Worried about the plumbing

As markets staged a monster rally in celebration of a potential US soft landing and coming rate cuts, one corner of the financial system has reason to remain on edge. For participants in the overnight funding markets—a key conduit for bank borrowing and a linchpin for determining interest rates—Wednesday’s Federal Reserve meeting contained a more pertinent message from Chair Jerome Powell: namely, that the central bank’s balance sheet reduction would continue as planned. A debate is simmering over whether the Fed is misjudging how far it can shrink its balance sheet—a process known as quantitative tightening—without causing dislocations in places like the repurchase-agreement markets—part of the essential plumbing of the financial system. —David E. Rovella

Still, the party is on. Wall Street went all-in on stocks and bonds this week after Powell affirmed the Fed is ready to shift to rate cuts. First the Dow Jones Industrial hit a record, and now the Nasdaq 100. The S&P 500 and the tech-heavy gauge both notched seven-week winning streaks on the back of the Fed’s news.

In the past five years, US exchange-traded fund market assets have more than doubled, over 1,000 new funds launched and annual trading volumes jumped by around $11 trillion. Yet there has been one exception to all this explosive ETF growth: The ranks of firms responsible for steering cash in and out of every product. There’s only a handful of them, and you know their names.

Russia and the European Union just set parameters for the next phase of the war in Ukraine, Marc Champion writes in Bloomberg Opinion. Both recommitted to the fundamental positions that began the conflict back in 2014. Vladimir Putin has put his nation’s industry and mobilized youth where his mouth is as Europe dithers. The Kremlin leader is all-in on his war, Champion writes, and the West must be, too.

More agencies and government-backed firms across China have ordered staff to stop bringing iPhones and other foreign devices to work, setting in motion an unprecedented prohibition that’s likely to block Apple and Samsung from parts of the world’s biggest mobile market. Apple shares dipped to a session low after Bloomberg reported on the widening bans.

Copper prices need to almost double to prompt mining companies to build costly mines needed to feed cleaner energy technology, according to billionaire Robert Friedland. The mining magnate said forecasts of copper prices reaching $9,000 a metric ton next year aren’t enough to stimulate the industry to take on the necessary risks.

DocuSign, whose software handles electronic signatures, rallied the most in a year after a report that the company was considering a sale. DocuSign is said to be working with advisers to explore a leveraged buyout, but the talks are reportedly in early stages. DocuSign’s market value was $12.8 billion as of Friday.

As the crypto market emerges from a brutal winter, gone are the hordes wearing leather vests and cowboy hats, hawking Jelly Donut NFTs. At the CoinAgenda conference held this week in Puerto Rico, the mood was more serious than in previous editions. The attendees—mostly dressed in business casual—were focused on the less flashy aspects of the blockchain. “Crashes have a way of forcing out the trash and forcing the scammers to go elsewhere,” said Rob Montgomery, founder of Resonate, a company that helps firms access digital assets. “Now they’re all busy peddling AI.”

Every December, Bloomberg’s Elin McCoy relives her most memorable wine experiences of the year by flipping through tasting notes and recalling the bottles that really stood out—and why. Choosing just 10 is never easy. Great wine is as much about the occasion and the people as the liquid in the glass. In 2023, McCoy said she was lucky enough to sample incredible reds, whites, rosés and bubblies from 21 countries on six continents, from historic vintages of classic Bordeaux to cabernets from California estates celebrating 50th anniversaries, to luscious examples on visits in Italy, and others from such far flung places as Armenia and China. Also close to her heart were the growing number from winemakers seriously committed to fighting climate change. With all that said, here are her top 10.

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