A shutdown looms

Good morning. A government shutdown just became more likely. Gisèle Pelicot’s ex-husband gets the maximum sentence in France’s mass rape trial. And why Americans are living longer. Listen to the day’s top stories.

A stopgap funding deal looks to have fallen apart following opposition from Donald Trump and Elon Musk, increasing the likelihood of a government shutdown this week. The president-elect said he wanted lawmakers to include an increase to the debt ceiling in the package, which needs to happen before the summer to avoid a default. Why? So it would be raised under Joe Biden's watch.

Markets and central banks: Futures rebounded and Treasuries steadied after the Federal Reserve’s hawkish pivot caused the S&P 500 to suffer its biggest decision-day loss since 2001. The yen sank more than 1% as the Bank of Japan cast doubt on the prospect of a January rate hike.

Gisèle Pelicot’s ex-husband was sentenced to the maximum 20 years in prison in the historic mass rape trial that shocked France.In other legal news, Segantii and its founder Simon Sadler pleaded not guilty to insider trading in Hong Kong. In the Archegos case, a judge will decide whether to shorten Bill Hwang’s 18-year prison term and grant him home confinement.

Brazil’s congress watered down President Lula da Silva’s fiscal plan again, after the real hit a record low on rising concern about the nation’s finances. Hoping to stem the slide, the central bank plans to sell $3 billion in a new spot auction today—its fourth intervention this week. Meanwhile, Lula’s top economic aides are feeling increasingly powerless to curb the market panic. As one money manager put it, “the government lacks credibility.”

Nike’s new CEO Elliott Hill is about to face his first earnings call since taking the job in September, and Wall Street has many questions. More corporate action: Micron tumbled premarket after its revenue forecast missed projections. IPhone-maker Foxconn is reportedly in talks with Renault to buy the French carmaker’s Nissan shares. And remember Blackberry? It’s one of several companies that spent billions on a poorly timed acquisition and is now regretting it.

Deep Dive: New York Office Property

There’s rarely been a better time to own a top-quality office building in Manhattan.

The Big Take

Opinion

The Fed just dropped a lump of coal into the market’s Christmas stocking, John Authers writes. The biggest disappointment was the “dot plot,” which showed an increase in expected inflation and projected growth, and a scaling back in projections for rate cuts.

Before You Go

US life expectancy at birth increased to its highest level since the Covid-19 pandemic, bolstered by a decrease in drug overdose deaths. The 4% drop last year “is one of the largest single-year decreases in overdose deaths we’ve seen since the modern overdose crisis in the 1990s,” said Brown University researcher Brandon Marshall.

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