Market Beats | US Private-sector Firms Slow Hiring; Chick Fil A Saves Staff 10k Hours with Robotics; Bridgewater China Fund Posts 35% Return; LA Wildfires Still Untamed as Thousands Flee; Micron Spends $7bn to Build Singapore Factory; BlackRock to Cut 1% of Workforce; BlackRock to Cut 1% of Workforce; US Consumer Debt Surprisingly Drops

—— US Private-sector Firms Slow Hiring; Chick Fil A Saves Staff 10k Hours with Robotics; Bridgewater China Fund Posts 35% Return; LA Wildfires Still Untamed as Thousands Flee; Micron Spends $7bn to Build Singapore Factory; BlackRock to Cut 1% of Workforce; BlackRock to Cut 1% of Workforce; US Consumer Debt Surprisingly Drops

1. US Private-sector Firms Slow Hiring

In December, the US saw a slowdown in private-sector employment and wage increases, reflecting a continued easing in labor demand.

Last month, job growth amounted to 122,000, marking the smallest gain in four months, as per data from the ADP Research Institute released on Wednesday. This was below the median forecast of 140,000 anticipated by economists surveyed by Bloomberg and followed a November increase of 146,000.

The employment gains were uneven across sectors; education and health services, construction, and leisure and hospitality saw the largest upticks, while manufacturing, natural resources and mining, as well as professional and business services experienced reductions.

The data from December indicates that the gradual weakening of the US labor market observed throughout 2024 persisted into the year’s end. This trend poses a challenge for Federal Reserve officials, who must weigh these labor market conditions against concerns of rising inflation when deciding the extent of interest rate cuts in 2025 and beyond.

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2. Chick Fil A Saves Staff 10k Hours with Robotics

Chick-fil-A Inc. has introduced robots to handle the arduous task of squeezing 2,000 lemons daily at each of its locations. This initiative takes place in a plant situated north of Los Angeles, where machines are now capable of processing up to 1.6 million pounds of lemons with minimal human intervention. The 190,000 square foot facility, which is larger than the typical Costco store, prepares and distributes bags of lemon juice to various Chick-fil-A stores. There, employees mix the juice with water and sugar to create the brand’s signature lemonade.

This automation has significantly alleviated the burden on store staff, allowing them to attend to customers more promptly. Previously, manually squeezing lemons required up to 10,000 hours of labor per day across all locations and led to numerous injuries. By automating this process, Chick-fil-A not only enhances workplace safety but also makes employment more attractive. This is particularly vital as the company plans to expand amidst a tight labor market in the fast-food industry.

The use of such automation in the lemonade production exemplifies how restaurants are increasingly turning to technology to boost operational efficiency and increase sales amid growing competition for both customers and workers.

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3. Bridgewater China Fund Posts 35% Return

Last year, Bridgewater Associates significantly expanded its presence in China, outperforming its international competitors due to the consistent performance of its multi-asset strategy, which drew in more affluent local investors amid market fluctuations.

Operating out of Shanghai, Bridgewater’s private fund management division saw its assets under management grow to over 55 billion yuan (approximately $7.5 billion) by the end of December, up from less than 40 billion yuan at the beginning of 2024—a roughly 40% increase. This growth was driven by both strong investment returns and new capital inflows, according to sources who preferred to remain anonymous due to the confidentiality of the information.

The firm’s onshore All Weather Plus fund notably achieved a return of over 35% for the year, significantly outperforming the average 11% return of local multi-asset funds, as reported by Shenzhen PaiPaiWang Investment & Management Co. This impressive performance highlights Bridgewater’s effective strategy and its appeal to investors in a challenging and volatile market environment.

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4. LA Wildfires Still Untamed as Thousands Flee

The Los Angeles area is currently enduring its most severe windstorm in over a decade, which has exacerbated several wildfires and forced thousands of residents to evacuate. The storm, marked by hurricane-force winds reaching up to 86 miles per hour, is expected to continue wreaking havoc for at least another two days.

These intense winds are driving flames across affluent neighborhoods and are complicating the efforts of over 1,400 firefighters battling multiple uncontrolled fires throughout the region. “We have a couple of days of this to go,” noted Peter Mullinax, a forecaster at the US Weather Prediction Center, indicating a prolonged period of high-risk conditions.

The largest of these fires, the Palisades Fire, has already consumed nearly 3,000 acres west of Santa Monica. Meanwhile, other fires have dramatically increased in size overnight, including one in Eaton Canyon near Altadena, which now covers about 2,227 acres.

Additional fires are also spreading northwest of Los Angeles and near Coachella in the desert southwards towards the Salton Sea, with all fires currently uncontained.

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5. Micron Spends $7bn to Build Singapore Factory

Micron Technology Inc. has announced a substantial $7 billion investment to expand its manufacturing operations in Singapore, driven by the rising demand for advanced memory chips from the burgeoning artificial intelligence sector.

The American company initiated construction of a new facility in Singapore on Wednesday, which is projected to begin operations by 2026. This plant will focus on packaging high-bandwidth memory chips, which are essential for AI data centers, and is expected to generate approximately 1,400 jobs.

This expansion is part of a broader strategy by Micron and other tech companies to diversify their manufacturing bases across Southeast Asia, moving some of their focus away from China and Taiwan. This shift is largely motivated by ongoing tensions between Washington and Beijing. In a similar vein, NXP Semiconductors NV and a company affiliated with Taiwan Semiconductor Manufacturing Co. are also investing in the region, with plans to construct a $7.8 billion wafer plant in Singapore.

Micron emphasized that the new facility would bolster Singapore’s semiconductor ecosystem and spur further innovation. Additionally, the company highlighted that its future growth plans in Singapore would support long-term production needs for NAND technology, which is critical for storing data in devices ranging from data-center computers to smartphones.

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6. BlackRock to Cut 1% of Workforce

BlackRock Inc. has announced that it will be reducing its workforce by approximately 1% as part of a strategic realignment. This decision comes after the company committed over $25 billion to acquisitions last year, aiming to enhance its capabilities in private-market assets and data analytics.

According to a memo sent to employees by BlackRock President Rob Kapito and Chief Operating Officer Rob Goldstein, this reduction translates to about 200 jobs given the firm’s current workforce of more than 21,000 people. The layoffs are described as a necessary adjustment to align the company’s resources more closely with its strategic objectives.

Despite these cuts, BlackRock has seen significant growth in its employee base, having added 3,750 staff members last year. The firm also anticipates adding another 2,000 employees by 2025 following its acquisitions of Global Infrastructure Partners, HPS Investment Partners, and the data firm Preqin.

The memo highlighted the difficulties of such decisions, stating, “This is never easy,” acknowledging the impact on the employees who will be leaving the company.

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7. US Consumer Debt Surprisingly Drops

In November, US consumer debt outstanding saw an unexpected decrease, marking the largest drop in over a year, with a significant reduction in credit card balances.

According to Federal Reserve data released on Wednesday, total consumer credit fell by $7.5 billion, a stark contrast to the $17.3 billion increase in October and contrary to economists’ expectations of a $10.5 billion rise as per a Bloomberg survey. This decrease in credit balances isn’t adjusted for inflation.

Specifically, credit card and other revolving debts saw a reduction of $13.7 billion, the most significant decline since the early months of the pandemic, following a substantial increase the previous month. However, non-revolving credit, which includes loans for vehicle purchases and school tuition, went up by $6.2 billion.

The data indicates that consumers are making concerted efforts to reduce their credit card debt, especially as borrowing rates remain high, well over 20%. This comes at a time when Americans have increasingly relied on credit to sustain spending amid ongoing inflation.

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