US ECONOMY & POLITICS

US Trade Deficit Unexpectedly Narrows as Services Surplus Rises – Bloomberg, 1/9/2024

• The US trade deficit unexpectedly narrowed in November, driven by a pickup in services exports and a slight decline in merchandise imports.
• The deficit in goods and services trade shrank 2% from the prior month to $63.2 billion, Commerce Department data showed Tuesday.
• The median estimate in a Bloomberg survey of economists called for a $64.9 billion gap.
• The value of imports and exports each decreased by 1.9%.
• US services exports climbed for a fourth month to a record $85.7 billion in a broad advance.
• On an inflation-adjusted basis, the merchandise trade deficit shrank to $84.8 billion in November, the smallest in three months.
• Travel exports — or spending by visitors to the US — rose 1.4% after falling in October.
• Travel imports — a measure of Americans traveling abroad — climbed 2.7% to a record high.
• The value of goods imported from China declined more than 11% to the lowest since March 2020.

Home Prices in Detroit Are Rising Even Faster Than in Miami – Bloomberg, 1/9/2024

• The price of a single-family home rose faster in the Detroit area than any other large US metro in the year through November, bringing Miami’s 16-month run as the nation’s fastest-appreciating market to an end.
• Detroit posted the highest year-over-year home price increase among the nation’s top 20 markets with a 9.2% gain, beating Miami’s 8.3% rise, according to property data provider CoreLogic.
• Overall, US home prices increased 5.4% in the year ending in November.
• Homes in the three largest US markets, the New York City, Los Angeles, and Chicago metro areas, gained 7.2%, 4.3%, and 6.3%, respectively.
• Meanwhile, home prices in the San Francisco area are down 2.5%, the only major metro to see a decline.
• CoreLogic projects that US annual home prices will gain another 2.5% by November 2024, but some markets are under considerable pressure.

Trump Seeks Immunity for January 6 Charges – Bloomberg, 1/9/2024

• Donald Trump’s lawyers will spar with federal prosecutors Tuesday in a high-stakes court battle to determine if he is immune from charges of trying to overturn the 2020 election because he was president then.
• The two sides are set to make oral arguments in Washington before a three-judge panel with the US Court of Appeals for the DC Circuit over whether Trump is shielded from prosecution for his actions, including actions taken before the January 6, 2021, riot at the US Capitol as Congress certified that he lost.
• Trump, currently the frontrunner for the Republican nomination in the 2024 race for the White House, said on social media that he would attend the hearing, prompting heightened security in and around the federal courthouse.
• While his lawyers will present his legal arguments to the panel, Trump isn’t expected to address the court.
• The judges could hand down their ruling any time following the hearing.

Severe Storms Sweep the US, Bringing Blizzards, Flooding, High Winds – Wall Street Journal, 1/9/2024

• Nearly every part of the US braced for severe weather this week.
• A series of powerful weather systems are forecast to bring blizzards, severe flooding, and heavy winds, affecting everywhere from the Central and Southern Plains to the Midwest, the South, and the Northeast.
• As of Tuesday morning, all but one state—North Dakota—had a weather warning, watch, or advisory, according to the National Weather Service.
• Heavy snowfall blanketed areas from the Texas Panhandle to the Great Lakes overnight, with more than 18 million people under winter storm warnings early Tuesday.
• “Wind gusts of 60-80 mph will create ferocious whiteouts and subzero wind chills,” the National Weather Service said Monday afternoon, with blizzards, heavy snow, and high winds expected to persist through Tuesday night.
• “Travel remains extremely dangerous to impossible,” the NWS added.
• Parts of New England and the central Appalachians were likely to see bursts of heavy snow developing Tuesday, said AccuWeather meteorologist Dan Pydynowski.

EUROPE & WORLD

World Bank forecasts 2024 global growth to slow for a third consecutive year – Reuters, 1/9/2024

• The World Bank warned on Tuesday that global growth in 2024 is set to slow for a third year, prolonging poverty and debilitating debt levels in many developing countries.
• Hamstrung by the COVID-19 pandemic, then the war in Ukraine and ensuing spikes in inflation and interest rates around the world, the first half of the 2020s now looks like it will be the worst half-decade performance in 30 years, it added.
• Global GDP is likely to grow 2.4% this year, the World Bank forecast in its latest Global Economic Prospects report.
• That compares to 2.6% in 2023, 3.0% in 2022, and 6.2% in 2021 when there was a rebound as the pandemic ended.
• It forecasts 2025 global growth slightly higher at 2.7%, but this was marked down from a June forecast of 3.0% due to anticipated slowdowns among advanced economies.
• The US economy grew 2.5% in 2023, 1.4 percentage points higher than its June estimate, the World Bank said.
• It forecasted growth this year to slow to 1.6% as restrictive monetary policy restrained activity amid diminished savings but said this was twice the June estimate.
• The eurozone’s picture is considerably bleaker, with growth this year forecast at 0.7% after high energy prices resulted in just 0.4% growth in 2023.
• Tighter credit conditions prompted a 0.6 percentage point cut to the region’s 2024 outlook from the bank’s June forecast.
• China is also weighing on the global outlook as its growth slows to a forecast of 4.5% in 2024.

Samsung Profit Tumbles 35% as Chip Weakness Persists – Bloomberg, 1/9/2024

• Samsung Electronics posted its sixth quarter of declining operating profit, reflecting weak consumer demand and stoking uncertainty over the timing of a broader tech recovery.
• Korea’s largest company reported a 35% fall in operating income to 2.8 trillion won ($2.1 billion), about 24% shy of estimates.
• Revenue slid more than anticipated to 67 trillion won.
• For all of 2023, Samsung reported its slimmest operating profit in 15 years.
• The results underscore how demand for smartphones and the memory chips that power modern electronics remains sluggish, given economic uncertainty.
• It also muddies the outlook for a market recovery that many investors had hoped would emerge in 2024.
• In October, Samsung predicted the long-depressed $160 billion memory market will bounce back gradually in 2024, driven by a boom in AI development. Executives said prices should start climbing out of troughs around the latter part of 2023.

JD.com Unit Dives 46% After Disclosing ‘Suspicious’ Revenue – Bloomberg, 1/9/2024

• A high-profile JD.com unit disclosed it’s investigating “suspicious practices,” including the overstatement of some 1 billion yuan ($140 million) of revenue and costs, triggering a 46% collapse in its share price.
• Dada Nexus said it may have overstated roughly 500 million yuan of online advertising and marketing sales and about the same amount of operating and support costs.
• It withdrew its revenue outlook for 2023 after discovering the issues during a routine audit, Dada said.
• Dada, which operates the neighborhood platform JD Daojia and delivery service Dada Now, said it’s enlisted independent advisers to assist with a review of the situation.

PepsiCo, Grocery Giant Bicker Over Who Dumped Whom – Wall Street Journal, 1/9/2024

• A breakup over grocery prices got messier Monday when PepsiCo said that it, not supermarket chain Carrefour, initiated the split.
• PepsiCo said it had decided to stop supplying the chain’s European stores because the two sides hadn’t agreed on a new contract.
• The impasse spilled into public view Thursday when Carrefour said it would stop selling Pepsi, Lay’s, Doritos, Cheetos, Quaker Oats, and other PepsiCo products in France, Italy, Spain, and Belgium.
• Carrefour posted notes on store shelves saying it would no longer carry the brands because of unacceptable price increases.

Blinken Meets Israeli Leaders in Effort to Prevent Wider War – Wall Street Journal, 1/9/2024

• Secretary of State Antony Blinken held talks with senior Israeli leaders aimed at preventing the war in Gaza from escalating into a regional conflict and charting a path for the future of the Palestinian territories.
• Blinken’s visit on Tuesday, part of a broader tour of the Middle East, comes as tensions between Israel and Lebanon’s Hezbollah group are growing, with the killing of a senior commander of the militant group on Monday.
• The US is urging Israel to shift to lower intensity fighting in Gaza to contain civilian casualties in the strip and ensure that displaced Palestinians can return home as soon as conditions allow.
• “I will press on the absolute imperative to do more to protect civilians and to do more to make sure that humanitarian assistance is getting into the hands of those who need it,” Blinken said Monday.

China Launches Satellite, Setting Off Alerts Across Taiwan – Wall Street Journal, 1/9/2024

• Taiwan frequently accuses China of interfering in its elections.
• With just days to go before a closely contested presidential poll that could further strain Beijing’s ties with Taipei and Washington, Taiwanese officials are finding evidence of meddling everywhere: In coordinated social-media posts disparaging outgoing President Tsai Ing-wen, for instance, or in efforts to intimidate Taiwan’s most famous rock band.
• On Tuesday, Taiwan Foreign Minister Joseph Wu was given an opportunity to call out another alleged instance of mischief-making in real-time.
• Halfway through a news conference to warn about the threat of Chinese election interference, a wave of emergency smartphone alerts rippled through the ballroom of Taipei’s Regent Hotel, where more than 100 foreign journalists were gathered.
• Labeled “Presidential Alert,” the message warned Taiwan’s 24 million people, in English and Chinese, that a Chinese rocket had just flown over southern Taiwan.
• “Please be safe,” the alert read in Chinese, indicating that the rocket had carried a satellite.
• Alarmingly, however, the English-language message was labeled an “Air-Raid Alert” and warned of a “missile flyover.”
• Within minutes, Taiwan’s Defense Ministry had clarified to reporters by text message that the launch involved a satellite, not a missile.

China Becomes the World’s Biggest Auto Exporter—With Help From Russia – Wall Street Journal, 1/9/2024

• China’s overseas auto sales surged to a record last year, on track to surpass Japan as the world’s biggest car exporter and marking a tectonic shift for the global industry.
• While China has become acknowledged as a world leader in electric vehicles, traditional gas-powered autos were the main driver of the increase, with demand surging, especially in Russia.
• Chinese carmakers seized the void left in the country by the departure of Western carmakers following the war in Ukraine, selling at least five times as many vehicles there last year than the 160,000 it sold in 2022, according to the China Passenger Car Association.
• On Tuesday, the association estimated that 5.26 million made-in-China vehicles were sold overseas last year. It said that would likely be almost a million more than exports of made-in-Japan cars.
• Japan shipped just under four million vehicles abroad during the first 11 months of 2023, according to the country’s most recent official data.

Macron Appoints Youngest Prime Minister in France’s Modern History – Wall Street Journal, 1/9/2024

• French President Emmanuel Macron has appointed France’s 34-year-old education minister to helm a new government as prime minister, tapping a popular but relatively untested official to breathe life into political ranks that badly fractured over the passage of a recent immigration bill.
• Gabriel Attal, a former socialist and close Macron ally, is set to become the youngest prime minister in the history of France’s modern republic and the first openly gay.
• He has been tasked with naming a new cabinet, the president’s office said Tuesday.
• Attal faces the challenge of reuniting Macron’s deeply divided camp.
• Left-leaning members of Macron’s party, a bipartisan movement that includes former socialists and conservatives, have grown increasingly frustrated by the government’s rightward tilt.
• Attal’s promotion also positions him as a potential successor to Macron, who has struggled to cultivate a deep bench of lieutenants who can secure the future of his nascent political party, Renaissance.

Factmonster – TODAY in HISTORY

• Connecticut became the 5th state in the United States. – 1788
• Mississippi became the second state to secede from the Union. – 1861
• The Russian Revolution of 1905 was sparked by troops firing on petitioners to Czar Nicholas in St. Petersburg. – 1905
• Anti-American rioting broke out in the Panama Canal Zone. – 1964
• Surveyor 7, the last of America’s unmanned lunar probes, landed on the Moon. – 1968