Market Beats | Citadel Extends Non-Compete to 21 Months; Morgan Stanley Sees High Risk in US Stocks; Italy in Talks with SpaceX for $1.6bn Contract; Qualcomm Unveils New AI Chips for PC; Tencent Included in US Military Blacklist; Google to Implement Gemini into TVs; Dell to Use AMD PC Chips for First Time

—— Citadel Extends Non-Compete to 21 Months; Morgan Stanley Sees High Risk in US Stocks; Italy in Talks with SpaceX for $1.6bn Contract; Qualcomm Unveils New AI Chips for PC; Tencent Included in US Military Blacklist; Google to Implement Gemini into TVs; Dell to Use AMD PC Chips for First Time

1. Citadel Extends Non-Compete to 21 Months

Ken Griffin’s Citadel has extended its non-compete agreements for certain portfolio managers to 21 months, highlighting the fierce recruitment battle among multistrategy hedge funds.

Previously in 2020, the average duration for non-competes at the firm was one year, although some managers were required to wait up to 18 months to receive their deferred compensation. Citadel’s recent increase in the non-compete period surpasses that of its competitors, whose policies typically last about 12 months, based on insights from individuals familiar with hiring practices.

The quest for skilled professionals within multistrategy firms is escalating, with a 13% rise in investment staff over the 12 months ending June 30, as reported by a recent study from Goldman Sachs Group Inc.

These firms are actively recruiting from each other to staff senior positions.

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2. Morgan Stanley Sees High Risk in US Stocks

Morgan Stanley strategists predict a challenging six months ahead for US equities, attributing the potential difficulties to rising Treasury yields and a strengthening dollar amid inflation concerns.

Strategist Michael Wilson noted a “decisively negative” shift in the correlation between the S&P 500 Index and bond yields, with the 10-year Treasury yield surpassing 4.5%. Meanwhile, the 30-year yield reached its highest mark since late 2023 this Monday.

The strengthening dollar is nearing levels that could adversely affect companies with significant international operations, potentially broadening the impact on stocks in the first half of the year, especially as market breadth remains weak, Wilson explained.

Looking further ahead, Wilson suggested, “We think 2025 could be a year of two halves,” anticipating that market-friendly policies such as potential tax cuts could bolster stocks in the latter part of the year.

In November, the team set a 12-month target for the S&P 500 at 6,500 points, indicating a prospective increase of about 9% from last Friday’s close.

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3. Italy in Talks with SpaceX for $1.6bn Contract

Italy is nearing a significant agreement with Elon Musk’s SpaceX to provide secure telecommunications services for its government, marking the largest project of its kind in Europe, according to sources familiar with the situation.

Negotiations for the five-year contract are still in progress, and no final deal has been signed yet, said the sources, who preferred to remain anonymous due to the confidential nature of the talks. The initiative has received approval from Italy’s Intelligence Services and the Defense Ministry.

The Italian government confirmed on Monday that discussions are ongoing and clarified that no agreement has been finalized. “The talks with SpaceX are part of normal government business,” stated the government.

The talks had been paused but gained momentum following Italian Prime Minister Giorgia Meloni’s visit to President-elect Donald Trump in Florida on Saturday, although the Italian government noted that this issue was not discussed during their meeting.

The deal under discussion, valued at approximately €1.5 billion ($1.6 billion), is intended to equip Italy with comprehensive, high-level encryption for telephone and internet services used by the government, according to the sources.

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4. Qualcomm Unveils New AI Chips for PC

Qualcomm Inc. introduced new chips designed to power personal computers capable of running the latest artificial intelligence software yet cost as little as $600.

The Snapdragon X Platform, which consists of an 8-core Oryon central processor, a graphics component and dedicated AI chip, will run Microsoft Corp.’s Copilot+ software, Qualcomm announced at the CES show in Las Vegas. PC makers including Dell Technologies Inc. and Lenovo Group Ltd. will offer laptops based on the new product in “early 2025,” the chipmaker said.

Chief Executive Officer Cristiano Amon has been pushing Qualcomm into the PC market as a pillar of his plan to lessen the company’s reliance on chips for smartphones, where it has long held a dominant share among high-end handsets.

The San Diego-based company has won widespread support from PC makers and Microsoft, as well as garnering positive reviews for devices that entered the market last year.

But as of yet, Qualcomm hasn’t made a major dent in the market share of PC chip incumbents Intel Corp. and Advanced Micro Devices Inc.

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5. Tencent Included in US Military Blacklist

Tencent Holdings Ltd., a major player in social media and gaming globally, experienced a decline in US trading on Monday following a Defense Department declaration identifying the company as a Chinese military business operating in the US.

The Shenzhen-based firm was listed alongside other companies such as Contemporary Amperex Technology Co. Ltd. (CATL) and Autel Robotics Co. in a Federal Register notice designating them as Chinese military entities. While the Pentagon’s blacklist does not impose specific sanctions, it generally serves to deter US companies from engaging in trade with those listed.

In response to the designation, Tencent contested its inclusion on the list, stating, “We are not a military company or supplier,” and emphasizing that the listing does not affect their business operations.

However, the company acknowledged the potential for reputational impact and expressed its intention to work with the Department of Defense to resolve any misunderstandings.

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6. Google to Implement Gemini into TVs

Alphabet Inc.’s consumer division announced an AI enhancement for TV sets equipped with its Google TV operating system by integrating Gemini into its Google Assistant voice-control system. This announcement came during the CES technology conference on Monday.

The updated Google TV software will feature more intuitive voice commands, enhanced content search capabilities, and deeper YouTube integration. The Gemini upgrade, set to be released later this year, enables users to engage in ongoing conversations with their TVs, eliminating the need for repeating the “Hey Google” trigger phrase before each command. This was demonstrated in a showcase where users could more naturally access content, such as videos from recent trips saved in their Google Photos accounts.

This update is notable as it extends Gemini functionality to third-party TV models running Google’s operating system for the first time. Brands like Sony Group Corp., Hisense Home Appliances Group Co., and TCL Technology Group Corp. will offer this feature, which was initially introduced on Google’s own streaming device last year.

Google TV competes with other major TV operating systems from Samsung Electronics Co., Amazon.com Inc., and Roku Inc.

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7. Dell to Use AMD PC Chips for First Time

Advanced Micro Devices Inc. (AMD), the world’s second-largest computer processor manufacturer, announced that its chips will be used for the first time in Dell Technologies Inc.’s PCs aimed at business clients.

The announcement was made as AMD introduced new processors at the CES show in Las Vegas, claiming these chips will position AMD-based personal computers as the leading choice for running artificial intelligence software. Dell has opted to incorporate these AMD chips into some of its business-oriented computer models, as stated by AMD executives during the event.

AMD, along with competitors Intel Corp. and Qualcomm Inc., unveiled new laptop and desktop components at CES, each claiming their technology offers superior performance for artificial intelligence workloads. The introduction of AI capabilities is seen as a potential revitalizer for the PC market, allowing machines to handle more complex tasks effectively.

Dell’s decision to use AMD chips in its corporate PCs—extending beyond their existing use in consumer devices—represents a significant shift and a challenge to Intel, which has been trying to maintain its leading position in a market where commercial and gaming PCs are especially lucrative due to their need for high-quality components.

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