--:-- Kate Bullivant: Voices are powerful things. At Vanguard, investors are also owners, and their voices are heard. And now with Investor Choice, they have an even greater voice when investing. It's just another reason millions of investors have turned to Vanguard for 50 years. 50 million investors, 50 million voices. Vanguard. Vanguard is owned by its funds, which are owned by Vanguard's fund shareholder clients. To learn more, visit Vanguard.com. All investing is subject to risk. Vanguard Marketing Corporation Distributor. Figure as of January 2025.
--:-- Kate Bullivant: Stocks continue to slide this morning following yesterday's sell-off on Wall Street as fears over tech stocks and missing data take hold. We've had this extraordinary run-up in risky assets of all sorts this year. So you could say that we were priced at something close to perfection and so it doesn't take much of a shift in mood for things to start coming back a bit. Plus, US Customs and Border Protection agents set their sights on North Carolina. And we look at why next year's graduates face the worst job market in five years. It's Friday, November 14th.
--:-- Kate Bullivant: I'm Kate Bullivant for The Wall Street Journal. And here is the AM edition of What's News, the top headlines and business stories moving your world today.
--:-- Kate Bullivant: Stock futures and markets around the world are down this morning, continuing yesterday's sell-off. Relief on Wall Street following the end of the government shutdown has given way to fears about whether a flood of delayed economic data could swing markets and upend bets on a December interest rate cut.
--:-- Kate Bullivant: US stocks posted their worst day in a month yesterday, with investors continuing to dump tech stocks, while Bitcoin extended a recent fall, hitting its lowest level in about six months.
--:-- Quinton Webb: The market has run up so much this year and tech stocks in particular have rallied so hard that now there has come into focus this question about whether valuations are excessive. So we are now by some measures back to sort of dot-com era style valuations. And there is a concern that if, you know, some of the promise of AI doesn't come to fruition or it doesn't come to fruition as quickly as people are hoping, Some of the huge amounts that tech companies are starting to spend on data centres and other AI initiatives may not deliver acceptable returns.
--:-- Quinton Webb: And if that starts to happen, then these valuations will not look sustainable. I added that fears over delayed economic data following the government shutdown are also fuelling investor uncertainty. Quite possibly we'll see more evidence of some of the things that people are starting to worry about, i.e. more evidence of sticking inflation, perhaps more evidence of labour market weakness.
--:-- Quinton Webb: The concern for investors, I suppose, is partly that we could see signs of real economic stress, but probably the primary concern is that the Fed sees enough in the data to convince it to hold off near rate cuts. Futures pricing now shows a roughly 50 chance that Fed officials will cut rates in December. That down from 67 a week ago and 95 a month ago.
--:-- Quinton Webb: One of the data points investors are particularly worried about is inflation. Consumer prices have continued to rise during Trump's trade war, prompting the administration to now eliminate tariffs on bananas, coffee, beef, and certain apparel and textile products from four Latin American countries.
--:-- Quinton Webb: A senior administration official told reporters yesterday this would happen under framework agreements with Ecuador, Argentina, El Salvador and Guatemala, saying details would be released in the coming weeks. Tariff rates of at least 10% would still apply on other products from those nations.
--:-- Quinton Webb: The four countries will also reduce regulations and license requirements on US companies and coordinate with Washington on trade with non-market economies, including China. Meanwhile, signs of weakness continue to show in China's economy, with one measure of investment notching the sharpest slowdown in years.
--:-- Quinton Webb: The January to October drop in fixed asset investment marks the first time the country has seen a decline over the first 10 months of the year, going back to at least 1992. Momentum in retail sales and industrial production also slowed last month, while the property market continued to struggle.
--:-- Quinton Webb: The drop in investment could reflect China's efforts to discourage new investment in oversaturated sectors, including steel and electric vehicles.
--:-- Kate Bullivant: Back in the US, all eyes will be on Charlotte, North Carolina this weekend, as federal agents from US Customs and Border Protection shift their focus to the Democratic-led City.
--:-- Kate Bullivant: The local sheriff's office said it was notified by two federal officials earlier this week that ICE agents are expected in the area as early as Saturday.
--:-- Josh Stein: If we had absolute confidence that ICE was going to come here and they were going to go and find violent, dangerous drug traffickers and criminals and be targeted in their work, the city would welcome them with open arms. I'm almost certain of that.
--:-- Josh Stein: We haven't heard from them, so we don't know what their plans are. But we have seen instances where ICE has gone after American citizens and detained them for up to days at a time. We've seen them assault senior people. We've seen them go after people who were peacefully protesting. This is not how policing is supposed to happen in this country.
--:-- Kate Bullivant: It comes after a recent immigration crackdown in Chicago, led by the US Border Patrol commander Gregory Bovino, has faced scrutiny.
--:-- Kate Bullivant: The Charlotte-Mecklenburg Police Department said it has no involvement in planning any federal activities and doesn't participate in ICE operations.
--:-- Kate Bullivant: Coming up, a new policy looking to regulate chip exports could give tech titans preferential access to NVIDIA's coveted AI chips. More on that story after the break.
--:-- Kate Bullivant: You don't have time to wait on data you need. Just ask iWant from Paycom. Get real-time employee data instantly at your command. Learn more at Paycom.com.
--:-- Sandra Killhoff: Now, we're exclusively reporting that Amazon and Microsoft are getting behind a policy that could hurt chip giant NVIDIA.
--:-- Armut Ramkumar: The GAIN-AI Act would effectively limit NVIDIA's ability to freely export its AI chips to countries of concern like China and others with arms embargoes.
--:-- Armut Ramkumar: Tech policy reporter Armut Ramkumar says instead the policy would give U.S. tech companies preferential access to the chips. China is the real focus because NVIDIA has been trying to get access to that market, and the Trump administration has been weighing whether or not to allow it to export certain products.
--:-- Armut Ramkumar: These chips are vital for training AI models, and they go into the data centers that everyone is clamoring over. This policy is really interesting because it splits the hyperscalers, the tech giants like Amazon and Microsoft, and it basically gives them an exemption to the policy that would allow them to transfer their chips from the U.S. to overseas, to places like the Middle East, without needing export licenses from the government.
--:-- Armut Ramkumar: Those export licenses have been a real pain point for these companies, and that's why they've really sort of broken from NVIDIA in this way. Lobbying for the new policy has been going on behind closed doors, but both Microsoft and Amazon Web Services have indicated they would support the GAIN AI Act, while other tech titans like Meta and Google have stayed mum.
--:-- Armut Ramkumar: And as I explain, there are also divisions in Washington over how best to curtail chips to China. The reason this is also convoluted in some ways is that the policy is an amendment to the National Defense Authorization Act, which typically lands on the president's desk by the end of the year.
--:-- Armut Ramkumar: Right now, the House and Senate leaders are negotiating the final language and which amendments will make it through. And it's really unclear if this Gain AI Act will do so. It has some major supporters, including Minority Leader Chuck Schumer, Elizabeth Warren, which shows that Democrats are on board in some cases.
--:-- Armut Ramkumar: But it still needs to get key Republicans in the House leadership and Senate Banking Committee Chair Tim Scott on board to really get across the finish line. The support from Amazon and Microsoft could be a big part of that. But on the other side, you have NVIDIA spending a lot of time and energy lobbying against the bill, as are other semiconductor companies.
--:-- Armut Ramkumar: Amrith says the potential divergence between tech titans is notable, with NVIDIA, which controls 80% of the AI processor market, calling the act an unnecessary intervention. These are the companies that are spending tens of billions of dollars or more income cases on these giant data centers and to buy these chips.
--:-- Alex Frangos: So it does just show that policy in Washington on this chip export control issue could complicate the relationship and could evolve very rapidly. Lawmakers are very concerned about security risks associated with exporting these chips potentially to places like China or even the Middle East, where the Chinese and others could gain access through some of those intermediaries.
--:-- Alex Frangos: And this policy issue will continue to come up over and over as the AI race continues For more on the GAIN AI Act and how it could shake up the US tech industry check out Armour story on wsj We left a link in our show notes
--:-- Kate Bullivant: Now we've learned that Paramount, Comcast and Netflix are preparing bids for Warner Brothers Discovery with an initial deadline of November 20th for non-binding first-round offers. Warner is hoping to have the auction process completed by the end of the year.
--:-- Kate Bullivant: According to people familiar with the matter, Paramount is committed to buying the entire company, while people close to Comcast and Netflix said that they're primarily interested in Warner's movie and TV studios and HBO Max.
--:-- Kate Bullivant: And if you're graduating in 2026, you might want to brace yourself, as it's shaping up to be the worst college grad job market in five years. That's according to a survey carried out by the National Association of Colleges and Employers, which found more than half of 183 employers rate the job market for the class of 2026 as poor or fair, the most pessimistic outlook since the first year of the pandemic.
--:-- Alex Frangos: It's basically the worst hiring market for grads since the pandemic. And there's a bunch of things going on. One is the overall economy. The job market seems to be plateauing. If we just yesterday had this news about Verizon letting off 15,000 people. And the other thing is there's AI. A lot of companies thinking, hey, maybe we can replace the entry-level tasks that we used to have the fresh young people do. We can do with AI.
--:-- Alex Frangos: And they're just being choosier. Where they are hiring, they're hiring people with a little bit of experience. And adding to the gloom, Alex says economists have found that the job market that graduates enter has a profound impact on their whole careers.
--:-- Alex Frangos: You come into a terrible job market and you're set back because your salary starts lower and your prospects are lower. And if you come in to a booming job market, your salary starts at a higher level. And that's something you build on throughout your career. So it's pretty bad news.
--:-- Alex Frangos: That said, there are a few fields where entry-level jobs are growing, according to job search platform Handshake. This includes healthcare, education and manufacturing.
--:-- Kate Bullivant: And that's it for What's News for this Friday morning. Today's show was produced by Daniel Bark. Our supervising producer was Sandra Kilhoff. And I'm Kate Bullivant for The Wall Street Journal. We'll be back tonight with a new show. Until then, have a great weekend and thanks for listening. Thank you. Ablecoin. It's happening with Ripple.
