Page 103 – Virginia Business

Investors eager for delayed data to shed light on US economy

Summary

Delayed jobs and CPI reports to offer crucial insight after shutdown.
S&P 500 retreats from record as AI stock disappointments weigh.
Fed cut rates again but signaled caution amid weak labor trends.
Investors brace for volatility as year-end profit-taking looms.

NEW YORK, Dec 12 (Reuters) – A host of delayed employment, inflation and other data in the coming week will give a long-anticipated view of the U.S. economy that could help guide markets into year-end.

U.S. stocks pulled back to end the week, after the benchmark S&P 500 had ended on Thursday at a record closing high. Back-to-back disappointing quarterly reports from Oracle and Broadcom, two signature stocks in the artificial intelligence trade that has propelled markets this year, weighed down the heavyweight technology sector.

The upcoming data is especially critical because investors and the Federal Reserve have been navigating with little certainty since a 43-day federal government shutdown postponed key reports.

The U.S. jobs report for November is due on Tuesday, while the monthly consumer price index, which is closely watched for inflation trends, is out on Thursday.

“There has been a lack of clarity for investors,” said Jim Baird, chief investment officer with Plante Moran Financial Advisors. “Strong corporate earnings certainly helped to support the markets. The Fed and anticipated rate cuts helped to provide a little bit of a boost. But now it’s time to turn our attention back to the underlying economy and what path we’re on.”

A divided Fed cut interest rates by a quarter percentage point on Wednesday for a third-straight meeting as it seeks to shore up a weakening labor market. But the central bank signaled borrowing costs are unlikely to drop further in the near term as it awaits more economic clarity.

“Because of the government shutdown and the catch-up schedule, we have essentially three months of both labor and inflation data coming out between the December and January Fed meetings,” said David Seif, chief economist for developed markets at Nomura.

U.S. payrolls are expected to have climbed by a tepid 35,000 in November, according to a Reuters poll. Fed Chair Jerome Powell on Wednesday said while payrolls have been averaging an increase of 40,000 per month since April, the Fed thinks those numbers are overstated and could instead be an average loss of 20,000 per month.

“If we start getting negative prints around jobs, you can’t avoid the recession discussion,” said Marvin Loh, senior global macro strategist at State Street.

The monthly CPI data comes as inflation has continued to run above the Fed’s target, which could complicate any further Fed easing if inflation does not cool. Three policymakers dissented from the decision to lower rates, including two who argued rates should have been left unchanged.

“We continue to expect further cuts in January and April, but if the labor market stabilizes, then future cuts may not come until inflation decelerates,” Morgan Stanley economists said in a note on Thursday.

A report on retail sales is among the other releases next week that will help provide more insight into economic growth. Micron Technology’s quarterly report on Wednesday also could draw added scrutiny following the AI turbulence this week.

The S&P 500 is up 16% so far in 2025, pushing its gain during the bull market that began in October 2022 to 90%. December is traditionally a positive month for stocks.

However, investors could seek to lock in year-to-date profits, bringing selling pressure. The approaching holidays also stand to reduce trading volumes, which can lead to exaggerated asset-price moves.

“For the most part, it’s been a very, very good year for risk assets,” Loh said. “If you get some shaky numbers or you don’t get a resounding reason to add risk, it could add volatility in the market just because of the thinner markets.”

Trump Launches $1M ‘Gold Card’ Offering Path to Citizenship

Summary

Trump launches “gold card,” offering permanent residency for $1M.
Program replaces EB-5 visas and targets skilled foreign workers.
Corporations can buy cards for $2M per employee, with no job-creation rules noted.
Trump predicts billions in revenue; critics cite immigration policy contradictions.

MOUNTAIN VIEW, Calif. (AP) — Robots have long been seen as a bad bet for Silicon Valley investors — too complicated, capital-intensive and “boring, honestly,” says venture capitalist Modar Alaoui.

But the commercial boom in artificial intelligence has lit a spark under long-simmering visions to build humanoid robots that can move their mechanical bodies like humans and do things that people do.

Alaoui, founder of the Humanoids Summit, gathered more than 2,000 people this week, including top robotics engineers from Disney, Google and dozens of startups, to showcase their technology and debate what it will take to accelerate a nascent industry.

Alaoui says many researchers now believe humanoids or some other kind of physical embodiment of AI are “going to become the norm.”

“The question is really just how long it will take,” he said.

Disney’s contribution to the field, a walking robotic version of “Frozen” character Olaf, will be roaming on its own through Disneyland theme parks in Hong Kong and Paris early next year. Entertaining and highly complex robots that resemble a human — or a snowman — are already here, but the timeline for “general purpose” robots that are a productive member of a workplace or household is farther away.

Even at a conference designed to build enthusiasm for the technology, held at a Computer History Museum that’s a temple to Silicon Valley’s previous breakthroughs, skepticism remained high that truly humanlike robots will take root anytime soon.

“The humanoid space has a very, very big hill to climb,” said Cosima du Pasquier, founder and CEO of Haptica Robotics, which works to give robots a sense of touch. “There’s a lot of research that still needs to be solved.”

The Stanford University postdoctoral researcher came to the conference in Mountain View, California, just a week after incorporating her startup.

“The first customers are really the people here,” she said.

Researchers at the consultancy McKinsey & Company have counted about 50 companies around the world that have raised at least $100 million to develop humanoids, led by about 20 in China and 15 in North America.

China is leading in part due to government incentives for component production and robot adoption and a mandate last year “to have a humanoid ecosystem established by 2025,” said McKinsey partner Ani Kelkar. Displays by Chinse firms dominated the expo section of this week’s summit, held Thursday and Friday. The conference’s most prevalent humanoids were those made by China’s Unitree, in part because researchers in the U.S. buy the relatively cheap model to test their own software.

In the U.S., the advent of generative AI chatbots like OpenAI’s ChatGPT and Google’s Gemini has jolted the decades-old robotics industry in different ways. Investor excitement has poured money into ambitious startups aiming to build hardware that will bring a physical presence to the latest AI.

But it’s not just crossover hype — the same technical advances that made AI chatbots so good at language have played a role in teaching robots how to get better at performing tasks. Paired with computer vision, robots powered by “visual-language” models are trained to learn about their surroundings.

One of the most prominent skeptics is robotics pioneer Rodney Brooks, a co-founder of Roomba vacuum maker iRobot who wrote in September that “today’s humanoid robots will not learn how to be dexterous despite the hundreds of millions, or perhaps many billions of dollars, being donated by VCs and major tech companies to pay for their training.” Brooks didn’t attend but his essay was frequently mentioned.

Also missing was anyone speaking for Tesla CEO Elon Musk’s development of a humanoid called Optimus, a project that the billionaire is designing to be “extremely capable” and sold in high volumes. Musk said three years ago that people can probably buy an Optimus “within three to five years.”

The conference’s organizer, Alaoui, founder and general partner of ALM Ventures, previously worked on driver attention systems for the automotive industry and sees parallels between humanoids and the early years of self-driving cars.

Near the entrance to the summit venue, just blocks from Google’s headquarters, is a museum exhibit showing Google’s bubble-shaped 2014 prototype of a self-driving car. Eleven years later, robotaxis operated by Google affiliate Waymo are constantly plying the streets nearby.

Some robots with human elements are already being tested in workplaces. Oregon-based Agility Robotics announced shortly before the conference that it is bringing its tote-carrying warehouse robot Digit to a Texas distribution facility run by Mercado Libre, the Latin American e-commerce giant. Much like the Olaf robot, it has inverted legs that are more birdlike than human.

Industrial robots performing single tasks are already commonplace in car assembly and other manufacturing. They work with a level of speed and precision that’s difficult for today’s humanoids — or humans themselves — to match.

The head of a robotics trade group founded in 1974 is now lobbying the U.S. government to develop a stronger national strategy to advance the development of homegrown robots, be they humanoids or otherwise.

“We have a lot of strong technology, we have the AI expertise here in the U.S.,” said Jeff Burnstein, president of the Association for Advancing Automation, after touring the expo. “So I think it remains to be seen who is the ultimate leader in this. But right now, China has certainly a lot more momentum on humanoids.”

AI boom fuels new push for humanoid robots, despite doubts

Summary

AI advances and investor enthusiasm revive efforts to build humanoid robots.
More than 2,000 attendees join the Humanoids Summit in California.
China leads global development with major incentives and rapid scaling.
Skeptics warn humanlike robots face steep technical and commercial hurdles.

Alaoui says many researchers now believe humanoids or some other kind of physical embodiment of AI are “going to become the norm.”

“The question is really just how long it will take,” he said.

“The humanoid space has a very, very big hill to climb,” said Cosima du Pasquier, co-founder of Haptica Robotics, which works to give robots a sense of touch. “There’s a lot of research that still needs to be solved.”

The Stanford University postdoctoral researcher came to the conference in Mountain View, California, just a week after incorporating her startup.

“The first customers are really the people here,” she said.

Virginia sees home sales decline across major markets

SUMMARY:

Home inventory rose year-over-year in Northern Virginia and Hampton Roads
Homes sales dropped in both regions
Northern Virginia’s total sales volume was $969,577,300, a 1.6% decrease from last year

Housing inventories climbed across Hampton Roads and Northern Virginia in November, but fewer deals closed as home sales declined across the two regions.

Northern Virginia

The Northern Virginia Association of Realtors reports that 1,091 units were sold in November, a 6.6% decrease from November 2024. Total sales volume was $969,577,300, a 1.6% decrease from last year, which the association says reflects a shift toward mid-priced transactions as buyers adjusted to interest rates. Pending sales increased 0.7% year-over-year to 1,091.

“Northern Virginia is experiencing a meaningful rebalancing,” NVAR CEO Ryan McLaughlin said in a statement. “The market remains competitive, but rising inventory and longer market times are giving consumers more room to consider their choices. That change supports healthier, more sustainable transactions than the highly accelerated pace we saw in recent years.”

NVAR said the median sold price climbed to $740,000, up 5.7% from last year, which it says underscores “continued desirability of Northern Virginia’s communities.”

Months of supply of inventory (MSI) in November — a measure of how many months homes would remain on the market if no new inventory were added — was 1.48, up 41.2% compared with November 2024.

Active listings jumped 45.1% year-over-year, with 2,042 listings in November.

Homes took longer to sell in November, with an average 29 days on the market — up 31.8% from November 2024. The association said the return to a more normal sales cadence “signals a balancing environment after several years of ultra-fast turnover.

NVAR reports home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church, and the towns of Vienna, Herndon and Clifton.

Hampton Roads

According to the Real Estate Information Network (REIN), Hampton Roads saw active listings increase year-over-year but pending and settled sales both declined in November.

Hampton Roads saw 1,774 sales in November, down from 2,099 in October and down 6.6% from 1,889 in November 2024. Active residential listings declined to 5,179 from 5,571 in October, but were up 13.5% year-over-year from 4,565 in November 2024.

MSI for November in Hampton Roads was 2.51, down from 2.68 in October, but up year-over-year from 2.23 in November 2024.

“Inventory across Hampton Roads remains higher than it was at this time last year, giving buyers a wider selection of homes than they had in November 2024,” said Barbara Wolcott with Berkshire Hathaway HomeServices RW Towne Realty and president of REIN’s board in a statement. “Month-to-month changes reflect the typical seasonal patterns we expect as the market moves into the winter months.”

The median sale price for November was $367,000, up from $362,000 in October and up 4.9% from $350,000 in November 2024.

November’s pending sales for the month stood at 1,849, down from 2,162 in October, but up 9.2% from 1,693 in November 2024.

Hampton Roads homes spent a median of 31 days on the market compared to 30 in October and 27 in November 2024.

Founded in 1969, REIN is a regional multiple listing service that covers an area stretching from Williamsburg east to Virginia Beach and south across the North Carolina border.

US mortgage rates tick up to 6.22% but stay near lows

Summary

Average 30-year mortgage rate rose to 6.22%, up from 6.19% last week.
Rates remain near 2025 lows and continue to follow 10-year Treasury yields.
Refinancing applications jumped 14%, making up 58% of home loan activity.
Economists see rates staying slightly above 6% next year despite Fed cuts.

The average rate on a 30-year U.S. mortgage edged higher this week, though it remains relatively near its low point so far this year.

The uptick brings the average long-term mortgage rate to 6.22% from 6.19% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.6%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. The rate averaged 5.54%, up from 5.44% last week. A year ago, it averaged 5.84%, Freddie Mac said.

Mortgage rates are influenced by several factors, from the Federal Reserve‘s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

The 10-year yield was at 4.12% at midday Thursday, slightly higher than it was a week ago.

The rise in mortgage rates comes a day after the Federal Reserve cut its main interest rate for the third time this year and indicated another cut may be ahead in 2026.

The Fed doesn’t set mortgage rates, so even when it cuts its short-term rates that doesn’t necessarily mean rates on home loans will necessarily decline.

That’s what happened last fall after the central bank cut its main rate for the first time in more than four years. Instead of falling, mortgage rates marched higher, eventually cresting above 7% in January this year. At that time, the 10-year Treasury yield was climbing toward 5%.

Mortgage rates began declining this summer ahead of the central bank’s September rate cut, its first in a year. The average rate on a 30-year mortgage got as low as 6.17%, the lowest level in more than a year, on Oct. 30.

That pullback in rates helped lift sales of previously occupied U.S. homes in October on an annual basis for the fourth straight month.

Still, affordability remains a challenge for many aspiring homeowners, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase. Uncertainty over the economy and job market are also keeping many would-be buyers on the sidelines.

The overall decline in mortgage rates this fall has been a boon for homeowners eager to refinance their home loan to a lower rate.

Applications for mortgage refinancing loans jumped 14% last week from the previous week, and accounted for about 58% of all home loan applications, according to the Mortgage Bankers Association. Applications for loans to buy a home climbed nearly 5%.

Economists generally forecast that the average rate on a 30-year mortgage will remain slightly above 6% next year.

“While this is unlikely to deliver the sharp relief some buyers are hoping for, rates are expected to be low enough to help counterbalance continued, but modest, home price growth,” said Anthony Smith, senior economist at Realtor.com.

Chesterfield Towne Center sells to New York, Swiss companies

Chesterfield Towne Center, the largest enclosed mall in the Richmond area, was sold on Friday to New York-based real estate investment firm JRE Partners and Switzerland-based Anastacia AG.

Los Angeles-based real estate development and management company Pacific Retail Capital Partners, which announced the sale, will assume management and leasing responsibilities for the property.

The financial terms of the deal were not disclosed, and the purchasers declined to comment on the transaction.

Brookfield Properties, one of the nation’s largest mall operators, previously owned the property. According to Chesterfield County real estate records, the mall property is 72.4 acres, with an assessed value of $67.8 million.

The 1.03 million-square-foot mall, located at the intersection of Midlothian Turnpike and Huguenot Road, serves as a retail cornerstone for one of Richmond’s largest and fastest-growing suburban communities. According to PRCP, the property draws 5.8 million annual visitors from a 5-mile trade area with a median household income of $106,083.

With several national retail chains and dining destination, the mall is anchored by Macy’s, JCPenney, At Home, and T.J. Maxx/HomeGoods stores.

PRCP plans to leverage its relationships with national and local retailers to improve the center’s merchandising mix and customer experience. The company may redevelop the property, though a spokesperson said there is no timeline or guarantee it will happen.

“Working alongside two deeply respected institutions in JRE Partners and Anastacia AG, we will look to elevate the consumer experience at Chesterfield Towne Center,” PRCP CEO Steve Plenge said in a statement. “We collectively feel there is massive upside potential at this strategically important asset that can be realized through leasing enhancements, operational improvements and repositioning opportunities — all services that PRCP specializes in and excels at. We look forward to partnering with the community, being true hands-on operators and reinvigorating this property for generations to come.”

PRCP firm currently manages more than $3 billion in retail assets nationwide.

LS Cable to add $689M factory in Chesapeake, creating 430 jobs

SUMMARY:

LS Cable & System to build $689M copper and advanced materials manufacturing campus, create 430 jobs in Chesapeake
Subsidiary of South Korean company already building $681M+ cable factory in Chesapeake, creating 330 jobs
New manufacturing campus will create rare earth materials supply chain through allied nations

LS Cable & System is more than doubling its capital investment in Chesapeake manufacturing facilities and bringing its expected job creation total to 760.

The South Korean company will build a $689 million copper and advanced materials manufacturing campus in Chesapeake, expected to create 430 jobs, Gov. Glenn Youngkin announced Friday.

LS Cable is the parent company of LS GreenLink USA, which started construction in April on its $681 million-plus advanced cable manufacturing facility, expected to create 330 jobs, in Chesapeake.

“Today is about confidence in America,” Youngkin said. “Today is about confidence in Virginia. Today is about confidence in partnerships. Today is about relationships,” Youngkin said, adding that he met with LS Cable officials during his first trade mission in South Korea.

The GreenLink facility set a record for the largest capital investment in Chesapeake, and the LS Cable project will break that record. Its expected investment would be the single largest capital investment in Hampton Roads history.

U.S. Deputy Secretary of Commerce Paul Dabbar attended the announcement event and called the project an “economic success story for everyone.”

“This announcement is proof that America remains open for business,” he said, “and America leads in the cutting edge of new technology and innovation.”

The company plans to construct three facilities on the site: one for copper rod manufacturing, one for magnetic wires and one for rare earth magnet manufacturing. The company will establish three U.S. subsidiaries, said Patrick Shim, managing director for LS Cable & System.

Youngkin said to reporters: “The supply of the rare earth components that go into, particularly magnets that are used in a lot of our sophisticated weapon systems, come from China, and therefore we have a massive risk in the United States for that supply chain.

“It’s why this particular investment is so important,” he added, “because it creates a secure supply chain with trusted allies for these most critical components.”

According to the International Energy Agency’s Global Critical Minerals Outlook 2025, China is the leading refiner for 19 out of 20 strategic minerals, with an average market share of 70%.

LS Cable & System’s facility will recycle copper scraps and produce copper rods for cable manufacturing. It will supply the LS GreenLink facility and other LS operations throughout the U.S., Shim said. All of the copper scraps will come from domestic sources, said LS Cable & System President and CEO Bon-Kyu Koo. The magnet wires being made in the second facility are components of electric motors.

The third component, rare earth magnets, are components in electric motors and some advanced weapons systems, like the Javelin missile, F-35 fighter jet, nuclear submarines and unmanned aerial vehicles. Rare earth materials will come from Australia, be processed in Malaysia, Australia or Vietnam, and then sent to the U.S. for magnet manufacturing, Koo said.

“These capabilities are not simply an extension of our product lines,” Koo said. “They are strategic investments that strengthen American domestic supply chains, reduce reliances on foreign sources and support American national security priorities.”

Square footage for the manufacturing campus will be released later because the facilities’ designs haven’t been finalized, Shim said.

In response to a question about power usage, Shim said: “There are a couple sites that we’re currently comparing. … We’re working with Dominion [Energy] on finalizing our power load amount, and … we’re kind of finalizing our project planning right now.”

LS Cable plans to complete the permitting process by the end of the first quarter of 2026, Shim told reporters, hopefully start construction by the middle of next year and be fully operational by late 2027, at which point the company will have filled the campus’ 430 jobs.

Founded in 1962, LS Cable & System develops and provides cable solutions for power grids and communication networks. The company has more than 6,500 employees and 40 subsidiaries across 17 countries.

Dow, S&P 500 hit records despite AI stock slump

Summary

S&P 500 rose 0.2% to close at a new all-time high.
Dow Jones surged 646 points, setting another record.
Oracle shares tumbled after higher-than-expected AI spending plans.
AI-related weakness dragged the Nasdaq down 0.3%.

NEW YORK (AP) — Wall Street set records on Thursday, even as a sell-off for Oracle and worries about a potential bubble in artificial-intelligence technology weighed on the market.

The S&P 500 inched up 0.2% and eked past its prior all-time closing high, which was set in October. The Dow Jones Industrial leaped 646 points, or 1.3%, to top its own record set last month. The Nasdaq composite lagged behind and slipped 0.3% because of the weakness for AI stocks.

It’s the latest return to records for the market following what had appeared to be a debilitating set of worries. Some of the most recent included concerns about what the Federal Reserve will do with interest rates and whether all the dollars flowing into AI chips and data centers will produce profits and productivity as prolific as proponents are promising.

Such worries sent Wall Street last month to some of its worst and scariest days since its sell-off during April, but it then got several boosts that helped it regain its footing. Key among them was a continuing parade of companies saying they’re making bigger profits than analysts expected. Stock prices tend to track with corporate profits over the long term.

The Fed also on Wednesday cut its main interest rate for the third time this year and indicated another cut may be ahead in 2026. Wall Street loves lower interest rates because they can boost the economy and send prices for investments higher, even if they potentially make inflation worse.

The Fed’s chair, Jerome Powell, did hint that interest rates may be on hold for a while. But he helped soothe nerves when his comments appeared less harsh than some investors expected in shutting off the possibility of more cuts in 2026.

Easier interest rates can give the biggest benefits to the smallest companies, which are more likely to be losing money and often need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks jumped 1.2% to help lead the market.

Banks and other companies whose profits are closely tied to the strength of the economy also rallied. Gains of 2.5% for Goldman Sachs and 6.1% for Visa were the strongest forces pushing the Dow higher.

The Walt Disney Co. added 2.4% after OpenAI said the entertainment giant is investing $1 billion in it. It’s part of a three-year agreement that will also allow OpenAI to use more than 200 Disney, Marvel, Pixar and Star Wars characters to generate short, user-prompted social videos.

Eli Lilly rose 1.6% after announcing encouraging results from a clinical trial for adult patients who are obese or overweight and have knee osteoarthritis, without diabetes. Planet Labs PBC soared 35% after the provider of satellite images used by governments and businesses reported stronger results for the latest quarter than analysts expected.

But a return to records for the U.S. stock market does not mean all worries are gone.

Oracle dropped 10.8% and had briefly been on track earlier in the day for its worst loss since 2001, when the dot-com bubble was still deflating.

Doubts remain about whether all the spending that Oracle is doing on AI technology will be worth it. Analysts said they were surprised after Oracle laid out on late Wednesday how much it will spend on investments this fiscal year, and questions continue about how the company will pay for it.

Such doubts are weighing on the AI industry broadly, even as many billions of dollars continue to flow in.

Nvidia, the chip company that’s become the poster child of the AI boom and is raking in close to $20 billion each month, fell 1.5% Thursday. It was the heaviest weight on the S&P 500 because of its massive size.

Also on the losing end of Wall Street was Oxford Industries. The company behind Tommy Bahama and Lilly Pulitzer dropped 21.2% after highlighting how its customers have been seeking out deals and are “highly value-driven.”

CEO Tom Chubb said the start of the holiday shopping season has been weaker than the company expected, and it cut its forecast for revenue for the full year.

Lower- and middle-income households are feeling the squeeze of high prices following years of high inflation, along with a slowing job market. That means a roughly 25% chance of a recession, according to Barry Bannister, chief equity strategist at Stifel.

Even all the spending underway for AI chips is “not enough to offset a consumer pull-back,” he said, and the U.S. stock market still broadly looks expensive relative to history.

All told, the S&P 500 rose 14.32 points to 6,901.00. The Dow Jones Industrial Average jumped 646.26 to 48,704.01, and the Nasdaq composite slipped 60.30 to 23,593.86.

In the bond market, Treasury yields held relatively steady after a report said the number of U.S. workers applying for unemployment benefits jumped last week by more than economists expected. That’s a potential indication of rising layoffs.

The yield on the 10-year Treasury inched up to 4.14% from 4.13% late Wednesday.

In stock markets abroad, indexes ticked higher in Europe after falling in much of Asia.

Japan’s Nikkei 225 index sank 0.9%, hurt by a sharp drop for SoftBank Group Corp., which is a major investor in AI.

Hearing on whether ex-Abercrombie & Fitch CEO is mentally fit to stand trial for sex trafficking set

NEW YORK (AP) — The former CEO of Abercrombie & Fitch faces a March court hearing to determine whether he’s competent to stand trial on sex trafficking charges after being hospitalized in recent months for dementia and Alzheimer’s symptoms.

If he’s found mentally fit, Michael Jeffries could have his day in court by late October, U.S. District Court Judge Nusrat Choudhury said Thursday.

“We are aiming for a trial this fall,” she said on a phone conference that included Jeffries, two other defendants in the case and their lawyers.

Jeffries pleaded not guilty last year to federal charges of sex trafficking and interstate prostitution that echoed sexual misconduct accusations made in a civil case and in the media in recent years.

Prosecutors say Jeffries, his romantic partner and a third man used the promise of modeling jobs to lure men to drug-fueled sex parties in New York City, the Hamptons and other locations.

Federal prison officials said in a letter to the court filed Wednesday that Jeffries is mentally fit after spending about four months at the Federal Medical Center in Butner, North Carolina.

The 81-year-old is “able to understand the nature and consequences of the proceedings against him and to assist properly in his own defense,” the prison’s acting warden wrote in a document titled a “Certificate of Restoration of Competency.”

But Jeffries’ lawyers on Thursday disputed the assessment and requested Choudhury hold a hearing to hear from other medical experts.

Brian Bieber, an attorney for Jeffries, said defense lawyers expect to call at least three experts to testify on his mental condition. Prosecutors said they expect to call two of their own.

Defense lawyers have previously said Jeffries requires around-the-clock care as he’s dealing with Alzheimer’s disease, Lewy body dementia and a traumatic brain injury.

At least four medical professionals concluded that Jeffries’ cognitive issues were “progressive and incurable” and that he would not “regain his competency and cannot be restored to competency in the future,” the lawyers previously wrote to the court.

Bieber didn’t immediately respond to an email seeking comment Thursday. He previously said he and his client “look forward to the Judge hearing the medical evidence, and deciding on the appropriate course of action moving forward.”

A spokesperson for the U.S. Attorney’s Office for the Eastern District of New York declined to comment.

Jeffries left Abercrombie in 2014 after more than two decades at the helm. His partner, Matthew Smith, has also been charged and has pleaded not guilty, as has their co-defendant, James Jacobson.

Newport News music festival set for Memorial Day weekend 2026

Newport News City Council on Tuesday approved a roughly $3 million grant to support the launch of a major music festival coming Memorial Day Weekend 2026, aimed at boosting tourism, igniting interest in downtown and supporting area businesses.

The city says the event, designed to be a “significant regional attraction,” will feature internationally recognized musical artists and Hampton Roads community leaders. The festival will feature performances, conversations, large-scale art installations, interactive community workshops, hands-on tech experiences and cultural and business showcases.

Although the main festival will be held over Memorial Day weekend, youth and community activities will start earlier and continue afterward.

“This festival marks the next step in Newport News‘ growth as we compete for regional tourism dollars,” said Mayor Phillip Jones in a statement. “By strategically investing in economic development, we are creating an event that highlights future projects in our city, with a goal of generating more than $3 million in economic impact.”

Jones first suggested launching a major festival in January, during a City Council retreat.

He said the city’s $3 million investment was possible because of a year-end surplus and that the city will be seeking corporate sponsors to help grow and expand the festival.

Newport News has partnered with the Port Warwick Foundation, a nonprofit with experience producing public events in Newport News, to facilitate efforts launching the festival.

“Our goal is to help create a platform where residents, artists and innovators can come together in meaningful ways,” said Laura Fisher, executive director of the Port Warwick Foundation, in a statement. “This festival is designed to open doors—for creativity, for connection and for community pride.”

The city says the 2026 event will be produced in partnership with Global Music Touring, a national promoter known for delivering large-scale cultural and music festivals, including the Norfolk Cousinz Festival.

The agreement between the city and the foundation includes accountability requirements, reporting timelines, insurance and risk-management controls, audit provisions and a requirement to return unspent funds. The city says this will ensure that taxpayer dollars “are used transparently and effectively.”

The city said more information about the festival will be released at a later time, as planning progresses.