| By Charles Riley • Thursday, December 5 | | | | Good Thursday morning. Charles here. I'm filling in for Julia, who's on vacation in Paris during the biggest strike by French workers since 1995. 😬 In today's newsletter: Saudi Aramco prices its IPO as OPEC meets, another luxury deal takes shape and Silicon Valley suffers a setback.
US stock futures are higher. Markets in Europe opened mixed, while stocks in Asia also struggled to find direction. Crude oil prices are little changed.
▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. | | | What's happening now in markets: MARKET DATA AS OF 5:30 AM ET | | MARKET FLASH Time for the biggest IPO ever? | |
Saudi Arabia's state oil company is poised to price what could be the biggest IPO in history.
Saudi Aramco said last month that it was aiming to sell about 1.5% of its 200 billion shares in a partial privatization for between 30 riyals ($8) and 32 riyals ($8.53) each. A final decision on price is expected to be announced on Thursday.
The competition: Alibaba's 2014 debut on the New York Stock Exchange, so far the world's biggest IPO, raised $25 billion. Aramco will top that if the price is set at the top of its range.
High expectations: The Saudi government initially discussed floating 5% of the company in 2018 in the hope of raising as much as $100 billion. It was looking at international markets such as New York or London, as well as Riyadh.
Yet the project was shelved amid concerns about legal complications in the United States, as well as doubts about the $2 trillion valuation reportedly sought by Saudi Crown Prince Mohammed bin Salman.
The deal was revived earlier this year after Aramco pulled off a successful international bond sale. But international investors are less convinced about buying Aramco stock: Among their concerns: Low oil prices, the climate crisis and geopolitical risks.
Meanwhile, in Vienna: OPEC and its allies are once again being forced to consider dramatic action to avert a crash in oil prices.
The cartel led by Saudi Arabia is reportedly working towards an agreement with OPEC producers and others including Russia to extend and deepen production cuts designed to put a floor beneath prices. Meetings take place Thursday and Friday.
If the group fails to cut production, the world oil market will be oversupplied by about 800,000 barrels per day during the first half of 2020, according to consulting firm Rystad Energy.
The ensuing supply glut would spark a "significant oil price correction," driving Brent crude into the low $40s for a short period of time, Rystad predicted. That represents a plunge of about 30% from current levels of nearly $63 a barrel.
| | VOICES On President Donald Trump's trade strategy "We are engaged in a 'stop or I'll shoot myself in the foot' strategy. It's hard to know just how adverse the impact will be."
FORMER US TREASURY SECRETARY LARRY SUMMERS
Read more from CNN Business. | | LUXURY DEALS Gucci owner targets Moncler | |
Kering, the owner of luxury brands including Gucci and Yves Saint Laurent, has held exploratory talks to buy Italian apparel company Moncler, according to Bloomberg.
Moncler is best known for its puffy winter coats. Its shares shot up by 9% on Thursday, while Kering stock posted a more modest rise of 1.3%. When asked about the report, Kering declined to comment and Moncler did not immediately respond.
What's so great about Moncler? Our colleagues at CNN Style point to its innovative approach to leadership: One project involves asking multiple creative directors to produce individual collections that are released on a rolling calendar. This allows new products to be marketed on a monthly instead of seasonal basis.
Should the deal be completed, it would help Kering compete with rival French luxury group LVMH. The owner of Louis Vuitton and Christian Dior announced last month that it would buy Tiffany & Co. in a deal that values the jeweller at about $16.2 billion.
LVMH on a roll: The luxury conglomerate led by billionaire Bernard Arnault is having a great year, with shares increasing nearly 55% so far. Earlier in 2019, LVMH acquired Rihanna's Fenty and Fenty Beauty fashion and cosmetics lines, which have enjoyed huge success with a diverse swath of young women.
It's all working out well for Arnault. With a fortune of $106 billion, he could soon overtake Jeff Bezos and Bill Gates to become the world's richest person. | | UP NEXT
Dollar General, Kroger and Tiffany & Co. report earnings before US markets open. American Outdoor Brands and Ulta Beauty will follow after the close.
Also today →
▸ The US trade balance for October arrives at 8:30 a.m. ET.
Coming tomorrow: The US jobs report for November will give fresh insight into America's economic health.
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WHAT WE'RE READING AND WATCHING
▸ Mid-size US companies are already moving away from China (CNN Business)
▸ The Reserve Bank of India delivers another shock decision (CNBC)
▸ The US furniture industry is back. But its workers aren't (WSJ)
▸ Ford is turning McDonald's coffee waste into headlights (CNN Business)
▸ Pablo Escobar's brother has released a foldable smartphone (CNN Business)
▸ Expedia is replacing its CEO and its CFO over a strategy fight (CNN Business) | | | FINAL WORD Silicon Valley faces a major loss in trade talks
Tech companies have long relied on just a few sentences of US law — Section 230 of the 1996 Communications Decency Act — to avoid legal trouble over what internet users write and post on their platforms.
The legal provision has proved hugely valuable to the industry, helping to give rise to Facebook, Instagram and Twitter by ensuring that the platforms would not be held responsible for the actions of their users.
According to the Wall Street Journal, internet companies have been lobbying for the legal protections to be included in the new US trade agreement with Mexico and Canada. But in a sign of growing skepticism in Washington toward Big Tech, House Speaker Nancy Pelosi, who represents San Francisco in Congress, is pushing to strip them out of the deal.
Another sign of discontent: Several US civil rights leaders recently invited to Facebook CEO Mark Zuckerberg's home have slammed what they say is a "lackluster response" to their concerns.
"Our communities are being targeted by bad actors on Facebook and the company has a moral obligation to fix this ongoing problem," the group said in a statement. "Facebook's lackluster response to our serious concerns is devoid of any commitments to implement substantive measures and changes to its policies."
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