Bloomberg - Evening Briefing - This year’s wild cards

Wars in Europe and the Middle East, a real estate crisis in China and high inflation in the aftermath of a pandemic made for a tumultuous global economy in 2023. And yet the US blew past repeated recession calls to arrive on the threshold of a soft landing, a booming electric-vehicle industry and healthy dose of fiscal stimulus helped China stick close to its growth target and the world economy’s great new hope, India, took up the remaining slack. For 2024, the International Monetary Fund forecasts global growth of 2.9%, just a little below last year. But with those wars still raging and some 40 national elections coming, political developments are likely to play an outsized role in determining the course of the global economy. Still, there remain several economic stress points that could be critical as well. Here are five potential wild cards that may knock everything off course. —David E. Rovella 

Still, new data on Thursday indicates that, in America at least, everything remains on track. US companies ramped up hiring in December as wage gains continued to cool, consistent with an outlook for sustained economic growth and diminishing inflation. Private payrolls increased 164,000 last month, the most since August. The advance was led by services sectors including leisure and hospitality and education and health care, while manufacturing cut jobs for a fourth straight month. Separate data showed initial applications for unemployment insurance fell in the final week of 2023 to 202,000, the lowest level since October. Continuing claims also declined. 

WW International plunged the most in more than two months Thursday after Eli Lilly launched a digital health-care platform to deliver weight-loss drugs, posing a threat to a key area of growth for the wellness company. Shares in WW International, better known as WeightWatchers, tumbled 11% in the biggest one-day drop since Oct. 19. The decline follows a 11% slump Wednesday after Barclays gave WW its only sell-equivalent rating.

Apple was already the least-loved big tech stock on Wall Street. Growing concerns over iPhone sales have now triggered a second downgrade this week, cementing analysts’ cautious approach. Piper Sandler’s Harsh Kumar cut his Apple rating on Thursday, citing a weak macro environment in China that will dampen demand for iPhones. “We are concerned about handset inventories,” Kumar said in a note, lowering his recommendation for Apple to neutral from overweight. “Growth rates have peaked for unit sales,” he said.

Russia fired missiles provided by North Korea at targets in Ukraine as part of an aerial barrage in recent weeks, according to a recently declassified US intelligence assessment showing Moscow’s growing reliance on other countries to wage its war. The US believes Russia used the North Korean-provided missiles in at least two attacks on Dec. 30 and Jan. 2, White House spokesman John Kirby said Thursday.

Xi Jinping has spent the past decade trying to remake China’s military in a campaign to ostensibly root out corruption. However, a widening purge among the very people he’s elevated is showing his initiative to be far from complete. China has abruptly unseated at least 15 senior military figures—including the highest-level defense leader ousted since 2017—in the past six months. Their removal has been left unexplained by Beijing, but comes amid reports of graft probes roiling the upper echelons of the People’s Liberation Army. In the latest round on Friday, China’s top legislative body unseated nine military figures, including five linked to the secretive missile force Xi revamped in 2015

A year ago, electric vehicles had the auto world abuzz, and it seemed like an all-electric future was just around the corner. But today’s car buyers are having second thoughts, short-circuiting sales growth and causing plug-in models to pile up on dealer lots. Automakers, who are pouring more than $100 billion into developing EVs this decade, are now slashing prices, production and profit forecasts for the new green vehicles. Inventory of battery-powered models made by companies like Tesla has more than doubled over the past year, reaching a record high of a 114-day supply last month, compared with 71 days for the overall auto industry.

Speaking of Tesla, Elon Musk’s electric-vehicle maker is now second banana to China’s BYD while his social media platform X (formerly Twitter) continues to spiral downward. One might think the world’s richest man could take solace in the success of SpaceX, the rocket-launching enterprise awash with government contracts. Well that might soon be changing, and it could be thanks to the world’s second-richest man. When the Vulcan rocket lifts off for the first time from Florida in the coming days, multiple billionaires are sure to be watching. Built through a joint venture of Boeing and Lockheed, the new vehicle is poised to take on SpaceX and ferry satellites and cargo for the likes of the Pentagon, NASA and even Amazon. Vulcan is also helping fuel takeover offers for the company building it, the United Launch Alliance. Among them is a multibillion-dollar bid from Blue Origin, the ambitious space venture run by billionaire Jeff Bezos.

The Vulcan rocket on the United Launch Alliance  launchpad at the Cape Canaveral Station in Florida Photographer: Michelle Bruzzese/Bloomberg

• Islamic State claims responsibility for deadly Iran blasts.
• Trump hotels said to get millions in foreign cash while he was president.
• Wall Street’s ambitions in China are running into a big firewall.
• Bloomberg Opinion: America faces a possible new “axis of evil.”
• The Supreme Court may soon decide the course of the 2024 campaign.
• Citi alumni plan Bitcoin securities that don’t need SEC approval.
• Microsoft just put a new key on its keyboard—it’s the AI button.

It’s 72 degrees and sunny in Indian Creek Village, a town for the ultra rich on an island off the coast of Miami—a perfect winter morning in Florida’s Billionaire Bunker. Out of sight that day was Bezos, the newest addition to the insulated enclave. His purchases mean the island’s five wealthiest property owners alone control fortunes totaling some $191 billion, according to the Bloomberg Billionaires Index. The exclusive paradise is ground zero for the unprecedented migration of wealth to South Florida over the past five years. It’s also a showcase for the issues cropping up throughout the region as a result—soaring home prices, one of the country’s fastest inflation rates and a growing divide that separates the elite from the hoi polloi, who increasingly struggle to afford to live there.

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