Evening Briefing: Americas

After a few weeks in which Donald Trump’s musings about seizing control of territory belonging to US allies or renaming bodies of water after America appeared to entrance the media to the exclusion of much else, some of the less fanciful crises that dominated coverage before the holidays are returning to the fore. On Friday, Trump’s status as the only former president in US history to become a convicted felon was formally added to his other presidential firsts (such as being indicted four times and impeached twice). The Republican emerged from his virtual sentencing however with no penalty for 34 counts that could have netted someone else a few years in prison. A New York jury found Trump guilty last year of trying to manipulate the 2016 presidential campaign by paying pornographic film actor Stormy Daniels to stay silent about an alleged affair, and then illegally hiding the transaction. Looking forward, earlier storms over Trump’s inexperienced picks for major posts in his new administration are picking up again. Congress is preparing for hearings on the controversial nominations of cable television host Pete Hegseth for Secretary of Defense, former Representative Tulsi Gabbard (who has voiced sympathy for Russia’s stated reasons for invading Ukraine) for intelligence director and vaccine skeptic Robert F. Kennedy, Jr. to run Health and Human Services. —David E. Rovella

What You Need to Know Today

Since the pandemic recession, veteran economists and Wall Street prognosticators repeatedly predicted a second recession would strike thanks to the Federal Reserve’s rate hikes or President Joe Biden’s recovery policies or both. They were all famously wrong, as we now know. Indeed, with 10 days until he leaves office, it seems Biden may be having the last laugh (of sorts). After years of unemployment at or near half-century lows, the report for December came in with payrolls increasing by 256,000, the most since March and exceeding all but one forecast in a Bloomberg survey of economists. The unemployment rate actually fell to 4.1% while average hourly earnings rose. Chicago Fed President Austan Goolsbee said the strength in hiring wasn’t an indication of an overheating economy and that he still expects interest rates to be “a fair bit lower” over the next 12 to 18 months—as long as inflation doesn’t move higher.

But good news for American workers is often what Wall Street wants least. Particularly when investors and companies are more interested in lower interest rates. With Trump promising to slash regulations and regulators and Congressional Republicans looking to potentially renew his 2017 tax cuts, 2025 was supposed to be Wall Street’s year. Unfortunately, all those red hats on the floor of the New York Stock Exchange aren’t enough to sway markets. Barely two weeks into 2025, and hopes for an easy ride are in trouble. A choppy start to the year turned into an all-out selloff Friday when evidence of rising strength in the labor market was interpreted bearishly. Here’s your markets wrap.

Three days after the fire began raging in the Pacific Palisades of Los Angeles, only 8% has been contained and residents are still required to stay away from the wealthy enclave. But some are ignoring the mandatory evacuation orders, slipping past roadblocks and witnessing the devastation firsthand. The picture that’s emerging is grim: Entire neighborhoods leveled. Homes from cozy cottages to lavish beachfront villas reduced to ash. Schools gutted. And along the commercial corridor, buildings from the Gelson’s supermarket to the local Starbucks in ruins. And it’s not over yet. Here’s the latest on the fires.

Health insurance companies selling private Medicare Advantage plans in the US would see a greater increase in payments in 2026 than in the current year if a proposal released Friday is adopted by the incoming Trump administration. Medicare Advantage plan payments would rise 4.3% on average, the government said, bolstering revenue for healthcare giants UnitedHealth, Humana and CVS Health. Excluding expected changes in patient risk scores, which increase revenues, payments would increase by 2.2%. The positive update may be welcomed by the industry, and Trump could make the policy more favorable. If today’s proposal is adopted, it would result in an additional $21 billion in payments in 2026 over expected payments in 2025.

Hewlett Packard Enterprise won a deal worth more than $1 billion to provide Elon Musk’s X social network with servers optimized for artificial intelligence work. Competitors Dell and Super Micro also bid to sell the equipment. Demand for computing to run AI workloads has led to a boom for makers of high-powered servers like HPE. Musk’s companies including Tesla and xAI have emerged as major customers for the hardware. A supercomputer project being built by xAI in Memphis has used a mix of Dell and Super Micro servers.

Institutional investors would face new restrictions on buying housing units in New York state under a proposal that Governor Kathy Hochul aims to pass in the state budget due April 1. The proposal could make New York a model for increasing home ownership by eliminating incentives for hedge funds, private equity groups and other institutional investors who would have to wait 75 days before making offers on single and two-family homes under the Democratic governor’s plan. Large institutional investors—those who hold more than 100 single-family homes—own about 574,000 out of 15.1 million one-unit rental properties across the country, according to a 2022 report by the Urban Institute, a Washington-based think tank. They are seen as one of several main drivers of America’s ongoing housing crisis.