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  • Thursday's Scoop: Wavering 🌤️

Thursday's Scoop: Wavering 🌤️

Ticketmaster's mega hack & WeWork back from the grave

 
Hey friends - it was a short week. Short weeks sound nice but usually stink. How’d you make out? Either way, it’s Friday 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

  1. Layoffs are still pretty low.

  2. The economy started the year off slower than previously thought.

  3. Foreclosures are rising.

How are you feeling about the economy?

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 💼 Work trends

Unemployment Rate: 3.9%
Still near the lowest rate in 50+ years

Companies still seem to be avoiding layoffs. The Labor Department reported that initial unemployment claims rose slightly to 219,000 last week, still around average for a healthy economy. Continuing claims from those who have been out of work for consecutive weeks rose again, indicating that finding a job is getting a little more challenging. However, unemployment is historically low, and there are still more than 1.3 available jobs for every unemployed person.

The economy didn’t start the year as strong as economists thought. The Commerce Department revised its first-quarter economic growth estimate lower. Real US gross domestic product (GDP) grew at an annualized rate of only 1.3% in the first quarter, the slowest pace in nearly two years and less than half as fast as the fourth quarter. Consumer spending, which powers two-thirds of the economy, slowed even more than initially thought as Americans added less incremental money to their pocket after taxes and inflation. Household spending on goods declined enough to offset higher business spending on artificial intelligence. Government spending declined as defense bills pushed into the next quarter. Overall, the economy showed signs of strength, but the slowdown raises concerns about how long consumers can keep consuming at higher prices.

 

🏠 Housing trends

30yr Mortgage Rate: 7.1%
That’s up from 6.9% a year ago. (MBA)
Median Home Price: $407,600
That’s up from $386K a year ago. (Existing homes - NAR)

Foreclosures are rising quickly in certain parts of the country, particularly Florida and Texas. This uptick is driven by increasing property taxes, insurance costs, and mortgage rates that now top 7%. Higher costs are trapping some homeowners who cannot sell their homes or refinance their mortgages. Particularly in Houston, foreclosure filings surged by 37% in the first quarter compared to last year, marking the largest increase in the nation among major metro areas. This rise in foreclosures is unusual to see with unemployment near record lows. It's a stark reminder of the strain of higher borrowing costs.

 

 📈 Investment trends

The Market: ⬇️ -0.6%
S&P 500: 5,235.48
1Mo: +4% | 1Yr: +24% | 5Yr: +90%

The market drifted lower on Thursday as investors digested mixed signals about the economy. Financial updates from major retailers have demonstrated that companies with the best leadership are earning sales as shoppers grow more selective with their budgets.

 

🏭 Companies worth watching

👍👎 APPROVAL RATINGS

Join the board at America’s biggest companies. Vote and judge their decisions. (+2 pts)

Live Nation

Crisis Control

Hackers reportedly stole the data of 560 million Ticketmaster users and demanded a $500,000 ransom in one of the biggest data thefts of all time.

The event ticketing giant has yet to confirm the breach and scale of customers impacted.

Tell Live Nation's CEO how you feel

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 💭 Broader perspectives… (+2 pts)

Should companies be required to compensate customers for cyber breaches?

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Palantir

Classified Contract Win

Palantir secured a massive $480M contract with the US Army to expand sophisticated artificial intelligence technology that uses a range of data to map enemy targets.

The secretive intelligence company has expanded its customer base but still focuses heavily on government clients.

Tell Palantir's CEO how you feel

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Gap

Brand Recovery

Gap grew sales across each of its brands - Old Navy, Banana Republic, Athleta, and Gap - for the first time in years and swung to a profit in the first quarter.

The retailer's new CEO's turnaround strategy has focused on brand storytelling to bring Gap back into the culture.

Tell Gap's CEO how you feel

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Kohl’s

Failed Incentives

Kohl's plan to add in-store Sephora makeup shops hasn't converted into apparel sales. Sephora sales surged 20% last quarter while broader sales sank 4%.

The retailer aims to turn things around with Babies R Us in-store shops and more trendy items for teens.

Tell Kohl's CEO how you feel

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WeWork

Debt Freedom

WeWork will emerge from bankruptcy after six months, eliminating $4B in debt by handing over ownership to its lenders.

The shared office space provider restructured, negotiated $12B in lower rent costs, and shed a third of its locations.

Tell WeWork's CEO how you feel

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 🤓 Inside Scoop: What happens when a company goes into bankruptcy?

Bankruptcy is a formal legal process that helps identify a path forward for companies and individuals who can't pay their debts. Lawyers come in to analyze the bankruptcy filer's income, available assets, and debt to figure out how to pay back as much debt as possible by selling non-essential valuables and property, then sometimes restructure the terms of the outstanding debt to something more manageable.

The most common type of business bankruptcy is Chapter 11, in which the company can stay operating but gets help restructuring its debt to create terms it can afford. It might use this to stall while looking for a buyer. Once the company files Chapter 7, it's out of business and plans to liquidate everything immediately to pay off debts. If you own stock in the company, you might see a return if it recovers from Chapter 11, but you'll lose your investment upon Chapter 7.

 

 

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