Today's Scoop:

Hey friends - hope you had a lovely weekend. Make sure to catch up with our Weekly Scoop, and don’t miss our Explained on taking the politics out of business.

Here’s what you need to know today…

1. Salary demands are rising.

2. Interest rates keep increasing, making borrowing more expensive.

3. The Panama Canal is drying up, stalling global shipping.

S&P 500: 4,399.77
1Mo: -3% | 1Yr: +6% | 5Yr: +53%

The market floated higher today in a brief break from weeks of negativity. Some updates from tech companies sparked investor optimism.

American workers want higher wages to meet higher living costs. The Federal Reserve's employment survey revealed a significant increase in the minimum salary people would accept to switch jobs, up 8% in the past year to $78,645. The average full-time salary offer is only $69,475, though that's up 14% over the past twelve months. Fewer people reported looking for a new job or expecting to.

Interest rates keep climbing, making debt more expensive. Confidence in the strength of the US economy and fears that policymakers may have to fight higher inflation have pushed the 10-year US treasury bond yield to its highest rate since 2007, 4.34%. Since the US government is considered a "riskless" borrower, the treasury bond is the baseline rate for most other borrowing. So as treasury rates rise, other debt like mortgages grows more expensive.

The Panama Canal's drying up. Historic drought and warm sea temperatures have forced operators of the vital Pacific-Atlantic Ocean shortcut to limit the size and weight of cargo ships. The restrictions have already delayed transports by weeks and sent shipping costs surging. Roughly 80% of global trade is carried by the ocean. Severe drought disruptions in the world's fifth-wettest country highlight growing climate concerns for businesses.

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• GM’s self-driving taxis face setback after crash

• WeWork is in trouble, launches a 40-to-1 reverse stock split

• Starbucks pays out millions in racial firing lawsuit

• Deere signals a healthy construction market [🤓]

• Krogers becomes the sushi capital but faces merger pushback

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Why earnings guidance matters

One of the most critical components of corporate financial reports is the guidance. Public companies must report on their financial health each quarter, releasing standardized metrics on their sales, expenses, debt, profit, etc. All of that information, though, is backward-looking. Investors are buying a company for its future earnings (aka profit).

Companies often "issue guidance" or provide future sales and earnings projections. This gives investors a sense of optimism or pessimism from those who know the company the best. Forecasted metrics are not required, so many companies have often avoided making projections over the past few years, given the unprecedented economic events. If they do report, you'll hear that they may have raised or lowered guidance, meaning they expect higher or lower profit/sales/whatever than they projected last time. You might also hear guidance compared to Wall Street Analysts' projections or estimates.

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