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Thursday's Scoop: Optimism 🌤️
Starbucks CEO's big bonus & Walmart's discount wins
Scoops Team
August 15, 2024
Hey friends - only a few summer Fridays left. Call in sick tomorrow.😈
Insiders, look out for the Weekly Scoop tomorrow.
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Layoffs are still pretty low.
Americans keep spending despite high prices.
China’s economic recovery is hitting some bumps.
How are you feeling about the economy? |
💼Work trends
Unemployment Rate: 4.3%
Relatively low, but up from record lows.
Layoffs remain low, offering some reassurance about the economy. The Labor Department reported that initial jobless claims fell to 227,000 last week, the lowest level since early July and roughly in line with pre-pandemic averages. Despite concerns over slower hiring and a rising unemployment rate, the number of people receiving unemployment benefits for a consecutive week also declined. Recent data suggests that while employers have cut back their hiring plans from the post-pandemic boom, they aren’t looking to ramp up layoffs just yet.
China’s economic recovery is hitting some bumps. Factory output slowed for the third consecutive month in July, raising concerns about the strength of the world’s second-largest economy. However, there was a glimmer of hope as retail sales picked up slightly, thanks to recent consumer-focused stimulus efforts, according to National Bureau of Statistics data. This mixed performance highlights the need for Chinese policymakers to continue supporting households, as analysts suggest that more consumer-driven measures could help stabilize the economy in the coming months.
👜Cost of living trends
Inflation Rate: +2.9% (YoY), +0.2% (MoM)
Policymakers aim for 2% YoY inflation. (July CPI)
High prices aren’t stopping Americans from spending. Retail sales surged in July, marking the most significant increase since early 2023, according to fresh data from the Commerce Department, helping ease worries about an economic slowdown caused by an increase in the unemployment rate. Shoppers spent 1% more in July after cutting back slightly in June. Wages have been rising faster than the cost of living over the past few months, giving Americans more purchasing power. While many have turned to credit cards and loans to support their spending, the latest figures show that the US consumer is holding up reasonably well.
📈Investment trends
The Market: ⬆️ +1.6%
S&P 500: 5,543.22
1Mo: -2% | 1Yr: +25% | 5Yr: +92%
The market climbed again on Thursday, recovering completely from last week's meltdown, as more data about the economy eased concerns about an impending recession. It still looks like there's still a solid desire and ability to spend, and companies haven't ramped up layoffs yet.
🤓 Inside Scoop: How does knowing what happens in the financial world help achieve future goals?
Staying informed provides the context that makes every financial decision easier and less intimidating. It helps us make more informed decisions about our jobs, homes, savings, and spending.
Financial markets affect layoffs, mortgage costs, government policies, and many other aspects of our lives that we don’t learn about in school. Knowledge of economic trends can help identify investment opportunities, manage risks, and plan for future needs like retirement, education, or major purchases.
Observing the actions of business leaders can help us determine which companies are worthy of our time and hard-earned money. Our choices in where we work, shop, and invest help shape our future.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Join the board at America’s biggest companies. Vote and judge their decisions. (+2 pts)
 Walmart | Discount Dominance America's largest retailer reported an optimistic view on the economy, seeing increased store traffic and online spending, including growth in general merchandise sales for the first time in years. Walmart has pushed suppliers to reduce costs and kept its own pricing steady this year, helping it gain market share with inflation-weary customers.
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 Tapestry | Price of Luxury Tapestry reported shrinking sales across its luxury brands, such as Coach and Kate Spade, though it boosted profits by continuing to raise prices despite inflation concerns. The New York fashion giant still plans to acquire Versace-owner Capri to expand its luxury brand portfolio, despite regulators' attempts to block it.
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 Chevron | Tax Payoff Chevron agreed to pay $550M to Richmond, California, over ten years to avoid a newly proposed tax on its refinery located there. The agreement eliminates the risk of future lawsuits and ensures Chevron can continue operating in this critical region.
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 Deere & Co | Slow Season Deere is battling a significant slowdown in the farming industry with mass cost-cutting initiatives and careful inventory management. The farm machinery maker held its prices high to maintain its profit margins as sales tumbled last quarter.
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 Starbucks | Special Order Starbucks' new CEO, Brian Niccol, will receive a $113M pay package and be allowed to work from his home in California instead of relocating to the Seattle headquarters. The coffee chain raised wages for its workers by less than 5% this year and required corporate staff to return to the office three days per week.
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💭Broader perspectives… (+2 pts)
Are CEOs overpaid? |
🛠️ Recommended resources (+2pts)
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