Business

➚ BUY: Tea leaves. Signs point to a still-hot economy, leading analysts to now openly wonder whether the Fed will pivot to a rate hike rather than holding steady or continue cutting. (More below on expectations for tomorrow’s inflation reading.)

➘ SELL: Mixed messages. JPMorgan elevated Jennifer Piepszak to COO, making her Jamie Dimon’s obvious successor — for about 15 minutes, before a bank spokesman told Bloomberg that Piepszak “does not want to be considered for the CEO position at this time.”

China mulls selling TikTok to Musk as US ban looms... Coinbase beats the SEC... Lina Khan’s last corporate fight… Barry Diller’s unusual management style… Spymaster sheikh’s AI vision… JPM staffers weigh unionization… Elon is in the way (of airplanes)...

Donald Trump is expected to dial in via videoconference to the World Economic Forum in Davos next week, Semafor scoops. The conference, which kicks off on Inauguration Day, is a watering hole for the global elite that MAGA world, broadly speaking, disdains. But it’s also a key hub for global CEOs, who are keen to get on the President-elect’s good side and decipher an unpredictable Washington. Trump used his two past in-person appearances at Davos, in 2018 and 2020, to shill for his international trade deals and defend his America First policies.

Introducing The CEO Signal from Semafor Business, an exclusive, invitation-only membership for chief executives of the world’s largest companies.

Andrew Edgecliffe-Johnson helps global bosses connect, learn, and navigate an uncertain world, offering candid, practical insights, and interviews for leaders who are short on time and seeking actionable intelligence.

Cleveland-Cliffs CEO Lourenco Goncalves has lined up financing for a multi-part US Steel bid in the $8 billion range, he told Semafor’s Rohan Goswami in an interview.

Goncalves declined to specify which banks had committed to the bid. But he’s been working with advisers from Moelis, JPMorgan, UBS, Truist, and Wells Fargo on strategy and structure for a bid in the high $30s, people familiar with the matter said. CNBC first reported the discussions.

The company has been working with Nucor on a bid that would carve up US Steel, whose sale to Japan’s Nippon is on life support after the Biden administration blocked it on national security grounds, some of the people said.

Cleveland-Cliffs would make an all-cash bid for US Steel “when, not if, the Nippon deal collapses,” Goncalves said in an interview Monday in Butler, Pennsylvania, next to Cliffs’ most profitable steel mill.

A new Baby Berkshire? Bill Ackman wants to turn real-estate developer Howard Hughes, which he offered to buy for $1 billion this week, into the foundation of a corporate empire modeled by Warren Buffett.

It’s classic Ackman, whose ideas can be overly clever and unworkably ambitious. He said he believes that Howard Hughes, which has never paid a dividend, will soon start generating enough cash to make it an acquisition vehicle — similar to the Massachusetts textile mill Buffett used to build Berkshire.

Ackman has long admired Buffett and teamed up with the billionaire on a wildly profitable deal for Burger King in 2010. He tried to liken his firm, Pershing Square, to Berkshire last year during a failed IPO. He re-upped the comparison in his letter to Howard Hughes’ board: “With apologies to Mr. Buffett, HHH would become a modern-day Berkshire Hathaway that would acquire controlling interests in operating companies.”

Efforts to emulate Buffett over the years have mostly failed. Leucadia — which seeded Pershing Square back in 2004 — once modeled itself as a “Baby Berkshire,” right down to the spartan corporate website and holdings, from mining to meatpacking to investment banking, before shedding everything but the investment bank and rebranding as Jefferies. The truth is that conglomerates are wildly out of fashion, and Berkshire is grandfathered in by decades of outperformance and Buffett’s own star power.

“If you are a craftsman in the industry, if you’re crew, why would you rebuild here?” “Wouldn’t you go to where the work is?”

— Terry Press, former CBS Films president, on the wildfires’ long-term effects on Hollywood

Tomorrow’s US inflation numbers will be even more closely watched after last week’s strong jobs report. With signs piling up that the economy is still running hot, investors have abandoned any hope of significant rate cuts this year, and analysts are starting to openly wonder whether the Federal Reserve’s next move on interest rates is up, not down. Apollo’s chief economist puts the odds at 40%.

Fed Chair Jay Powell has always said he’ll go where the data points. But the central bank switching direction this quickly — its first cut was less than four months ago — would be unnerving, like watching a driver ride the brakes.

Economists expect consumer prices to rise 2.8% in December, the fastest inflation since July.

OpenAI published a list of policy proposals on Monday, outlining how US federal and state governments can catalyze the artificial intelligence industry and keep China from taking the lead, Semafor’s Reed Albergotti reported.

The document argues the US should invest heavily in energy and other infrastructure to spur investment in American AI, calling for a closer relationship between AI companies and the US national security community.