Good Afternoon. December is off to a bumpy start. Central banks are deliberating, strategists are chest-thumping, Elon is predicting deflation, and Bitcoin is doing its best impression of a dropped ornament rolling under the couch. Meanwhile, governments from London to Kyiv are cutting deals, building models, and trying to keep up with an AI world that refuses to slow down. Let’s get into it.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Markets Slump

The News: Bitcoin slid to its worst single-day decline since March, dragging crypto-adjacent stocks like Coinbase, Robinhood, and Strategy Inc. lower. The selloff marks another leg down in crypto’s two-month unwind, hitting just as broader U.S. markets softened and bond yields ticked higher. The slump comes amid a week loaded with macro risk: investors are bracing for fresh labor-market data and the Fed’s Dec. 10 meeting — where traders still expect a third straight rate cut. Add to that a hawkish signal from Japan’s central bank, which sent Japanese stocks and bonds lower, and you get another day of tightening risk appetite across global markets.

Why It Matters: Crypto may be the most sensitive real-time barometer for liquidity hopes, and Monday’s drop underscored how exposed the space is to even small shifts in rate-cut expectations. If the Fed hesitates, the unwind could deepen not just in crypto, but across higher-beta equities that have been riding the “cuts are coming” wave.

What to Watch: Expect markets to trade twitchy until Friday’s ADP report lands and even more so next week. A rate cut is still the base case, but if incoming labor data runs hot, December could get “holiday horror-movie volatile.” For now, Bitcoin remains the asset most likely to tell you before anyone else when the mood turns.
Source: wsj.com

2. Musk says AI will solve US debt crisis within three years

The News: Elon Musk is again testing the elasticity of bold economic claims, telling audiences that AI-driven productivity will outpace inflation within three years, pushing the economy toward “significant deflation” and potentially even zero interest rates. His comments landed the same week federal interest payments hit $970 billion for FY2025 — now officially larger than U.S. defense spending — underscoring the surreal juxtaposition of surging debt costs and Musk’s hyper-optimistic AI future.

Musk acknowledged that AI hasn’t yet produced measurable productivity gains but argued the inflection point is imminent. His optimism arrives as he promotes Tesla’s Optimus humanoid robot, which he says could eliminate poverty once production costs drop to ~$20,000 per unit.

Why It Matters: If Musk is even directionally right, the macro implications are seismic: disinflation, collapsing real rates, a multi-decade reset of labor markets, and an economy where physical output decouples from human labor in ways policy isn’t prepared to absorb. But the expert consensus is far cooler: the Penn Wharton model pegs AI’s GDP lift at just 1.5% by 2035, and Geoffrey Hinton continues to warn that productivity gains will accrue overwhelmingly to capital, not workers. The cognitive dissonance is striking: Washington is paying record interest bills just to stand still, while Silicon Valley is promising a productivity boom big enough to erase inflation.

What to Watch: Whether markets treat Musk’s deflation call as techno-prophecy or just another “Muskian forward guidance.” A three-year transformation of the global price level would require productivity gains so dramatic they’d make the Industrial Revolution look like a firmware update — which is either thrilling… or a reminder that not all exponential curves are destined for the real economy.
Source: fortune.com

3. RBC Sets 7,750 S&P Target

The News: Building on that optimism, RBC Capital Markets became the latest firm to plant a bullish flag. The bank set a 12-month S&P 500 target of 7,750, implying almost 14% upside, and placing RBC firmly in the camp with Deutsche Bank and other houses calling for fresh highs into 2026.

Why It Matters: The exuberance is notable. Two weeks ago, markets gave a December cut about a 30% chance; now the FedWatch gauge sits near 87%, and equity strategists are penciling in another year of double-digit gains despite uneven GDP prints and a “stagflation-light” backdrop. Earnings momentum is doing real work: Q3 profits rose 13.4%, marking the fourth straight quarter of double-digit expansion. While Big Tech still carries the index, RBC argues the rotation underway into value and the broader market could give this bull market a second wind.

What to Watch: Whether this bullish turn becomes consensus or just the part of the cycle where strategists discover they, too, enjoy being invited to holiday parties. As long as recession odds remain tame, RBC says drawdowns should be capped at 5–10%. But a midterm election year, “affordability” stimulus ideas, and still-sticky inflation mean the tug-of-war between growth, value, and rates isn’t done yet.
Source: aol.com

4. AI-Assisted Shopping Takes Over the Holiday Season

The News: AI is the hottest item of the holidays — not under the tree, but helping you decide what should go under it. Retail giants and tech platforms have rolled out a new wave of AI shopping agents capable of comparing prices, recommending gifts, tracking deals, and even calling stores on your behalf. Salesforce estimates AI will influence $73 billion in sales just during the Thanksgiving-to-Cyber-Monday stretch.

Why It Matters: We’re watching the transition from “search” to “solve.” Instead of sifting through pages of links, shoppers now describe what they want — “a warm sweater for January in New York that works with jeans or a skirt” — and the AI does the rest, pulling from billions of product listings in seconds. Retailers love it because AI-driven price alerts and personalized recommendations lift conversion rates. Consumers love it because the holiday gift scramble becomes slightly less chaotic. And everyone else is wondering if we’ve finally reached the point where the algorithm knows our in-laws better than we do.

What to Watch: How much these tools actually change behavior and Q4 earnings calls highlighting AI’s contributions. Right now, AI is saving clicks; next year, it might be saving relationships by preventing last-minute trips to the store.
Source: apnews.com

5. Bitcoin Slides 8% to $84K as Liquidity Vanishes and Macro Fears Stack Up

The News: Bitcoin opened December with a thud, dropping 8% to the mid-$84,000s in a steep overnight slide that extended a two-month, 30% drawdown from October’s highs. The move erased last week’s tentative rebound, when BTC briefly reclaimed $92,500 before selling pressure returned Sunday night. More than 220,000 traders were liquidated over 24 hours, wiping out $630 million in positions. By midday, Bitcoin was clawing back toward $86K — but the damage to sentiment was done.

Why It Matters: This wasn’t one catalyst — it was a pileup: A DeFi shock: A flaw in Yearn Finance’s yETH pool allowed an attacker to mint fake tokens, triggering a stampede out of DeFi that spilled into majors. Macro hits at the same time: Japanese government bond yields spiked to their highest levels since 2008 after BOJ Governor Kazuo Ueda hinted at a December hike. And then liquidity disappeared: Last week was one of the thinnest liquidity periods since July. With order books shallow, small waves became crashes. Meanwhile, derivatives markets were already flashing caution: futures open interest fell by $1.1 billion heading into the weekend.

What to Watch: Whether the Fed delivers the liquidity boost crypto traders are betting on. Markets now price an 80–87% chance of a December cut. A hold could spark a broader unwind and December has a long history of catching overleveraged Bitcoin optimists off guard.
Source: bitcoinmagazine.com

1. UK & US Seal Zero-Tariff Pharma Deal After Months of Standoff

The News: London and Washington on Monday struck a long-awaited agreement that removes U.S. tariffs on British pharmaceutical exports—an escalation that had threatened to hit some of the UK’s strongest global champions, including AstraZeneca and GSK. In exchange, the UK agreed to raise the prices it pays for new, cutting-edge medicines by 25% and to cap NHS rebate clawbacks at 15% starting in 2026 (down from ~23%). The deal also includes a political sweetener: the U.S. pledged not to target UK drug-pricing practices in any new investigations for the remainder of President Trump’s term.

Why It Matters: This is the closest thing to a ceasefire in one of the most sensitive transatlantic trade flashpoints: who pays how much for lifesaving drugs. The UK gives up some pricing power, but it protects its pharma exporters—one of the country’s few high-margin, globally competitive industries—and avoids the doomsday scenario of U.S. tariffs up to 100%. For investors, the agreement signals a more predictable environment for UK pharma earnings and may slow the recent shift of R&D investment from Britain to the U.S.

What to Watch: Whether drugmakers reverse or rethink their recent pivot toward U.S. expansion. If this deal helps stabilize the UK commercial environment, 2026 could mark a turning point for Britain’s life sciences sector after years of losing ground to American incentives.
Source: euronews.com

2. Brazil Approves World’s First Single-Dose Dengue Vaccine

The News: Brazilian regulators have cleared Butantan-DV, the world’s first single-dose dengue vaccine, marking a major breakthrough against a disease that killed more than 12,000 people globally last year. Developed by São Paulo’s Butantan Institute in partnership with China’s WuXi Biologics, the vaccine is approved for people aged 12–59 and arrives as dengue cases hit a record 14.6 million worldwide in 2024.

Why It Matters: A one-shot vaccine is a big deal—especially for a disease driven by climate change and festering in hot, densely populated regions where multi-dose regimens can falter. For health systems, a single-dose schedule means fewer logistical hurdles, higher coverage, and potentially sharper drops in outbreaks. For households, it could reduce hospitalizations, missed workdays, and the economic ripple effects of a disease notorious for draining both energy and income. Investors should also note the scientific signal here: Brazil is stepping firmly into the global vaccine vanguard.

What to Watch: How quickly vaccination campaigns scale and whether efficacy holds as other dengue strains circulate. Also keep an eye on demand across climate-vulnerable countries; a single-dose vaccine tends to travel fast. And if you live somewhere mosquitoes think of as “up and coming,” this could be the best news you hear before next summer.
Source: agenciabrasil.ebc.com.br

3. Ukraine is Building Its Own AI Model Using Google’s Gemma Framework

The News: Ukraine is developing a sovereign large language model built on Google’s open-weight Gemma architecture, aiming to create an independent, locally controlled AI system for both military and civilian use. Initial training will run on Google’s compute infrastructure before shifting entirely to Ukrainian data centers—partly powered by Kyivstar, the telecom operator that just became the first Ukrainian company to list on Nasdaq. The model will serve 23 million daily users across government portals, telecom services, and eventually private-sector applications.

Why It Matters: Sovereign AI isn’t just a tech priority anymore—it’s becoming a national security requirement. Ukraine wants a battlefield-ready model that supports frontline operations, handles local dialects, and can be deployed securely under conditions where cloud access or foreign systems could be compromised. The project also strengthens ties between Ukraine and the U.S., arriving months after Kyivstar’s high-profile U.S. market debut. Language coverage is a major motivator: existing models struggle with regional blends of Ukrainian, Russian, Bulgarian, and minority languages like Crimean Tatar.

What to Watch: Whether Ukraine’s “homegrown AI” becomes a blueprint for smaller nations—proving you don’t need to be the U.S. or China to build strategic AI infrastructure. And, perhaps more urgently, how long it takes before Russia tries to hack it… because nothing attracts cyberattacks like a shiny new LLM trained to ignore your propaganda.
Source: thestar.com

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