President Biden and Xi Jinping, the Chinese leader, are scheduled to meet on Wednesday. The previous time the two met was last November at the Group of 20 meeting in Bali, Indonesia.Credit…Doug Mills/The New York Times
Trying to set a floor under U.S.-China relations
Nine months after the Chinese spy balloon controversy sent relations between Washington and Beijing to a new low, President Biden and the Chinese leader, Xi Jinping, will meet this week in San Francisco for face-to-face talks.
The summit won’t end the standoff between the world’s biggest economies. But it’s a sign that Biden and Xi want to maintain ties, despite trade tensions, tit-for-tat sanctions and questions about the future of Taiwan — and business leaders will be hoping for some sign of a thaw.
Talk is about derisking, not decoupling. Officials have been at pains to emphasize that the U.S. and China are competitors rather than zero-sum rivals. “We have a $700 billion trading relationship with China. The vast majority — 99 percent of that — has nothing to do with export controls,” Gina Raimondo, the commerce secretary, told CNN this weekend. Jake Sullivan, the national security adviser, has called the countries “economically interdependent” and Janet Yellen, the Treasury secretary, has warned that economic separation “would have significant global repercussions.”
Xi told a visiting U.S. congressional delegation last month that there were “a thousand reasons to make U.S.-China relations better, and no reason to make them worse.”
Can they find common ground? The U.S. hopes to resume military communications that were broken off after Representative Nancy Pelosi visited Taiwan last year. Biden may reassert American support for the “one China” policy that recognizes Beijing as the sole government of China, while warning Xi against interfering in Taiwan’s presidential election next year. And the U.S. will hope for cooperation on tackling climate change and fentanyl trafficking (China is a big source of the drug used in opioid production).
Where does this leave business? Xi will hold a banquet with U.S. executives after the summit, an effort to show that his country is open to foreign businesses.
Many Western companies say it is becoming increasingly difficult to operate in China. But some of Wall Street’s top bosses attended a financial industry summit in Hong Kong last week, suggesting that they aren’t about to leave. Still, there was little talk about the challenge of doing business in China, and in a sign of the sensitivity, reporters weren’t even allowed in the room to ask questions.
But that might not matter for Xi. Images of the Chinese leader breaking bread with American C.E.O.s may be valuable enough for his audience at home.
Save the date: The DealBook Summit is on Nov. 29. Among the guests are Bob Iger of Disney; Lina Khan of the F.T.C.; and Jensen Huang of Nvidia. You can apply to attend here.
HERE’S WHAT’S HAPPENING
Senator Tim Scott suspends his 2024 presidential campaign. The South Carolina Republican announced the effective end of his primary run, as polls show that Donald Trump is leading the G.O.P. field by double digits. Scott initially stood out for his Reagan-esque happy-warrior message, but he failed to gain much traction in the polls; a super PAC, largely backed by Oracle’s Larry Ellison, said last month that it was cutting a planned multimillion-dollar ad spend.
Ford and General Motors employees reject proposed labor contracts. Production workers at two Ford plants in Kentucky voted against the deal that the U.A.W. struck with the carmaker late last month, joining union members at a G.M. plant in Flint, Mich. The moves raise questions about the fate of those contracts, which are meant to end the U.A.W.’s financially punitive strike against the big Detroit automakers.
Eric Adams is under scrutiny over role in Turkey’s new Manhattan consulate. F.B.I. agents are investigating the New York City mayor over his efforts in 2021, before he won election, to pressure city officials to sign off on the complex despite safety concerns about the building, The Times reports. Adams’s campaign is facing a public corruption inquiry related to illicit donations from Turkey.
The latest Marvel movie disappoints at the box office. “The Marvels” grossed $47 million at U.S. and Canada box offices this weekend, the lowest debut in the 33-part Marvel Cinematic Universe. That underperformance is fueling more concern that Disney’s biggest blockbuster factory is faltering as audiences tire of superhero movies.
The Wegovy boom continues
Shares in Novo Nordisk jumped more than 3 percent on Monday, extending an extraordinary yearlong rally. The cause: results of a study published this weekend (funded by the drugmaker) that showed its wildly popular weight-loss treatment Wegovy reduces the risks of heart disease and stroke in some patients.
It’s the latest good news for Novo Nordisk and Wegovy, one of a new class of weight-loss drugs that analysts and experts say could transform health care — and a wide swath of businesses — in just a few years.
Doctors described the news as a breakthrough. “We’ve just identified a new best practice,” Dr. Clyde Yancy, chief of the division of cardiology at Northwestern Medicine, told The Times. Dr. Yuan Lu, an assistant professor of cardiovascular medicine at the Yale School of Medicine, predicted “skyrocketing” Wegovy prescriptions in the coming years.
The study of 17,000 adults found that Wegovy, a so-called GLP-1 drug created to fight diabetes, reduced the risk of heart attack, stroke or death from cardiovascular issues by 20 percent among overweight people with heart disease.
The medicine isn’t without risks. Over 16 percent of trial participants suffered side effects like vomiting and diarrhea, forcing them to drop out. (Some doctors downplayed this outcome, saying such symptoms could be avoided or minimized by tweaking the prescribed medication.)
It’s also not clear how Wegovy improves heart health, and whether it would show success outside the trial.
Investors have high hopes for GLP-1 drugs. Shares in Novo Nordisk have jumped more than 50 percent this year on the strength of sales of Wegovy and the related treatment Ozempic, making it Europe’s most valuable publicly traded company. The company said last week that it would spend $6 billion on a new manufacturing plant to meet soaring demand.
Makers of other GLP-1 drugs have also seen a boom. Eli Lilly, whose Mounjaro is also seen as highly promising, has enjoyed a stock rise nearly as high as Novo Nordisk’s. Richard Vosser, an analyst at JPMorgan Chase, has forecast that Novo Nordisk and Eli Lilly would make up nearly half of the GLP-1 market, which could hit $71 billion by 2032.
Pfizer and AstraZeneca are betting on oral versions of GLP-1 drugs.
And companies producing traditional weight-loss treatments have been hammered. Herbalife and Medifast, which make diet products and nutritional supplements, have seen their shares plummet as GLP-1 drugs grow in popularity.
Remote working was supposed to help women. Did it?
Before the pandemic, women often felt compelled to opt out of the work force because traditional careers and office norms left little room to accommodate child care. (Those who tended to succeed in 9-to-5 jobs, according to the legal scholar Joan Williams, were men whose wives did not work.)
To many, the rise of remote working signaled a possibility that things were changing. But as more companies push employees to return to the office, those who aren’t back full time are seen as less serious or unambitious.
DealBook’s Sarah Kessler took a look at how new working patterns could still lead to women being relegated to the so-called mommy track:
But there are nuances to the argument as well, according to Claudia Goldin, the Harvard professor who won the Nobel for economics in October for her research on the gender pay gap. “It could lead to a female enclave who work at home more than most men,” she said. “But the question is whether that is worse than having the same women be part-time.”
“Stephen King is susceptible to artificial intelligence. Danielle Steel is even more susceptible to artificial intelligence. The worse the writing, the more susceptible it is to artificial intelligence.”
— Andrew Wylie. The literary superagent played down fears that artificial intelligence will upend the publishing industry. But he does see some writers as vulnerable.
The week ahead
Stock markets have risen in nine of the past 10 trading sessions. That run could be tested this week by some big statistics releases. Here’s what to look out for.
Tuesday: All eyes are on Consumer Price Index data. Economists have forecast little to no month-on-month change in “core” inflation (which strips out food and fuel prices) for October. On an annualized basis, that figure is likely to have risen 4.1 percent, well above the Fed’s target of 2 percent.
On the earnings front, Home Depot reports third-quarter results.
Wednesday: Inflation hawks will most likely zero in on retail sales and producer price index data, which are scheduled for release. Britain, where inflation is running hot, is also scheduled to release C.P.I. data. Earnings-wise, there’s Target and Cisco.
Thursday: Walmart reports results.
Friday: It’s déjà vu in Washington, where the federal government will shut down if Congress does not reach an agreement on a federal spending plan by midnight. A complex proposal by House Republicans over the weekend was met by skepticism by the White House and Senate Democrats.
THE SPEED READ
General Atlantic agreed to buy control of Joe & the Juice, the smoothies and sandwiches chain, in a deal that’s said to be valued at $641 million. (Bloomberg)
Alphabet, Google’s parent company, is reportedly close to investing hundreds of millions in Character.AI, a start-up specializing in artificial intelligence. Relatedly, Sam Altman of OpenAI said he expects to raise more money from Microsoft, his company’s biggest backer. (Reuters, FT)
David Cameron, the former British prime minister, was named foreign secretary, despite criticism of his lobbying former colleagues on behalf of the now-collapsed financial firm Greensill Capital. (NYT, FT)
Silicon Valley billionaires like Peter Thiel are turning against Trump. Here’s why. (WaPo)
“The ‘Georgists’ Are Out There, and They Want to Tax Your Land” (NYT)
Best of the rest
“Army Ammunition Plant Is Tied to Mass Shootings Across the U.S.” (NYT)
Seismic activity near Iceland’s main airport has lessened in recent hours, but warnings of a volcanic eruption persist. (BBC)
A new study argues that Google should pay U.S. publishers at least $10 billion annually for using their news content in its search results. (Semafor)
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