What Investors and the Fed Will Look For in the Jobs Report

Jobs report: the numbers to watch

Wall Street, the White House and the Fed will all be watching Friday’s jobs report for signs of how the labor market is holding up. The numbers may also deliver clues on the central bank’s next move on interest rates.

The Bureau of Labor Statistics is set to release the nonfarm payrolls number at 8:30 a.m. Eastern. Here are the data points to watch:

160,000. Economists polled by FactSet expect the report to show that employers added roughly 160,000 jobs last month, a drop from the 199,000 positions created in November. They also forecast that the unemployment rate ticked up to 3.8 percent in December, from 3.7 percent the previous month.

2.7 million. If those predictions are correct, it would bring total hiring in 2023 to about 2.7 million, a strong showing in a year marked by strikes and layoffs by large firms across multiple sectors. Heading into an election year, it’s a data point that President Biden is expected to trumpet to voters still unconvinced about his handling of the economy.

3.9 percent. The big number investors will be watching is wage growth. The consensus estimate is that average hourly wages grew by 3.9 percent on an annualized basis last month, roughly in line with figures from November.

A hot number here could spook markets. Wall Street is divided over how the Fed’s interest rate policy will unfold this year. The central bank has signaled that a trio of cuts could be coming, but officials have since warned that a resurgence in inflation could stall such a dovish pivot — and even reopen the door for rate increases.

1.7 percent. The past two jobs reports have been good ones for investors, with the S&P 500 climbing after the data was released. Market watchers will be hoping for a similar performance. The benchmark index is on a four-day losing streak, and has lost 1.7 percent in 2024.

HERE’S WHAT’S HAPPENING

Foreign governments paid millions to Donald Trump’s companies during his presidency. A report by House Democrats found that Trump businesses received at least $7.8 million — most of it from China. Democrats argued that the findings, drawn from court documents, show that the former president engaged in the kind of activity that Republicans accuse the Biden family of; G.O.P. lawmakers and Trump’s son Eric dismissed the report.

Eurozone inflation rises. Prices in the 20-country region rose 2.9 percent in December, ending months of declines. The rise spurred new questions about when the European Central Bank would begin cutting interest rates. Relatedly, the big French retailer Carrefour stopped carrying PepsiCo products over “unacceptably” high prices.

Bill Ackman’s wife is accused of plagiarism by Business Insider. The publication said that Neri Oxman, a prominent academic and architect who formerly taught at M.I.T., had failed to use quotation marks around several passages in her 2010 doctoral dissertation that were taken from other papers, though she cited her sources. Oxman posted on X that she was checking the accusations, apologized and would request any necessary corrections; Ackman, who was a leading advocate for ousting Claudine Gay as Harvard’s president over plagiarism accusations, posted in support of his wife.

Hedge fund winners (and losers) of 2023

Last year presented challenges for hedge fund moguls, given volatility in the bond markets, economic uncertainty and the U.S.’s regional banking crisis. But some of the industry’s top players were still able to mint money.

2023 proved to be a good, but not stellar, year for big hedge funds. Take Citadel, one of the industry’s best performers, which fell far short of the 38 percent gain it reported for 2022. (That said, it’s returning $7 billion to investors.)

The picture was murkier for the broader industry. Hedge funds on average returned 4.5 percent, according to the data provider HFR. And they were vastly outperformed by the S&P 500, which gained 24 percent.

Here’s how some hedge-fund titans fared in 2023, according to news reports:

Trying not to kill The Messenger

The Messenger was started last year by the veteran media mogul Jimmy Finkelstein with $50 million in funding to become the next big name in digital news publishing.

But the start-up is now under severe financial pressure and looking to raise more money, The Times’s Ben Mullin reports, as its business model soured and it ran into editorial difficulties.

Among The Messenger’s problems:

The site generated about $3 million in revenue last year, and lost $38 million as costs mounted, including $8 million for leases on offices in New York, Washington and West Palm Beach, Fla.
It has told potential investors that it had only $1.8 million in cash on hand at the end of December.
It is laying off two dozen employees, including reporters covering national politics, science and technology.

A spokeswoman for The Messenger said the company wasn’t in “dire” straits, saying that it booked as much revenue in January as it did for all of 2023. She added that the company had already raised more than $10 million in a new funding round.

What went wrong: The Messenger bet on digital advertising even though that market remains troubled. It also wagered that it could draw big traffic numbers by optimizing for search, which hasn’t paid off nearly as well as the company had hoped. (It is gaining some traction, having drawn 24 million visitors in December, up 24 percent month on month.)

A highly regarded politics editor quit last year after clashing with a senior colleague, while some reporters have chafed at demands to write articles based on competitors’ stories.

The Messenger is now in talks with conservative investors to sell a majority stake, according to Axios. They include Omeed Malik, a financier who has backed Tucker Carlson’s new media venture, and George Farmer, the former C.E.O. of the right-wing social media site Parler.

The investors recently met with Finkelstein at Donald Trump’s Mar-a-Lago estate to discuss a deal for $30 million for 51 percent of the company that valued The Messenger at $60 million.

“I think I wasn’t actually torturing some poor A.I. artist who could suffer. But it’s not a good sign for our civilization that we don’t seem to have any way of knowing for sure.”

— Eliezer Yudkowsky, an artificial intelligence researcher who pushed ChatGPT to produce more “normal” images after it created absurd pictures and resisted some of his requests.

Meet the “C.E.O.” of Hamas

As the Israel-Hamas war grinds on, more attention has fallen on how the Islamist group finances its military operations, including the Oct. 7 attacks.

That’s in part because of Zaher Jabarin, who over several years built a financial network across the Middle East to secure funding for Hamas. (A former Israeli security officer called him the “C.E.O.” of Hamas.) The Wall Street Journal takes a close look at Jabarin, who operates from an office building in Istanbul and says he isn’t part of Hamas’s militant wing or involved in raising money for the group:

Jabarin, working closely with other Hamas officials, developed a real-estate portfolio in the country, which made up the bulk of its $500 million worth of assets globally, the U.S. said a few years later. It included stakes in companies based in Algeria and the U.A.E., which didn’t respond to requests for comment.

The highest-profile asset was real-estate developer Trend GYO. Listed on the Turkish stock exchange, it was owned 75% by front men for Hamas, according to the U.S., which sanctioned the firm in May 2022.

The Turkish government granted one of Trend’s founders citizenship and a new name, according to U.S. officials. Hamas officials based in Turkey have opened Turkish bank accounts to move cash and transfer it to operatives in the West Bank, they said.

In a statement, Trend said it didn’t know Hamas or people associated with the group.

In other Middle East news: Secretary of State Antony Blinken will begin another diplomatic tour of the region. Here’s why the oil industry has largely shrugged off the threats against shipping traffic in the Red Sea. And the McDonald’s C.E.O., Chris Kempczinski, said that the war “and associated misinformation” was having a “meaningful business impact” on several of its markets.

THE SPEED READ

Deals

A group including Jeff Bezos and Nvidia has invested $74 million in Perplexity AI at a $520 million valuation, betting that the search start-up can steal market share from Google. (WSJ)
Deutsche Bank has hired Alison Harding-Jones, Citigroup’s former M.&A. chief for Europe, the Middle East and Asia, as its global head of M.&A. (FT)
Amer Sports, the Chinese-backed group that makes Wilson tennis rackets and Salomon hiking boots, filed to go public in the U.S., reportedly eyeing a $10 billion valuation. (Bloomberg)

Policy

Names being floated for a potential Nikki Haley administration include Gary Cohn, the former Goldman Sachs president, as Treasury secretary and Dina Powell, a former top Goldman executive, as chief of staff. (The Messenger)
Donald Trump met with the Teamsters’ chief, Sean O’Brien, as the former president and President Biden compete for union support. (NYT)
SpaceX sued the National Labor Relations Board a day after the agency accused it of illegally firing employees, arguing that the regulator operates unconstitutionally. (Politico)

Best of the rest

A trial will begin next week over a Russian oligarch’s claim that the auction house Sotheby’s abetted a scheme to defraud him of millions via overinflated art sales. (NYT)
Social media influencers are worried that A.I. might cost them valuable brand partnerships, but there’s reason to believe that those fears are overstated. (FT, Business Insider)
BlackRock has hired Leigh Farris, the former head of communications at the Carlyle Group, as global communications chief; Carlyle named Meg Starr, who recently led its E.S.G. efforts, as global head of corporate affairs. (Reuters, Axios)