Nvidia jitters, geopolitics cloud markets

Good morning. Here's what happened overnight and what you need to know today.

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1.

Nvidia nerves: Global stocks dipped on geopolitical concerns, Nvidia’s earnings anticipation and mixed corporate results. Nvidia, whose value tripled in 2024 to USD3.5 trillion ($5.39 trillion), is expected to report record profits but faces uncertainty over production delays for its new Blackwell chips. Shares were 1.38% lower on Wednesday afternoon, ahead of its much-anticipated 3Q earnings result. Option markets are implying a rough 8% move in either direction on its market value after the release, or a swing close to USD300 million. It comes as the ECB warned about a “bubble” in stocks related to artificial intelligence. Target's shares plummeted on weak results, while Walmart hit a record high after raising forecasts a day earlier. Bitcoin surged to USD94,725, oil rose marginally, gold hit USD2,650 and 10-year US Treasury yields rose slightly to 4.4%. European stocks were little changed after a day of losses as Russia tensions escalated. (Bloomberg)(Reuters)

2.

Dual defeat: News Corp said it fended off a non-binding proposal from activist hedge fund Starboard Value to loosen the Murdoch family’s grip on the company by eliminating its dual-class share structure. The company said the proposal was voted down at News Corp’s annual general meeting, held after 5:00am Sydney time, following a weeks-long campaign that secured the support of investors in the United States and in Australia. The Murdoch family has an economic stake in News Corp of about 14% but controls some 40% of the votes. Starboard Value put its proposal to shareholders on 9 September in a letter signed by the fund’s managing member, Jeffrey Smith. He wrote that dual-class share structures are not in the best interests of shareholders and are “not reflective” of corporate governance best practices. (Capital Brief)

3.

Future investment: The Future Fund is primed to take a greater role in net zero and housing development, with the federal government changing its investment mandate and releasing a new statement of expectations. The new mandate requires it to align with national priorities—where consistent with strong returns—including boosting residential housing supply, supporting the energy transition and improving infrastructure for economic resilience and security. The FF’s primary focus remains "maximising returns," with its benchmark return target of 4-5% above CPI and risk profile unchanged. The government pledged no drawdowns before 2032-33, when the fund’s value is expected to reach $380 billion, up from $230 billion today. “(Australia’s) economy faces major structural shifts, including the global net zero transformation, technological and demographic changes, and global fragmentation,” said Treasurer Jim Chalmers and Finance Minister Katy Gallagher, adding the fund “has made clear it can play a prominent role in capitalising on these economic opportunities and supporting Australia’s prosperity.” (Capital Brief)

4.

VC play:Airtree Ventures is raising $650 million for two new funds targeting technology start-ups, so far attracting USD67.69 million in new money from US investors. A spokeswoman said most of the capital for the Core Fund V (seed) and Opportunity Fund V (growth) had been raised in the first close, with a second close set for the first half of 2025. SEC filings dated 18 November show USD67.69 million was raised from three investors, including Adams Street Partners and university-linked institutions Harvard Management Company and University of Wisconsin. Returning investors AustralianSuper, Australian Retirement Trust and TelstraSuper also participated, the AFR reported citing unnamed sources. The seed fund plans to back up to 12 early-stage start-ups annually, while the growth fund will focus on follow-on investments in Core Fund V successes and later-stage start-ups. (Capital Brief)(AFR)(SEC filings)

5.

Retail story: Target’s shares plunged over 20% to as little as USD121 ($186.39) each after a disappointing Q3 earnings report, flat holiday sales expectations, and lowered full-year guidance. Comparable sales in Q3 rose 0.3%, well below the 1.5% analysts expected. Digital sales grew 10.8%, but discretionary spending on items like apparel and home goods remained weak, with store sales dropping 1.9%. "Things have taken a turn (for Target) in Q3, and it seems that the softness is going to linger into the holiday season as well," said CFRA analyst Arun Sundaram. Target slashed its full-year earnings projection to USD8.30–USD8.90 from USD9–USD9.70, as supply chain costs from pre-emptive shipments before an October port strike dented profits. The results sharply contrast Walmart’s strong Q3, which saw upgraded forecasts and optimism about the holidays. It comes as a new report showed shoplifting is on track to rise in 2024. (Capital Brief)(Reuters)

6.

Social fines: Social media companies could face fines of up to $50 million under the Albanese government’s proposed ban on children under 16 using social media. The legislation, expected to pass within a fortnight with Coalition support, will require platforms to take “reasonable steps” to keep underage users off their sites, echoing laws in South Australia. Communications Minister Michelle Rowland on Wednesday revealed the laws include fines of up to $50 million for “systemic breaches”. The eSafety commissioner, Julie Inman Grant, who has previously criticised total bans, will oversee enforcement. Despite pushback from social media companies the legislation is likely to pass with bipartisan support. “Social media has a social responsibility for the safety and mental health of young Australians,” Rowland said, framing the move as a step toward a safer online environment for children. (Capital Brief)

7.

Ukraine war: Ukraine fired British-made Storm Shadow missiles into Russia for the first time, targeting military sites in the Kursk region, the Financial Times reported citing sources. The UK approved their use in response to Russia deploying North Korean troops, a source told Bloomberg. The strikes on Wednesday came as the US said it will give anti-personnel landmines to Ukraine to bolster its defences, and a day after Ukraine used US ATACMS missiles against Russia, reportedly authorised by President Joe Biden, just two months before leaving office. A pro-Russian Telegram channel claimed up to 12 Storm Shadows hit Kursk, while Russian officials said two missiles were intercepted. Kyiv has long sought permission to use Western long-range weapons, a request reinforced after Russia deployed over 10,000 North Korean troops. In an interview published Wednesday, Russian intelligence chief Sergei Naryshkin warned NATO of retaliation over enabling such strikes. Amid rising tensions, the US shut its Kyiv embassy, followed by Italy and Greece. (FT)(NYT)(Bloomberg) (Reuters)

8.

Trump cards: President-elect Donald Trump named Matthew Whitaker, a NATO sceptic, as ambassador to the alliance, a WWE executive and Trump loyalist Linda McMahon to lead the Education Department, and heart surgeon turned controversial TV personality, Dr Mehmet Oz to oversee Medicare and Medicaid. Trump’s choices reflect his emphasis on loyalty in staffing key roles for his incoming administration. Whitaker’s appointment aligns with his criticism of NATO, while Dr Oz’s nomination has drawn criticism for his lack of experience. “We will send Education BACK TO THE STATES, and Linda will spearhead that effort,” Trump said announcing his nomination Tuesday. Meanwhile, Apollo Global Management shares fell 4% after CEO Marc Rowan emerged as a contender for Treasury secretary, while Vice President-elect JD Vance continued shepherding previous controversial Trump picks, including Matt Gaetz for attorney general and Pete Hegseth for defence secretary, both facing allegations of misconduct. (FT)(Barrons)(NYT)(Washington Post)