August 24, 2023
Hopeful signs of an economic ‘soft landing’ emerge in Jackson Hole as Fed meets with world watching
JACKSON HOLE, Wyoming (AP) — Business these days in Jackson Hole, Wyoming, is still good — just not as robust as it was after the U.S. economy roared out of the pandemic recession. As the Federal Reserve prepares to hold its annual economic conference there, its policymakers are trying to guide the nation’s economy toward something akin to what’s happening in Jackson Hole. They have jacked up their key interest rate to a 22-year high to try to slow growth and bring inflation down to their 2% target. Even as they do so, the Fed’s policymakers hope to avoid tipping the economy into a recession — a notoriously difficult achievement that economists call a “soft landing.”
Starbucks’ Pumpkin Spice Latte turns 20, beloved by millions and despised by some
The seasonal drink that made pumpkin spice a star is marking two decades in the world. And unlike the autumn days it celebrates, there seems to be no chill in customer demand. Starbucks’ Pumpkin Spice Latte goes on sale Thursday in the U.S. and Canada. It’s the coffee giant’s most popular seasonal beverage, with hundreds of millions sold since its launch in 2003. And it has spawned a huge and growing industry. In the year ending July 29, Nielsen says U.S. sales of pumpkin-flavored products reached $802.5 million. That’s up 42% from the same period in 2019.
Stock market today: Wall Street mixed early as Nvidia pushes Nasdaq higher
Wall Street was mixed in premarket trading early Thursday after chipmaker Nvidia reported blowout earnings, pushing Nasdaq futures higher. Futures for the S&P 500 gained 0.6% before the bell, the Nasdaq jumped 1.2%, while Dow futures lagged, inching back 0.1%. That comes a day after Wall Street rallied to its best day since June as pressures from the bond market relaxed. Nvidia shares jumped more than 8% in off-hours trading after the company’s financial results exceeded its own astronomical growth projections. Investors are awaiting news from this week’s conference of central bankers in Jackson Hole, Wyoming, where Fed Chair Jerome Powell will speak Friday.
Turkey’s central bank raises interest rates again in another sign of normalizing economic policy
ANKARA, Turkey (AP) — Turkey’s central bank has raised its key interest rate by an aggressive 7.5 percentage points, in a new sign of a return to more traditional economic policies. The bank hiked its policy rate to 25% on Thursday. The bank is backtracking from a rate-cutting course set by President Recep Tayyip Erdogan that’s been blamed for inflaming a cost-of-living crisis. Many households have been left struggling to afford rent and basic goods as inflation has surged. Central banks worldwide have been hiking rates to bring consumer price rises under control, but the Turkish central bank started cutting rates in late 2021 under pressure from Erdogan. He appointed a new economic team after being reelected in May.
California may pay unemployment to striking workers. But the fund to cover it is already insolvent
SACRAMENTO, Calif. (AP) — Some California lawmakers want to make striking workers eligible for unemployment benefits. The push in the final weeks of the state’s legislative session is in response to multiple strikes. That includes hotel workers in Southern California, and Hollywood actors and writers. California does not have enough money to pay all of the unemployment benefits workers are owed today. The fund is filled by a tax businesses pay on their workers wages. But the tax has not changed since 1984 and is among the lowest in the country. Labor unions say workers should not be punished for businesses not paying enough taxes.
Iran, Saudi Arabia and Egypt are among 6 nations set to join China and Russia in BRICS economic bloc
JOHANNESBURG (AP) — Iran and Saudi Arabia are among six nations that have been invited to join the BRICS bloc of developing economies. United Arab Emirates, Argentina, Egypt and Ethiopia are also set to join the bloc of developing economies from 2024. South African President Cyril Ramaphosa, whose country presently chairs BRICS, made the announcement at a bloc summit Thursday in Johannesburg. BRICS is currently made up of the emerging economies of Brazil, Russia, India, China and South Africa and those five members agreed at this week’s summit to expand the bloc. It currently represents around 40% of the world’s population and more than a quarter of global GDP, although that is set to increase with the new members.
Regulator’s review of over 30 Swiss banks finds shortcomings in money-laundering controls
GENEVA (AP) — Switzerland’s financial markets authority says an in-depth review of more than 30 banks conducted this spring found that “a large number” failed to meet basic requirements for analyzing the risk of money laundering. The authority, known as FINMA, says the review was prompted by repeated signs of shortcomings in money-laundering risk analysis during its regular visits to financial institutions. The poor assessment of the banks — which were not identified by name — is significant because Switzerland ranks No. 1 worldwide in wealth management.
Surprisingly durable US economy poses key question: Are we facing higher-for-longer interest rates?
WASHINGTON (AP) — A year ago, Chair Jerome Powell warned that to fight high inflation, the Federal Reserve would continue to sharply raise interest rates, bringing “some pain” in the form of job losses and weaker economic growth. Since Powell spoke at the conference of central bankers in Jackson Hole, Wyoming, the Fed has raised its key rate to its highest level in 22 years. Yet so far, not much pain has arrived. As Powell and other central bankers return to Jackson Hole, the economy’s resilience has raised the prospect that the Fed will need to keep its key rate higher for longer than had been expected to slow growth and tame inflation.
Nvidia’s rising star gets even brighter with another stellar quarter propelled by sales of AI chips
SAN FRANCISCO (AP) — Computer chip maker Nvidia has rocketed into the constellation of Big Tech’s brightest stars while riding the artificial intelligence craze that’s fueling red-hot demand for its technology. The latest evidence of Nvidia’s ascendance emerged with Wednesday’s release of the company’s quarterly earnings report. The results covering the May to July period exceeded Nvidia’s projections for astronomical sales growth propelled by the company’s specialized chips needed to power different forms of artificial intelligence such as Open AI’s popular ChatGPT chatbot. Nvidia’s revenue doubled from a year ago to $13.51 billion and the company projected sales are bound even higher. The company’s shares surged 6% in extended trading.
Foot Locker lowers full-year outlook again, pauses dividend as 2Q sales fall on cautious consumers
Foot Locker is cutting its full-year outlook again and pausing its quarterly dividend as sales dropped in its fiscal second quarter with consumers continuing to be more cautious about their purchases. Shares tumbled more than 33% on Wednesday. The footwear and clothing retailer said quarterly sales declined to $1.86 billion from $2.07 billion. That’s short of the $1.88 billion that analysts polled by Zacks Investment Research were calling for. Same-store sales, a key indicator of a retailer’s health, dropped 9.4% in the quarter.