• Markets: If red’s not your color, you may want to avoid looking at yesterday’s stock charts: Stocks fell as bond yields surged (more on that later).
• Stock spotlight: Investors did not respond royally to Royal Caribbean’s announcement that it’s buying a 50% stake in the parent company of Sandals and Beaches Resorts for $3 billion, sending the cruise operator’s stock to a 52-week low during the day.

TAKE XI TO YOUR LEADER

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China’s President Xi Jinping arrived yesterday for a state visit to the US. It’s his first time here since 2015, and he and President Trump will have a three-day huddle that concludes tomorrow and could have ramifications for artificial intelligence, trade, and the war in Iran.

Trump made the grand gesture of meeting Xi when his plane landed at Joint Base Andrews in Washington, DC, yesterday rather than at the White House, not unlike when people met their loved ones at the airport gate during that montage in Love Actually. Tonight, Trump will host a slew of CEOs at a state dinner for Xi, including OpenAI’s Sam Altman, Nvidia’s Jensen Huang, Google’s Sundar Pichai, and Tesla’s Elon Musk.

One major announcement has already been made: Treasury Secretary Scott Bessent told Fox News yesterday after Xi arrived that a trade truce between the US and China that ended steep duties on Chinese goods by the US and Beijing’s tight restrictions on rare earth exports had been extended to Jan. 10.

There’s a lot to talk about

The big items on the agenda for the first meeting between Trump and Xi since the former went to Beijing in May include:

• AI: Less than two weeks after a warning about AI growing too quickly from Anthropic CEO Dario Amodei, Treasury Secretary Scott Bessent said the AI race will be atop the Trump/Xi agenda. Both the US and China are racing to assert dominance in the tech.
• Middle East: China is Iran’s top trading partner. Some US lawmakers have implored Trump to push Xi into pressuring Iran into reopening the Strait of Hormuz. However, it’s unlikely that China will exert influence on Iran.
• Taiwan: Xi will forcefully stake China’s claim to Taiwan. It’s an awkward topic for the US, which sold Taiwan $11 billion in arms in December and has another $14 billion arms purchase that’s been on hold for months, per Reuters. Trump said after May talks with Xi that the latter deal was “a very good negotiating chip.”

However…experts aren’t expecting many deliverables from the summit, unless you count the memes Musk will create on his way home from the dinner tonight.—DL

      

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