What to watch for today
Free trade between Australia and China. Australian prime minister Tony Abbott and Chinese president Xi Jinping hope to conclude a landmark deal while Xi is in Canberra, the culmination of nine years of contentious negotiations. New Zealand concluded a similar free trade deal with China in 2008 and since seen trade double.
Actavis is close to buying Allergan. A reported $65.5 billion buyout deal would end the long pursuit of the Botox maker by Canadian drugmaker Valeant and activist investor Bill Ackman. An Actavis offer of up to $220 per share would probably put Allergan out of Ackman’s reach, though he could still profit from the huge run-up in the share prices of the companies involved.
More trouble at Petrobas. The Brazilian oil giant delayed filing its third-quarter earnings as federal police arrested 18 people (paywall) in a widening corruption probe. Newly re-elected Brazilian president Dilma Rousseff, who chaired Petrobras from 2003 to 2010, promised a wide-ranging investigation that would “change forever the relationship between Brazilian society, the Brazilian state, and private companies.”
Alibaba’s biggest challenger reports earnings. JD.com, China’s second-largest online retailer, has been investing heavily in logistics and warehouses, which could impact its third-quarter results. Investors will also want to know how JD is doing with mobile shoppers.
Over the weekend
Japan entered a recession. The economy posted its second consecutive decline, with GDP unexpectedly shrinking by 1.6% in the third quarter compared with the same period a year ago. Prime minister Shinzo Abe is likely to postpone a planned sales tax increase; his economic adviser said the GDP drop was “shocking” and called for additional economic stimulus measures.
China’s bad loans rose by the most in nine years. The country’s banking regulator said third-quarter non-performing loans rose to 766.9 billion yuan ($125 billion), up 72.5 billion yuan from the previous quarter. Rising concerns over bad loans is lowering bankers’ appetite for risk, and is slowing a much-needed expansion in credit.
The Hong Kong-Shanghai “through-train” left the station. A link between Shanghai and Hong Kong stock exchanges will give Hong Kong investors direct access to mainland shares for the first time, and vice versa, in a big step for China’s efforts to liberalize its economy. Cross-border share deals will however be subject to numerous restrictions (paywall), and may be hindered by a notorious lack of transparency among Shanghai-listed companies.
An oil services merger turned ugly. Negotiations between Halliburton and Baker Hughes broke down, as Halliburton warned its smaller rival that it plans to mount a proxy fight to take control at a shareholder meeting in April. Talks between the second-largest and third-largest oil services providers reportedly stalled due to disagreements over price and securing clearance from US anti-trust regulators.
The G20 chastised Putin. Canadian prime minister Stephen Harper said to the Russian president: “I guess I’ll shake your hand, but I have only one thing to say to you: You need to get out of Ukraine.” Putin was the only G20 leader to leave Brisbane before the summit was over, saying he needed to sleep on the long flight home to Moscow.
ISIL beheaded another hostage. The group posted a video showing the decapitation of American aid worker Peter Kassig. The man carrying out the killing spoke with a British accent, just days after the UK pledged to take action to combat ISIL jihadists.
Facebook went B2B. The company is experimenting with “Facebook at Work,” which would allow colleagues to communicate and collaborate, sources told the Financial Times (paywall). The new service would compete with Google Docs and newer companies like Slack.
The US Navy deployed its first laser weapon. The USS Ponce now has a “laser gun” capable of destroying a drone or a small boat. The ship, which essentially functions as a floating helicopter pad, is currently patrolling oil shipping routes in the Persian Gulf, where Iran has experimented with the use of drones and small “swarming” craft.
Quartz obsession interlude
Kabir Chibber on how the new “Assassin’s Creed” game is reviving an ancient debate over the French Revolution. “Ubisoft, the maker of the series of video games, which has been going since 2007 and has sold more than 70 million copies, is in fact French. One of the makers of the game replied that ‘Assassin’s Creed: Unity’ is a ‘consumer video game, not a history lesson’.” Read more here.
Matters of debate
Politically correctness makes groups more creative. Without rules, people keep their ideas to themselves.
France is a tax haven. The country’s generous tax breaks for research and development are attracting tech companies.
Obama’s email list shouldn’t be for sale. An aligned non-profit rents it for $1.2 million a year.
Schools with immigrants outperform their peers. Aspiration, ambition, and engagement are higher—in London, at least.
Apple’s latest upgrade is an insult to Israel. Its flag has disappeared from the Yosemite OS X.
Christmas is under fire in Japan. A nationwide butter shortage is threatening seasonal cakes and cookies.
ISIL is launching its own currency. Not that the Islamic Dinar is anything new.
The tilde is under threat from emoji. The 3,000-year-old character (~) should consider becoming “Invisible Man With Twirled Mustache.”
A French selfie fan was aiming high in New York. Police arrested him after he tried to scale the Brooklyn Bridge.
Click here for more surprising discoveries on Quartz.
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