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- Thursday's Scoop: Stumble🌤️
Thursday's Scoop: Stumble🌤️
Live Nation gets a breakup notice & Norfolk Southern pays for negligence
Hey friends - it’s time for a three-day weekend. There will be no scoops on Monday in observance of the Memorial Day holiday.
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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
Companies are still hanging onto their employees.
The economy showed new signs of life this month.
The housing shortage keeps pushing prices higher and stalling sales.
How are you feeling about the economy? |
💼 Work trends
Unemployment Rate: 3.9%
Still near the lowest rate in 50+ years
Layoff rates are still very low. The Labor Department reported initial unemployment claims dropped for the second straight week last week to 215,000, roughly average for a healthy economy. Unemployment is historically low, and there are still more than 1.3 available jobs for every unemployed person.
The economy showed new signs of life this month. S&P Global’s composite Purchasing Managers Index (PMI), which tracks manufacturing and service sectors, surged to the highest level in over two years in May. Manufacturing snapped out of a downturn, and the services industry accelerated to a twelve-month high. New orders picked up, but so did costs. Businesses reported rising materials and labor costs that they expect to pass on to customers, a warning sign for more potential price inflation.
🏠 Housing trends
30yr Mortgage Rate: 7.0%
That’s up from 6.7% a year ago. (MBA)
Median Home Price: $407,600
That’s up from $386K a year ago. (Existing homes - NAR)
High mortgage costs and rising home prices have stalled sales. The Commerce Department reported sales of newly-built homes dropped 4.7% in April as the median sale price rose to $433,500. This aligns with an earlier report that existing home sales, which comprise most of the market, also slumped in April. High mortgage costs have deterred buyers and kept sellers on the sideline, shrinking the number of homes available for resale. That’s pushed buyers to new construction over the past several months, but that appears to be slowing. The volume of new home sales, which account for 13% of all sales, was 8% lower in April than the year before.
📈 Investment trends
The Market: ⬇️ -0.7%
S&P 500: 5,267.84
1Mo: +4% | 1Yr: +27% | 5Yr: +86%
The market slumped on Thursday as the AI enthusiasm fueled by Nvidia's blowout earnings report faded into renewed concerns about inflation. New economic data pointed to a May rebound that might drive higher prices.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Join the board at America’s biggest companies. Vote and judge their decisions. (+2 pts)
![]() Live Nation | Breakup Battle Federal regulators have sued Live Nation, claiming the event promoter used its 2010 purchase of Ticketmaster to monopolize the live ticketing industry, stifle competition, and inflate prices. The event conglomerate controls more than 80% of primary ticketing for concerts and a growing share of the resale market, according to the Justice Department.
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💭 Broader perspectives… (+2 pts)
Do concert and event ticket prices feel fair? |
![]() Johnson & Johnson | No Texas Two-Step Cancer victims filed a lawsuit claiming Johnson & Johnson committed fraud by repeatedly trying and failing to limit its baby powder lawsuit payouts by transferring liability to a shell company and filing bankruptcy. The health giant faces over 50,000 lawsuits alleging its baby powder caused cancer.
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🤓 Inside Scoop: What is a Texas Two-Step?
The Texas Two-Step bankruptcy has recently faced much controversy and media attention, particularly regarding Johnson & Johnson's handling of its cancer victim lawsuits.
The corporate restructuring move allows companies to limit their exposure to legal claims on the whole company by transferring the liability to a smaller company with fewer assets. The larger company will split off a smaller part of its business, assign the issue's legal liability and some assets to it, and then file for bankruptcy with the smaller company. The bigger company and its assets are then shielded from future lawsuits on the issue, and any legal payouts will be limited to the new company's assets. It gets its name from a state with business-friendly policies that allow the maneuver.
![]() PepsiCo | Electrified Pepsi will shift a substantial portion of its delivery fleet in California to electric vehicles, purchasing 50 Tesla semi-trucks and 75 Ford electric vans. The snack and beverage giant aims to emit net zero carbon emissions by 2040.
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![]() Norfolk Southern | Crash Costs Norfolk Southern agreed to pay $310M to cover past and future environmental cleanup costs related to its 2023 train derailment in Ohio that contaminated East Palestine with toxic chemicals. The train company already agreed to pay $600M to local residents.
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![]() Ralph Lauren | Brand Power Ralph Lauren maintained sales growth last quarter despite broader shopper fatigue, reporting strong demand in China. The fashion house has increased profitability by growing direct-to-consumer to more than two-thirds of its sales.
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