Money, Money, Money, In Nvidia's World

Forex

Stocks

Summary:

A 2025 refrain many of us likely have heard would be: "You're buying that? You're doing that? In this economy?"

But this problem does not seem to extend to the world's most valuable company Nvidia, which is sitting on a problem most of us would like to have: having too much cash.

At the end of October, Nvidia had $60.6 billion in cash and short-term investments. That's up from $13.3 billion in January 2023, just after OpenAI released ChatGPT.

And this is even after splashing out billions of dollars on stakes in companies: $1 billion for Nokia, $5 billion for Intel, $10 billion for Anthropic—and a jaw-dropping $100 billion commitment to OpenAI still under discussion.

To add to this, Nvidia announced it would invest $2 billion in Synopsys this week.

Nvidia, which has gone from a niche maker of graphic cards to the world's most valuable company, has also made $37 billion in buybacks and dividends, with a further $60 billion authorised.

When your biggest challenge is figuring out how to spend $60 billion, you're living the ultimate corporate luxury.

To take a line from ABBA: "Money money money, must be funny, in Nvidia's world."

What you need to know today

Microsoft Office price hikes. Microsoft said Thursday that it will increase the prices of Office productivity software subscriptions for commercial and government clients on July 1. The company has been facing increased competition in recent years from Google.

Bitcoin falls, but it's normal. Bitcoin's more than 30% drop from its record high underscores volatility, but history shows that price swings are all part of bitcoin's normal operating pattern and may often precede a rally.

More departures from Apple. The firm's general counsel, Kate Adams, and Vice President for environment, policy, and social initiatives Lisa Jackson, are retiring from the company. This comes after the departure of its AI chief, and its chief operating officer's retirement.

Markets little changed. U.S. markets traded mixed Thursday stateside as investors assessed a report showing announced job cuts in November from U.S. employers surpassed 1 million for the year. The pan-European Stoxx 600 closed 0.5% higher.

[PRO] AI stocks at a reasonable price? Investors should turn to less explored pockets of the market to find stocks that are a play on the artificial intelligence boom but also offer growth at a reasonable price, Citigroup analysts say.

Ukraine, trade, pandas: What China's Xi and France's Macron discussed in Beijing

China said it was open to importing more goods from France in exchange for a "fair, conducive environment" for Chinese businesses in the European nation, President Xi Jinping told his counterpart Emmanuel Macron on Thursday as they met in Beijing.

The French president kicked off a 3-day visit to China on Wednesday — his first trip to Beijing in more than two years — on the heels of growing frictions over a range of topics including trade imbalance and the long-running war in Ukraine.

In a separate readout from the French government, Macron told Xi that the two countries must work together based on "a balanced relationship," while urging Beijing to help end the Russia-Ukraine war.

Source: CNBC

Risk Warnings and Disclaimers

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Henry Thompson

Japan's households unexpectedly cut spending for the first time in six months, in a sign of the fragility of domestic demand as the Bank of Japan prepares to consider raising borrowing costs later this month.

Outlays by households adjusted for inflation fell 3% in October from a year earlier, led by spending declines in transport and housing, the Ministry of Internal Affairs and Communications reported Friday. Economists had expected a 1% gain.

Private spending is a key component in the BOJ's goal of achieving a virtuous economic cycle in which wage gains help fuel demand-led price increases. Domestic consumption has expanded for three straight quarters, albeit at a subdued pace.

The BOJ said in its October outlook report that private consumption will likely stay more or less flat for now before gradually returning to "a moderate increasing trend, with a continued rise in employee income." The negative number Friday will add an element of complexity as the BOJ moves toward its next rate hike, but isn't expected to derail that trajectory.

BOJ Governor Kazuo Ueda gave a signal Monday that the board is moving toward a hike as soon as Dec. 19, by explicitly mentioning the fact that the bank will consider a rate hike. Overnight index swaps point to about a 90% probability of a December rate increase.

Consumption makes up more than half of Japan's gross domestic product and will be crucial to whether the economy returns to a growth path after recording the first contraction in six quarters during the summer.

Looking ahead, the strength of consumption will depend largely on the interplay between prices and wages. The nation's inflation gauge has stayed at or above the BOJ's 2% target for 43 months, the longest stretch since 1992. Data Monday may show that real wages fell for a 10th month in October, underscoring how steady gains in nominal pay aren't keeping up with price growth.

Source: Bloomberg Europe

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Alice Winters

Oil held a two-day advance as investors weighed the next steps for talks on a ceasefire in Ukraine, and signs of a swelling surplus.

West Texas Intermediate traded near $60 a barrel after closing 1.2% higher on Thursday. Brent settled above $63. Ukrainian negotiators will join a new round of discussions in Florida, while Russian President Vladimir Putin said some of the points in a US-backed peace plan were unacceptable to him.

The market is watching for progress on a deal, which could potentially lead to sanctions being lifted on Russia and more oil exports, though reaching an actual agreement appears distant at this stage. Additional supply would likely weigh on prices, which are already on track for a hefty annual loss on glut concerns.

Oversupply is putting pressure on prices globally: Saudi Aramco will reduce the price of its flagship Arab Light crude grade to the lowest level since 2021 for January, while Canadian oil has tumbled.

The "bearish trend is likely to resume, because fundamentally, crude is in a state of oversupply," said Zhou Mi, an analyst at a research institute affiliated with Chaos Ternary Futures Co. The talks on Ukraine and US rhetoric against Venezuela are "market noise," he added.

Source: Bloomberg Europe

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James Whitman

Political

In the high-frequency churn of President Donald Trump's first term, Defense Secretary Pete Hegseth's repeated missteps would have fueled guessing games about his imminent firing. In the second, he has maintained White House support — at least for now.

On Thursday, a Pentagon inspector general found that Hegseth risked endangering US pilots, troops and attack plans with his decision to send sensitive information in Signal texts. Days earlier, he was on the defensive over his handling of an attack on an alleged drug boat in the Caribbean Sea that raised accusations of war crimes.

They were the latest in a string of mishaps and controversies that have pushed Hegseth into the spotlight since well before he even won confirmation running the Department of Defense.

Yet Trump has so far stood by the 45-year-old former infantry officer and Fox News host, publicly voicing his support.

Hegseth was seated right next to Trump at a Cabinet meeting on Wednesday, a clear sign of support even before the president said, "Pete's doing a great job." In April, after the initial reports of the Signal chats first emerged, Trump said: "Everybody is happy with him."

And last year, when Hegseth's nomination appeared in jeopardy over a series of allegations of alcohol abuse and sexual assault, Trump wrote that "Pete is a WINNER, and there is nothing that can be done to change that." Hegseth denied the allegations, which he said were part of a smear campaign, while acknowledging, "I'm not a perfect person."

Hegseth's staying power breaks with the precedent of Trump's first term in office, when he went through two confirmed defense secretaries and two acting ones, along with his four national security advisers and four chiefs of staff.

But it's very much in keeping with the second term, where Trump has mostly resisted firing his staff — with "Signalgate" merely resulting in his national security advisor Mike Waltz being shuffled to a new role at the United Nations.

Rather than surrounding himself with highly experienced executives and former officers, the emphasis this time has been more on loyalty and staff who, in the words of his son Donald Trump Jr., "don't think they know better."

With Hegseth, "there are White House people who don't like him but it's really Trump himself who likes his attitude," former Representative Barbara Comstock, a Virginia Republican, said in an interview. "The more obnoxious he is, the more Trump-like he is — that's what Trump likes."

It's all reminiscent of Trump's tactics almost exactly a year ago, even before his inauguration, when the administration stuck by Hegseth and pushed his nomination through Congress despite the assault and alcohol abuse claims.

At the time, Republicans close to Trump suggested there was a strategy behind that decision. Hegseth's nomination, they said, was a test case to see how much Trump could bend Congressional Republicans to his will. Hegseth had few obvious qualifications for the job and faced deep skepticism from Republicans in Congress.

In the end, Hegseth won confirmation by a single tie-breaking vote from Vice President JD Vance. And indeed, it served as a harbinger to Trump's expansion of executive branch authority with a virtual rubber stamp from the GOP. Meanwhile, Hegseth cemented his status in the administration as one of Trump's most vocal and aggressive champions. Rather than back down, he's delighted in trolling Democrats and taken up with fervor the MAGA penchant for meme-based online mockery.

He leaned harder into the military campaign in the Caribbean Sea, posting an image that showed the children's book character Franklin the turtle blasting a boat with a rocket-propelled grenade. "For your Christmas wish list," Hegseth wrote. He denied the Pentagon had done anything wrong with the boat strikes.

"As I've said, and I'll say it again, we've only just begun striking narco-boats and putting narco-terrorists at the bottom of the ocean because they've been poisoning the American people," Hegseth said at Trump's most recent Cabinet meeting.

Hegseth directed Pentagon resources to Trump's anti-immigration agenda, pushed to eradicate DEI and other so-called "woke" initiatives and, early in the administration, embraced Elon Musk's DOGE push. He kicked reporters out of their Pentagon offices and on Thursday oversaw a Christmas-tree lighting ceremony at the Pentagon, with a tribute to Trump thrown in.

"A couple of months ago, my wife said, 'Babe, President Trump brought Merry Christmas back, we're going to bring Christmas back to the Pentagon,'" he said in a social media video about the event.

And Hegseth does retain plenty of support from many of Trump's allies. Senator Eric Schmitt, the Missouri Republican, called the Pentagon inspector general's report about Hegseth's Signal use a "nothing burger" and part of a "neverending stream of efforts to undermine Pete Hegseth," according to the Wall Street Journal. "I think he's doing a great job, and it is what it is," Schmitt said.

The question now is how long that will last. A recent Fox News poll put Trump's approval rating at 41%, a sharp dip from two months ago and near the all-time low for Trump of 38% from his first term. And some of those who supported Hegseth then, such as Senator Thom Tillis, have expressed reservations now.

"I'm sure the Democrats are fine letting Hegseth twist in the wind and every day you drag him up there, every problem he has only exacerbates all the other problems," Comstock said. "That's a lot of capital you're expending in an area you're already underwater."

Source: Bloomberg

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James Whitman

Economic

National Economic Council Director Kevin Hassett said the Federal Reserve should cut interest rates at its meeting next week and predicted a reduction of 25 basis points as speculation grows that President Donald Trump is readying his nomination to lead the central bank.

Hassett, speaking in an interview on Fox News, was asked if he believed the Federal Open Market Committee would cut rates.

"I think we should, and I think that we are likely to," Hassett said, pointing to recent communications from Fed governors and regional presidents. "They now seem much more like they're leaning in the direction of a rate cut."

Hassett said he wanted to "get to a much lower rate" over the long run.

"If there's consensus around 25 basis points, which it looks like there is, then I'll take it," he continued.

The presidential economic adviser demurred when asked how many additional cuts he might pursue if nominated and confirmed to lead the Fed, saying the chair's job was to be "very data responsive" and consider what adjusting the rates would do to inflation and employment.

Trumponomics: What If Kevin Hassett Becomes Fed Chair?

"The president has a number of candidates that he's been thinking about," Hassett said. "I'm honored to be on a list with some great people. And we'll see how it goes."

Trump said earlier this week he plans to announce his selection to lead the Federal Reserve in early 2026 and had settled on a finalist. He has repeatedly praised Hassett in recent days and teased his possible nomination.

"I guess a potential Fed chair is here too," Trump said during an event Tuesday at the White House. "I don't know who is allowed to say that — potential. He's a respected person that I can tell you. Thank you, Kevin."

Trump allies have been discussing the possibility of giving Hassett's current role leading the National Economic Council to Scott Bessent — in addition to his job as Treasury secretary — should the nomination move forward.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

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Manuel

Cryptocurrency

Ethereum completed its Fusaka upgrade on Dec. 3, marking one of the network’s most essential steps toward long-term scalability.

The upgrade builds on a series of changes since the 2022 Merge and follows the earlier Dencun and Pectra releases, which lowered Layer 2 fees and increased blob capacity.

Fusaka goes further by restructuring how Ethereum confirms that data is available, widening the channel through which Layer 2 networks like Arbitrum, Optimism, and Base post their compressed transaction batches.

It does this through a new system called PeerDAS, which allows Ethereum to verify large volumes of transaction data without requiring every node to download it.

Buterin says Fusaka is ‘incomplete’

However, Ethereum co-founder Vitalik Buterin cautioned that Fusaka should not be viewed as a completed version of sharding, the network’s long-term scaling plan.

Buterin noted that PeerDAS represents the first working implementation of data sharding. However, he noted that several critical components remain unfinished.

According to him, Ethereum can now make more data available, and at lower cost, but the full system envisioned over the past decade still requires work across multiple layers of the protocol.

Considering this, Buterin highlighted three gaps in Fusaka’s sharding.

First, Ethereum’s base layer still processes transactions sequentially, meaning execution throughput has not increased alongside the new data capacity.

Secondly, block builders, specialized actors who assemble transactions into blocks, continue to download full data payloads even though validators no longer need to, which creates a centralization risk as data volumes grow.

Lastly, Ethereum still uses a single global mempool, forcing every node to process the same pending transactions and limiting the network’s scalability.

His message essentially frames Fusaka as the foundation for the next development cycle. He stated: “The next two years will give us time to refine the PeerDAS mechanism, carefully increase its scale while we continue to ensure its stability, use it to scale L2s, and then when ZK-EVMs are mature, turn it inwards to scale ethereum L1 gas as well.”

Glamsterdam becomes the next focal point

The most immediate successor to Fusaka is the Glamsterdam upgrade, targeted for 2026.

If Fusaka expands Ethereum’s data bandwidth, Glamsterdam seeks to ensure that the network can handle the operational load that comes with it.

The headline feature is enshrined proposer-builder separation, known as ePBS. This change shifts block construction into the protocol itself, reducing Ethereum’s dependence on a handful of external block builders who currently dominate the market.

As data volumes rise under Fusaka, those builders would gain even more influence. ePBS is meant to prevent that outcome by formalizing how builders bid for blocks and how validators participate in the process.

Running alongside ePBS is a complementary feature called block-level access lists. These lists require builders to specify which parts of Ethereum’s state a block will touch before execution begins.

Client teams say this allows software to schedule tasks more efficiently and lays the groundwork for future parallelization. This would be an essential step as the network prepares for heavier computational loads.

Together, ePBS and access lists form the core of Glamsterdam’s market and performance reforms. They are viewed as structural prerequisites for operating a high-capacity data system without sacrificing decentralization.

Other planned Ethereum upgrades

Beyond Glamsterdam lies another roadmap milestone, the Verge, centered on Verkle trees.

This system restructures how Ethereum stores and verifies the network’s state.

Instead of requiring full nodes to store the entire state locally, Verkle trees enable them to verify blocks with compact proofs, significantly reducing storage requirements. Notably, this was partially addressed in Fusaka.

For node operators and validators, this aligns with one of Ethereum’s core priorities: ensuring that running a node remains accessible without enterprise-grade hardware.

This work matters because Fusaka’s success increases the amount of data Ethereum can ingest. Still, without changes to state management, the cost of keeping up with the chain could eventually climb.

The Verge aims to ensure the opposite, and that Ethereum becomes easier to run even as it processes more data.

From thereon, Ethereum would focus on updates to the Purge, a long-term effort to remove accumulated historical data and retire technical debt, making the protocol lighter and easier to operate.

Beyond those changes is the Splurge, a collection of upgrades designed to refine the user and developer experience.

This would be achieved through improvements to account abstraction, new approaches to MEV mitigation, and ongoing cryptographic enhancements

A global settlement layer

Taken together, these updates form successive stages of the same ambition:

“Ethereum is positioning itself as a global settlement layer capable of supporting millions of transactions per second through its Layer 2 ecosystem while maintaining the security guarantees of its base chain.”

Long-time ecosystem figures increasingly echo that framing. Joseph Lubin, an Ethereum co-founder, noted:

“The world economy will be built on Ethereum.”

Lubin pointed to the network’s nearly decade-long uninterrupted operation and its role in settling more than $25 trillion in value last year.

He also noted that Ethereum currently hosts the largest share of stablecoins, tokenized assets, and real-world asset issuances, and that ETH itself has become a productive asset through staking, restaking, and DeFi infrastructure.

His remarks capture the broader thesis behind the current roadmap: a settlement platform that can run continuously, absorb global financial activity, and remain open to any participant who wants to validate or transact.

That future depends on three outcomes, according to CoinGecko. The network must remain scalable, enabling rollups to process large volumes of activity at predictable costs. It must remain secure, relying on thousands of independent validators whose ability to participate is not restricted by hardware demands. And it must remain decentralized, ensuring that anyone can run a node or validator without specialized equipment.

Source: Cryptoslate

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Manuel

Economic

The transformative effects of artificial intelligence dominated discussions at the Reuters NEXT conference in New York, with panelists concentrating on how it may upend work - and job growth - sidestepping concerns about an AI bubble.

Artificial intelligence represents the biggest technological upheaval to the world economy since the rise of the internet a quarter-century ago. It has brought trillions of dollars of investment and dizzying stock-market gains, but also a shortage of memory chips, regulatory scrutiny, and rising anxiety about job displacement.

The numbers are ‌eye-popping. In the first half of 2025, AI-related capital expenditures contributed more to GDP growth than the consumer, according to JP Morgan Asset Management. Investment advisory Bespoke Investment Group recently estimated about one-third of the rise in global market cap since the introduction ‌of AI assistant ChatGPT comes from 28 AI-related companies.

Corporate executives at Reuters NEXT largely focused on how AI would transform work, though some talked about the threat to jobs. "All (of our customers) are focused on slowing headcount growth," said May Habib, CEO and co-founder of AI startup Writer. "This has happened just in the last few weeks. You close a customer, you get on the phone with the CEO to kick off the project, and it's like, 'Great, how soon can I whack 30% of my team?'"

FEARS OF JOB UPHEAVAL

The fears about job displacement brought on by the AI boom are backed by a U.S. Federal Reserve report noting data and surveys ⁠that say artificial intelligence is already replacing entry-level positions and causing companies ‌to trim hiring plans. An August Reuters/Ipsos poll showed 71% were concerned AI will be "putting too many people out of work permanently."

Striking a more optimistic tone that became one theme of the Reuters NEXT conference, economist Joseph Lavorgna, counselor to the U.S. Treasury secretary, said the focus should be on how the technology could ‍enhance labor rather than replace it. “AI is an incredible tool that I think is complementary to the existing workforce,” he said. “We need policies that are going to encourage businesses to invest, and AI is a complement to it.”

Nevertheless, employment data is hard to ignore. Recent college graduates have seen a sharp rise in unemployment, with a current jobless rate of 9.5% for those between 20 and 24 with a bachelor's degree, according to the U.S. Labor Department, compared with the nation's 4.4% rate.

Joe Depa, EY chief innovation officer, likened the changes to previous tech upheavals like the development of the internet, but “the difference this time is that the disruption is ‌faster.” Depa said “adaptability is the new job security,” with his biggest worry around the middle management class.

Tracey Franklin, Moderna's chief people and digital technology officer, said what has changed is how companies are starting to evaluate employment needs in tandem with technological needs, rather than separately.

“We're pooling teams together and really looking at, what is their IT portfolio, what is their human capital strategy, how do we pull that together to meet their business objectives. So we're having these integrated conversations we didn't have before,” she said.

SKEPTICISM AND WORRY

The Reuters/Ipsos poll also showed 61% worried about increased electricity consumption from data centers, which is only set to grow. Jeff Schultz, senior vice president of portfolio strategy at Cisco Systems, noted the infrastructure to run AI and the chips needed already consume a lot of power, and that network traffic ⁠needed for agentic AI is much higher and steadier than sporadic demand from AI chatbots.

But backlash is growing to the energy-hogging data center clusters that have contributed to rising utility prices. It is evident in places like Virginia and Pennsylvania, even among supporters of President Donald Trump, who has championed AI development and is considering ways to restrict state-level regulations.

There was notable trepidation among speakers at Reuters NEXT from the media and creative industries, due to concern that AI-generated content could replace the creative work of writers or actors.

“When it comes to talent, there is ‍a lot of controversy whether it's acting, whether it's ⁠music, et cetera, and that's where I think we really need to be very aggressive in protecting creative talent and making sure that they are not replaced,” said longtime media executive Shari Redstone.

Sarah Jessica Parker, the longtime star of TV series “Sex and the City,” said she thinks people still value the tactile human experience – citing the unpredictability and spontaneity of performance.

“We’re still – the ⁠majority of us - are relying on the human exchange,” Parker told Reuters editor-in-chief Alessandra Galloni. “Even on film, even though I know there's so much now that you can fix and make prettier or tighter or better, there's still this human element ‌when we talk about the movies we love … I’m not sure that AI will be able to replicate that live nerve.”