What’s Next for TikTok After Court Upholds U.S. Ban

Summary

WSJ What’s News: Episode Summary – "What’s Next for TikTok After Court Upholds U.S. Ban"
Release Date: December 6, 2024
Host: Tracy Hunt, The Wall Street Journal

---

1. U.S. Labor Market Rebounds

Tracy Hunt opens the episode by highlighting the recent resilience of the U.S. labor market. In November, the economy saw a robust addition of 227,000 jobs, aligning with expectations despite challenges posed by storms and a Boeing strike.

"The U.S. labor market bounced back last month as workers sidelined by storms got back on the job and thousands of striking Boeing employees returned to work." [00:18]

Justin Layhart, WSJ Economics Reporter, discusses the Federal Reserve's potential reactions to this job growth in the upcoming rate decision.

"At this point, the betting is that the Fed will be cutting rates again." [01:42]

Layhart elaborates that the strong job growth was anticipated due to the resolution of previous economic distortions and anticipates further rate cuts unless inflation data presents unexpected challenges.

2. Impact of Potential Trump Administration on Job Growth

The conversation shifts to the implications of President-Elect Donald Trump's anticipated return on labor market dynamics, particularly focusing on immigration policies.

Justin Layhart points out the critical role of immigration in recent job growth, noting a significant decrease in immigration rates since last summer. He emphasizes:

"If net immigration falls to something like zero, then you just can't support as much job growth." [02:17]

This underscores the uncertainty surrounding future labor supply and its effect on economic expansion.

3. Market Performance and Trends

Tracy Hunt reviews the day's market activities, noting mixed performances among major stock indexes. While the Dow Jones dipped by over 0.25%, both the S&P 500 and Nasdaq reached new annual highs, buoyed by the positive jobs report.

"Following a solid jobs report, The S&P 500 rose a quarter of a percent and the Nasdaq rose 0.8%." [03:31]

The discussion also touches upon a high-profile criminal case involving a United Health Group executive, reflecting on law enforcement’s swift response and ongoing investigations.

4. Federal Appeals Court Upholds TikTok Ban

The core segment of the episode addresses the significant legal development concerning TikTok. A federal appeals court has upheld the U.S. government's ban on TikTok, affirming Congress's authority to act in the nation’s interest.

Jacob Gershman, WSJ Law Reporter, provides in-depth analysis:

"This is a decisive, unanimous ruling against TikTok that really narrows its legal pathway." [05:18]

Gershman explains TikTok's limited options moving forward, which include selling the app to a U.S. company or relying on possible interventions by the incoming Trump administration, though the latter's effectiveness remains uncertain.

Tracy Hunt adds that TikTok users in the U.S. will lose the ability to update the app starting January 19, effectively halting new downloads thereafter.

5. International News: Romania Cancels Presidential Election

Shifting to global affairs, Romania has annulled its presidential election amid allegations of Russian interference. The government unveiled intelligence reports suggesting that pro-Russian candidate Colin Georgescu benefited from a sophisticated online influence campaign orchestrated from Moscow.

"The cancellation of the Romanian vote comes amid wider worries in the west about Russia's unconventional tactics." [05:49]

This unprecedented move by Romania's top court halts the second round of voting, drawing concern from the U.S. State Department regarding Russia's ongoing disruptive strategies.

6. Introduction of New Host Alex Osola and Market Projections

Tracy Hunt introduces Alex Osola as the new host for the upcoming episodes of What’s News. Osola, known for his work on WSJ’s "Tech News Briefing" and "The Future of Everything," brings fresh insights into market trends.

Osola engages in a discussion with James McIntosh, WSJ Senior Markets Columnist, about the current state of the stock market and future projections.

"Historically, there's just been no link between valuations and the next year's returns." [08:05]
"Bubbles are very, very hard to define, let alone to say if you're in one or not until afterwards." [09:20]

McIntosh explains that while current stock valuations are high, driven by enthusiasm around AI, potential deregulation, and strong economic performance, the market's sustainability remains uncertain. Factors such as continued growth in AI and favorable regulatory changes could propel stocks further, but any unforeseen negative developments could disrupt this trajectory.

7. Upcoming Episodes and Closing Remarks

Tracy Hunt wraps up the episode by previewing future segments:

• Weekly Markets Wrap-Up on the following day.
• What’s News Sunday, featuring an in-depth look at Robert F. Kennedy Jr.'s "Make America Healthy Again" platform, including proposed changes to food and healthcare policies and the challenges ahead.

---

This episode of What’s News provides a comprehensive overview of significant economic indicators, legal decisions impacting major tech companies, international political maneuvers, and thoughtful analyses on market trends, ensuring listeners are well-informed on the factors shaping global and financial landscapes.

Transcript

[Narrator]

You let him try violin because you love him. And if you love him that much, love him enough to make sure he's buckled up and in the backseat. Find out [e-mail] therightseat brought to you by the National Highway Traffic Safety administration and the Ad Council.

[Tracy Hunt]

The U.S. labor market bounced back last month, adding more than 220,000 jobs to the economy. And a federal appeals Court says the US government can move forward with its ban on TikTok plus plus the three main indexes hit record highs this year, but what does that mean for the market next year and ten years from now?

[James McIntosh]

Historically, there's just been no link between valuations and the next year's returns. Because if things turn into a bubble, or if it turns out with hindsight that we are in a bubble, bubbles keep inflating until they pop.

[Tracy Hunt]

It's Friday, December 6th. I'm Tracy Hunt for the Wall Street Journal. This is the PM edition of what's news. The the top headlines and business stories that move the world today. The US labor market bounced back last month as workers sidelined by storms got back on the job and thousands of striking Boeing employees returned to work. The Labor Department reported today that the U.S. added a seasonally adjusted 227,000 jobs in November, solid jobs growth that was roughly in line with expectations. Justin Layhart is an economics reporter for the Wall Street Journal. Justin, the Fed is meeting later this month. How will this new information figure into their decision about another interest rate cut?

[Justin Layhart]

At this point, the betting is that the Fed will be cutting rates again. This bounce back in jobs was really fully expected. Everybody knew that there were hurricanes. Everybody knew that there was the big Boeing strike and that those distortionary effects that we saw in October had ended. So unless there is a bad inflation report next week, it looks as if the Fed will be cutting rates.

[Tracy Hunt]

Economists expect job growth to slow down next year, but still grow at a decent rate. But how could President elect Donald Trump's return to the White House affect those numbers?

[Justin Layhart]

There's a big question mark about immigration. So one of the things that we've seen the past few years is there was just a surge of immigration. What that did was it added a lot to labor supply. There were more people to hire as a result of the immigration surge. And that's part of why we saw such strong job growth over the last few years. Now, we know already that immigration surge is down a lot since the summer in particular. So regardless of who won the election, it really did seem like we're not going to see that supply of labor next year like we did this past year. When it comes to deportations in particular, if there are lots of deportations, if net immigration, the number of people coming in versus the number of people leaving, right. If that fall to something like zero, then you just can't support as much job growth. That's sort of the way economists think about it.

[Tracy Hunt]

That was our reporter Justin Layhart. Thank you so much, Justin.

[Justin Layhart]

All right, thanks.

[Tracy Hunt]

In U.S. markets, stocks finished the day mix. The Dow fell just over a quarter of a %, while the S&P 500 in the Nasdaq rallied to set new records. Following a solid jobs report, The S&P 500 rose a quarter of a percent and the Nasdaq rose rose 0.8%. NYPD Commissioner Jessica Tisch today said that the person of interest in the killing of a United Health Group executive is likely no longer in New York City. Police officials told CNN that they traced his movements from midtown to an upper Manhattan bus station. Tish said officers were in Central park today looking for the backpack they believed the suspect abandoned after fatally shooting Brian Thompson outside a Manhattan hotel early Wednesday. The attack sparked an intense response from law enforcement, with officers arriving on the scene in minutes, but the suspect had already disappeared in Central Park. For more on this story as it develops, go to WSJ.com Coming up, what's next for TikTok after a federal court ruled the US can move forward with a ban on the app? That's after the break. A federal appeals court today ruled that TikTok can be banned in the U.S. saying Congress can take action in order to protect U.S. interest. The ruling upholds a federal law requiring the popular social media app to shed its Chinese ownership to keep operating. The court rejected a First Amendment challenge brought by the app and several of its star users. Jacob Gershman covers law for the Wall Street Journal, and he says the app's owner has few options left.

[Jacob Gershman]

This is a decisive, unanimous ruling against TikTok that really narrows its legal pathway. It's still possible for the Supreme Court to at least temporarily suspend enforcement of the ban. But Friday's ruling means that TikTok and its parent company, ByteDance, probably have two options to keep operating in the U.S. either sell off TikTok or count on some intervention by incoming President Donald Trump, though it's not clear what Trump can do to block the ban if he wanted to.

[Tracy Hunt]

Short of any such developments, existing TikTok users will stop being able to update the app on January 19, and at that point, the app won't be available to new users in the US Looking to download it. And in international news, Romania has canceled its presidential election after allegations of Russian influence. In an unprecedented move, the Romanian government declassified a raft of intelligence reports that alleged that pro Russian frontrunner Colin Georgescu was helped by an elaborate Internet scheme directed from Moscow. Romania's top court then annulled the election's first round, blocking the second round of voting planned for Sunday. The Kremlin didn't immediately respond to requests for comment. The cancellation of the Romanian vote comes amid wider worries in the west about Russia's unconventional tactics. The U.S. state Department said this week that it was concerned by the Romanian government's report. Finally, I want to introduce my colleague Alex Osola, who will be our new host starting Monday. Alex, welcome. I'm so excited for you. Can you tell us a little bit about yourself?

[Alex Osula]

Hi, Tracy. Thank you so much. Yes, well, you might have heard me before if you're an avid listener of Wall Street Journal podcasts, on Tech News Briefing or on the future of Everything. And I'm really excited to be joining the team here on what's News.

[Tracy Hunt]

And you have an interview for us now looking at the markets in 2025. And since you're going to be the host taking us into 2025, I'll turn it over to you.

[Alex Osula]

Perfect. Thanks. So right now, stocks are expensive. This week, the three main indexes hit record highs. And today The S&P 500 and Nasdaq edged even higher in light of the November jobs report. And while it's good news for investors right now, historically it's meant lower returns in the long run. Banks like Goldman Sachs and Bank of America are making pretty dire forecasts for the next 10 years, predicting that the market will sour. But what about the next year? What will that look like? I'm joined now by senior Markets columnist James McIntosh. James, given how expensive stocks are right now, what does that tell us about where they might go in 2025?

[James McIntosh]

Well, historically there's just been no link between valuations and the next year's returns because if things turn into a bubble or if it turns out with hindsight that we are in a bubble, bubbles keep inflating until they pop and no one can really tell when it's going to happen. And if it turns into a bubble and inflates all next year, it may pop the next year or maybe even the year after. Things don't go on forever. Hence these bad 10 year forecasts where people tend to think that valuations do return to something akin to normal in the long run.

[Alex Osula]

So what are some of the factors that could push these stocks to even greater heights?

[James McIntosh]

So pushing things up at the moment, people are very excited about AI. If they get even more excited about AI, of course, that could make things go up even more. People are very excited about the prospect of deregulation under a Trump administration. They think that could help profits and it could help the economy. They're very positive, actually, about tax cuts. Investors tend to like tax cuts. That's good for stock prices. And the US Economy has been going great guns. And so investors in the rest of the world have been piling into America.

[Alex Osula]

You mentioned the word bubble feels like a little verboten. Is the market overvalued right now? Like, are we headed into bubble territory?

[James McIntosh]

Bubbles are very, very hard to define, let alone to say if you're in one or not until afterwards. Stocks are very, very expensive. One way of thinking about that is people are expecting an awful lot of growth in profits in the future. So if it turns out that in particular the AI boom, but also the other things I just talked about all do deliver much higher profit growth rate in the future, and that goes on for multiple years, then actually stocks aren't expensive. They're correctly priced for very fast growth ahead. Now, history suggests when things are priced for very fast growth ahead on the basis of hope. And remember, this is on the basis of hope. If all those things happen, then we'll say this wasn't a bubble. This was the market correctly priced for a bunch of good news in future. It was rightly anticipating it. The problem is, of course, there are always a whole bunch of bad things as well. And any one of those could provide, at the very minimum, a hiccup. And at the moment, the market's not ready for hiccups.

[Tracy Hunt]

That was WSJ senior Markets columnist James McIntosh speaking with our new host, Alex Osila. And that's what's news for this week. Tomorrow you can look out for a weekly markets wrap up, what's News and Markets. Then on Sunday, we'll be looking at Robert F. Kennedy Jr. S Make America Healthy Again platform. What changes he might make to food and health care policy and what hurdles he might face. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bienname and Anthony Bansi with supervising producers Catherine Millsop and Michael Kosmidis. Michael Lavalle wrote our theme music. Aisha Al Muslim is our development producer. Scott Salloway and Chris Inslee are our deputy editors. And Philana Patterson is the Wall Street Journal's head of news audio. I'm Tracy Hunt.

[Alex Osula]

And I'm Alex Osula. See you on Monday. Thanks for listening.