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Good morning and welcome back. In today’s newsletter:
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UK pension funds move away from US stocks
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ECB refuses to backstop EU’s planned Ukraine loan
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Ownership claim of Italy’s gold reserves
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Zara-labelled products found in Russian shops
We begin in the UK, where pension funds are cutting back exposure to US equities, amid fears over the market’s concentration in a limited number of tech stocks and the risk of a bubble in artificial intelligence.
What to know: Schemes managing more than £200bn in assets for millions of British savers told the Financial Times they have been shifting allocations to other regions or adding protection against a potential fall in stock prices.
Concentration risk: The tech-heavy Nasdaq Composite index has shot up more than 20 per cent this year, driven by the so-called Magnificent Seven stocks such as Nvidia, Alphabet and Meta.
This has fuelled concerns about the domination of a small number of stocks and the risk of a bubble that could leave retirement savers exposed to a sharp sell-off.
Read where the pension funds are switching to.
Here’s what else we’re keeping tabs on today:
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Economic data: The EU publishes flash November inflation data and October unemployment figures. The OECD publishes its latest economic outlook.
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UK: FT Global Banking Summit begins in London, running until Thursday, with Barclays chief executive CS Venkatakrishnan, HSBC’s Georges Elhedery and Lloyds Banking Group’s Charlie Nunn scheduled to speak. Register here.
Join senior FT editors tomorrow for a discussion on what will shape the year ahead. Register for free today.
Five more top stories
1. Exclusive: The European Central Bank has refused to backstop a €140bn payment to Ukraine, dealing a blow to an EU plan to raise a “reparations loan” backed by frozen Russian assets. The ECB told the European Commission that such a move would violate its mandate.
2. Lawmakers from Giorgia Meloni’s right-wing coalition are pushing to have Italy’s gold reserves — the third-largest in the world after the US and Germany — declared the property of the Italian people. But critics fear the move will pave the way for a government sell-off of the precious metal.
3. France’s President Emmanuel Macron, who will visit Beijing this week, is expected to warn of industrial dependence on China. But European companies continue to increase their investment in local factories which they say helps them compete with Chinese rivals.
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EU competitiveness: The bloc must repeal its Corporate Sustainability Due Diligence Directive, which is killing growth, writes Andrew Puzder, US ambassador to the EU.
4. Swedish private equity group EQT is considering charging institutional investors more to back its deals, as an influx of money from wealthy individuals makes it less reliant on funds from traditional backers. Read details of the change.
5. Payments to UK non-executive directors have fallen more than 10 per cent in real terms over the past decade, raising concerns that London-listed companies will struggle to attract experienced board members, research has found. Read the full story.
The Big Read
© Carolina Vargas/FT montage/Dreamstime
China’s biopharmaceutical companies are developing drugs faster and more cheaply than foreign competitors thanks to a surge in investment and improved supply chains. But can the country’s industry match rivals like AstraZeneca and Pfizer?
We’re also reading . . .
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Affordable leggings: Adanola, the gym-to-coffee shop womenswear brand from Manchester, is taking on Lululemon, writes John Gapper.
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Remaking divorce law: A group of women in London has become the best-known, most successful family lawyers of their generation.
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Labour isn’t working: The UK government’s muddled thinking on the economy is causing it to haemorrhage support on all sides, writes Stephen Bush.
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Budget leak: How the Office for Budget Responsibility, Britain’s “fiercely independent” fiscal watchdog, came undone.
Graphic of the day
Battlefield momentum has swung behind Rapid Support Forces in the weeks since seizing the Sudanese city of El Fasher. After consolidating control of the surrounding region, the ruthless paramilitary is now pushing east and south in an offensive that is rattling regional powers and is set to compound the world’s worst humanitarian catastrophe.
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Take a break from the news . . .
Jeanette Winterson returns with a non-fiction work with the same flavour and force we have come to know. One Aladdin Two Lamps blends her views on a range of contemporary issues with some of the oldest stories we know.
Jeanette Winterson: a writer of ‘formidable imagination’ © David Levenson/Getty Images
