Evelyn Reynolds

The shift is indicative of the importance of new artificial intelligence technology to Silicon Valley and Wall Street investors.For more than a decade, Apple was the stock market’s undisputed king. It first overtook Exxon Mobil as the world’s most valuable public company in 2011 and held the title almost without interruption.But a transfer of power has begun.On Friday, Microsoft surpassed Apple, claiming the crown after its market value surged by more than $1 trillion over the past year. Microsoft finished the day at $2.89 trillion, higher than Apple’s $2.87 trillion, according to Bloomberg.The change is part of a reordering of the stock market that was set in motion by the advent of generative artificial intelligence. The technology, which can answer questions, create images and write code, has been heralded for its potential to disrupt businesses and create trillions of dollars in economic value.When Apple replaced Exxon, it ushered in an era of tech supremacy. The values of Apple, Amazon, Facebook, Microsoft and Google dwarfed former market leaders like Walmart, JPMorgan Chase and General Motors.The tech industry still dominates the top of the list, but the companies with the most momentum have put generative A.I. at the forefront of their future business plans. The combined value of Microsoft, Nvidia and Alphabet, Google’s parent company, increased by $2.5 trillion last year. Their performances outshined Apple, which posted a smaller share price increase in 2023.“It simply comes down to gen A.I.,” said Brad Reback, an analyst at the investment bank Stifel. Generative A.I. will have an impact on all of Microsoft’s businesses, including its largest, he said, while “Apple doesn’t have much of an A.I. story yet.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

Even before a snowstorm brought Des Moines to a near standstill on Friday, the city felt decidedly more subdued than it usually does around the Iowa caucuses: quiet restaurants, empty streets, bartenders with little to do.The numbers confirm it: The 2024 caucuses are expected to bring less than 40 percent of the direct economic impact to the capital that the 2020 contest provided — an estimated $4.2 million, down from $11.3 million four years ago. Direct economic impact measures what visitors do, like sleeping, driving, eating and drinking.It is a striking decline that reflects, among other things, diminished media engagement in a presidential race that is less competitive than in past years, when the state has been inundated by presidential hopefuls, their campaigns and teams of journalists in hot pursuit.“Media is way down,” said Greg Edwards, the chief executive of the Greater Des Moines Convention and Visitors Bureau, which provided the numbers. “The major networks aren’t sending their major anchors like they have in the past.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

The producer price index, a gauge of wholesale prices, fell 0.1% for the month and ended 2023 up 1% from a year ago, the Labor Department reported Friday.
Excluding food and energy, core PPI was flat against the estimate for a 0.2% increase. Excluding food, energy and trade services, PPI also was up 0.2%, in line with the estimate.

Wholesale prices unexpectedly declined in December, providing a positive signal for inflation, the Labor Department reported Friday.
The producer price index fell 0.1% for the month and ended 2023 up 1% from a year ago, the Labor Department reported Friday. Economists surveyed by Dow Jones had been expecting a monthly gain of 0.1%. The index had surged 6.4% in 2022.

Excluding food and energy, core PPI was flat against the estimate for a 0.2% increase. Excluding food, energy and trade services, PPI also was up 0.2%, in line with the estimate. For the full year, the final demand measure less food, energy and trade services rose 2.5% for all of 2023 after being up 4.7% in 2022.
The PPI release comes a day after less encouraging news from the Labor Department, which reported Thursday that the prices consumers pay for goods and services rose 0.3% in December and were up 3.4% on the year. That was higher than Wall Street expectations and still a good deal away from the Fed’s 2% inflation target.
However, PPI is generally considered a better leading index as it measures pipeline prices that companies get for intermediate goods and services.
Markets initially reacted positively to the PPI release but turned lower through morning trading.
“What inflation risks remain in the U.S. economy clearly cannot be sourced to any upward pressure in producers’ costs,” said Kurt Rankin, senior economist at PNC. “Whether surveying from producers’ intermediate or final demand perspective, there is little to no pricing pressure headed into the U.S. economy from the supply side entering 2024.”

Prices for final demand goods declined 0.4% in December, the third straight month of decreases, according to the release. Diesel fuel prices tumbled 12.4%, even though gasoline increased 2.1%.
On the services side, which Fed officials have been following more closely, prices held at unchanged for the third straight month. Prices in fields associated with financial advice rose 3.3%, while margins for machinery and vehicle wholesaling dipped 5.5%.
PPI measures the prices that producers pay for goods and services, while CPI gauges what consumers pay in the marketplace. CPI also includes imports whereas PPI does not. PPI, however, covers a broader set of goods and services.
Markets are convinced that waning inflation signs will push the Fed to cut interest rates starting in March, even with inflation above target.
Traders in the fed funds futures market are pricing in about a 70% probability that the first-quarter percentage point cut will come at the March 19-20 meeting of the Federal Open Market Committee, according to the CME Group’s FedWatch tracker. From there, markets expect another five rate cuts, taking the benchmark fed funds rate down to a target range of 3.75%-4%.
However, various Fed officials in recent days have made statements that seem to counter the market’s aggressive view. Moreover, JPMorgan Chase CEO Jamie Dimon on Friday warned that heavy government deficit spending along with other factors could cause inflation to be stickier and rates to be higher than the market expects. More

The assembly line for South Fork begins miles away from the offshore site, at the State Pier in New London, Conn. The project — which is a joint venture between Eversource, a New England utility, and Orsted, a Danish company — has been a global operation. The biggest components, including turbine blades as long as […] More

For the period from October 2023 through December 2023, the budget deficit totaled just shy of $510 billion, following a shortfall of $129.4 billion in December alone.
The deficit has continued to pile up despite the Biden administration’s assurances that the Inflation Reduction Act, in addition to reducing prices, would shave “hundreds of billions” off the deficit.

US President Joe Biden, with Treasury Secretary Janet Yellen, speaks during a meeting with his cabinet at the White House in Washington, DC, on March 3, 2022.
Jim Watson | AFP | Getty Images

The U.S. government ran up another half a trillion dollars in red ink in the first quarter of its fiscal year, the Treasury Department reported Thursday.
For the period from October 2023 through December 2023, the budget deficit totaled just shy of $510 billion, following a shortfall of $129.4 billion in just December alone, which was 52% higher than a year ago. The jump in the deficit pushed total government debt past $34 trillion for the first time.

Compared to last year, which saw a final deficit of $1.7 trillion, 2024 is running even hotter.
In the first quarter of fiscal 2023, for example, the difference between spending and receipts totaled $421.4 billion. On an unadjusted basis, that’s an increase of $89 billion between fiscal 2024 and last year. Adjusted for calendar factors, the Treasury Department said the change between the two years is actually $97 billion. December’s shortfall was higher by more than $34 billion compared to the previous year, driven by higher Social Security payments and interest costs.
If the current pace continues, 2024 would end with a deficit of just more than $2 trillion.
The deficit has continued to pile up despite the Biden administration’s assurances that the Inflation Reduction Act, in addition to reducing prices, would shave “hundreds of billions” off the deficit.
While the rate of inflation has come down, Labor Department data Thursday showed the consumer price index increased another 0.3% in December, pushing the 12-month rate up to 3.4%, higher than the Wall Street consensus and above the Federal Reserve’s 2% goal.

With interest rates elevated as the Fed fights inflation, financing costs for the government in 2023 totaled nearly $660 billion. Debt as a percentage of gross domestic product rose to 120% in the third quarter of 2023.Don’t miss these stories from CNBC PRO: More

The consumer price index increased 0.3% in December and 3.4% from a year ago, compared with respective estimates of 0.2% and 3.2%
Excluding volatile food and energy prices, the so-called core CPI also rose 0.3% for the month and 3.9% from a year ago, compared with respective estimates of 0.3% and 3.8%.
Much of the increase came due to rising shelter costs. The category rose 0.5% for the month and accounted for more than half the core CPI increase.
Wages adjusted for inflation posted a 0.2% gain on the month, while rising a modest 0.8% from a year ago.

Prices that consumers pay for a variety of goods and services rose more than expected in December, according to a Labor Department measure Thursday that shows inflation still holding a grip on the U.S. economy.
The consumer price index increased 0.3% for the month, higher than the 0.2% estimate at a time when most economists and policymakers see inflationary pressures easing. On a 12-month basis, the CPI closed 2023 up 3.4%. Economists surveyed by Dow Jones had been looking for a year-over-year reading of 3.2%.

By comparison, the annual CPI gain in December 2022 was about 6.4%.

Excluding volatile food and energy prices, the so-called core CPI also rose 0.3% for the month and 3.9% from a year ago, compared with respective estimates of 0.3% and 3.8%. The year-over-year core reading was the lowest since May 2021.
Much of the increase came due to rising shelter costs. The category rose 0.5% for the month and accounted for more than half the core CPI increase. On annual basis, shelter costs increased 6.2%, or about two-thirds of the rise in inflation.

Fed officials largely expect shelter costs to decline through the year as renewed leases reflect lower rents.
Stock market futures were negative following the release while Treasury yields held slightly higher.

Food prices increased 0.2% in December, the same as in November. Egg prices surged 8.9% on the month, but were still down 23.8% annually. Energy posted a 0.4% gain after sliding 2.3% in November as gasoline rose 0.2%, but natural gas declined 0.4%. Airline fares increased 1% for the month.
In other key price indexes, motor vehicle insurance bounced 1.5% higher, medical care accelerated by 0.6% and used vehicle prices, a key contributor in the initial inflation surge, increased another 0.5% after being up 1.6% in November.
Wages adjusted for inflation posted a 0.2% gain on the month, while rising a modest 0.8% from a year ago, the Bureau of Labor Statistics said in a separate release.
Fed officials are paying particular attention to services prices as evidence for whether inflation is showing durable signs of getting back to the central bank’s 2% target.
Services less energy increased 0.4% for the month and 5.3% from a year ago.
The inflation readings cover the same month that the Federal Reserve held its key borrowing rate steady for the third straight meeting. Along with that decision, policymakers indicated that they could begin cutting rates this year so long as the inflation data continues to cooperate.
Despite the higher-than-expected inflation readings, futures traders continued to assign a strong possibility that the Fed would start cutting interest rates in March. The CME Group’s FedWatch gauge of futures pricing indicated about a 69% probability of a March reduction, slightly higher than where it stood Wednesday.
However, the probability also reflects a divide between the market and the Fed about the timing and extent of rate cuts in 2024. Markets expect six rate cuts this year; Fed projections point to just three.
“These are not bad numbers, but they do show that disinflation progress is still slow and unlikely to be a straight line down to 2%,” said Seema Shah, chief global strategist at Principal Asset Management. “Certainly, as long as shelter inflation remains stubbornly elevated, the Fed will keep pushing back at the idea of imminent rate cuts.”
In recent days several policymakers have avoided committing to easier monetary policy.
New York Fed President John Williams said Wednesday that inflation clearly has abated from its more than 40-year peak in mid-2022 and is making solid progress. But he gave no clues as to when he thinks rate cuts will be appropriate and insisted that “restrictive” policy is likely to stay in place for some time.
Other officials, such as Fed Governor Michelle Bowman and Dallas Fed President Lorie Logan, also expressed skepticism and said they wouldn’t hesitate to hike should inflation turn higher.
Those comments come against a resilient economic backdrop, with unemployment holding below 4% and consumers continuing to spend despite evidence of rising debt loads and contracting savings.
In other economic news Thursday, the Labor Department reported that initial jobless claims were little changed at 202,000, below the Dow Jones estimate for 210,000.
Don’t miss these stories from CNBC PRO: More

Maersk CEO Vincent Clerc said it was unclear whether Red Sea trade would resume in “days, weeks or months,” and that there could be “significant consequences” for global growth.
Maersk and other shipping giants are diverting vessels away from the Red Sea and around the south of Africa, adding to journey times and driving up freight rates.

Ongoing disruption to trade flows through the Red Sea could hit global economic growth, the head of one of the world’s largest container shipping firms said Thursday.
Maersk CEO Vincent Clerc said it remained unclear whether passage through the waterway would be re-established in “days, weeks or months,” in comments first provided to the Financial Times and confirmed to CNBC.

“It could potentially have quite significant consequences on global growth,” Clerc said.
The company announced Friday its vessels would be diverted from the Red Sea — which provides access to Egypt’s Suez Canal, the quickest route between Europe and Asia — for the “foreseeable future.”
Vessels are instead traveling around the southern coast of Africa, which can add between two to four weeks to a Europe-Asia voyage, Clerc previously told CNBC.

Arrows pointing outwards

Maersk further said this week that some inland transportations were facing delays due to a wave of strikes in Germany.
The seaborne diversions by Maersk and a host of other firms are due to a series of attacks on ships by Houthi militants from Yemen. The group’s leaders say they are responding to Israel’s bombing of Gaza.

Clashes have continued into the new year despite the launch of a U.S.-led military taskforce which has seen major powers send warships to the area.
Houthi militants this week launched the largest attack of the campaign so far.

Companies including Sweden’s Ikea have warned of potential product delays as a result, while freight rates are moving higher.
In a further sign of volatility in the region, an oil tanker was hijacked near the Gulf of Oman on Thursday.
The World Bank meanwhile said Tuesday that global growth is set to mark its worst half decade for 30 years.
Ayhan Kose, the group’s deputy chief economist, told CNBC that the world economy faced a host of risks, including escalations of conflict in the Middle East or the war in Ukraine.
— Additional reporting by Ruxandra Iordache More

The Biden administration has deployed various programs to try to increase access to clean energy. But systems that could help lower bills are still out of reach for many low-income households.Cindy Camp is one of many Americans facing rising utility costs. Ms. Camp, who lives in Baltimore with three family members, said her gas and electric bills kept “going up and up” — reaching as high as $900 a month. Her family has tried to use less hot water by doing fewer loads of laundry, and she now eats more fast food to save on grocery bills.Ms. Camp would like to save money on energy bills by transitioning to more energy-efficient appliances like a heat pump and solar panels. But she simply cannot afford it.“It’s a struggle for me to even maintain food,” Ms. Camp said.Power bills have been rising nationwide, and in Baltimore, electricity rates have increased almost 30 percent over the last decade, according to data from the Bureau of Labor Statistics. While clean energy systems and more efficient appliances could help low-income households mitigate some of those increases, many face barriers trying to gain access to those products.Low-income households have been slower to adopt clean energy because they often lack sufficient savings or have low credit scores, which can impede their ability to finance projects. Some have also found it difficult to navigate federal and state programs that would make installations more affordable, and many are renters who cannot make upgrades themselves.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More