Flagship

Honda-Nissan merger discussed

Japanese carmaking giants Honda and Nissan said they were exploring a merger, a defensive effort to ward off the growing dominance of Chinese rivals. The mammoth deal — potentially including Mitsubishi Motors, according to Nikkei — would create the world’s third-biggest automaker, girding the combined company against China’s fast-growing electric-vehicle manufacturers, which are eating into legacy firms’ market share in China and abroad. More broadly, the automotive market is becoming increasingly competitive: The Chinese telecoms giant Huawei has invested at least $5.6 billion in research on EVs, the Financial Times noted, in an effort to position itself as a key supplier to China-made marques.

Hopes raised for Gaza truce

US officials and the Palestinian militant group Hamas raised hopes that a ceasefire in Gaza may finally be in the offing. Talks over a truce have languished for months as Israel instead focused on dismantling the Iran-backed group Hezbollah in Lebanon and, more recently, establishing a buffer zone in Syria following the overthrow of Bashar al-Assad. Yet the Gaza portion of the conflict has persisted, with an estimated 45,000 people killed and millions displaced since Hamas’ Oct. 7, 2023, attack on Israel. The onslaught has reshaped the Middle East in ways the group did not anticipate: Its patron, Iran, has been weakened and Tehran’s proxies in Lebanon and Syria have been diminished or ousted.

Fed rate cut overshadowed

The US Federal Reserve is expected to cut rates today, but traders and economists were divided over future monetary policy. The widely anticipated 0.25-percentage-point reduction — a third consecutive cut — is already being overshadowed by debates over the implications of US President-elect Donald Trump’s policies, The Wall Street Journal’s chief economics correspondent wrote. The conversation is also centered on how close the Fed is to the “neutral” rate, where monetary policy neither drives nor drags economic growth. Experts see varying paths of between a half and a full percentage point of cuts next year. Even minor changes will have major implications for debt-reliant industries such as renewables, as well as countries worldwide that borrow in dollars.

Brazil’s currency crisis

The Brazilian real fell to a record low against the dollar, a rout that analysts warned would continue without fiscal discipline and other interventions. President Luiz Inácio Lula da Silva’s tax-and-spend policies have raised investor worries about inflation and debt, the Financial Times reported, compounding a broader emerging-market currency selloff ahead of US President-elect Donald Trump’s return to office. The foreign-exchange fears have contributed to a key Brazilian index falling 27% this year. Brazil’s central bank raised interest rates to reduce inflationary pressure, but an analyst told the FT that the bank and government must “deliver economic pain” in the short term and protect the currency.

AI demand raises US blackout risk

Growing power demand for artificial intelligence could cause blackouts in North America as the electricity grid struggles to keep up. The North American Electric Reliability Corporation, an industry watchdog, said that consumption is expected to rise 15% in the next decade even as coal-powered plants are shutting down. Adding to the problem, renewable energy sources are only being linked to the grid slowly. As a result, some areas of the US could see shortfalls in 2025. Big Tech is scrambling to find ways of powering its data centers, including deals with nuclear power, but NERC warned that the surge in demand will outpace new supply.

DRC sues Apple over minerals

The Democratic Republic of Congo filed criminal complaints against Apple in France and Belgium, arguing the company used conflict minerals in its products. The US tech giant “strongly disputes” the allegations, saying it told suppliers this year to stop sourcing the minerals in question from both the DRC and neighboring Rwanda, through which Congolese authorities argue minerals seized by armed groups are “laundered.” The case underscores the complex geopolitics of the technology supply chain, which is reliant on countries such as the DRC for minerals including tungsten and tin. Activists say the conflicts engulfing the country make it hard to stop so-called “blood minerals” being mixed in with those from legitimate mines.

Musk lacks top security clearance

Elon Musk cannot be told the payloads of some SpaceX rockets because he lacks the required US government security clearance. The SpaceX CEO is limited to top-secret level approval, which itself took him years to get after he publicly smoked marijuana on Joe Rogan’s podcast in 2018. Musk also has been in contact with hostile foreign leaders, including Russian President Vladimir Putin, The Wall Street Journal reported. As a result, he is barred from SpaceX facilities where classified work is done or discussed, and is rarely privy to meetings about classified cargo: SpaceX regularly carries military and spy satellites, for example. US President-elect Donald Trump is giving Musk a government job, though, and can grant him higher clearance.

Semafor will be on the ground in Davos for the World Economic Forum, the annual gathering where the world’s most powerful come together to strike deals, tout their good deeds, and navigate the snow — sometimes getting stuck long enough to share a scoop or two with us.

We’ll deliver exclusives on the high-stakes conversations shaping the world. Expect original reporting, scoops, and insights on all the deal-making, gossip, and lofty ambitions — with a touch of the pretentious grandeur Davos is famous for.

China’s twin anniversaries

Chinese leader Xi Jinping marked 25 years since Macau’s handover to China from Portugal as another major anniversary loomed. Xi’s visit to the southern Chinese territory came on the eve of the 40th anniversary of the signing of the Sino-British Joint Declaration, the document that outlined Hong Kong’s transfer from British rule. London has argued that Beijing has violated the terms of that deal in its crackdown on the financial hub’s pro-democracy campaigners, allegations the mainland has denied but which have nevertheless worsened bilateral relations. The two countries are now embroiled in a new dispute, this one over links between Britain’s Prince Andrew and a Chinese businessman who UK intelligence officials say is a spy.

Scientists’ fears over Chinese drone ban

Scientists warned that a possible US ban on Chinese-made drones could harm research. One Chinese firm, DJI, accounts for over 70% of the US drone market. But lawmakers are expected to soon pass a bill restricting Chinese drones over security concerns: DJI is linked to the Chinese government. Researchers told Science that they use DJI drones for climate monitoring, tracking microbes, observing wildfires, and even monitoring whale health by gathering snot from their spouts. US-made drones are more expensive and less effective, one said: “It seems like lunacy” to ban the DJI models. The whale-snot scientist in particular was unimpressed: “I don’t want to be flying an inferior product over an endangered species.”

Bluey movie announced

A movie of the smash hit children’s animated series Bluey will be released in 2027. An extra-long finale to the third season, which aired this year, was “pretty final-feeling,” Gizmodo noted, and parents of small children worldwide were worried that it was coming to an end. But fans of the show, which follows a good-natured family of Australian dogs through parenthood, friendship, and disappointment, will be relieved by the announcement of a feature-length release — although less so, perhaps, by the showrunner Joe Brumm saying that he will step down. Since its launch in 2018, Bluey has become a phenomenon: It was the second-most streamed show in the US last year, and is worth an estimated $2 billion to its owners.

Ademola Lookman plays for Atalanta, not for Bayer Leverkusen, as we said in yesterday’s item about African soccer players. This unforgivable error was brought to you by Flagship’s Tom having a brain freeze when he remembered Lookman scoring three goals against Leverkusen in last season’s Europa League final.

• Egypt hosts delegations from countries including Turkey, Iran, and Malaysia for a meeting ahead of the D-8 Summit of Muslim-majority developing nations.
• Stellantis workers in the British town of Luton protest over the automaker’s plans to shut its electric van factory.
• Singer-songwriter Billie Eilish turns 23.

Amount in tonnes of global coal use, a record, according to the International Energy Agency. Demand for coal is likely to stay elevated until 2027, the Paris-based organization said, driven in large part by China: Coal use is declining across most advanced economies thanks either to the stick of penalties in places such as the European Union or the availability of low-cost natural gas elsewhere. Beijing’s efforts to accelerate the deployment of renewables, build new nuclear power plants, and reshape its domestic electricity market should limit further coal demand growth in China, the IEA noted. Still, one in every three tonnes of coal burned worldwide is done at a plant in the country.

Nosferatu. This vampire horror, drawing on the 1924 movie of the same name as well as Bram Stoker’s classic Dracula, is “a cryptic, beautiful and unsettling experience,” Matt Zoller Seitz said on RogerEbert.com. Its director, Robert Eggers, who previously made The Northman, is “a rare filmmaker who seems capable of putting his modern consciousness aside when telling stories,” meaning that “there are no metaphors or analogies, only uncanny things that actually happen.” Nosferatu is in theaters from Jan. 1.

Young talent managers are professionalizing Africa’s fast-growing content creator market, as top creators in Nigeria earn upwards of six figures from comedy videos, travel recaps, and cooking shows, Torinmo Salau reported in Semafor Africa. The market boom is “driven by a certainty that the move to self-made creators is just beginning to take hold,” Salau wrote.