Ukraine Gets OK to Use Long-Range Missiles Inside Russia
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President Biden lets Ukraine use long-range missiles to strike Russia, but will that dramatically change the course of the war?

Plus, the contest to become the next U.S. Treasury Secretary turns messy. And we'll look at the week ahead in markets with the new hosts of WSJ's Take on the Week. We've been talking about the magnificent seven tech stocks, but the rest of the S&P 500, the conversation is going to start to shift to everyone else because the market really has questions about the AI story. With the election, people are looking at what's going to happen with the 493 stock.

It's Monday, November 18th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. We begin in Ukraine, where the government in Kiev is now wielding a new power, authorization from the U.S. to use Western-made weapons to strike targets inside Russia.

Ukraine had pleaded for such permission for months amid what President Volodymyr Zelensky, as well as his top aides, said was an imbalance in the war that gave Russia the upper hand.

However, Journal of Brussels bureau chief Dan Michaels told me the decision is unlikely to be a game changer for Ukraine. Now, with thousands of North Korean troops in the Kursk region of Russia that Ukraine occupies, the Biden administration apparently feels that the scales have tipped enough in Russia's favor that Washington wants to allow Ukraine to fight back.

apparently only in that limited region. This is not a blank check for Ukraine to strike all over Russia. And Dan also told me that Biden's move comes as our journal colleagues report that President-elect Trump's push for Russia-Ukraine peace talks is finding growing acceptance in Europe.

I guess you might call it a degree of capitulation on the part of European politicians, a recognition that the situation and the outlook for Ukraine is not good. There have been massive Russian attacks, especially in recent days, on Ukrainian infrastructure, energy infrastructure. German Chancellor Olaf Scholz last week spoke by phone with Russian President Vladimir Putin. This is the first meeting

direct contact between Putin and a Western leader in months, if not more than a year.

Schultz drew a lot of criticism for this, and there was a lot of analysis that, in fact, this had less to do with the Ukrainian battlefield than the upcoming elections in Germany, where Schultz may stand for re-election. And so it's emblematic of the kind of fighting we're seeing in European countries over how to proceed, because the European economy is in bad shape. They are not in a position to open the tap on funding.

President Zelensky warned after the German chancellor's call with Putin that it risks opening a Pandora's box, and that it could lead to further calls amounting to nothing. And he said that Moscow, quote, understands no language but that of force.

The contest to helm the U.S. Treasury Department in the future Trump administration is heating up, with two new names joining the fray after jostling for the job turned messy in recent days. Among those now being discussed by Trump's advisers are Kevin Warsh, an economic policy adviser to President George W. Bush, who later served on the Fed's Board of Governors, and Mark Rowan, the chief executive of Apollo Global Management.

Warsh, who's serving on Trump's transition team, didn't respond to requests for comment, while Rowan previously affirmed interest in the job, but we report isn't actively lobbying for it.

The new entrants in the Treasury competition come as longtime frontrunners Scott Bessant and Howard Lutnick remain in contention. However, some people close to Trump say that Lutnick's chances had dimmed after an aggressive campaign for the job by him and his allies, including Elon Musk, kicked into high gear in recent days.

Donald Trump has selected outspoken fossil fuel champion Chris Wright as his nominee for energy secretary. Wright, the CEO of Liberty Energy, has been at the center of the fracking revolution. His nomination elevates a branch of the oil and gas industry that is skeptical of climate change science and mostly hasn't pledged to build out low-carbon energy businesses unlike giants ExxonMobil and Chevron.

But while Wright's ascension culminates a push by so-called oil wildcatters into Trump's political ranks, Journal heard-on-the-street columnist Jinju Lee said that the president-elect's promise to scrap Biden-era barriers to drilling oil and gas may not be music to the ears of big oil. The biggest oil producers actually have the means and the resources to comply with regulations that

Smaller companies often don't, and that can work in big companies' advantage. Stricter regulations can either eliminate competition by putting smaller companies out of business, or it can also force smaller companies to sell to larger companies.

What's interesting is that historically, oil and gas companies have performed quite well under Democrats. And that's because they favor putting roadblocks on new supply. That tends to limit producers' capital spending and tends to boost oil prices. And those roadblocks tend to be more damaging to smaller companies, not the giants.

Spirit Airlines has filed for bankruptcy, hoping to restructure its debts to bondholders and live to fly another day. The Chapter 11 filing in New York comes after its merger with JetBlue Airways was blocked early this year.

A pioneer of the ultra-low discount model, Spirit has recently struggled to compete with major carriers who've increasingly offered low prices and has also been facing soaring labor costs and an engine problem that's kept dozens of its planes on the ground.

And we are exclusively reporting that Warner Bros. Discovery has settled its breach of contract lawsuit against the National Basketball Association, keeping it in business with the league for at least the next decade. While Warner is losing rights to regular and postseason games for its TNT network after this season, the agreement, expected to be announced this week, gives it rights to a significant amount of NBA content domestically and abroad.

It also avoids a continued legal battle that began in the summer when the NBA signed new rights deals with competitors including ESPN, NBCUniversal, and Amazon.com. Coming up, the WSJ's Take on the Week podcast is back, and new hosts Gunjan Banerjee and Telus Demos will join us with a taste of the investor insights and market analysis that they'll be serving up every Sunday to help us get ready for the week. That's after the break.

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Well, it is shaping up to be a busy week in markets ahead of earnings from chipmaker NVIDIA and results from a number of major retailers that'll give us a window into consumer spending trends. And if those items are also on your radar, or you're just looking to get a leg up on the world of money and investing, good news, because the WSJ's Take on the Week podcast is back with new hosts Telus Demos and Gunjan Banerjee, who join me now to get ready to take on this week's

Gunjan, tell us. It's great to have you here. I'm so excited for this relaunch. Thanks for having us. Thank you. Gunjan, I know you're not alone in watching NVIDIA closely. This company has now got a massive valuation exceeding $3.5 trillion. So when they report earnings on Wednesday after the closing bell, heads will turn, markets will move. What is the big storyline to be keeping an eye on here?

Yeah, it's so interesting. The past few weeks, a lot of investors have really been focused on the U.S. election. And AI has taken a little bit of a backseat. In coming days, that's going to shift. Last earnings season, this really became like the financial markets Super Bowl, the thing that every single person I was talking to was focused on. Some of that excitement has died down, but I still think this is going to be the biggest thing to watch in the next few days. Well, but like the Super Bowl, some people like to watch for money.

not for the game itself, but for the ads. And I think here, the ads are the, we've been talking about the Magnificent Seven tech stocks, but the 493, the rest of the S&P 500 are,

Because the market really has questions about the AI story. And with the election, people are looking at what's going to happen with the 493. Are tariffs going to slow some companies? Are they going to accelerate some? What could tax cuts do? What could Trump's regulatory policy do? I think we're going to be talking much more about the other stuff. That's what I think the 2025 conversation will be like. But that being said, even though you're totally right, people are going to be focusing on all these other companies.

What you're seeing in the market is people continue to price in these giant swings in NVIDIA stock right after its earnings. I was taking a look at pricing data in stocks options. People are betting on like a 12 percent move on Thursday after it reports earnings. I mean, that's a crazy move for a three trillion dollar company.

Something that may come into focus midweek. Another thing you guys discussed on the latest episode of the podcast are some other companies whose fortunes are likely to be very affected by the broader market. Retailers target Walmart lows among those reporting earnings in the next few days. Tell us, I know you've been keeping track of kind of the outlook for these guys. What are we listening for most keenly? What we're listening for is are people in a discretionary spending mood?

Both Target and Walmart have over the years obviously added a lot of

discretionary, the stuff you don't exactly need, purchases to their business. Target talks about affordable joy. What's also been really interesting about them, inflation, obviously top of mind in the election, something we're all still paying attention to. Those two stores have been cutting prices on a lot of things. Target has announced thousands of rollbacks. Walmart, obviously a bedrock of their business is everyday low prices, and they've been continuing to achieve that by

using their leverage to tell their suppliers, you got to lower the price on this for us. And so what does that say about the inputs into inflation, like supply chain issues that we know have played a role aside from economic growth and other things? So those companies will give us a little bit of a read on inflation, but really, I think on just the consumer's mood and how they're feeling going into the holidays. Yeah.

And maybe this is premature, but is it possible the longer-term forecasts for these retailers might hint at what they're expecting, for instance, their margins to look like in a higher tariff environment? So we saw corporate executives mention the U.S. election at an insane pace this earnings season. So I think that's one really big thing to watch in the next few weeks and months. One thing investors have been cautioning me is that it

It really is way too soon to pick some of those winners and losers because so much could change in terms of Trump's priorities and policies in coming months. I mean, one name that has emerged as a bit of a bellwether on this just because they're a familiar name and they've been making very serious pronouncements.

Stanley Black and Decker, they put out a securities filing. My colleague John Weil here in New York wrote about this. They said the toolmaker believes that the Trump administration's expected tariff increases could result in an annualized $200 million pre-tax hit to operating income. That's a big number. And so regardless of whether you think that overall tariffs are good or bad policy for the U.S., there are certainly going to be companies that it is a major factor in their business. Maybe it hits their margin.

Maybe it affects sales. Maybe they pass those prices along to people. And companies did do that the last time around. So we'll see if that plays any role in future inflation. I mean, the Federal Reserve is not ready to declare total victory over inflation, and they probably have things like this on their mind.

Tell us, Gunjan, you've set us up really nicely for the week ahead. Thank you both so much. Let's do this next Monday. What do you say? Sounds great. Thank you. And for much more, the first episode of Take on the Week is out now and includes a fascinating conversation with Dominic Rizzo, a tech portfolio manager at T. Rowe Price about AI investment and tech stocks. And you can check it out wherever you get your podcasts.

And that's it for What's News for Monday morning. Today's show was produced by Kate Boulivant and Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We'll be back tonight with a brand new show. Until then, thanks for listening. ♪

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