Good Morning

Ukraine has marked 1,000 days since the start of the Russian invasion. Despite massive casualties and ongoing fighting, President Zelensky hopes to end the war diplomatically in 2024. US authorization to strike Russian targets with American weapons could limit Russian attacks, but Trump's return to the White House raises uncertainties about Western support. While Russia deploys North Korean troops and makes military progress, Ukraine is under increasing pressure. Moscow continues to demand territorial cessions and an end to Ukraine's NATO ambitions, but Zelenskyi rejects any compromises without security guarantees.

In Hong Kong, 45 pro-democracy activists were sentenced to prison terms of up to 10 years for conspiracy to commit subversion. The trial was based on the organization of an unofficial primary election in 2020 and took place under the National Security Law issued by Beijing. Critics, including the USA and Australia, have described the charges as politically motivated and are calling for the release of those convicted. Beijing and Hong Kong defend the action as necessary to maintain security. The sentences are damaging Hong Kong's reputation as a global financial center and have triggered worldwide concern about the restriction of democratic freedoms.

On the last day of the G20 summit in Rio, the heads of state called for increased climate financing and a new agreement to support poorer countries in the fight against climate change. There was disagreement over the inclusion of wealthy emerging economies such as China. The G20 also agreed on a binding agreement to limit plastic pollution by 2024. At their summit in Rio de Janeiro, the G20 countries agreed on key projects for host country Brazil, including the fight against hunger and increased taxation of the super-rich. The final declaration announced international cooperation on the effective taxation of the very wealthy.

A submarine data cable between Germany and Finland, the “C-Lion1”, has been damaged, causing concern in both countries. The incident occurred in Swedish waters and initial indications point to mechanical damage caused by an anchor or a trawl. There are no concrete signs of sabotage. The repair could take up to 15 days. Fortunately, internet traffic has not been affected as alternative connections are in place. The incident raises questions about the security of critical infrastructure.

An Israeli airstrike in Beirut killed five people, while Lebanon and Hezbollah agreed to a US ceasefire proposal. Talks are ongoing, but details could delay the agreement. Israel's campaign against Hezbollah since September has claimed over 3,400 lives in Lebanon, while Hezbollah attacks have killed 43 civilians in Israel.

The debate surrounding Olaf Scholz as the SPD's candidate for chancellor is intensifying, especially in the influential NRW state association. Two leading SPD MPs, Wiebke Esdar and Dirk Wiese, expressed doubts and reported growing support for Defense Minister Boris Pistorius. Scholz has been criticized for his lack of approachability and communication weaknesses. Pistorius, who is very popular in the polls, praised Scholz, but left open the possibility of running for chancellor. The SPD party leadership is divided and has yet to make a clear commitment to Scholz.

New York has issued an official drought warning for the first time in 22 years, as the city is experiencing one of the longest periods of drought. Due to declining water reserves, a decommissioned aqueduct is being put back into operation. The city has already taken measures to reduce water consumption, including washing buses less frequently and restricting fountain and golf course use. If the drought continues, the warning could be extended to an emergency. October was the driest in 150 years, without a single millimeter of rainfall.

Sony is in talks to buy Japanese media company Kadokawa, known for the game *Elden Ring*, according to insiders. Kadokawa, whose market value before the announcement was around USD 2.7 billion, is a major player in the anime and games industry. Sony already owns a 2% stake in Kadokawa and its subsidiary FromSoftware, the developer of *Elden Ring*.

Eli Lilly's experimental pill muvalaplin has reduced the cholesterol marker lipoprotein(a) (Lp(a)) by up to 86% in a Phase 2 trial, as reported at a meeting of the American Heart Association. Lp(a) is a genetic risk factor for cardiovascular disease for which there are currently no approved therapies. The study tested three doses (10, 60, 240 mg) in 233 adults, with the highest dose showing the greatest reduction. Side effects were comparable to those of the placebo group.

Nvidia: Problems with AI chip “Blackwell”: At $3.4 trillion, the chip manufacturer is the most expensive company in the world. However, alleged overheating problems with the new “Blackwell” chip are now causing the share price to fall significantly one day before the announcement of the quarterly figures. (TI)

Real estate bankruptcy: Supervisory Board members to pay for Benko bankruptcy: In December 2023, René Benko's most important real estate companies went bankrupt. One year on, chaos still reigns. The hoped-for real estate deals are few and far between. Now the insolvency administrators are targeting close associates of Benko such as Austria's former chancellor Alfred Gusenbauer. (MM)

Ailing battery manufacturer: Northvolt apparently misses production targets: According to insiders, the battery cell manufacturer Northvolt has repeatedly missed its weekly production targets since September. Production is currently even at a standstill in one of the Swedish factories. The company is fighting for its future. (HB)

After fraud case: Bafin sends special commissioner to Volksbank Düsseldorf-Neuss: The financial supervisory authority Bafin has sent a special commissioner to the Management Board of the cooperative Volksbank Düsseldorf Neuss. The background to this is a case of fraud involving hundreds of millions of euros. After CEO Jürgen Mellis, board member Jessica Jüntgen also resigns. (SZ)

Meta: Starts AI-Ray Ban rollout in Europe (not Germany): Meta is now offering its AI glasses developed with Ray Ban in Europe - first in France, Italy, Ireland and Spain. Southern Europe makes sense (MT)

• Germany: Supplies 4,000 AI-controlled drones to Ukraine (HB)
• NVIDIA: Has problems with Blackwell chips - they allegedly overheat (RT)
• Tech investor: Entrepreneur Vinod Khosla outlines a possible AI utopia in TIME Magazine (TIME)
• AI Code of Practice: Independent experts publish first draft, EU Commission wants to discuss it with +1,000 stakeholders, have fun (EC)
• OpenAI: Change of strategy due to slower GPT progress? (TI)
• DAX: Year-end rally currently not in sight (TAG)
• Real estate market: Major investors return (HB)
• BGH ruling: Facebook to pay damages to thousands of users (MM)
• Aurubis: Drugstore billionaire increases stake to +20% (HB)
• Houthi militias: Sending threatening emails to German shipping companies (ZON)
• US retail sales: Rise 0.4% in October (BBG)
• Global equity funds: Record largest weekly inflow in a decade (RT)
• TikTok owner ByteDance: Raises valuation to $300bn (WSJ)
• Northvolt: struggling battery maker apparently regularly misses production targets (MM)
• PE firms: KKR & Bain engage in bidding battle for Fuji Soft (FT)