World Street: GM's labour loss, slowing global growth, crude shock, US debt threat, Alibaba course correction and more

World Street

General Motors faces a $9.3 billion cost pressure because of labour deals, offset by a $10 billion share buyback and increased dividends. The OECD anticipates a slight global economic slowdown in 2024, and potential oil production cuts are on the radar as Middle East crisis continues. Jack Ma calls for Alibaba's course correction in a surprising internal memo. The UK government urges crypto users to disclose unpaid taxes, while JPMorgan's Jamie Dimon warns of the precarious economic position of US due to heavy reliance on debt. All these and more in this edition of World Street.

Love’s Labour’s Lost

General Motors said its new labour deals following a lengthy US strike will cost it $9.3 billion, while it outlined a $10-billion share buyback, a 33 percent dividend increase and reduced spending at its robotaxi unit Cruise. The buyback is equivalent to nearly a quarter of GM's common stock. Its shares were down about 14 percent this year before rising 7.7 percent in premarket trading on Wednesday.

Growth Pangs

The global economy will slow slightly next year but the risk of a hard landing has subsided despite high levels of debt and uncertainty over interest rates, the Organisation for Economic Cooperation and Development (OECD) said. It sees global growth moderate from 2.9 percent this year to 2.7 percent in 2024 before picking up in 2025 to 3.0 percent.

Crude Oil

OPEC and its Russia-led allies are considering new oil production cuts of as much as 1 million barrels a day, amid tension in oil markets fuelled by the war in the Middle East, reports WSJ. The move, which would likely send the oil prices higher, could be announced on Thursday at a virtual meeting of the cartel.

Iran Sanctions

The US Department of Treasury has slapped sanctions on an additional 20 entities, including Iranian Sepehr Energy and individuals and companies globally, in connection to the facilitation of finances that support Iran’s military, reports Oilprice.com.

CO2  Capture

Arca Climate Technologies has launched a pilot project for air-to-rock carbon mineralisation using waste from BHP’s Mt Keith Nickel West mine in Australia, reports mining.com. The 18-month project will test Arca’s methodology to capture and permanently store atmospheric carbon dioxide, and demonstrate the technologies can integrate safely at an operating mine.

Smell the Coffee

India and China are key coffee markets for Nestle SA, according to Philipp Navratil, head of the group’s coffee strategic business unit. “We have a really strong footprint in Asia and we are really bullish about those markets that have very low per-capita consumption,” Navratil told Bloomberg.

Realty Bites

Property and retail giant Signa declared insolvency on Wednesday after its last-ditch attempts to secure fresh funding failed, making it the biggest casualty so far of Europe's property crash. Controlled by Austrian magnate Rene Benko, the group is an owner of New York's Chrysler Building as well as several high-profile projects and department stores across Germany, Austria and Switzerland.

Deal Alert

KKR said on Wednesday it would buy the remaining 37 percent stake in Global Atlantic Financial Group for $2.7 billion in an all-cash deal. The private equity firm has served as the manager of Global Atlantic's investment portfolio since 2021. Global Atlantic's assets under management have grown to $158 billion from $72 billion in 2020.

Ma Jacks up Alibaba

Jack Ma urged Alibaba Group Holding to correct its course in a surprise internal memo. The billionaire who had mostly distanced himself from day-to-day operations of the company since 2020, surprised employees by responding to a staff post on Alibaba's internal forum. In a brief message, he lauded decisions made by rival PDD Holdings Inc to seize market share, and also expressed confidence that Alibaba will evolve and "correct its course". Once seen as China's top candidate for a trillion-dollar valuation, Alibaba is trading near its lowest value this year, a fraction of its 2020 peak.

Taxing Tokens

The UK government has called on crypto users to voluntarily disclose any unpaid capital gains or income taxes to avoid penalties, and published guidance on how to pay them. The tax disclosures should reflect capital gains or income from exchange tokens like bitcoin (BTC), non-fungible tokens (NFTs), and utility tokens. Users who have made crypto tax disclosures to the UK Treasury have 30 days from the disclosure date to make all necessary payments, failing which, the Treasury will take steps to recover the money.

Debt Addiction

JPMorgan CEO Jamie Dimon warns that the US, heavily reliant on debt, is in a precarious economic position. "The US is practically addicted to debt...That money is like heroin," Dimon said at the Global Investment Summit.  The US's total debt pile hit a record $33 trillion for the first time this year, and it's edging higher as lawmakers spar over the federal budget. "We're on this sugar high and I'm not saying this ends in a depression (but) I think there's more inflationary forces out there," Dimon warned.