factmonster – TODAY in HISTORY

• Ivan the Terrible was crowned the first czar of Russia. – 1547
• The U.S. Civil Service Commission established. – 1883
• A year after it was ratified, the 18th Amendment to the Constitution, prohibiting the sale of alcoholic beverages, went into effect. – 1920
• Operation Desert Storm was announced by the White House. – 1991
• The El Salvador government signed a peace treaty with guerrilla forces, formally ending 12 years of civil war. – 1992
• Space shuttle Columbia blasted off on what would be its final mission. The craft broke up on its descent on Feb. 1, killing all on board. – 2003

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