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  • Leading indicators point to slowing U.S. economy and recession in 2023

    Leading indicators point to slowing U.S. economy and recession in 2023

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    The numbers: The U.S. leading index fell a sharp 1% in November, extending a downturn that began last spring and points to a weakening economy.

    Economists polled by The Wall Street Journal had forecast a 0.5% decline.

    The LEI is a gauge of 10 indicators designed to show whether the economy is getting better or worse. The report is published by the nonprofit Conference Board.

    The index also fell 0.9% in October.

    Big picture: The economy is still expanding as the year winds down, but rising interest rates orchestrated by the Federal Reserve to tame high inflation could choke off growth in 2023. Many economists even predict a recession.

    Key details: The leading economic index fell last month largely because of higher jobless claims, a sagging housing market and a slowdown in manufacturing.

    A measure of current economic condition rose 0.1% in November.

    The so-called lagging index — a look of sorts in the rearview mirror — increased by 0.2%.

    Looking ahead: “The U.S. LEI suggests the Federal Reserve’s monetary tightening cycle is curtailing aspects of economic activity, especially housing,” said Ataman Ozyildirim, senior director of economic research at the board.

    “As a result, we project a U.S. recession is likely to start around the beginning of 2023 and last through mid-year.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -1.40%

    and S&P 500
    SPX,
    -1.83%

    fell in Thursday trades.

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  • Franco Harris, Hall of Fame running back, dies aged 72

    Franco Harris, Hall of Fame running back, dies aged 72

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    PITTSBURGH (AP) — Franco Harris, the Hall of Fame running back whose heads-up thinking authored “The Immaculate Reception,” considered the most iconic play in NFL history, has died. He was 72.

    Harris’ son Dok told The Associated Press his father passed away overnight. No cause of death was given.

    His death comes two days before the 50th anniversary of the play that provided the jolt that helped transform the Steelers from also-rans into the NFL’s elite and three days before Pittsburgh is scheduled to retire his No. 32 during a ceremony at halftime of its game against the Las Vegas Raiders.

    Harris ran for 12,120 yards and won four Super Bowl rings with the Pittsburgh Steelers in the 1970s, a dynasty that began in earnest when Harris decided to keep running during a last-second heave by Steelers quarterback Terry Bradshaw in a playoff game against Oakland in 1972.

    With Pittsburgh trailing 7-6 and facing fourth-and-10 from their own 40 yard line and 22 seconds remaining in the fourth quarter, Bradshaw drifted back and threw deep to running back French Fuqua. Fuqua and Oakland defensive back Jack Tatum collided, sending the ball careening back toward midfield in the direction of Harris.

    While nearly everyone else on the field stopped, Harris kept his legs churning, snatching the ball just inches above the Three Rivers Stadium turf near the Oakland 45 then outracing several stunned Raider defenders to give the Steelers their first playoff victory in the franchise’s four-decade history.

    “That play really represents our teams of the ’70s,” Harris said after the ”Immaculate Reception” was voted the greatest play in NFL history during the league’s 100th anniversary season in 2020.

    While the Steelers fell the next week to Miami in the AFC Championship, Pittsburgh was on its way to becoming the dominant team of the 1970s, twice winning back-to-back Super Bowls, first after the 1974 and 1975 seasons and again after the 1978 and 1979 seasons.

    Harris, the 6-foot-2, 230-pound workhorse from Penn State, found himself in the center of it all. He churned for a then-record 158 yards rushing and a touchdown in Pittsburgh’s 16-6 victory over Minnesota in Super Bowl IX on his way to winning the game’s Most Valuable Player award. He scored at least once in three of the four Super Bowls he played in, and his 354 career yards rushing on the NFL’s biggest stage remains a record nearly four decades after his retirement.

    Born in Fort Dix, New Jersey, on March 7, 1950, Harris played collegiately at Penn State, where his primary job was to open holes for backfield mate Lydell Mitchell. The Steelers, in the final stages of a rebuild led by Hall of Fame coach Chuck Noll, saw enough in Harris to make him the 13th overall pick in the 1972 draft.

    “When (Noll) drafted Franco Harris, he gave the offense heart, he gave it discipline, he gave it desire, he gave it the ability to win a championship in Pittsburgh,” Steelers Hall of Fame wide receiver Lynn Swann said of his frequent roommate on team road trips.

    Harris’ impact was immediate. He won the NFL’s Rookie to the Year award in 1972 after rushing for a then-team-rookie record 1,055 yards and 10 touchdowns as the Steelers reached the postseason for just the second time in franchise history.

    The city’s large Italian-American population embraced Harris immediately, led by two local businessmen who founded what became known as “Franco’s Italian Army,” a nod to Harris’ roots as the son of an African-American father and an Italian mother.

    The “Immaculate Reception” made Harris a star, though he typically preferred to let his play and not his mouth do the talking. On a team that featured big personalities in Bradshaw, defensive tackle Joe Greene, linebacker Jack Lambert among others, the intensely quiet Harris spent 12 seasons as the engine that helped Pittsburgh’s offense go.

    Eight times he topped 1,000 yards rushing in a season, including five times while playing a 14-game schedule. He piled up another 1,556 yards rushing and 16 rushing touchdowns in the playoffs, both second all-time behind Smith.

    Despite his gaudy numbers, Harris stressed he was just one cog in an extraordinary machine that redefined greatness.

    “You see, during that era, each player brought their own little piece with them to make that wonderful decade happen,” Harris said during his Hall of Fame speech in 1990. “Each player had their strengths and weaknesses, each their own thinking, each their own method, just each, each had their own. But then it was amazing, it all came together, and it stayed together to forge the greatest team of all times.”

    Harris also made it a habit to stick up for his teammates. When Bradshaw took what Harris felt was an illegal late hit from Dallas linebacker Thomas “Hollywood” Henderson in the second half of their meeting in the 1978 Super Bowl, Harris basically demanded Bradshaw give him the ball on the next play. All Harris did was sprint up the middle 22 yards — right by Henderson — for a touchdown that gave the Steelers an 11-point lead they would not relinquish on their way to their third championship in six years.

    Despite all of his success, his time in Pittsburgh ended acrimoniously when the Steelers cut him after he held out during training camp before the 1984 season. Noll, who leaned on Harris so heavily for so long, famously answered “Franco who?” when asked about Harris’ absence from the team’s camp at Saint Vincent College.

    Harris signed with Seattle, running for just 170 yards in eight games before being released in midseason. He retired as the NFL’s third all-time leading rusher behind Walter Payton and Jim Brown.

    “I don’t even think about that (anymore),” Harris said in 2006. “I’m still black and gold.”

    Harris remained in Pittsburgh following his retirement, opening a bakery and becoming heavily involved in several charities, including serving as the chairman of “Pittsburgh Promise,” which provides college scholarship opportunities for Pittsburgh Public School students.

    Harris is survived by his wife Dana Dokmanovich and his son, Dok.

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  • House panel will make Trump’s long-sought tax returns public

    House panel will make Trump’s long-sought tax returns public

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    WASHINGTON — The Democratic-controlled House Ways and Means Committee voted along party lines on Tuesday to make parts of Donald Trump’s tax returns public, a move that could provide new insight into the finances of a former president who broke political norms by refusing to release the information on his own.

    The level of detail that will be revealed is uncertain, but lawmakers said they expect it to include six years of Trump’s tax returns and eight affiliated companies. Some sensitive personal information would be redacted. While an initial report on the committee’s work was issued later Tuesday night, the tax returns themselves may not be released for several more days.

    The release is the culmination of a yearslong fight between Trump and Democrats that has played out everywhere from the campaign trail to the halls of Congress and the Supreme Court. Democrats on the tax-writing Ways and Means Committee argued that transparency and the rule of law were at stake by voting to issue a report that legally rests on questions about how the IRS audits the wealthy. Republicans countered that the release would set a dangerous precedent with regard to the loss of privacy protections.

    “This is about the presidency, not the president,” committee Chairman Richard Neal, D-Mass., told reporters.

    Texas Rep. Kevin Brady, the panel’s top GOP member, said, “Regrettably, the deed is done.”

    “Over our objections in opposition, Democrats in the Ways and Means Committee have unleashed a dangerous new political weapon that overturns decades of privacy protections,” he told reporters.

    Trump has long had a complicated relationship with his personal income taxes.

    As a presidential candidate in 2016, he broke decades of precedent by refusing to release his tax forms to the public. He bragged during a presidential debate that year that he was “smart” because he paid no federal taxes and later claimed he wouldn’t personally benefit from the 2017 tax cuts he signed into law that favored people with extreme wealth, asking Americans to simply take him at his word.

    Tax records would have been a useful metric for judging his success in business. The image of a savvy businessman was key to a political brand honed during his years as a tabloid magnet and star of “The Apprentice” television show. They also could reveal any financial obligations — including foreign debts — that could influence how he governed.

    But Americans were largely in the dark about Trump’s relationship with the IRS until October 2018 and September 2020, when The New York Times published two separate series based on leaked tax records.

    The Pulitzer Prize-winning 2018 articles showed how Trump received a modern equivalent of at least $413 million from his father’s real estate holdings, with much of that money coming from what the Times called “tax dodges” in the 1990s. Trump sued the Times and his niece, Mary Trump, in 2021 for providing the records to the newspaper. In November, Mary Trump asked an appeals court to overturn a judge’s decision to reject her claims that her uncle and two of his siblings defrauded her of millions of dollars in a 2001 family settlement.

    The 2020 articles showed that Trump paid just $750 in federal income taxes in 2017 and 2018. Trump paid no income taxes at all in 10 of the past 15 years because he generally lost more money than he made.

    The articles exposed deep inequities in the U.S. tax code as Trump, a reputed multi-billionaire, paid little in federal income taxes. IRS figures indicate that the average tax filer paid roughly $12,200 in 2017, about 16 times more than the former president paid.

    Details about Trump’s income from foreign operations and debt levels were also contained in the tax filings, which the former president derided as “fake news.”

    At the time of the 2020 articles, Neal said he saw an ethical problem in Trump overseeing a federal agency that he has also battled with legal filings.

    “Now, Donald Trump is the boss of the agency he considers an adversary,” Neal said in 2020. “It is essential that the IRS’s presidential audit program remain free of interference.”

    The Manhattan district attorney’s office also obtained copies of Trump’s tax records in February 2021 after a protracted legal fight that included two trips to the Supreme Court.

    The office, then led by District Attorney Cyrus Vance Jr., had subpoenaed Trump’s accounting firm in 2019, seeking access to eight years of Trump’s tax returns and related documents.

    The DA’s office issued the subpoena after Trump’s former personal lawyer Michael Cohen told Congress that Trump had misled tax officials, insurers and business associates about the value of his assets. Those allegations are the subject of a fraud lawsuit that New York Attorney General Letitia James filed against Trump and his company in September.

    Trump’s longtime accountant, Donald Bender, testified at the Trump Organization’s recent criminal trial that Trump reported losses on his tax returns every year for a decade, including nearly $700 million in 2009 and $200 million in 2010.

    Bender, a partner at Mazars USA LLP who spent years preparing Trump’s personal tax returns, said Trump’s reported losses from 2009 to 2018 included net operating losses from some of the many businesses he owns through his Trump Organization.

    The Trump Organization was convicted earlier this month on tax fraud charges for helping some executives dodge taxes on company-paid perks such as apartments and luxury cars.

    The current Manhattan district attorney, Alvin Bragg, told The Associated Press in an interview last week that his office’s investigation into Trump and his businesses continues.

    “We’re going to follow the facts and continue to do our job,” Bragg said.

    Trump, who refused to release his returns during his 2016 presidential campaign and his four years in the White House while claiming that he was under IRS audit, has argued there is little to be gleaned from the tax returns even as he has fought to keep them private.

    “You can’t learn much from tax returns, but it is illegal to release them if they are not yours!” he complained on his social media network last weekend.

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  • Ukraine’s Zelensky set to visit Washington on Wednesday, meet with Biden

    Ukraine’s Zelensky set to visit Washington on Wednesday, meet with Biden

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    WASHINGTON — Ukrainian President Volodymyr Zelensky is preparing to visit Washington on Wednesday, according to three AP sources, in his first known trip outside the country since Russia’s invasion began in February.

    Two congressional sources and one person familiar with the matter confirmed plans for the visit. They spoke on the condition of anonymity because of the highly sensitive nature of the trip. They said Zelensky’s visit, while expected, could still be called off at the last minute due to security concerns.

    The visit to Washington is set to include an address to Congress on Capitol Hill and a meeting with President Joe Biden. It comes as lawmakers are set to vote on a year-end spending package that includes about $45 billion in emergency assistance to Ukraine and as the U.S. prepares to send Patriot surface-to-air missiles to the country to help stave off Russia’s invasion.

    The latest tranche of U.S. funding would be the biggest American infusion of assistance yet to Ukraine, above even President Joe Biden’s $37 billion emergency request, and ensure that funding flows to the war effort for months to come.

    House Speaker Nancy Pelosi encouraged lawmakers to be on hand for Wednesday evening’s session.

    “We are ending a very special session of the 117th Congress with legislation that makes progress for the American people as well as support for our Democracy,” Pelosi wrote Tuesday in a letter to colleagues. “Please be present for a very special focus on Democracy Wednesday night.”

    Zelensky has — almost daily — addressed various parliaments and international organizations by video and he has sent his wife to foreign capitals to drum up assitance against the Russian invasion. The visit comes a day after he made a daring and dangerous trip to what he called the hottest spot on the 1300-km (808-mile) front line, the city of Bakhmut in Ukraine’s contested Donetsk province.

    In a video released by his office from the Bakhmut visit, Zelensky was handed a Ukrainian flag and alluded to delivering it to U.S. leaders.

    “The guys handed over our beautiful Ukrainian flag with their signatures for us to pass on,” Zelensky said in the video. “We are not in an easy situation. The enemy is increasing its army, and our people are braver and need more powerful weapons. We will pass it on from the boys to the Congress, to the President of the United States. We are grateful for their support, but it is not enough. It is a hint — it is not enough.”

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  • U.S. stocks edge higher, aiming to end four-day skid as Bank of Japan policy surprise adds to jitters

    U.S. stocks edge higher, aiming to end four-day skid as Bank of Japan policy surprise adds to jitters

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    U.S. stocks turned higher at midday Tuesday, as investors gauged whether the recent losing streak in equities has been overdone. Traders also weighed the potential rippled effects of the Bank of Japan’s surprise announcement to put a higher ceiling on government bond yields.

    How are stocks are trading
    • The S&P 500
      SPX,
      +0.45%

      rose 9 points, or 0.2%, to 3,814.

    • The Dow Jones Industrial Average
      DJIA,
      +0.63%

      was up 114 points, or 0.3%, at 32,866.

    • The Nasdaq Composite
      COMP,
      -1.76%

      was up 26 points, or 0.2%, to 10,578.

    Stocks fell for a fourth straight session on Monday. The Nasdaq Composite was down 6.3% over that stretch, and has retreated 32.6% so far this year.

    What’s driving markets

    Wall Street is looking to avoid a fifth straight losing session, while investors weighed the implications of a surprise monetary policy shift by the Bank of Japan.

    The S&P 500 closed the previous day near a six-week low as concerns intensify that central banks’ hiking of borrowing costs to combat inflation will push economies into recession and cause corporate earnings to fall.

    The Bank of Japan had been an outlier among major central banks by having maintained rates at the zero lower bound, while others embarked on their biggest tightening cycle in a generation, noted Henry Allen, strategist at Deutsche Bank.

    But on Tuesday the BoJ doubled the cap on the country’s 10-year bond, from 0.25% to 0.5%, causing the yen to jump more than 3%, while whacking equities in the region and giving U.S. stock investors more to consider.

    See: Why the Bank of Japan’s surprise policy twist is rattling global markets

    The BoJ kept its short-term interest rate at minus 0.1%, but the raising of the yield at which it will allow bonds to trade was seen as a step towards the ending of its era of ultra-loose monetary policy. The Nikkei 225
    NIK,
    -2.46%

    fell 2.5%.

    “It’s important not to underestimate the impact this could have, because tighter BoJ policy would remove one of the last global anchors that’s helped to keep borrowing costs at low levels more broadly,” Allen added.

    The 10-year U.S. Treasury yield
    TMUBMUSD10Y,
    3.692%

    stood at 3.685% as the equivalent maturity Japanese government bond
    TMBMKJP-10Y,
    0.417%

    climbed to 0.418%.

    However, some analysts argued that recent drops in U.S. stocks were starting to go too far.

    “I think we’ve been oversold the last couple weeks,” Joe Saluzzi, partner at Themis Trading, said in a phone interview. There’s the macroeconomic pressures weighing on stocks, but Saluzzi said the recent run of heavy selling may also be partly attributable to year-end tax loss harvesting in order to reap tax benefits from the year’s losses.

    The Bank of Japan announcement may have unsettled some early trading, he said. But ultimately, there’s just one central bank in the mind of U.S. equity investors, Saluzzi noted.

    Until the Federal Reserve is clear that its own interest rate hikes are complete, markets will be choppy, Saluzzi said. “The economy is weakening. No matter what the Fed said, they are not going to be doing much more,” he said.

    “U.S. equity markets remain trending lower in the short run, but are close to near-term support which should materialize between 12/21-12/23 at marginally lower levels,” wrote Mark Newton, head of technical strategy at Fundstrat, in a note to clients.

    “The percentage of stocks above their 20-day moving average is nearing single-digit territory, which normally provides relief for longs. Overall, I don’t expect markets to go down much further in December, and risk/reward for trading shorts looks sub-par with SPX not far above targets at 3,725.

    “This might materialize at 3775-3800 before allowing for a minor bounce, and then retest into Wednesday-Friday. However, I’m fully expecting a bounce next week into year-end, regardless if it proves temporary,” Newton concluded.

    Tuesday morning data gave another window to a slowing economy. Building permits and housing starts were both down in November.

    Companies in focus
    • 3M Co. 
      MMM,
      -0.34%

      is phasing out the manufacturing of so-called “forever chemicals” like fluoropolymers, fluorinated fluids, and PFAS-based additive products by the end of 2025. The phase-out process will include taking mostly non-cash charges of $1.3 billion to $2.3 billion to exit the line of business. Shares are down 0.5% in mid-morning trading.

    • Wells Fargo & Co. 
      WFC,
      -1.06%

      is being ordered to pay a civil penalty of $1.7 billion and return more than $2 billion to consumers, according to the Consumer Financial Protection Bureau. The regulator said the fines and consumer redress are connected to “widespread mismanagement” of auto loans, mortgages and deposit accounts, the CFPB said. Shares were off 1.1% in mid-morning trading.

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  • Stocks could face another explosion of volatility Friday as $4 trillion of options expire in ‘quadruple witching’

    Stocks could face another explosion of volatility Friday as $4 trillion of options expire in ‘quadruple witching’

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    Stocks have been on a wild ride this week, and conditions could still get weirder as traders brace for “quadruple witching” on Friday, when a flurry of equity options and futures contracts expire.

    In particular, options contracts tied to $4 trillion in stocks, stock-index futures and exchange-traded funds are set to expire, making Friday potentially the busiest day for options traders this year, according to data compiled by Rocky Fishman, the head of index volatility research at Goldman Sachs.

    The…

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  • Jobless claims drop to 11-week low of 211,000 in early December

    Jobless claims drop to 11-week low of 211,000 in early December

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    The numbers: The number of Americans who applied for unemployment benefits in early December fell to a nearly three-month low of 211,000, indicating layoffs around the holiday season remain low even as the economy softens.

    New unemployment filings declined by 20,000 from 231,000 in the prior week, the government said Thursday.

    Economists…

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  • Bank of England slows rate hike pace to a half point

    Bank of England slows rate hike pace to a half point

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    The Bank of England on Thursday slowed the pace of interest-rate hikes down to a half point, as the U.K. central bank balances a need to fight inflation with signs the economy is decelerating.

    The Bank of England increased its main interest rate to 3.5% from 3%. There were two votes for no change and one for a 75 basis point hike.

    U.K. inflation…

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  • I have obtained a dog

    I have obtained a dog

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    Only 4 weeks but the former owner left her out in the cold. Coonhound. Apparently coonhounds were bred to chase prey up trees and then howl real loud so the hunter can tell where they went, then shoot the animal in the tree. That’s where the phrase “barking up the wrong tree” came from.

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  • Landmark bill protecting same-sex and interracial marriages passes House

    Landmark bill protecting same-sex and interracial marriages passes House

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    WASHINGTON (AP) — The House gave final approval Thursday to legislation protecting same-sex marriages, a monumental step in a decadeslong battle for nationwide recognition of such unions that reflects a stunning turnaround in societal attitudes.

    President Joe Biden is expected to promptly sign the measure, which requires all states to recognize same-sex marriages, a relief for hundreds of thousands of couples who have married since the Supreme Court’s 2015 decision that legalized those marriages nationwide.

    The bipartisan legislation, which passed 258-169, would also protect interracial unions by requiring states to recognize legal marriages regardless of “sex, race, ethnicity, or national origin.”

    In debate ahead of the vote, several gay members of Congress talked about what it would mean for them and their families. Rep. Chris Pappas, D-N.H., said he was set to marry “the love of my life” next year and that it is “unthinkable” that his marriage might not be recognized in some states.

    Rep. Mark Pocan, D-Wis., said he and his husband should be able to visit each other in the hospital just like any other married couple and receive spousal benefits “regardless of if your spouse’s name Samuel or Samantha.”

    Rep. David Cicilline, D-R.I., said that the idea of marriage equality used to be a “far-fetched idea; now it’s the law of the land and supported by the vast majority of Americans.”

    While the bill received GOP votes, most Republicans opposed the legislation and some conservative advocacy groups lobbied aggressively against it, arguing that it doesn’t do enough to protect those who want to refuse services for same-sex couples.

    “God’s perfect design is indeed marriage between one man and one woman for life,” said Rep. Bob Good, R-Va. “And it doesn’t matter what you think or what I think, that’s what the Bible says.”

    Rep. Vicky Hartzler, R-Mo., choked up as she begged colleagues to vote against the bill, which she said undermines “natural marriage” between a man and a woman.

    “I’ll tell you my priorities,” Hartzler said. “Protect religious liberty, protect people of faith and protect Americans who believe in the true meaning of marriage.”

    Democrats moved the bill quickly through the House and Senate after the Supreme Court’s June decision that overturned the federal right to an abortion. That ruling included a concurring opinion from Justice Clarence Thomas that suggested same-sex marriage should also be reconsidered.

    The House passed a bill to protect the same-sex unions in July with the support of 47 Republicans, a robust and unexpected show of support that kick-started serious negotiations in the Senate. After months of talks, the Senate passed the legislation last week with 12 Republican votes.

    House Speaker Nancy Pelosi, D-Calif., presided over the vote as one of her last acts in leadership before stepping aside in January. She said the legislation “will ensure that “the federal government will never again stand in the way of marrying the person you love.”

    The legislation would not require states to allow same-sex couples to marry, as the Supreme Court’s 2015 Obergefell v. Hodges decision now does. But it would require states to recognize all marriages that were legal where they were performed and it would protect current same-sex unions if the Obergefell decision were overturned.

    While it’s not everything advocates may have wanted, passage of the legislation represents a watershed moment. Just a decade ago, many Republicans openly campaigned on blocking same-sex marriages; today more than two-thirds of the public support them.

    Democrats in the Senate, led by Wisconsin’s Tammy Baldwin and Arizona’s Kyrsten Sinema, slowly won over key Republican votes by negotiating an amendment that would clarify that the legislation does not affect the rights of private individuals or businesses that are already enshrined in current law. The amended bill would also make clear that a marriage is between two people, an effort to ward off some far-right criticism that the legislation could endorse polygamy.

    In the end, several religious groups, including The Church of Jesus Christ of Latter-day Saints, came out in support of the bill. The Mormon church said it would support rights for same-sex couples as long as they didn’t infringe upon religious groups’ right to believe as they choose.

    Conservative groups that opposed the bill pushed the almost four dozen Republicans who previously backed the legislation to switch their position. The Republicans who supported the bill in July represented a wide range of the GOP caucus — from more moderate members to Pennsylvania Rep. Scott Perry, the chair of the conservative hard-right House Freedom Caucus, and New York Rep. Elise Stefanik, the No. 3 House Republican. House Republican leader Kevin McCarthy voted against the measure.

    Thursday’s vote came as the LGBTQ community has faced violent attacks, such as the shooting earlier this month at a gay nightclub in Colorado that killed five people and injured at least 17.

    “We have been through a lot,” said Kelley Robinson, the incoming president of the advocacy group Human Rights Campaign. But Robinson says the votes show “in such an important way” that the country values LBGTQ people.

    “We are part of the full story of what it means to be an American,” said Robinson, who was inside the Senate chamber for last week’s vote with her wife and young son. “It really speaks to them validating our love.”

    The vote was personal for many senators, too. The day the bill passed their chamber, Senate Majority Leader Chuck Schumer was wearing the tie he wore at his daughter’s wedding to another woman. He recalled that day as “one of the happiest moments of my life.”

    Baldwin, the first openly gay senator who has been working on gay rights issues for almost four decades, tearfully hugged Schumer as the final vote was underway. She tweeted thanks to the same-sex and interracial couples who she said made the moment possible.

    “By living as your true selves, you changed the hearts and minds of people around you,” she wrote.

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  • U.S. jobless claims climb to 230,000 in sign labor market is slowly cooling off

    U.S. jobless claims climb to 230,000 in sign labor market is slowly cooling off

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    The numbers: The number of Americans who applied for unemployment benefits in early December rose slightly to 230,000, pointing to a slow but steady increase in layoffs as the U.S. economy slows.

    Economists polled by the Wall Street Journal had forecast new claims to total 230,000 in the seven days ended Dec 3. The figures are seasonally adjusted.

    The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment filings have gradually risen from a 54-year low of 166,000 last spring , but they are still extremely low.

    Economists predict layoffs will rise, however, as rising interest rates orchestrated by the Federal Reserve choke off U.S. growth. The tech sector has already suffered a wave of layoffs and manufacturers are also scaling back.

    Big picture: The strongest U.S labor market in decades has now become a double-edged sword.

    Rising wages and low unemployment have allowed Americans to meet their needs and spend enough to keep the economy growing.

    Yet the fastest wage growth in four decades is now adding to high U.S. inflation and putting more pressure on the Fed to get prices back under control.

    The Fed could tip the economy into recession if it raises rates high enough to cool off a hot labor market.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.00%

    and S&P 500
    SPX,
    -0.19%

    were set to rise in Thursday trades.

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  • Volodymyr Zelensky and ‘the spirit of Ukraine’ named Time’s Person of the Year

    Volodymyr Zelensky and ‘the spirit of Ukraine’ named Time’s Person of the Year

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    ‘For proving that courage can be as contagious as fear, for stirring people and nations to come together in defense of freedom, for reminding the world of the fragility of democracy — and of peace — Volodymyr Zelensky and the spirit of Ukraine are TIME’s 2022 Person of the Year.’

    That was Time editor in chief Edward Felsenthal explaining why the publication has named the Ukrainian leader and his people as 2022’s “Person of the Year,” an annual honorific that Time gives to the person or group of people who “most influenced the events of the past 12 months, for good or for ill.” 

    This year’s 10 finalists also included Tesla
    TSLA,
    -3.21%

    CEO Elon Musk (who took the title last year, and has remained a news driver with this Twitter takeover this year), U.S. Treasury Secretary Janet Yellen (whom the U.S. has “leaned on” to interpret the telltale signs of a recession) and Florida governor (and possible 2024 GOP presidential candidate) Ron DeSantis.

    In fact, some of these finalists were also recently featured in the inaugural MarketWatch 50 list of the investors, CEOs, policy makers, crypto players and influencers who are impacting markets and your money this year.

    But Felsenthal wrote that Zelensky was “the most clear-cut” choice for “Person of the Year” in recent memory, because he “galvanized the world in a way we haven’t seen in decades” following the unprovoked Russian invasion of Ukraine led by President Vladimir Putin on Feb. 25.

    The Time editor notes how Zelensky became a household name and international icon this year for staying in his country throughout the invasion, and rallying support on social media by giving daily speeches remotely. Some 141 countries in the United Nations condemned the unprovoked invasion of Ukraine. And almost 1,000 companies, including giants like McDonald’s
    MCD,
    -0.53%

    and Starbucks
    SBUX,
    -0.21%
    ,
    pulled out of Russia in response. The blue and gold Ukrainian flag became a familiar site on social media, as well, as users and accounts showed their support for Ukraine. 

    The “Person of the Year” report notes that Zelensky has also drawn his share of criticism, however — including from his fellow Ukrainians —for downplaying the threat of invasion before the Russian bombs first fell. And some critics have called his charm offensive via fashion photo shoots and virtual Grammy Awards appearances and the like somewhat out-of-touch with the human casualties of the war in Ukraine.

    “Later we will be judged,” Zelensky told Time reporter Simon Shuster in an accompanying interview. But in the meantime, he says, “I have not finished this great, important action for our country. Not yet.”

    Apart from Musk, DeSantis and Yellen, the other “Person of the Year” finalists included Wyoming GOP Rep. Liz Cheney for her work on the Jan. 6 committee and her vow to do “whatever it takes” to keep former President Donald Trump out of the Oval Office in the next election.

    Amazon
    AMZN,
    +0.24%

    founder Jeff Bezos’ ex MacKenzie Scott also made the list for her historic philanthropy, donating almost $2 billion to 343 organizations focused on the support of underserved communities in this year alone.

    And the U.S. Supreme Court was given a nod for its historic decision to overturn Roe v. Wade and end almost 50 years of constitutional precedent that protected abortion rights for American women, along with swearing in its first Black female justice, Ketanji Brown Jackson, to the bench.

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  • U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

    U.S. stocks waver in choppy trade, S&P 500 on pace for 5-day losing streak as economic growth worries linger

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    U.S. stock indexes are wavering between small gains and losses on Wall Street Wednesday, struggling to gain ground after a four-day losing streak amid worries about the chances of an economic downturn in coming months.

    How are stock-index futures trading
    • S&P 500
      SPX,
      -0.16%

      dropped 14 points, or 0.3%, to 3,927

    • Dow Jones Industrial Average
      DJIA,
      +0.08%

      shed 70 points, or 0.2%, to 33,528, after rallying over 145 points earlier in the session

    • Nasdaq Composite
      COMP,
      -0.50%

      fell 83 points, or 0.8% to 10,931

    On Tuesday, the Dow Jones Industrial Average fell 351 points, or 1.03%, to 33596, the S&P 500 declined 58 points, or 1.44%, to 3,941, and the Nasdaq Composite dropped 225 points, or 2%, to 11,015.

    What’s driving markets

    A four-day losing streak, during which the S&P 500 index has lost 3.4%, showed little sign of being snapped Wednesday as investors continued to assess the potential economic damage inflicted by high inflation and the Federal Reserve’s campaign to damp it by raising interest rates. U.S. stock indexes extended losses in midday trade despite regaining some ground in the morning session.

    MarketWatch Live: S&P 500 on pace for 5-day losing streak as stocks turn negative heading into midday

    “The recent run of macro data points in the U.S. continues to underscore relatively solid economic trends. And combined with the recent easing in financial conditions, it may trigger a need for the Fed to push back in December. Put another way, the dove camp is feeling some pain,” said Stephen Innes, managing partner at SPI Asset Management.

    Jim Reid, strategist at Deutsche Bank , noted that the S&P 500 had now lost ground in the last seven out of eight sessions. “In fact, the latest moves for the S&P mean it’s now unwound the entirety of the rally following Fed Chair Powell’s [supposedly dovish] speech last week, which makes sense on one level given he didn’t actually say anything particularly new.”

    The S&P 500 has fallen 17.2% in 2022 as the Federal Reserve has driven borrowing costs sharply higher in an effort to tame inflation that has been running at the fastest pace in 40 years.

    See: BNP Paribas studied 100 years of market crashes — here’s what it says is coming next

    The Fed’s monetary tightening alongside stubborn inflation may deliver a marked economic slowdown, senior bankers such as JPMorgan’s Jamie Dimon and Goldman Sachs’s David Solomon warned this week.

    “Fears are growing that economies are in for a rough time ahead as feverish inflation and the bitter interest rate medicine being used to bring it down take effect,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

    “Worries deepened amid warnings from U.S. banking and media sectors that navigating through the storm would not be easy, while the latest data has shown China’s trade has been sideswiped by a drop in global demand and zero-COVID policies. Despite today’s easing of restrictions it’s clear China’s COVID nightmare is not at an end,” Streeter added.

    China on Wednesday announced a series of measures rolling back some of its most draconian anti-COVID-19 restrictions. People who test positive for the virus will be able to isolate at home rather than in overcrowded and unsanitary field hospitals, and schools where there have been no outbreaks must return to in-class teaching, according to the National Health Commission.

    The Hang Seng index
    HSI,
    -3.22%

    in Hong Kong fell 3.2%, while the CSI 300
    000300,
    -0.25%

    dropped 0.2%, suggesting investors had already discounted Beijing’s more relaxed COVID stance.

    See: A speedy reversal of China COVID-19 restrictions could cause 1 million winter deaths: report

    However, long time bull Tom Lee, head of research at Fundstrat, reckons equities will benefit in coming weeks as investors start to get greater clarity on when the Fed may stop tightening policy.

    “We don’t think the end of the inflation war in 2022 is the Fed cutting rates. It is when Fed and markets see sufficient progress in inflation to remove the upside risks to higher rates. We think this could happen as early as the November CPI report. This will be released on 12/13,” Lee wrote in a note.

    “And if November CPI is soft, we think this will support a strong year-end rally. Admittedly, a 10% move between now and [year end] seems a stretch given the S&P 500 is around 4,000 but… the broader point is we see stocks having positive skew given the cautious positioning of investors and the possibility of very favorable incoming inflation reports,” Lee added.

    On the U.S. economic front, nonfarm productivity, which measures hourly output change per worker, rose at a 0.8% annualized rate last quarter, the Labor Department said on Wednesday. Unit labor costs, the price of labor per single unit of output, climbed by a smaller 2.4% annual pace in the third quarter, compared to the preliminary 3.5% increase.

    What companies are in focus

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  • Trump Organization found guilty in executive tax-fraud scheme

    Trump Organization found guilty in executive tax-fraud scheme

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    NEW YORK — Donald Trump’s company was convicted of tax fraud on Tuesday in a case brought by the Manhattan District Attorney, a significant repudiation of financial practices at the former president’s business.

    A jury found two corporate entities at the Trump Organization guilty on all 17 counts, including conspiracy charges and falsifying business records.

    The verdict came on the second day of deliberations following a trial in which the Trump Organization was accused of being complicit in a scheme by top executives to avoid paying personal income taxes on job perks such as rent-free apartments and luxury cars.

    The conviction is a validation for New York prosecutors, who have spent three years investigating the former president and his businesses, though the penalties aren’t expected to be severe enough to jeopardize the future of Trump’s company.

    As punishment, the Trump Organization could be fined up to $1.6 million — a relatively small amount for a company of its size, though the conviction might make some of its future deals more complicated.

    Trump, who recently announced he was running for president again, has said the case against his company was part of a politically motivated “witch hunt” waged against him by vindictive Democrats.

    Trump himself was not on trial but prosecutors alleged he “knew exactly what was going on” with the scheme, though he and the company’s lawyers have denied that.

    The case against the company was built largely around testimony from the Trump Organization’s former finance chief, Allen Weisselberg, who previously pleaded guilty to charges that he manipulated the company’s books and his own compensation package to illegally reduce his taxes.

    Weisselberg testified in exchange for a promised five-month jail sentence.

    To convict the Trump Organization, prosecutors had to convince jurors that Weisselberg or his subordinate, Senior Vice President and Controller Jeffrey McConney, were “high managerial” agents acting on the company’s behalf and that the company also benefited from his scheme.

    Trump Organization lawyers repeated the mantra “Weisselberg did it for Weisselberg” throughout the monthlong trial. They contended the executive had gone rogue and betrayed the company’s trust. No one in the Trump family or the company was to blame, they argued.

    Though he testified as a prosecution witness, Weisselberg also attempted to take responsibility on the witness stand, saying nobody in the Trump family knew what he was doing.

    “It was my own personal greed that led to this,” an emotional Weisselberg testified.

    Weisselberg, who pleaded guilty to dodging taxes on $1.7 million in fringe benefits, testified that he and McConney conspired to hide that extra compensation from his income by deducting their cost from his pre-tax salary and issuing falsified W-2 forms.

    During his closing argument, prosecutor Joshua Steinglass attempted to refute the claim that Trump knew nothing about the scheme. He showed jurors a lease Trump signed for Weisselberg’s company-paid apartment and a memo Trump initialed authorizing a pay cut for another executive who got perks.

    “Mr. Trump is explicitly sanctioning tax fraud,” Steinglass argued.

    The verdict doesn’t end Trump’s battle with Manhattan District Attorney Alvin Bragg, a Democrat who took office in January.

    Bragg has said that a related investigation of Trump that began under his predecessor, District Attorney Cyrus Vance Jr., is “active and ongoing.”

    In that wide-ranging probe, investigators have examined whether Trump misled banks and others about the value of his real estate holdings, golf courses and other assets — allegations at the heart of New York Attorney General Letitia James’ pending lawsuit against the former president and his company.

    The district attorney’s office has also investigated whether any state laws were broken when Trump’s allies made payments to two women who claimed to have had sexual affairs with the Republican years ago.

    Near the end of his tenure last year, Vance directed deputies to present evidence to a grand jury for a possible indictment of Trump. After taking office, though, Bragg let that grand jury disband so he could give the case a fresh look.

    On Monday, he confirmed that a new lead prosecutor had been brought on to handle that investigation, signaling again that it was still active.

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  • A ‘Spectral Fingerprint’ With Ultimate Precision For Authenticity

    A ‘Spectral Fingerprint’ With Ultimate Precision For Authenticity

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    Tokenising luxury assets is a game-changing development for the industry because it provides a way to preserve the value of luxury assets, protect them from counterfeiting, and create new revenue streams. By using dynamic non-fungible tokens (NFTs) and incorporating spectral fingerprinting technology, luxury watch brands can preserve the value of their assets, enable provenance, and reduce counterfeiting.

    Dynamic NFTs are unique digital tokens that represent a specific luxury asset. These tokens are built on blockchain technology and are verified using cryptographic algorithms. This ensures that the NFT is authentic and cannot be replicated or counterfeited.

    By tokenising luxury assets, watch brands can create a digital record of ownership which allows them to track the provenance of their watches and ensure that they are authentic and the use of spectral fingerprinting technology further enhances the authenticity of the token. This technology uses the spectrum of visible light to detect the materials in an object, making it highly accurate and precise.

    Incorporating spectral fingerprinting technology into the tokenisation process also helps to reduce counterfeiting. Counterfeiters often try to replicate the appearance of luxury watches, but they are unable to replicate the spectral fingerprint. This makes it easy to identify counterfeit watches and protect the value of authentic luxury assets.

    Tokenising luxury assets using dynamic NFTs and spectral fingerprinting technology is a powerful way to preserve value, enable provenance, and reduce counterfeiting. This technology has the potential to revolutionise the luxury watch industry and protect the integrity of high-end timepieces. Once the tokens are created, they can be sold to consumers who want to own a digital version of a luxury asset. The value of the token is determined by the rarity and desirability of the asset it represents.

    The integration of spectral fingerprint technology into luxury watches is a game-changing development for the industry. With its ultimate accuracy and precision, this technology allows watchmakers to create complex and reliable timepieces that are unmatched in their level of craftsmanship.

    Some of the technology behind the spectral fingerprint is based on a custom package made by Apple
    AAPL
    , known as a “system in package”. This package contains several ICs on one die, which are much more accurate and precise than other watches. The resulting timepieces are incredibly accurate and reliable.

    It is a powerful tool for luxury watchmakers themselves as it allows them to measure and control the precise time, which is essential for creating complex watches. The spectral fingerprint is an optical system that provides a high level of precision. This technology is able to detect even the smallest changes in time, making it the best choice for precision and accuracy.

    One company that is at the forefront of this technology is LLA Instruments GmbH & Co. KG. This research and development company designs and manufactures analytical spectral imaging processes. Its innovative technology helps distinguish between a variety of materials, including minerals and PVC in PET-flakes sorting. This technology can be used to determine metal content and other properties in a variety of applications.

    The use of spectral fingerprint technology is not limited to the luxury watch industry. It has applications in a variety of fields, including environmental and food testing, as well as in the analysis of petroleum products. The versatility and precision of this technology make it a valuable tool for a wide range of industries.

    The strategy for coupling spectral fingerprinting & dynamic NFTs as a tokenomics will drive a market for digital luxury assets to an innovation collision event that is bound to shrapnel value creation on various dimensions. It is visioned to allow luxury brands to reach a wider audience and tap into the growing market for digital assets. It also provides consumers with a way to own a digital version of a luxury asset and enjoy the benefits of ownership.

    Overall, the strategy for dynamic NFTs as a tokenomics is to create a new market for digital luxury assets and provide consumers with a way to own and trade these assets. As the technology continues to evolve, it is likely that we will see even more advanced and sophisticated uses for the spectral fingerprint. With its incredible accuracy and precision, this technology has the potential to revolutionize the way we measure and control time.

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    Leanne Kemp, Contributor

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  • Democrats move to make South Carolina, not Iowa, first primary voting state

    Democrats move to make South Carolina, not Iowa, first primary voting state

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    Democrats voted Friday to remove Iowa as the leadoff state on the presidential nominating calendar and replace it with South Carolina starting in 2024, a dramatic shakeup championed by President Joe Biden to better reflect the party’s deeply diverse electorate.

    The Democratic National Committee’s rule-making arm made the move to strip Iowa from the position it has held for more than four decades after technical meltdowns sparked chaos and marred results of the state’s 2020 caucus.

    The change also comes after a long push by some of the party’s top leaders to start choosing a president in states that are less white, especially given the importance of Black voters as Democrats’ most loyal electoral base.

    Discussion on prioritizing diversity drew such impassioned reaction at the committee gathering in Washington that DNC chair Jaime Harrison wiped away tears as committee member Donna Brazile suggested that Democrats had spent years failing to fight for Black voters: “Do you know what it’s like to live on a dirt road? Do you know what it’s like to try to find running water that is clean?”

    “Do you know what it’s like to wait and see if the storm is going to pass you by and your roof is still intact?” Brazile asked. “That’s what this is about.”

    Following Biden’s recommendations, the committee also opted to have New Hampshire and Nevada jointly vote second, a week after South Carolina, followed by Georgia and Michigan, two critical battleground states that would round out the top five in subsequent weeks.

    All the proposed contests would likely be held in February 2024.

    That’s a change from the current calendar, with Iowa holding the first-in-the-nation caucuses since 1972, followed by New Hampshire’s first-in-the-nation primary since 1920.

    Nevada and South Carolina have gone next since the 2008 presidential election, when Democrats last did a major overhaul of their primary calendar.

    The move will still have to be approved by the full DNC in a vote likely early next year, but it will almost certainly follow the rule-making committee’s lead.

    The revamped schedule could largely be moot for 2024 if Biden opts to seek a second term, but may remake Democratic presidential cycles in 2028 and beyond.

    The president has said for months that he intends to run again, and White House aides have begun making staffing discussions for his likely reelection campaign, even though no final decision has been made.

    Biden wrote in a letter to rules committee members on Thursday that the party should scrap “restrictive” caucuses altogether because their rules on in-person participation can sometimes exclude working-class and other voters.

    He told also told party leaders privately that he’d like to see South Carolina go first to better ensure that voters of color aren’t marginalized as Democrats choose a presidential nominee.

    Four of the five states now poised to start the party’s primary are presidential battlegrounds, meaning the eventual Democratic winner would be able to lay groundwork in important general election locales.

    That’s especially true for Michigan and Georgia, which both voted for Donald Trump in 2016 before flipping to Biden in 2020. The exception is South Carolina, which hasn’t gone Democratic in a presidential race since 1976.

    The first five voting states would be positioned to cast ballots before Super Tuesday, the day when much of the rest of the country holds primaries. That gives the early states outsize influence since White House hopefuls struggling to raise money or gain political traction often drop out before visiting much of the rest of the country.

    Scott Brennan, a rules committee member from Iowa, said “small, rural states” like his “must have a voice in the presidential nominating process.”

    “Democrats cannot forget about entire groups of voters in the heart of the Midwest without doing significant damage to the party in newer generations,” Brennan said.

    The Republican National Committee has already decided to keep Iowa’s caucus as the first contest in its 2024 presidential primary, ensuring that GOP White House hopefuls — which include Trump — have continued to frequently campaign there.

    House Majority Whip Jim Clyburn, South Carolina’s lone congressional Democrat and one of Biden’s top supporters in Congress, said the president called him Thursday to inform him of his push to move his state up.

    “I didn’t ask to be first,” Clyburn said. “It was his idea to be first.”

    Clyburn’s endorsement of Biden in 2020 boosted the candidate’s flagging presidential campaign just ahead of South Carolina’s primary, which he won big. That helped Biden shake off early losses in Iowa, New Hampshire and Nevada and eventually take the White House.

    “He knows what South Carolina did for him, and he’s demonstrated that time and time again, by giving respect to South Carolina,” Clyburn said.

    Still, the vote by the rules committee has faced serious pushback, with some states vowing to ignore the changes altogether. That’s despite the panel approving language saying states could lose all of their delegates to the party’s national convention if they attempt to violate new rules.

    Iowa and New Hampshire have said laws in their states mandate them going before others, and they intend to abide by those, not DNC decrees.

    Nevada, with its heavily Hispanic population, has balked at sharing the second-place slot with New Hampshire, a state 2,500 miles away.

    Nevada committee member Artie Blanco’s voice cracked as she argued against the change.

    “If we want to build a strong relationship with Latinos,” Blanco said, “then Nevada must stand alone on a date and not have to share that date.”

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  • U.S. adds 263,000 jobs in November and wages rise sharply — far too much for the Fed’s liking

    U.S. adds 263,000 jobs in November and wages rise sharply — far too much for the Fed’s liking

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    The numbers: The U.S. created a robust 263,000 new jobs in November, a historically strong pace of hiring that’s good for workers but that also threatens to prolong a bout of high U.S. inflation.

    The continued rapid gains in hiring have become a big source of angst at the Federal Reserve. Senior central bank officials worry that wage growth stemming from a tight labor market is adding upward pressure to already high U.S. inflation.

    The Fed is expected to keep raising interest rates — and pushing the economy closer to recession — until hiring slows, labor shortages ease and wage growth drops off.

    U.S. stocks fell in premarket trades and bond yields rose after the report. Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000.

    The U.S. economy created 263,000 new jobs in November — far more than Wall Street had expected.


    Justin Sullivan/Getty Images

    The unemployment rate was unchanged at 3.7%, the government said Friday, remaining close to a half-century low.

    Hourly pay, meanwhile, rose by a sharp 0.6% last month to an average of $32.82. That’s the biggest advance in 13 months and was far stronger than Wall Street expected.

    The increase in wages over the past year climbed to 5.1%, from 4.9% in the prior month. Wages are still rising much faster than they were before the pandemic, when they rose about 2% to 3% a year.

    The demand for labor is still strong,” said chief economist Steve Blitz of TS Lombard. “It’s still putting upward pressure on wages.”

    The Fed has embarked on a series of increases in U.S. interest rates to try to slow the economy just enough to tame inflation without tipping it into recession.

    The bank is trying to bring inflation back down to prepandemic levels of 2% from the current rate of 6%, based on the PCE price index.

    “The level of [hiring] is not conducive to getting the base inflation rate back to 2%,” Blitz said.

    The tough medicine, senior Fed officials figure, is likely to lift the unemployment rate to as high as 5% by 2023. Some Wall Street analysts believe the jobless rate will go even higher if a recession takes hold, as many are forecasting.

    Higher borrowing costs slow growth by depressing consumer spending and business investment, the two key pillars of the economy.

    Another potential pressure valve for the economy is also not offering any relief. The share of working-age people in the labor force — known as the labor-force participation rate — fell a tick to 62.1%, marking the third drop in a row.

    The lack of people looking for work is another big factor contributing to the labor shortage.

    Key details: The increase in employment last month was concentrated in hotels, restaurants and healthcare businesses. Americans have gone back to seeing their doctors and are spending more on travel and entertainment.

    Hiring also rose in construction and manufacturing, two areas of the economy that are under more duress, while government employment increased by 42,000.

    There were some signs of labor-market softness in the report. Retail employment shrank for the third month in a row, and warehouse and transportation jobs also declined.

    Hiring at professional businesses, a leader in employment, rose by a meager 6,000. That’s the smallest increase since April 2021.

    Hiring in October and September were little changed after government revisions. The economy added 284,000 jobs in October and 269,000 in September.

    Big picture: The economy is slowing, but the labor force is still an oasis of strength.

    For the Fed, it’s too much of a good thing. The central bank wants the demand and supply of labor to become more balanced to ease the pressure on wages.

    The ongoing labor shortage, however, might be a saving grace for the economy. Many businesses have told the Fed they plan to hold onto more workers than usual even if the economy slows, because it’s been so hard to hire people in the first place.

    If that’s the case, the economy might escape a recession altogether or only suffer a short and shallow downturn, some economists say.

    Looking ahead: “Job creation continues to top expectations, holding the unemployment rate near half-century lows,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

    “The Fed may be closing in on a point that the pace of rate hikes could be stepped down, but the combination of tight labor markets and stubbornly elevated inflation leaves policymakers with a clear directive: keep tightening.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.10%

    and S&P 500
    SPX,
    -0.12%

    were set to decline sharply in Friday trades.

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  • Appeals court ends special-master review of Trump documents, in win for Justice Department

    Appeals court ends special-master review of Trump documents, in win for Justice Department

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    WASHINGTON — A federal appeals court on Thursday ended an independent review of documents seized from former President Donald Trump’s Florida estate, removing a hurdle the Justice Department said had delayed its criminal investigation into the retention of top-secret government information.

    The decision by the three-judge panel represents a significant win for federal prosecutors, clearing the way for them to use as part of their investigation the entire tranche of documents seized during an Aug. 8 FBI search of Mar-a-Lag o. It also amounts to a sharp repudiation of arguments by Trump’s lawyers, who for months had said that the former president was entitled to have a so-called “special master” conduct a neutral review of the thousands of documents taken from the property.

    The ruling from the Atlanta-based U.S. Court of Appeals for the 11th Circuit had been expected given the skeptical questions the judges directed at a Trump lawyer during arguments last week, and because two of the three judges on the panel had already ruled in favor of the Justice Department in an earlier dispute over the special master.

    The special master litigation has played out alongside an ongoing investigation examining the potential criminal mishandling of national defense information as well as efforts to possibly obstruct that probe. Attorney General Merrick Garland last month appointed Jack Smith, a veteran public corruption prosecutor, to serve as special counsel overseeing that investigation.

    It remains unclear how much longer the investigation will last, or who, if anyone, might be charged. But the probe has shown signs of intensifying, with investigators questioning multiple Trump associates about the documents and granting one key ally immunity to ensure his testimony before a federal grand jury. And the appeals court decision is likely to speed the investigation along by cutting short the outside review of the records.

    The conflict over the special master began just weeks after the FBI’s search, when Trump sued in federal court in Florida seeking the appointment of an independent arbiter to review the roughly 13,000 documents the Justice Department says were taken from the home.

    A federal judge, Aileen Cannon, granted the Trump team’s request, naming veteran Brooklyn judge Raymond Dearie to serve as special master and tasking him with reviewing the seized records and filtering out from the criminal investigation any documents that might be covered by claims of executive privilege or attorney-client privilege.

    She also barred the Justice Department from using in its criminal investigation any of the seized records, including the roughly 100 with classification markings, until Dearie completed his work.

    The Justice Department objected to the appointment, saying it was an unnecessary hindrance to its criminal investigation and saying Trump had no credible basis to invoke either attorney-client privilege or executive privilege to shield the records from investigators.

    It sought, as a first step, to regain access to the classified documents. A federal appeals panel sided with prosecutors in September, permitting the Justice Department to resume its review of the documents with classification markings.

    The department also pressed for access to the much larger trove of unclassified documents, saying such records could contain important evidence for their investigation.

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  • Senate passes landmark bill protecting same-sex, interracial marriages

    Senate passes landmark bill protecting same-sex, interracial marriages

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    WASHINGTON — The Senate passed bipartisan legislation Tuesday to protect same-sex marriages, an extraordinary sign of shifting national politics on the issue and a measure of relief for the hundreds of thousands of same-sex couples who have married since the Supreme Court’s 2015 decision that legalized gay marriage nationwide.

    The bill, which would ensure that same-sex and interracial marriages are enshrined in federal law, was approved 61-36 on Tuesday, including support from 12 Republicans. Senate Majority Leader Chuck Schumer said the legislation was “a long time coming” and part of America’s “difficult but inexorable march towards greater equality.”

    Democrats are moving quickly, while the party still holds the majority in both chambers of Congress, to send the bill to the House and then — they hope — to President Joe Biden’s desk. The bill has gained steady momentum since the Supreme Court’s June decision that overturned the federal right to an abortion, a ruling that included a concurring opinion from Justice Clarence Thomas that suggested same-sex marriage could also come under threat. Bipartisan Senate negotiations got a kick-start this summer when 47 Republicans unexpectedly voted for a House bill and gave supporters new optimism.

    The legislation would not force any state to allow same-sex couples to marry. But it would require states to recognize all marriages that were legal where they were performed, and protect current same-sex unions, if the court’s 2015 Obergefell v. Hodges decision were to be overturned.

    That’s a stunning bipartisan endorsement, and evidence of societal change, after years of bitter divisiveness on the issue.

    The bill would also protect interracial marriages by requiring states to recognize legal marriages regardless of “sex, race, ethnicity or national origin.”

    A new law protecting same-sex marriages would be a major victory for Democrats as they relinquish their two years of consolidated power in Washington, and a massive win for advocates who have been pushing for decades for federal legislation. It comes as the LGBTQ community has faced violent attacks, such as the shooting last weekend at a gay nightclub in Colorado that killed five people and injured at least 17.

    “Our community really needs a win, we have been through a lot,” said Kelley Robinson, the incoming president of Human Rights Campaign, which advocates on LGBTQ issues. “As a queer person who is married, I feel a sense of relief right now. I know my family is safe.”

    The vote was personal for many senators, too. Schumer said on Tuesday that he was wearing the tie he wore at his daughter’s wedding, “one of the happiest moments of my life.” He also recalled the “harrowing conversation” he had with his daughter and her wife in September 2020 when they heard that liberal Justice Ruth Bader Ginsburg had passed away. “Could our right to marry be undone?” they asked at the time.

    With conservative Justice Amy Coney Barrett replacing Ginsburg, the court has now overturned Roe v. Wade and the federal right to an abortion, stoking fears about Obergefell and other rights protected by the court. But sentiment has shifted on same-sex marriage, with more than two-thirds of the public now in support.

    Still, Schumer said it was notable that the Senate was even having the debate after years of Republican opposition. “A decade ago, it would have strained all of our imaginations to envision both sides talking about protecting the rights of same-sex married couples,” he said.

    Passage came after the Senate rejected three Republican amendments to protect the rights of religious institutions and others to still oppose such marriages. Supporters of the legislation argued those amendments were unnecessary because the bill had already been amended to clarify that it does not affect rights of private individuals or businesses that are currently enshrined in law. The bill would also make clear that a marriage is between two people, an effort to ward off some far-right criticism that the legislation could endorse polygamy.

    Republican Sen. Thom Tillis of North Carolina, who has been lobbying his fellow GOP senators to support the legislation for months, pointed to the number of religious groups supporting the bill, including the Church of Jesus Christ of Latter-day Saints. Some of those groups were part of negotiations on the bipartisan amendment.

    “They see this as a step forward for religious freedom,” Tillis says.

    The nearly 17-million member, Utah-based faith said in a statement this month that church doctrine would continue to consider same-sex relationships to be against God’s commandments. Yet it said it would support rights for same-sex couples as long as they didn’t infringe upon religious groups’ right to believe as they choose.

    Most Republicans still oppose the legislation, saying it is unnecessary and citing concerns about religious liberty. And some conservative groups stepped up opposition in recent weeks, lobbying Republican supporters to switch their votes.

    “As I and others have argued for years, marriage is the exclusive, lifelong, conjugal union between one man and one woman, and any departure from that design hurts the indispensable goal of having every child raised in a stable home by the mom and dad who conceived him,” the Heritage Foundation’s Roger Severino, vice president of domestic policy, wrote in a recent blog post arguing against the bill.

    In an effort to win the 10 Republican votes necessary to overcome a filibuster in the 50-50 Senate, Democrats delayed consideration until after the midterm elections, hoping that would relieve political pressure on GOP senators who might be wavering.

    Eventual support from 12 Republicans gave Democrats the votes they needed.

    Along with Tillis, Maine Sen. Susan Collins and Ohio Sen. Rob Portman supported the bill early on and have lobbied their GOP colleagues to support it. Also voting for the legislation in two test votes ahead of passage were Republican Sens. Richard Burr of North Carolina, Todd Young of Indiana, Shelley Moore Capito of West Virginia, Mitt Romney of Utah, Joni Ernst of Iowa, Roy Blunt of Missouri, Cynthia Lummis of Wyoming and Lisa Murkowski and Dan Sullivan of Alaska.

    Lummis, one of the more conservative members of the Senate, spoke ahead of the final vote about her “fairly brutal self soul searching” before supporting the bill. She said that she accepts her church’s beliefs that a marriage is between a man and a woman, but noted that the country was founded on the separation of church and state.

    “We do well by taking this step, not embracing or validating each other’s devoutly held views, but by the simple act of tolerating them,” Lummis said.

    The growing GOP support for the issue is a sharp contrast from even a decade ago, when many Republicans vocally opposed same-sex marriages.

    Wisconsin Sen. Tammy Baldwin, a Democrat who is the first openly gay senator and has been working on gay rights issues for almost four decades, said this month that the newfound openness from many Republicans on the subject reminds her “of the arc of the LBGTQ movement to begin with, in the early days when people weren’t out and people knew gay people by myths and stereotypes.”

    Baldwin, the lead Senate negotiator on the legislation, said that as more individuals and families have become visible, hearts and minds have changed.

    “And slowly laws have followed,” she said. “It is history.”

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  • A Fed rate-hike cycle never hit stocks this hard before. Here’s what’s different this time.

    A Fed rate-hike cycle never hit stocks this hard before. Here’s what’s different this time.

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    Anyone watching the market knows stocks have been hammered since the Federal Reserve began in March what has turned into an aggressive series of interest rate hikes, but strategists at Deutsche Bank say they might be surprised to learn that those rate hikes probably aren’t the culprit.

    The S&P 500
    SPX,
    -0.16%

    has seen a return of negative 16.1%, at its current level, since the rate increases began. That’s the worst performance for an extended cycle of rate hikes since at least the late 1950s, according to a team led by Chief Strategist Binky Chadha in a Monday note (see chart below).


    Deutsche Bank

    The chart highlights what may be a surprise to many investors: rate hike cycles, historically, haven’t been a negative for stocks. Of the 11 previous hiking cycles dating back to 1958-59, only two (1994-95 and 1973), produced negative returns. On average, rate-hike cycles have produced a 9% return for the S&P 500.

    Any misconception that rate-hike cycles have tended to be negative for stocks was probably reinforced by the market’s ugly 2022 performance, but a closer look at the tape shows why that conclusion doesn’t hold up, Chadha and his team wrote:

    In contrast to most historical rate hiking cycles, which saw a positive correlation between Fed rates and equities (median +61%; 8 of 10 positive), this cycle has seen it run strongly negative (-68%). This negative correlation naturally suggests higher rates lowered equities, reinforcing the widely held belief. A closer look though reveals that the S&P 500 has been at current levels 4 times over the last 5 months, while rates have been successively and notably higher each time, with the 2y yield up 175bps (basis points) from the first time. This contradicts the view that higher rates drove the S&P 500 selloff, or at least show that the last 175bps higher in rates have not lowered the S&P 500.

    So if sharp interest rate rises aren’t the driver, what is behind the selloff?

    The Deutsche Bank analysts suspect it’s more about volatility in the bond market, which has seen a sustained rise since the Fed began raising rates. That’s unusual, they said, with rates volatility typically spiking in the run-up to and around the initial Fed hike and around changes in the speed of hikes during the cycle, then quickly dissipating.

    Treasury-yield volatility, as measured by the ICE BofA MOVE Index, hasn’t tended to rise in a sustained manner during rate-hike cycles, they wrote, with the one exception being the 1973 hiking cycle, which was the only one that also saw a significant stock-market selloff.

    Indeed, when rates and rate volatility have diverged in the current cycle, the stock market has inversely tracked the move in volatility rather than the level of yields, the analysts noted. For examples, they pointed to June, when volatility rose and equities fell sharply while yields rose modestly; August, when yield volatility fell even as yields rose; and the recent stretch, which has seen equities rally alongside a decline in yield volatility while yields have been rangebound (see chart below).


    Deutsche Bank

    “The selloff in equities during this rate hiking cycle has been driven, in our reading more by rising rates vol than it has by the higher level of rates, in what is a strong parallel with the only other rate hiking cycle (1973) that previously saw equities fall significantly,” the strategists wrote. “Vol” is market shorthand for volatility.

    So the key question for investors is whether yield volatility will fall. Chadha and his team think it probably will, for two reasons: a slower and more “deliberate” speed of Fed hikes ahead; and the fact that rates have already seen a significant rise, pushing them closer to where they will peak, even if they will get there only gradually.

    Volatility across asset classes tends to be highly correlated, they said, and paced by a common driver, which in this case has been the result of frequent changes in Fed guidance and the speed of rate hikes.

    That means a decline in yield volatility should see a decline in stock-market volatility, with systematic strategists set to raise equity exposure from extremely low levels and indicating the market rally has further to go, they said.

    Stocks were slightly lower in lackluster trade Tuesday, with the S&P 500 down 0.2%, while the Dow Jones Industrial Average
    DJIA,
    +0.01%

    was off around 25 points, or 0.1%.

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