The Morning Risk Report: Millicom Subsidiary Paid Bribes Using Drug Proceeds

The Morning Risk Report: Millicom Subsidiary Paid Bribes Using Drug Proceeds By David Smagalla | Dow Jones Risk Journal

Good morning. A subsidiary of telecommunications company Millicom used the proceeds of drug trafficking to pay off Guatemalan government officials

in exchange for business advantages, the subsidiary, Tigo Guatemala, admitted in newly unsealed documents filed in a Miami federal court.

Files unsealed: Risk Journal's Max Fillion digs deep into the defered prosecution agreement, which describes a $118 million deferred prosecution agreement

a Millicom subsidiary, mobile phone business Tigo Guatemala, recently reached with prosecutors over charges of bribery that garnered the company some $58 million in profits.U.S. District Judge Jacqueline Becerra unsealed the document, in which Tigo Guatemala admitted to a statement of facts detailing the scheme, after Millicom announced the agreement on Monday.

Bribes paid: The filing said Tigo Guatemala generated a portion of the cash it used to pay bribes by working with a banker who also laundered money for a drug trafficker. Tigo Guatemala admitted to prosecutors that the banker structured the laundering transactions so that some of the drug trafficker's cash wound up in the hands of the company's head of legal, Acisclo Valladares Urruela, who used it for bribe payments.

Significance: The settlement marks the first deferred prosecution agreement the Justice Department has filed under the Foreign Corrupt Practices Act since the agency's leadership directed prosecutors to give priority to foreign bribery cases

with connections to transnational criminal groups. Compliance

Why every company suddenly wants to become a bank.

Last year, Ripple Chief Executive Brad Garlinghouse had a bone to pick with banks, saying they had shut him and his industry out. This year, his cryptocurrency company is asking the Trump administration for permission to start its own bank .

Who's asking? Ripple isn't the only company that suddenly wants to be a bank. Under Trump, crypto firms and fintechs including Coinbase and Wise are looking to open banks and retailers such as Amazon and Walmart are eyeing expansions of banklike services. Trump-appointed regulators are welcoming their efforts, taking cues from a crypto-friendly administration that has said it wants to remove barriers to new payments systems.

Amazon and Microsoft back effort that would restrict Nvidia's exports to China.

Amazon.com is joining Microsoft in supporting legislation that threatens to further limit Nvidia's ability to export to China , a rare split between the chip designer and two of its biggest customers.

The moves by Microsoft and Amazon to work against a company they are deeply intertwined with highlights the fierce nature of the artificial-intelligence race. The companies are all jockeying for favorable policy to stay ahead of competitors. Nvidia is fighting for access to the lucrative Chinese market despite security concerns.

What they want. The legislation would require chip firms to satisfy U.S. demand before sending products to China and other countries subject to arms embargoes. It is one of the first efforts by Congress to address chip exports, which are vital for the data centers that train AI models.

The U.S. Chamber of Commerce filed an emergency request with the U.S. Supreme Court on Friday asking it to shut down rules

requiring companies to report their climate risk and greenhouse gas emissions in California, Clara Hudson reports for Risk Journal.

Luxury hotel upgrades. Lawyers billing 24 hours of work in a single day. Cellulite butter. Those are just a few of the costs that Charlie Javice has billed JPMorgan Chase for

as part of $74 million in legal expenses she has incurred while defending herself on charges she defrauded the bank, said Michael Pittinger, a lawyer representing the bank during a court proceeding Friday.

Businesses are poised to start reporting under the latest-and perhaps most consequential- extended producer responsibility rule

in the U.S., Risk Journal reports.

BHP Group is liable for a deadly dam collapse

in Brazil in 2015, London's High Court ruled Friday, potentially exposing the mining company to billions of dollars in compensation claims.

Germany's SAP proposed changes to how clients can request support and pay

for its business-management software, seeking to allay competition concerns from European Union officials weeks after they launched an investigation into the company.

The Federal Aviation Administration said it would lift its flight restrictions

related to the government shutdown, clearing the way for normal operations to resume at U.S. airports after weeks of delays and cancellations.

Adriana Kugler, a former Federal Reserve governor, reported numerous stock sales

and purchases on her annual financial disclosure forms that violated central bank policies and prompted the Fed to refer the matter to its inspector general this year. Events

Dragonfly's annual geopolitical assessment explores the key trends and risks businesses should expect to face in 2026, including major flashpoints for armed conflict, the outlook for rivalry and competition among the great world powers, and the effect elections could have on regional and global security alliances.

To attend the Nov. 27 event at the News Building in London, click here .

Risk

Trump implements major rollback of food tariffs.

President Trump on Friday moved to lower tariffs on beef, coffee and dozens of agricultural and food goods , marking a significant rollback of his so-called reciprocal levies as he looks for ways to address Americans' concerns about the cost of living.

Trump issued an executive order modifying the reciprocal tariffs he imposed on virtually every trading partner in August, exempting more than a hundred common food items including fruits, nuts and spices. The move continues a shift away from Trump's maximalist tariff policy.

U.S. to Cut Tariffs on Bananas, Coffee and Other Goods From Four Countries

South Korea to Expand Support for Tariff-Hit Auto Industry

The Gold Bar Diplomacy That Won Switzerland a Trade Deal With Trump

U.S. boat strikes are straining the counterdrug alliance.

France denounced the U.S. military strikes on alleged drug boats as a violation of international law. Canada and the Netherlands have stressed they aren't involved. Colombia has vowed to cut off intelligence cooperation with Washington. Mexico summoned the U.S. ambassador to complain.

Two months into the Trump administration's military campaign against low-level smugglers in the Caribbean and eastern Pacific, the coalition of partners that has long underpinned U.S. antidrug operations in the region is fraying.

Secret U.S. Memo Authorizing Drug-Boat Strikes Cites Chemical Weapon Threat

Trump Says U.S. May Hold Talks With Venezuela's Maduro

Tesla is now requiring its suppliers to exclude China-made components

in the manufacturing of its cars in the U.S., a fresh example of the fallout from deepening geopolitical tensions between the U.S. and China.

Europe is trying to get itself on the global rare-earths map, and a new facility on Russia's border

is its opening bid.

The new nuclear race has begun. But unlike during the Cold War, the U.S. must prepare for two peer rivals rather than one -at a time when it has lost its clear industrial and economic edge.

Iran seized a Cyprus-registered fuel tanker

Friday, its first such interdiction in the Strait of Hormuz in more than a year.

Signs of weakness in China's economy

stretched into October, with one measure of investment notching the sharpest slowdown in years.

In a sharp escalation of their diplomatic spat, China's Ministry of Foreign Affairs on Friday urged its citizens to avoid travel to Japan

and asked those residing in the country to be extra vigilant, saying Japanese Prime Minister Sanae Takaichi's comments threaten their safety.

The Japanese economy contracted for the first time in six quarters , further complicating the timeline of the central bank's next interest-rate hike.

Employers are changing layoff tactics with an aim of minimizing ugly public scenes . Data Security

Range Rover owner counts cost of crippling cyberattack.

A cyberattack that halted Range Rover production for more than a month cost the SUV brand's owner big time .

Impact. Jaguar Land Rover said Friday it swung to a quarterly loss of almost $750 million after stopping its assembly lines in September to manage a debilitating hack. In the same period last year JLR made roughly $375 million in profit. The reversal reflects a dramatic decline in revenue as well as more than $250 million in one-time costs associated with the incident.

Context. The attack is likely the most costly of a series of cyberattacks targeting some of the U.K.'s best-known businesses this year. It also took its toll on the British economy. A sharp fall in car production hit U.K. economic growth in September, official data showed Thursday.

The increase in online attacks isn't shielding cybersecurity professionals

from market uncertainties as surging tariff costs, inflation and the rise of artificial intelligence prompt companies to scale back security budgets and hiring. What Else Matters President Trump is making a last-ditch push to dissuade House Republicans

from supporting a measure this week to release files related to sex offender Jeffrey Epstein, in what is shaping up as a major test of GOP loyalty to the president.

President Trump and his advisers are rushing to try to lower prices

for U.S. consumers after voters sent a warning shot to Republicans this month over the high cost of living.

Chileans rallied behind hard-line conservatives

in elections Sunday as rising anger over crime and immigration pushes the mineral-rich country to the right.

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Morgan Stanley hikes S&P 500 target for next year. Here are the plays to make.

MarketWatch

By Jamie Chisholm

Earnings growth and an accommodative Fed will support market multiples, says Mike Wilson

Morgan Stanley analysts say the door will remain open for stock-market gains next year.

The dips are still being bought: S&P 500 futures at the start of the week are 1.5% above Friday's intraday low.

And our call for the day captures this underlying bullish mood. In a note published Monday, Morgan Stanley's chief U.S. equity strategist Mike Wilson, and team, say they are raising their 12-month target for the S&P 500 to 7,800. Wilson had forecast the stock barometer to be 7,200 around the middle of next year.

At current levels, 7,800 would represent a 16% rise. The S&P 500 SPX could surpass 7,000 this year and the Morgan Stanley target would still represent a double-digit gain for 2026.

They say economic conditions next year will see the benefit from growth-positive factors like tax cuts and deregulation, as opposed to growth-negative policies currently weighing on activity like tariffs and government job cuts.

"In short, we believe a new bull market and rolling recovery began in April which means it's still early days, and not obvious, especially for many lagging parts of the economy and market," says Wilson.

That's a good background for corporate earnings, which will also benefit from a return of positive operating leverage, greater pricing power, and AI-driven efficiency gains, according to Morgan Stanley.

"Our forecasts reflect this upside to earnings which is another reason why many stocks are not as expensive as they appear despite our acknowledgement that some areas of the market may appear somewhat frothy-i.e., certain unprofitable, speculative growth areas," Wilson says.

Indeed, supporting evidence of an earnings recovery can be seen in the recent third-quarter results, which Wilson calculates produced a 2.2% S&P 500 revenue beat rate, which was twice the average, and 8% earnings per share growth for the median stock in the Russell 3000, the strongest expansion in four years.

Morgan Stanley sees S&P 500 earnings per share of $272 for this year, which is 12% growth, 2026 EPS of $317 (17% growth), and 2027 EPS of $356 (12% growth).

Another tailwind for stocks is monetary policy. "While there's uncertainty around this dynamic in the short term, over the next 6-12 months, we think that moderate weakness in lagging labor data and the administration's desire to 'run it hot' will lead to an accommodative monetary policy backdrop involving both rates and the balance sheet," says Wilson.

Crucially, Wilson thinks the market currently is underestimating how accommodative the Federal Reserve will be and this also will support valuations.

Nevertheless, Wilson does think the market's price to EPS multiple will contract from current levels of about 22.3 - though his forecast of 22 times remains historically high. "Our work shows that it's rare to see meaningful multiple compression in periods of above-median EPS growth (7-8%) and accommodative monetary policy," he says. The Russell 2000 ETF IWM has underperformed the S&P 500 by about 7 percentage points this year.

Given all this, Wilson sees "a broadening in [market] leadership amid a healthy EPS environment," and consequently he is upgrading small caps relative to large caps. "Importantly, small cap earnings revisions are now starting to turn higher against large caps, a key development we were waiting for before upgrading the group to overweight," he adds.

And now Wilson prefers the struggling consumer discretionary goods sector - it names companies including Amazon.com (AMZN), Dick's Sporting Goods (DKS), AutoNation (AN) and Wayfair (W) - over services, double upgrading the former from underweight to overweight. Earnings revisions of consumer discretionary goods relative to services is picking up, Wilson says. "The long term performance ratio of this pair is also near historical lows and just starting to turn higher."

Morgan Stanley also reiterates its overweight stance for financials XLF, while healthcare XLV "remains our preferred exposure to quality growth, and we upgrade the sector to overweight as well."

The markets

U.S. stock-index futures (ES00) (YM00) (NQ00) are mixed as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar index DXY is up, while oil prices (CL.1) lower and gold futures (GC00) are trading around $4,083 an ounce.

   Key asset performance                                                Last       5d      1m      YTD      1y 
   S&P 500                                                              6734.11    0.08%   1.05%   14.49%   14.71% 
   Nasdaq Composite                                                     22,900.59  -0.45%  0.97%   18.59%   22.59% 
   10-year Treasury                                                     4.13       0.90    14.70   -44.60   -29.10 
   Gold                                                                 4082.1     -1.00%  -6.68%  54.67%   56.04% 
   Oil                                                                  59.94      -0.18%  5.29%   -16.60%  -13.23% 
   Data: MarketWatch. Treasury yields change expressed in basis points

The buzz

Alphabet shares (GOOGL) are up sharply after Warren Buffett's Berkshire Hathaway (BRK.B) bought a $4 billion stake in the Google parent.

U.S. economic data due Monday include the Empire State manufacturing survey for November, released at 8:30 a.m. Eastern. Now the U.S. government has re-opened investors can expect a bunch of economic news, notably the official U.S. jobs report for September, which will come out on Thursday, more than a month after its original Oct. 3 release date.

Federal Reserve officials speaking on Monday include Federal Reserve Vice Chair Philip Jefferson at 9 a.m.; Minneapolis Fed President Neel Kashkari at 1 p.m.; and Federal Reserve Governor Christopher Waller at 3:35 p.m.

The third-quarter earnings season is mostly done, but this week still sees a bevy of retailers presenting their numbers, including Home Depot (HD) on Tuesday, Target (TGT) on Wednesday, and Walmart (WMT) on Thursday.

But the earnings highlight will be Nvidia (NVDA), whose numbers are released after Wednesday's closing bell.

However, Peter Thiel, founder of PayPal (PYPL), has followed SoftBank (JP:9984) and dumped his Nvidia holding, according to a regulatory filing.

Morgan Stanley double-downgraded Dell Technologies (DELL) to underweight and also lowered its rating on HP (HPQ) to underweight, in a note warning of margin pressure.

Best of the web

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Boomers are passing down fortunes - and way, way too much stuff.

How $5,000 became $31 billion: 5 market lessons from the greatest trader ever.

The chart

One oft-cited cause of the stock market's recent wobbles is that investors have become more wary of the AI narrative. But a note published on Sunday by Julian Emanuel and team at Evercore ISI contained this chart showing investors have a pretty high conviction that AI capital expenditure won't peak until the second half of 2027, or beyond.

Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   GNS     Genius 
   PLTR    Palantir Technologies 
   GME     GameStop 
   TSM     Taiwan Semiconductor Manufacturing 
   AMD     Advanced Micro Devices 
   BYND    Beyond Meat 
   AAPL    Apple 
   GOOGL   Alphabet

Random reads

Arachnid super web.

Australia's 'Lucifer Bee'.

Chinese hotel offers lion cub wake-up call.

-Jamie Chisholm

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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Sensex Ends at Near 3-Week High

Trading Economics

India's BSE Sensex close about 0.5% up at 84,951 on Monday, the highest level since October 29, marking the sixth straight session of advances.

Market sentiment remained supported by healthy Q2 earnings, prospects of an India-US trade deal and expectations of rate cuts by the Bank of India.

The NDA's win in the Bihar elections 2025 and Reserve Bank of India’s relief measures for export-linked industries affected by US tariffs gave an additional boost. Top gainers included Eternal, Maruti Suzuki India, Kotak Mahindra Bank, Mahindra & Mahindra, Tech Mahindra, Titan, HDFC Bank, adding between 0.8% and 2%.

On the other hand, Tata Motors Passenger Vehicles plunged nearly 5%, after slashing full-year margin guidance, despite a 2110% yoy surge in net profit, as weak performance at Jaguar Land Rover weighed on results.

Asian Paints, UltraTech Cement, Bharat Electronics were also among the biggest laggards, with losses up to 0.9%.

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European Stocks Fall for 3rd Session

Trading Economics

Both the STOXX 50 and STOXX 600 extended losses on Monday, with the former down 0.6% and the latter falling 0.4%, continuing the decline that began last Thursday.

Caution prevailed among traders ahead of key catalysts due this week.

Nvidia is scheduled to release quarterly results, while in the US a series of economic data begins rolling out today following the end of the government shutdown.

Financials, insurers and luxury names were among the biggest laggards.

Burberry led losses on the STOXX 600, dropping more than 4%, followed by Worldline (-4.2%) and Adyen (-3%).

Siemens (-2.1%), Inditex (-1.9%), Bayer (-1.8%) and LVMH (-1.6%) also traded sharply lower.

On the upside, SAAB surged more than 7% after signing a €3.1 billion contract with the Colombian government to deliver 17 Gripen fighter jets over the next five years.

Airbus gained 1.3% after reports that it is poised to secure the majority of an aircraft order under negotiation with Flydubai.

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Nifty tops 26,000, Sensex climbs for sixth straight session on broad sectoral strength

Moneycontrol

Benchmark indices Nifty 50 and Sensex extended their winning streak to the sixth consecutive session on November 17, with the gains led by the banking and financial services pack.

All sectoral indices closed in positive territory, reflecting broad-based strength across the market. Nifty PSU Bank led the gains with a rise of 1.09 percent, followed by Nifty Consumer Durables which climbed 0.83 percent and Nifty Private Bank up 0.79 percent.

Nifty Auto, Financial Services, Realty, Oil and Gas, Healthcare, Media, FMCG, IT and Pharma also posted modest advances. Only Nifty Metal was nearly flat with a minimal uptick of 0.01 percent.

The market has maintained its positive momentum, hovering near the key psychological level of 26,000, as investors anticipate a strong catalyst for further upward movement.

"A potential trade deal remains a crucial trigger that participants are closely monitoring. Currently, the risk-reward ratio is largely favorable, bolstered by stronger-than-expected Q2 earnings from Midcaps, which have reinforced confidence in growth revival and point to potential future earnings upgrades," said Vinod Nair, Head of Research, Geojit Investments.

From a technical perspective, the Nifty is showcasing a steady continuation pattern, with the broader setup remaining constructive as the index comfortably trades above its 10-day and 20-day exponential moving averages.

While the Nifty 50 closed above 26,000, a sustained move above this level could unlock fresh momentum-driven buying, potentially propelling the index towards higher trajectories.

Nifty reclaimed and sustained levels above 26,000, signalling a renewed attempt to retest the upper boundary of its rising channel. "The index has consistently respected trendline support near 25,850, although the overhead supply zone at 26,050–26,100 continues to cap further upside. A decisive close above 26,100 will be key to unlocking the next leg of momentum. On the downside, supports at 25,900 and 25,800 remain intact, preserving the short-term bullish undertone," said Ponmudi R, CEO of Enrich Money.

The Nifty 50 options market echoed this cautious optimism. A heavy build-up of Call OI at the 26,000 and 26,100 strikes signalled firm supply zones, while steady Put writing at 25,900 and 25,800 underscored that buyers are stepping in on every dip. Overall, positioning remains constructive, with traders expecting a breakout on sustained strength.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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French Stocks on 3-Session Decline

Trading Economics

The CAC 40 edged down 0.2% to around 8,153 on Monday, marking its third consecutive session of losses as market sentiment remained cautious ahead of a series of key events later this week.

Investors are particularly focused on the forthcoming quarterly earnings report from AI powerhouse Nvidia, as well as the resumption of key macroeconomic data releases in the US. Luxury stocks posted declines, with LVMH falling 1% and Kering down 0.9%.

On the other hand, Airbus rose 1.4% following indications that it is poised to outpace Boeing in securing the bulk of a major aircraft order from flydubai, announced at the Dubai Airshow, along with an order from Air China Cargo for six A350F freighters.

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FTSE MIB Edges Lower

Trading Economics