The Economist 14Dec2019

8 The EconomistDecember 14th 2019
The world this week Business

The prospect of Congress

approving theUnited States-

Mexico-Canada Agreement

improved, after Democrats

reached a deal with the White

House to revise the trade deal.

The reworkedusmcaweakens

intellectual-property protec-

tions for the drugs industry,

which Democrats insist will

lead to lower health-care costs,

and beefs up workers’ rights,

putting more onus on employ-

ers to enforce labour stan-

dards. Theusmcawill eventu-

ally replacenafta.

Ain’t life a bitch

Still licking its wounds from its

disastrous investment in

WeWork, SoftBank was report-

edly selling its 50% stake in

Wag, a service that connects

dog owners with people who

will walk their pooch for them.

Wag has struggled to compete

against Rover, a rival. It has

also been hounded by bad

publicity about lost or dead

dogs under its care.

A judge on the New York state

Supreme Court cleared Exxon

Mobilof fraud related to its

accounting for climate-change

regulations. New York’s

attorney-general had sought to

show that the oil company

committed fraud by using two

methods to estimate costs

posed by possible climate

policies. The ruling lowers the

likelihood of similar litigation

in other states.

Chevronsaid it would record

impairments of more than

$10bn in its fourth quarter.

More than half of the write-

down comes from shale assets

in the Appalachian region. An

abundance of shale gas has

depressed prices, which are at

their lowest in 20 years.

America’s boundless produc-

tion in shale energy has also

kept down oil prices. In an

agreement by which they hope

to shore up prices, opecand

Russiaagreed to cut output by

another 500,000 barrels a day,

extending a strategy started in

2016. Saudi Arabia wanted
      deeper reductions, which were
      resisted by Russia.

Saudi Aramco’sshare price

surged when it began trading

on the Riyadh stock exchange.

Although just 1.5% of the state-

controlled oil company’s

shares were sold, it raised

$25.6bn in its ipo, the most

ever. Aramco is now the

world’s most valuable publicly

listed company, hitting $2trn

on December 12th. That is the

value that Muhammad bin

Salman, Saudi Arabia’s de facto

leader, has decreed Aramco is

worth, despite scepticism from

global investors. Tranches of

the shares are held by the Saudi

elite, who have reportedly been

pressed to trade the stock in

order to reach the target.

Problems at an oilfield off the

coast of Ghana were one factor

that caused Tullow Oilto

drastically reduce its produc-

tion forecasts for the next few

years. Its share price tanked by

70%, one of the worst falls on

the ftse250 this decade.

Pacific Gas & Electricreached

a $13.5bn settlement with the

victims of wildfires that were

sparked by its faulty equip-

ment. That brings the total

charges incurred by Califor-

nia’s biggest utility to $25.5bn.

The settlement with victims

could hasten pg&e’s exit from

bankruptcy protection, though

the deal must first be signed off

by California’s governor.

German industrial produc-

tionfell by 1.7% in October

compared with September,

renewing concerns that the dip

in German manufacturing may

be deeper than had been

thought. Compared with Octo-

ber 2018 output was down by

5.3%, the biggest drop by that

measure in a decade.

The Federal Reserve left its

benchmark interest rateon

hold, and suggested it would

stay on hold throughout next

year. The central bank cut the

rate three times this year, but

now believes the risks to the

economy have moderated.

Brazil’scentral bank lowered

its main interest rate for a

fourth consecutive time, to a

record low of 4.5%. That may

spur a further decline in the

real, which could be an issue

for Donald Trump; he has

accused Brazil of manipulating

its currency to favour exports.

Tributes were paid to Paul

Volcker, who died at the age of

92. Mr Volcker influenced
    monetary policy for decades,
    waging a war on inflation as
    chairman of the Federal Re-
    serve. He also proposed what
    became known as the “Volcker
    rule”, which bankers hate
    because it limits their trading.
    Asked how bad America’s
    economy was when he took
    charge at the Fed in 1979, Mr
    Volcker replied, “by Latin
    American standards, it wasn’t
    so bad”.

Festive cheers

JD Wetherspoon, a pub chain in

Britain, announced that it is

pumping £200m ($264m) into

its business over the next four

years, creating 10,000 jobs. The

ailing sector has been anything

but stout over the past two

decades, seeing around 12,

pubs and barsclose down.

However, recent statistics have

given the industry something

to toast: there was a net in-

crease of some 300 boozers in

the latest year. That may be

small beer for now, but

Wetherspoon, at least, expects

hoppy times ahead.

Market capitalisation

December 11th-12th 2019, $trn

Source: Bloomberg *Intraday

Alibaba 0.

Berkshire Hathaway 0.

Facebook 0.

Amazon 0.

Alphabet 0.

Microsoft 1.

Apple 1.

Saudi Aramco 2.03*