MEXICO: 6.2 Magnitude Earthquake Hits Mexico, Sheinbaum Press Conference Halted

E-mini S&P and US equities more broadly sold aggressively on a The Information article on Microsoft.

• "*MICROSOFT LOWERS AI SOFTWARE SALES QUOTAS: INFORMATION" - bbg
• The piece writes: "Executives at Microsoft and other enterprise software firms heralded 2025 as the year artificial intelligence would be capable of automating tasks that involve multiple steps, such as generating dashboards based on company sales data. But as the year comes to a close, Microsoft has lowered expectations for how quickly it can get customers to spend money on these newer products, known as agents. Multiple Microsoft divisions, for instance, have lowered how much salespeople are supposed to grow"
• Full article here: https://www.theinformation.com/articles/microsoft-lowers-ai-software-sales-quotas-customers-resist-newer-products

Two days of public hearings on the United States-Canada-Mexico trade agreement (USMCA) get underway today at USTR, ahead of a mandatory review of the agreement on July 1 next year. A full list of witnesses here. 

• The Globe and Mail reports that NY-based Canadian lawyer, Barry Appleton, said Canada needs to be prepared for the risk that the US announces its withdrawal from the USMCA as a negotiating tactic. Appleton told Bloomberg, “Simply hinting that he could [withdraw], would put the Canadians in an incredibly difficult negotiating position.”
• Laura Dawson at the Future Border Coalition said the US benefits too much from the USMCA to abandon it: “There are a lot of places in the United States that are both Trump supporters and trade supporters... it would be very difficult to find a constituency of support to abandon [USMCA].”
• The Brookings Institution notes, “if the three parties each agree to an extension by July 1, 2026 ..., the agreement will be extended until 2042. If they fail to agree, a clock will start to tick toward USMCA’s eventual termination in ten years at the end of the original 16-year term (i.e., 2036).”
• The Globe notes, “A withdrawal notice from any country that is a signatory to the USMCA would trigger a six-month countdown to that member exiting the agreement.”
• Brookings reported in March: “Unlike in the first round of USMCA negotiations, the agenda likely will go beyond traditional trade disciplines to include migration, drug interdiction, and possibly in the case of Canada, defense spending.”

• Date $MM Issuer (Priced *, Launch #)
• 12/03 $Benchmark Deutsche Bank 6NC5 +115a
• 12/03 $Benchmark Citigroup PerpNC5 7.125
• 12/03 $Benchmark Protective Life +3Y +90a
• 12/03 $500M Freedom Mortgage 5.5NC2.5
• $5.85B Priced Tuesday, $23.6B/wk