From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
JOBS BLOCKBUSTER
Investors ended the week digesting a blockbuster jobs report. Nonfarm payrolls in November rose by 266,000, according to the Labor Dept. The consensus estimate was about 180,000. The unemployment rate ticked down to 3.5 percent, and average hourly earnings rose another 0.2 percent. The unusually strong report was helped by GM, where tens of thousands of workers returned to their jobs (thus counting as new payrolls) after spending 40 days on the picket line. Still, hiring remains strong, and unemployment remains near historic lows even despite headwinds like the trade war and poor manufacturing data.
TRADE WAR(S)
In London for a commemoration of NATO's 70th birthday, President Trump indicated that the trade war with China may drag on, at least through the 2020 election. The president said he was willing to wait until then to make a deal with China on tariffs, a reversal from previous comments from White House officials that a deal was within striking distance. Stocks plunged on that news, but then recovered and ended the week sharply higher, lifted by the gangbusters employment number. And yet, the trade jitters remain. In addition to the conflicting statements on China, the Trump administration has proposed a tariff of up to 100 percent on $2.4 billion worth of French imports ー including handbags, cheese, and wine, that could impact American consumers. Meanwhile, the deadline for the next round of tariffs on Chinese goods is still scheduled for Dec. 15.
CYBER MONDAY BONANZA
Fourteen years after the term was coined, Cyber Monday has grown to become one of the most critical shopping events of the year for retailers. And in 2019, it hit a record. According to Adobe Analytics, shoppers spent $9.4 billion online ー the first $9 billion e-commerce day ever, and 19 percent higher than last year's Cyber Monday (and in addition to the $7.4 billion spent online on Black Friday). Total online spend for the season is expected to reach $143 billion, Adobe says, versus $126 billion in 2018. Big-box retailers like Target and Walmart are seeing some of the strongest e-commerce growth, as well as ーof course ー Amazon, which said this Cyber Monday was its biggest shopping day in the company's history.
GOOGLE TURNS THE PAGE
It's an end of an era at Google, where the co-founders who began the search giant in their friend's garage have officially relinquished executive control to Google CEO Sundar Pichai. Larry Page and Sergei Brin, who had stopped running the day-to-day operations years ago, will remain on the Alphabet board, and control a majority of the company's voting shares. They are stepping away from the company they started at a precarious time. Google is in the regulatory crosshairs of several governments over antitrust concerns and how it collects its vast troves of data. Pichai, an Indian immigrant who rose through the ranks of the company, will become CEO of both Alphabet and Google ー making him one of the single most powerful people in Silicon Valley.
UNITED CEO OUT
Brin and Page weren't the only executive departures of the week in a year that has seen a record number of CEO exits. Oscar Munoz, the chief executive of United Airlines, is resigning effective in May. United is promoting his deputy, Scott Kirby, who was rumored to be in the running for the top job at rival American Airlines. Munoz took over United four years ago and will leave the carrier in better shape than he found it, though he is perhaps best known for the company's botched response to an incident in 2017 in which a doctor was dragged screaming off of an overbooked flight.
Many U.S. consumers say they’ve noticed higher than usual prices for holiday gifts in recent months, according to a a December poll from The Associated Press-NORC Center for Public Affairs Research. A contributing factor is the unusually high import taxes the Trump administration put on foreign goods. While the worst-case consumer impact that many economists foresaw from the administration’s trade policies hasn’t materialized, some popular gift items have been affected more than others. Most toys and electronics sold in the U.S. come from China. So do most holiday decorations. Jewelry prices have risen due to the cost of gold.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
President Donald Trump has signed an executive order to block states from regulating artificial intelligence. He argues that heavy regulations could stifle the industry, especially given competition from China. Trump says the U.S. needs a unified approach to AI regulation to avoid complications from state-by-state rules. The order directs the administration to draw up a list of problematic regulations for the Attorney General to challenge. States with laws could lose access to broadband funding, according to the text of the order. Some states have already passed AI laws focusing on transparency and limiting data collection.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
House Republicans in key battleground districts are working to contain the political fallout expected when thousands of their constituents face higher bills for health insurance coverage obtained through the Affordable Care Act. For a critical sliver of the GOP majority, the impending expiration of the enhanced premium tax credits after Dec. 31 could be a major political liability as they potentially face midterm headwinds in a 2026 election critical to President Donald Trump’s agenda. For Democrats, the party’s strategy for capturing the House majority revolves around pinning higher bills for groceries, health insurance and utilities on Republicans.
