The daily business briefing: January 6, 2023

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1. Samsung says slowing demand hurt last quarter profits
2. FTC proposes banning noncompete clauses
3. Europe inflation falls to lowest since August
4. Stocks little changed ahead of December jobs report
5. Cryptocurrency firm Genesis cuts 30 percent of staff

published 6 January 2023

1. Samsung says slowing demand hurt last quarter profits

Samsung Electronics said Friday that it expected to report that its profits in the last three months fell 69 percent to an eight-year low due to a weakening global economy that has hurt demand for electronic devices. Samsung said a fall in demand for its memory chips, as device makers cut their stocks, also hurt. Analysts said the South Korean tech giant's profits would probably shrink again in the current quarter. Samsung, the world's largest memory chip, smartphone, and TV maker, is the latest major technology company to report business troubles stemming from global economic weakness. Its announcement fueled concerns about looming quarterly results from other big technology companies.

The Federal Trade Commission on Thursday unveiled a proposal to ban noncompete clauses. If the change is adopted, companies will no longer be able to impose contracts barring workers from leaving and taking jobs with rival companies, or starting their own competing businesses. The FTC said noncompete clauses are exploitative, and counter to the spirit of a 109-year-old law against unfair competition, according to The Wall Street Journal. "Noncompetes are basically locking up workers, which means they are not able to match with the best jobs," FTC Chair Lina Khan said. The move would be expected to face legal challenges from businesses that argue these clauses help them protect confidential corporate information, among other legitimate benefits.

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Inflation rose 9.2 percent in December in the 19 countries that were using the euro currency, compared to a year earlier, the European Union statistics agency Eurostat said Friday. It was the slowest pace since August, and down from 10.1 percent in November and a peak at a record 10.6 percent in October, although the cost of living remained high. The eurozone now has another member. Croatia joined on Jan. 1. European households have faced higher energy costs since Russia invaded Ukraine in February, upsetting oil and natural gas markets and leading Moscow to squeeze supplies. The latest inflation figures added to recent signs that the region's energy crisis was easing, as natural gas prices retreated from all-time highs.

U.S. stock futures were mixed early Friday as investors awaited the December jobs report. The Dow Jones Industrial Average and the S&P 500 were up 0.1 percent at 6:45 a.m. ET. The Nasdaq was down 0.2 percent. Economists polled by Dow Jones expect the employment report to show that the U.S. added 200,000 jobs last month, which would mark a slowdown from November. "A better-than-expected report pointing to a resilient labor market could mean the Federal Reserve has further to go in its efforts to tame inflation," according to CNBC. The Dow and the S&P 500 fell 1.0 percent and 1.2 percent, respectively, after a stronger-than-expected ADP private payrolls report fueled fears of more aggressive Fed rate hikes.

Crypto lender Genesis said Thursday it was laying off 30 percent of its workers. The Wall Street Journal, which first reported the news, said the company also was considering filing for bankruptcy protection. The layoffs left the company with 145 employees. The cuts came two months after Genesis froze withdrawals. A Genesis spokesperson told the Journal the company and its advisers were seeking ways "to preserve client assets and move the business forward." Genesis is the latest in a parade of crypto firms to teeter near collapse. The company suffered big losses from loans to now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital, both of which filed for bankruptcy last year.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.