| Here's your daily business briefing. - The U.S. economy added 275,000 jobs in February, but unemployment ticks higher.
- TSMC could get $5B for its semiconductor project in Arizona.
- TikTok could be forced to find an American owner or face a nationwide shutdown.
Thank you for reading. Feedback/comments are welcomed! Stjepan
p/stjepan-kalinic | |
| 1 | | The U.S. economy added 275,000 jobs, surpassing the non-farm payroll (NFP) expectations of 198,000 jobs gained. The unemployment rate rose to 3.9%, signaling a complex labor market scenario. 
More: - The Labor Department's report highlighted the third consecutive month of gains exceeding 200,000 and the 38th consecutive month of growth.
- Despite the positive job numbers, the unemployment rate rose to 3.9%, the highest in two years, driven by people losing or leaving jobs and those entering the labor force to seek employment.
- A broader measure of labor market slack, including part-time workers seeking full-time jobs, increased to 7.3%.
- The labor force participation rate for prime working-age individuals (25 to 54) reached 83.5%, while participation among those over 55 remained below pre-pandemic levels.
- Average hourly earnings rose by 4.3% over the year, although wage growth has slowed, potentially impacting the labor force's willingness to seek employment.
|     | |
| 2 | | Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to secure over $5B in federal grants from the U.S. government for its chip-making plant in Arizona. While the award is not finalized, TSMC plans to invest ~$40B billion in its Arizona facility, making it one of the largest foreign investments in U.S. history. More: - The Biden administration aims to revitalize American semiconductor manufacturing through the U.S. CHIPS Act, with TSMC, Intel, Micron, and Samsung expected to receive multi-billion dollar grants.
- The act passed in 2022 set aside $52.7B in funding, including $39B in subsidies for semiconductor production and $11B for research & development.
- TSMC, the world's leading contract chipmaker, is engaged in ongoing discussions with the U.S. Commerce Department on incentive funding. Most recently, the company delayed the second factory in Arizona, now expecting it to be operational in 2027 or 2028.
| | | |
| 3 | | A congressional committee has voted unanimously to advance a bill to the House that could effectively ban TikTok in the U.S. by forcing its Chinese parent company, ByteDance, to sell the app to a U.S. owner within six months or shut it down. This bipartisan bill, driven by concerns about national security risks associated with TikTok's Chinese ownership, poses a significant threat to the popular app used by over 170 million Americans. Why it Matters: The bill is crucial as it represents a serious attempt by U.S. lawmakers to address the alleged national security risks posed by TikTok, advancing a more targeted legislative effort than previous attempts. TikTok's attempts to mobilize users against the bill backfired, reinforcing lawmakers' resolve and highlighting the app's potential influence in shaping public opinion and user behavior.
Biden and Trump's Perspectives: President Biden expressed his intention to sign the bill if it passes through Congress, emphasizing national security concerns over TikTok's Chinese ownership. Former President Trump, who initially sought to ban TikTok during his term, has criticized the new measure, suggesting that a TikTok ban would benefit competitors like Facebook, which he described as an "enemy of the people." | | | |
| 4 | | The board of directors at 3M has approved the spinoff of the company's healthcare business, with the official separation scheduled for April 1. The new company, Solventum Corp., will start trading on the New York Stock Exchange under the ticker symbol SOLV. More: - The spinoff, announced in 2022, will separate 3M's faster-growing healthcare business, including wound care, healthcare information technology, and biopharma filtration.
- Solventum is expected to have had $8.2B in revenue in 2023 and aims to address a global market estimated at around $93B.
- 3M shareholders on record on March 18 will receive one share of Solventum for every four shares of 3M, with 3M retaining a 20% stake in the new company after the distribution.
- Bryan Hanson, the former head of musculoskeletal company Zimmer Biomet Holdings, will be Solventum's CEO, and Wayde McMillan, the former executive of medical device company INsulet, will become the CFO.
| | | |
| 5 | | Novo Nordisk's weight-loss drug Wegovy has received FDA approval to be prescribed for adults with obesity, lowering the risk of heart attack, stroke, and death from cardiovascular causes. This expanded approval may enhance insurance coverage for the drug despite its high cost and occasional lack of coverage. More: - The FDA approved Wegovy for use in reducing the risk of serious cardiovascular complications in adults with obesity and heart disease, marking the first-ever expanded approval for this purpose. Novo Nordisk anticipates a similar approval for Wegovy in the European Union later this year.
- The approval may lead to broader insurance coverage for Wegovy, addressing a significant barrier to access due to the drug's high cost, with similar treatments for obesity potentially benefitting as well.
- A landmark late-stage trial on Wegovy demonstrated a 20% reduction in the overall risk of heart attack, stroke, and death from cardiovascular causes when used weekly, highlighting the health benefits of weight loss drugs beyond managing weight and blood sugar.
- The approval is seen as a major advance for public health, particularly for adults with obesity and heart disease who are at increased risk of cardiovascular complications. The company is working to increase manufacturing capacity to meet the anticipated demand.
| | | |
| 6 | | Petrobras' shares closed 10.5% lower after reporting weaker-than-expected earnings and shareholder payouts, indicating potential challenges for the company's hefty dividends. The board approved $0.22 per share, or $2.9B in dividends for Q4, falling short of analysts' expectations. More: - Petrobras posted a 6.3% YoY decline in net recurring profit to $8.3B, missing estimates, along with an 8.5% drop in adjusted EBITDA to $13.5B.
- The board approved $2.9B in dividends for Q4, disappointing analysts who expected $3.7B in dividends and at least $3B in special dividends.
- Petrobras CEO Jean Paul Prates highlighted a more cautious approach to dividends as the company plans to allocate more funds to wind, solar, and biofuel projects, leading to concerns about reduced payouts.
- Brazil President Luiz Inacio Lula da Silva criticized Petrobras as a cash cow for private investors and urged more investment in refining and the energy transition.
- The lack of extraordinary dividends for the full year triggered downgrades from analysts, heightening risk perception at Petrobras and raising questions about the company's capital allocation decisions.
| | | |
| 7 | | Quick Hits: - Sales teams at MongoDB, Warmly, and User Evidence are seeing 56% more pipeline from this simple framework.*
- Rivian soared 17.25% after the EV manufacturer reported 68,000 reservations for its upcoming model R2. An electric SUV will be the firm's third model when it arrives in early 2026, starting at an estimated MSRP of $45,000.
- German luxury fashion brand Hugo Boss closed the week 12.2% lower after issuing a warning about a growth slowdown in 2024. The firm is expecting growth between 3%-6%, well below the consensus of 9%.
- Netflix continues to expand into live sports, announcing exclusive coverage of the boxing match between former undisputed world champion Mike Tyson and internet celebrity Jake Paul.
*This is sponsored content. | | | |
| Upcoming Events | | MAR
27 | | Discover how generative AI can speed up your enterprise, expand your business model, and improve your value proposition. Network with hundreds of AI leaders.* | | | | | | * This is a sponsored event | | | |
 | Freelance Writer | | Stjepan Kalinic is an analyst and writer with a background in institutional investment research. He's passionate about reading, playing music, lifting weights, and practicing martial sports. He values interesting books above everything else, and you can send recommendations through LinkedIn. | | This newsletter was edited by Vibha Chapparike | |
| |
| |
