Closing post
Time to wrap up….
The New York Times has filed a copyright infringement lawsuit against OpenAI and Microsoft in an escalation of a fight over intellectual content used to train generative artificial intelligence and large-language model systems.
The lawsuit, filed in a Manhattan federal court on Wednesday, claims that while the companies copied information from many sources to build their systems, they give New York Times content “particular emphasis” and “seek to free-ride on the Times’s massive investment in its journalism by using it to build substitutive products without permission or payment”.
The “unlawful use” of the paper’s “copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides, and more” to create artificial intelligence products “threatens The Times’s ability to provide that service”, the lawsuit claims.
In other news….
World stocks have rallied to their highest levels since late 2022 today, amid optimism that major central banks such as the U.S. Federal Reserve will start cutting interest rates early next year.
The recent rally has pushed the S&P 500 index towards its highest ever level this week.
UK chancellor Jeremy Hunt has announced the date of 6 March for a spring budget, fuelling speculation about an early general election despite the Conservatives trailing in the opinion polls.
And here’s the rest of today’s business news so far:
The New York Times’s lawsuit comes just days after Bloomberg reported that OpenAI was talking to investors about new financing that would value it at $100bn or more.
Such a valuation would confirm the ChatGPT maker as one of the world’s most valuable startups.
A New York Times spokesperson said today:
“If Microsoft and OpenAI want to use our work for commercial purposes, the law requires that they first obtain our permission.
They have not done so.”
The US S&P 500 share index is inching towards a new alltime high.
In early trading, the benchmark stock index is up 3.36 points or almost 0.1% at 4,778.11, approaching the record high of 4796.56 points set in January 2022.
Shares in Microsoft have dipped very slightly in early Wall Street trading.
They’re down 0.2% at $373.87, having hit record highs this year due to excitement around AI.
The NYT’s lawsuit against OpenAI and Microsoft will touch on the crucial question of whether content available on the internet can be used to train artificial intelligence systems under the “fair use” legal provision.
Tech companies building generative-AI tools have generally argued that “fair use” covers their use of material on the web to develop systems such as large language models (LLMs)
In its suit, the Times said the fair use argument shouldn’t apply, because the AI tools can serve up, almost verbatim, large chunks of text from Times news articles.
The lawsuit says:
Publicly, Defendants insist that their conduct is protected as “fair use” because their unlicensed use of copyrighted content to train GenAI models serves a new “transformative” purpose.
But there is nothing “transformative” about using The Times’s content without payment to create products that substitute for The Times and steal audiences away from it.
Because the outputs of Defendants’ GenAI models compete with and closely mimic the inputs used to train them, copying Times works for that purpose is not fair use.
The Wall Street Journal writes that the legal landscape surrounding generative-AI is “unsettled”, with the technology still in its early days, adding:
There are other lawsuits that could test the rights of AI companies to “scrape” content from the web to train AI tools, including one by several prominent book authors against OpenAI.
In February, Getty Images sued the AI art company Stability AI in Delaware, alleging that it had infringed on Getty’s copyrights. Stability AI at the time said it doesn’t comment on pending litigation.
Updated
The New York Times has asked for a jury trial in the suit, which was filed in U.S. federal court in the Southern District of New York (and can be seen here).
It reports;
The Times is the first major American media organization to sue the companies, the creators of ChatGPT and other popular A.I. platforms, over copyright issues associated with its written works.
The lawsuit, filed in Federal District Court in Manhattan, contends that millions of articles published by The Times were used to train automated chatbots that now compete with the news outlet as a source of reliable information.
New York Times sues Microsoft and OpenAI
The New York Times has announced it is suing artificial intelligence pioneer OpenAI, which developed ChatGPT, and major investor Microsoft over AI’s use of copyrighted work.
A lawsuit filed by the NYT claims that millions of articles from The New York Times were used, without permission, to create AI products.
The Times is seeking damages, in addition to asking the court to stop the tech companies from using its content and to destroy data sets that include the Times’ work.
In its complaint, the NYT says:
“Times journalism is the work of thousands of journalists, whose employment costs hundreds of millions of dollars per year.
Defendants have effectively avoided spending the billions of dollars that The Times invested in creating that work by taking it without permission or compensation.”
Breaking: The New York Times sued Microsoft and OpenAI for alleged copyright infringement, touching off a legal fight with far-reaching implications for news publishers https://t.co/wIQQzDTAoKhttps://t.co/wIQQzDTAoK
— The Wall Street Journal (@WSJ) December 27, 2023
Updated
The announcement of a budget on 6 March “looks like a last throw of the dice by a flailing Conservative government”, says Liberal Democrat Treasury spokeswoman Sarah Olney.
Olney adds:
“It’s too late for Jeremy Hunt to turn the tide after his record of failure has left us with growth flat-lining and public services at breaking point. People will never forgive the Conservative Party for crashing the economy, wrecking the NHS and clobbering families with years of unfair tax hikes.
“The only way to repair the damage done by the Conservatives is to kick them out of office through a general election.”
Shadow financial secretary to the Treasury James Murray has said it’s too late for the goevrnment to fix the damage caused to the UK economy:
“The next Budget will come after 14 years of economic failure under the Conservatives that have left working people worse off.
“The tax burden is set to be the highest in 70 years, with 25 Tory tax rises since the last election alone, and economic growth is on the floor. Nothing Rishi Sunak and Jeremy Hunt do in March can repair the damage they have done to our economy.
Just in: There were more customers in the shops this Boxing Day than a year ago, so ignore what we published this morning (see earlier post).
Data provider MRI Software has just reported that footfall levels were 4% higher than in 2022 yesterday, boosted by high streets and Central London. Initially they reported this morning that footfall fell by a fifth – which is being blamed on ‘technical issues’.
This is relief for retailers, although footfall was still almost 15% lower than before the pandemic.
MRI Software say:
Full day results show that footfall on Boxing Day rose year on year by +4% across all UK retail destinations, largely driven by high streets (+8.8%)
Week on week, footfall was -33% lower across all destination types
Shopping centres and retail parks declined by -34.9% and -47.5% from the same day in the week before
Central London experienced an increase in footfall by +10.6% from 2022, and +1.6% from 2019
Compared to 2019 levels, footfall remains -14.9% lower
Kate Nicholls, the head of UK Hospitality, says the trade body will work on a “detailed submission on measures to support hospitality” to feed into the chancellor’s plans for the budget.
Treasury says 2024 Budget to be held on 6 March - we will be working on detailed submission on measures to support hospitality. See @UKHofficial
— Kate Nicholls OBE (@UKHospKate) December 27, 2023
Campaign Paae on our website https://t.co/0pwunY8nMl
The spring budget is seen by Downing Street as “a crucial milestone” in the run-up to a general election expected next year, with tax cuts widely expected, points out the Financial Times.
Updated
Jeremy Hunt’s decision to announce 6 March as the date for a spring budget will fuel speculation over the timing of the next general election despite the Conservatives trailing in the opinion polls, my colleague Richard Partington reports.
He adds:
Labour’s lead over the Conservatives is at 13 points, according to the latest Opinium poll for the Observer.
Chancellor Jeremy Hunt will announce the UK’s next budget on March 6, giving the governing Conservatives what’s likely their last opportunity to announce giveaways before a general election https://t.co/DnuS8jtlKK
— Bloomberg Markets (@markets) December 27, 2023
The budget is likely to be Jeremy Hunt’s “last major chance to prepare the ground” ahead of the next election, says Reuters, adding:
The budget statement will include the government’s tax and spending plans as well as new growth and borrowing forecasts and government debt issuance for the 2024/25 financial year.
Spring Budget 2024 date confirmed
Newsflash: the Spring Budget 2024 will be delivered on 6 March, the UK government has just announced.
The Treasury says:
The Chancellor Jeremy Hunt has commissioned the Office for Budget Responsibility to prepare an economic and fiscal forecast to be presented to Parliament alongside his Spring Budget on 6 March 2024.
The Chancellor @Jeremy_Hunt has commissioned the @OBR_UK to prepare an economic and fiscal forecast to be presented to @UKParliament alongside his Spring Budget on 6th March 2024. pic.twitter.com/ZoTSfsM4sQ
— HM Treasury (@hmtreasury) December 27, 2023
This should be the final budget before the next election, which must take place by January 2025.
And there will be pressure on Hunt to deliver some pre-election giveaways to shore up support for the Conservatives, who are lagging well behind in the polls.
The Daily Telegraph today reports that Downing Street is considering axing inheritance tax in three months’ time in a pre-election giveaway, in an attmpt to boost Rishi Sunak’s chances of victory.
They say the PM has ordered a “gear change” on tax.
Wednesday’s Daily TELEGRAPH: “No10 plans to end IHT ahead of election” #TomorrowsPapersToday pic.twitter.com/snmZRUbBta
— Allie Hodgkins-Brown (@AllieHBNews) December 26, 2023
While The Times today reports that “Worried Tories” will promise help for first-time buyers, which could include backing long fixed-term mortgages to cut deposits.
Wednesday’s TIMES: “Tories to woo first-time buyers” #TomorrowsPapersToday pic.twitter.com/7LzWlRtS56
— Allie Hodgkins-Brown (@AllieHBNews) December 26, 2023
The i, meanwhile, report that Sunak and Hunt are plotting a spending trap for Labour by dictating the amount of money available for public services before the next election.
Wednesday’s i - “Sunak plots election trap for Starmer on spending” #TomorrowsPapersToday pic.twitter.com/fKyltzbA8V
— Allie Hodgkins-Brown (@AllieHBNews) December 26, 2023
Updated
World stocks at highest in over a year as rate cut hopes hold firm
World stocks have rallied to their highest levels since late 2022 today, Reuters flags.
Year-end optimism high on hopes that major central banks such as the U.S. Federal Reserve will start cutting interest rates early next year.
MSCI’s world stock index has touched a more than one-year high and is up 4.5% in December.
MSCI’s broadest index of Asia-Pacific shares outside Japan has gained more than 1% to an over four-month high.
SEB chief economist Jens Magnusson says:
“We still have strong equity markets and that is likely to hold through to New Year,”
UPDATE: This post now inaccurate due to updated footfall data….
Yesterday was a disappointing Boxing Day for UK retailers, new figures indicate.
MRI Software has reported that footfall at the UK’s retail destinations was more than a fifth (22.1%) lower this Boxing Day than a year ago.
The day had started better, with footfall 2.3% higher than last year by 3pm, but across the full day shoppers dropped off significantly compared to 2022.
The rise earlier in the day had been driven by a 6.5% increase in high street visitors, MRI Software said.
The only town to experience a rise compared to last year was central London, where footfall was 12.9% higher.
Week on week, footfall was 32.9% lower across all high street, retail park and shopping centre destinations.
Jenni Matthews, Marketing and Insights Director at MRI Software, says:
The footfall drop of -32.9% week on week across all destination types is not surprising given that last week consumers were finalising their festive shopping. The fact that compared to 2019 levels, footfall remains -33.8% indicates the long-term impacts of the continued rise of online shopping, as many consumers may have started their sale shopping on Christmas Day evening, and with Black Friday only a few weeks ago many will have grabbed their bargains back then.
We also can’t forget that many people may be tightening their purse strings given the cost of living status, or may still be spending time with their families on Boxing Day and not be heading out to stores and destinations until later in the week.
Updated
Eurozone government bonds are also rallying this morning, pushing down borrowing costs to the lowest level in months.
This is pushing down the yield, or interest rate, on eurozone bonds.
Reuters reports:
Germany’s 10-year yield, the benchmark for the euro zone, was down 4 basis points (bps) at 1.931%. The yield, which moves inversely to the price, fell to its lowest since March earlier in the session at 1.931%.
Italy’s 10-year bond yield was last 4 bps lower at 3.507%, after falling to 3.49%, the lowest since August 2022.
In the currency markets, the US dollar has slipped to a five-month low on expectations that the Federal Reserve could soon cut interest rates.
With trading volumes thin at the end of the year, the euro touched a four-month peak, rising over $1.105 for the first time since August.
Eurozone debt crisis veteran Wolfgang Schäuble has died
Former German finance minister Wolfgang Schäuble, one of the key figures in the eurozone debt crisis, has died aged 81.
Schäuble was one of the most significant figures of post-war German politics. He served as a member of the German parliament for over half a century.
During his career he helped negotiate German reunification in 1990, before later serving as finance chief under Angela Merkel, when Berlin consistantly insisted on austerity-led recovery plans.
Schäuble died at home on Tuesday evening, his family told German news agency dpa on Wednesday.
Chancellor Olaf Scholz has led the tributes this morning, posting that:
“Germany has lost a sharp thinker, passionate politician and pugnacious democrat.”
Wolfgang Schäuble hat unser Land mehr als ein halbes Jahrhundert geprägt: als Abgeordneter, Minister und Bundestagspräsident. Mit ihm verliert Deutschland einen scharfen Denker, leidenschaftlichen Politiker und streitbaren Demokraten. Meine Gedanken sind heute bei seiner Familie. pic.twitter.com/x1WsRHYJXe
— Bundeskanzler Olaf Scholz (@Bundeskanzler) December 27, 2023
European Central Bank president Christine Lagarde said she was “deeply saddened” to hear of Schäuble’s passing.
Lagarde, who ran the International Monetary Fund through many of the turbulent days of the eurozone crisis, added:
He was one of the most influential European leaders of his generation.
I personally witnessed his commitment to Europe, his intellectual rigour and his statesmanship.
My thoughts are with his family.
I am deeply saddened to hear of Wolfgang #Schäuble’s passing.
— Christine Lagarde (@Lagarde) December 27, 2023
He was one of the most influential European leaders of his generation.
I personally witnessed his commitment to Europe, his intellectual rigour and his statesmanship.
My thoughts are with his family. pic.twitter.com/UriPmqH5TH
France’s finance minister, Bruno Le Maire, posted that Schäuble had been “a friend, a loyal and reliable partner, a tireless architect of Franco-German friendship”
Je suis profondément attristé par la mort de l’ancien ministre des Finances allemand Wolfgang Schäuble. C’était un ami, un partenaire loyal et sûr, un artisan inlassable de l’amitié franco-allemande. À sa famille, à ses proches j’adresse tout mon soutien 🇫🇷🇩🇪
— Bruno Le Maire (@BrunoLeMaire) December 27, 2023
Wolfgang Schaeuble, who helped forge German reunification before being toppled from party leadership in 2000 by Angela Merkel, only to re-emerge almost a decade later as her finance minister during the euro crisis, has died. He was 81.https://t.co/OApFjiPlEy
— Adam Tooze (@adam_tooze) December 27, 2023
During the eurozone debt crisis, Berlin took a hardline approach to easing Greece’s debt burden, with Schäuble accusing the Syriza government of “acting irresponsibly” in February 2015 as it pushed for debt relief and an easing of some of its bailout conditions.
And in 2016, Schäuble warned Athens it must either enforce unpopular structural reforms or exit the bloc.
Schäuble went on to become Bundestag speaker, after the rightwing Alternative für Deutschland party made parliamentary gains in elections in 2017.
The UK’s transport minister has predicted that we could see cars with some self-driving technology on British roads by 2026.
Mark Harper told Radio 4’s Today programme that autonomous driving tech could be rolled out within three years, saying:
The legislation is going through Parliament at the moment so hopefully we’ll get that through Parliament by the end of 2024.
“Probably by as early as 2026, people will start seeing some elements of these cars that have full self-driving capabilities being rolled out.
“We already know the technology works. You can see the technology being rolled out with a safety driver in place.
“I’ve seen the technology being used in California for example, without a safety driver, so in full, autonomous mode.
“This technology exists, it works and what we’re doing is putting in place the proper legislation so that people can have full confidence in the safety of this technology, which I think is one of the important things we’ve got to do.”
Last month’s King’s Speech outlined plans for the Automated Vehicles Bill which will enable self-driving vehicles in the United Kingdom.
But while this technology has been under development for years, it remains problematic.
Earlier this month, Tesla said it would install new safeguards to its Autopilot advanced driver-assistance system on over 2 million vehicles in the US.
And in October, California suspended driverless cars operated by GM’s Cruise subsidiary in San Francisco, saying the vehicles were a risk to the public after a series of accidents.
Ford BlueCruise director Charles Nolan told Today that the technology to take a driver home from the pub was “certainly not there now”, adding:
“I think there is a way to go.”
Updated
European stock markets have now got into the Santa rally spirit.
In London, the FTSE 100 index is up 48 points or 0.6%, to 7745.
France’s CAC is 0.36% higher, with Germany’s DAX up 0.25% and Italy’s FTSE MIB 0.4%.
Oil is trading near its highest level since the end of November, as a spate of Houthi attacks disrupted shipping in the Red Sea.
Yesterday, the oil price climbed by 2.5%, with Brent crude settling $2 per barrel higher at $81.07, a one-month closing high. It’s slightly higher this morning.
Before Christmas the United States shot down four drones headed towards a US destroyer in the southern Red Sea, shortly after it launched Operation Prosperity Guardian to patrol Red Sea waters near Yemen.
European stock markets are reopening, after the Christmas break….
And the UK’s FTSE 100 share index has jumped by 35 points, or 0.45%, to 7732 points – towards the seven-month high set last week.
Mining companies are leading the risers, with Anglo American up 2.4% and Glencore gaining 1.9%.
Germany’s DAX and France’s CAC both gained 0.1% at the open.
Updated
Metal prices rise as China industrial profits jump
Some metal prices are rising this morning too, after China’s factories reported a rise in profits.
China’s November industrial profits rose by 29.5% year-on-year in November, the National Bureau of Statistics reported this morning, up from October’s 2.7% expansion.
#China's major industrial firms saw their profits surge 29.5% in November from the same period last year, data from the National Bureau of Statistics showed Wednesday.
— CGTN Global Business (@CGTNGlobalBiz) December 27, 2023
In the first 11 months of the year, the profits of major industrial firms with annual main business revenue of… pic.twitter.com/Yip2ALdcFo
This has helped to nudge the benchmark copper contract in London up by 0.6% to $8,625 per metric ton just after 7am this morning, as trading resumed after the Christmas break.
Zinc is up 0.9% in London, Reuters reports, while lead has climbed 0.6%, nickel has added 1.5% and tin is up 2.8%.
Metal prices have also been pushed up by the weaker dollar, which is trading near a five-month low on expectations of US interest rate cuts in 2024.
Australia's ASX 200 share index nears two-year high
Australia’s stock market saw a Santa Rally today too.
The S&P/ASX 200 index has gained 0.8%, and hit its highest level since late April 2022 as trading resumed for the week.
The index is on track for yearly gains of over 7%.
Optimism surrounding the Reserve Bank of Australia’s decision to hold steady on interest rates at its last meeting of the year, influenced in part by the more dovish stance of the Federal Reserve, has boosted Australian stocks.
Introduction: Markets in Santa rally as soft landing hopes build
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Global stock markets are embarking on an end-of-year ‘Santa rally’, as City traders and investors return to their desks after the Christmas break for the final push into 2024.
Optimism that central banks will start to lower interest rates in 2024, and cut several times next year, continues to push shares higher.
Yesterday the US stock market rallied again, with shares higher in light trading – lifting the S&P 500 index to its highest intraday level in almost two years.
That leaves the S&P 500 less than 1% below its closing all-time high of 4,796.56 set in January 2022.
S&P 500 is within a careless whisper of setting a new all-time high. On a total return basis, it's already there. pic.twitter.com/6zKgQx1RPM
— David Ingles (@DavidInglesTV) December 26, 2023
The rally indicates investors are more confident that US policymakers can achieve a ‘soft landing’ – pushing down inflation without causing a recession. Last Friday, the US PCE index showed inflation decelerated last month.
Stephen Innes, managing partner at SPI Asset Management, says:
The prevailing sentiment suggests a “risk-on” environment in U.S. markets, with renewed optimism focused on anticipating swifter and earlier rate cuts.
The US stock market has been pushing higher since early November, on rising hopes that America’s economy can avoid a recession.
Jan Szilagyi, CEO and co-founder of Toggle AI, told CNBC:
“I don’t love the term, but if you were to describe what is happening it’s definitely Goldilocks for the market.
Inflation’s coming down, the economy is still chugging along, and the hiking cycle’s over. On all of these macro trends, the rally has been justified.”
Asia-Pacific have picked up the baton, with China’s CSI 300 index up 0.4% and Japan’s Nikkei gaining over 1%
Hong Kong’s Hang Seng index has jumped 1.8%, as Chinese regulators appeared to soften a new crackdown on online gaming by approving a batch of new games.
⚡Hang Seng Index extends rebound by 2%, and Tech Index is now rising 2.7%.
— CN Wire (@Sino_Market) December 27, 2023
Netease rose more than 10%, Bilibili rose more than 6%, and Tencent rose more than 4%.#Tencent $TCEHY #NetEase $NTES #China #games $KWEB $FXI $HXC https://t.co/DTct6G7qea pic.twitter.com/g6z0wPwtKo
Recession worries are also looming over the City of London, though, after UK GDP data was revised down last Friday.
That showed the UK economy shrank slightly in the July-September quarter, adding to pressure on the Bank of England to cut interest rates in 2024.
European stock markets are set to open higher, with FTSE futures up 0.5%, Germany’s DAX up 0.45% in premarket trading, and the Eurostoxx 50 index of Europe’s largest companies up 0.55%.
The agenda
Noon GMT: MBA weekly US mortgage applications
3pm GMT: The Richmond Federal Reserve Manufacturing Index
