Good morning. Apple and Amazon may be in for an unmerry Christmas. U.K. households and businesses are also fretting. Facebook undergoes a Meta-morphosis.
What’s Happening Now
- Chinese Musician Song Dongye Canceled (Again) after Complaining about China’s Cancel Culture
- Chinese Student Forced to Undergo “Fake Surgery” and Borrow Money While Lying on the Operating Table
- China’s Bubble Operation Olympics: What is the “Closed Loop Management System”?
- ‘Anti-Square Dancing Device’ Goes Viral on Chinese Social Media
- Meng Wanzhou “Back to the Motherland,” Michael Kovrig and Michael Spavor Return to Canada
Ho ho…hum. Apple and Amazon reported disappointing results, sparking fears of an unhappy holiday season and sending their shares lower in late trading. Apple is taking a hit because it can’t keep up with demand. Amazon will spend billions of dollars hiring workers as it prepares to fulfill sales of up to $140 billion. But all that work may not earn it a cent.
Meta-morphosis. Facebook unveiled its new, much-speculated-on, branding—it’s now called Meta. The move is meant to highlight a shift to an emerging computing platform focused on virtual reality, but it also manages to decouple its corporate identity from the eponymous social network mired in scandal over data privacy. “From now on, we’re going to be metaverse-first, not Facebook-first,” said Mark Zuckerberg. It’ll start trading under a new ticker, MVRS, on Dec. 1. Shares rose.
Earnings: BNP Paribas will start a €900 million stock buyback after posting a 79% jump in equities trading. BBVA will buyback as much as €3.5 billion of shares after earnings beat estimates. Daimler said Mercedes-Benz now expects slightly lower unit sales this year, and added the chip situation may lower its sales during the rest of the year. Upcoming earnings include NatWest and Danske Bank.
Under pressure. Financial stress for U.K. households has been rising just as the BOE contemplates weaning the nation off of near-zero interest rates, Lowell said. Average credit use among Lowell customers climbed to 51.6% in the third quarter. Major cities have seen the highest increases in stress due to a rise in people claiming social benefits.
Businesses are also under stress. Creditors to U.K. businesses are losing patience over debt payment arrears, Begbies Traynor said. The number of county court judgments lodged against companies jumped to 21,769 during the third quarter, more than twice the amount a year earlier. The court orders to pay a debt “are often a bellwether for future insolvency and the latest data paints a gloomy picture.”
Why is a G-20 climate deal so difficult? The push to consign coal to history and achieve net-zero emissions by mid-century looks out of reach.
What’s the issue: There’s a sense the old establishment represented by the G-7 nations tried to impose itself on the likes of China, Russia and India rather than actively engage them. Some key players aren’t showing up in person and the mood of mutual suspicion is hard to bridge without the kind of face-to-face contact that can clear the air.
The personalities: Mario Draghi is hosting the G-20 summit starting tomorrow before the COP-26 in Glasgow. Here’s your guide to the complicated considerations of leaders as they attend, or dial in.
What to Watch
London here I come. The U.K. will remove all seven remaining countries including Panama and Ecuador from its Covid red list on Nov. 1, effectively ending a mandatory hotel quarantine requirement for any arriving travelers. Vaccine certification from over 30 more countries and territories will also be recognized. The changes will give people confidence to book trips, said the Airport Operators Association.
Summoned! The U.K. summoned the French ambassador over a post-Brexit fishing dispute, in a further ratcheting of tensions between two NATO allies. Talks will be held today. France claims its vessels are being wrongly denied licenses to fish in British waters and has threatened retaliatory measures.
One of the most expensive battles against climate change in U.S. history is taking place right now in the Hamptons on eastern Long Island’s South Fork. So far, nature is still winning. Local governments are dumping sand on beaches to help restore what’s been carried off by currents and storms intensified by the rising seas. Read more in the Big Take.
The rebranded Facebook’s biggest challenge is that it’s not clear the public really wants the company to win the eventual metaverse, Tae Kim writes. After alienating some users amid a raft of data privacy scandals, it’s hard to imagine that consumers, especially the younger ones that Facebook/Meta hopes to capture, will be any more persuaded to commit to the company’s vision.
Christine Lagarde missed her chance to counteract a surge in market interest rates that endangers growth in the euro bloc, Mark Gilbert writes. She didn’t push back strongly when asked whether traders were getting ahead of themselves by speculating on a rate increase by the end of next year. With central banks elsewhere tightening, maintaining stimulus is getting trickier.
By the Way
Faceb—erm, Meta—unveiled more than just a new name. Mark Zuckerberg also showcased Horizon Home where users will be able to interact as digital avatars in virtual homes. The company is also working on a smartwatch with a front-facing camera and rounded screen. Meta Materials, a day-trader favorite in the U.S., soared in late trading as investors mistook it for Facebook. The new name drew both critics and supporters.