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- Tuesday's Scoop: Cooler 🌤️
Tuesday's Scoop: Cooler 🌤️
Stabucks steals Chipotle CEO & Samsung workers strike
Scoops Team
August 13, 2024
Hey friend - welcome back to your daily scoops on the economy and companies impacting your life.
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Small businesses are doing a little better.
Businesses aren’t facing much supply cost inflation anymore.
Natural disasters are causing record insurance losses this year.
How are you feeling about the economy? |
💼Work trends
Unemployment Rate: 4.3%
Relatively low, but up from record lows
Small business owners are feeling slightly more optimistic, but they’re still struggling with hiring costs. The National Federation of Independent Business (NFIB) reported its Small Business Optimism Index rose to the highest level since February 2022 in July. Despite this uptick, the high cost of business, particularly higher wages, continues to be the top concern, with 25% of owners identifying it as their biggest challenge, up from June. Difficulties in finding qualified workers are also squeezing profits, leaving many small businesses facing an uncertain road ahead.
👜Cost of living trends
Inflation Rate: +3.0% (YoY), -0.1% (MoM)
Policymakers aim for 2% YoY inflation. (June CPI)
Businesses aren’t facing much inflation anymore. The Labor Department reported that the Producer Price Index (PPI), which tracks what companies pay for goods and services, rose by just 0.1% in July. This mild rise in wholesale prices is a good sign that businesses no longer need to pass on high supply costs to consumers. The core PPI, which excludes the more volatile food and energy sectors, didn’t increase at all. Overall, the stuff companies spend money on is only 2.2% more expensive than a year ago. This is another encouraging sign that inflation is under control, giving policymakers more room to consider easing their economic restrictions and lowering borrowing costs in the coming months.
🤓 Inside Scoop: What is the Producer Price Index (PPI)?
The Producer Price Index (PPI) is another important indicator for economists tracking inflation. Inflation is the rate at which things get more expensive.
Unlike the Consumer Price Index (CPI), which looks at a set basket of stuff your average consumer spends money on and tracks how much it costs each month, the PPI tracks the prices of wholesale goods - like how much Ford pays for the tires it installs in its cars before selling them to you. The rate of change in those prices is inflation.
Prices rarely decline. Inflation, aka rising prices, is only a problem when it's really fast (3%+ per year).
🌊Climate trends
Global Energy Emissions: 37.4 billion tonnes of CO2
An all-time high, up 1.1% from 2022. (IEA)
Natural catastrophes have caused record losses this year. Insured losses from natural disasters in the first half of 2024 surged 70% above historical averages, according to a new study by Munich Re, one of the world’s largest reinsurers. Extreme weather events like wildfires, floods, and droughts are pushing insurance claims to unprecedented levels following a record-breaking year in 2023. Last year, US home insurers faced their worst underwriting loss this century, and 2024 is shaping up to be just as challenging. With climate change driving more frequent and severe storms, the insurance industry is grappling with higher claims and the growing risk that some regions may become uninsurable.
📈Investment trends
The Market: ⬆️+1.7%
S&P 500: 5,434.43
1Mo: -4% | 1Yr: +21% | 5Yr: +88%
The market continued its rebound on Tuesday as investors celebrated more signs that inflation is cooling. Businesses aren't dealing with surging supply costs anymore, but we'll see if they're still pushing prices higher for consumers tomorrow.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
How are these companies doing? Judge their decisions. Investing starts with an opinion. (+2 pts)
 Starbucks | Leadership Shake-Up Starbucks abruptly fired its CEO, Laxman Narasimhan, after just 17 months and will replace him with Chipotle's CEO, Brian Niccol, starting in September, amid investor pressure to improve performance. The coffee chain hopes Niccol, known for revitalizing Chipotle, will be able to quickly turn around its slumping sales.
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 TotalEnergies | Green Ships TotalEnergies achieved a major milestone in decreasing fossil fuel pollution in the shipping industry, delivering its first cargo of 100% biofuel derived from recycled cooking oil to ships in Singapore. The energy giant expects demand for sustainable marine fuels to double within two years.
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 Apple | Fee Lockdown Apple updated its payment rules in Europe to comply with fair business regulations, but it made it even more difficult for developers to avoid paying its high commissions. The tech giant's new structure no longer blocks developers from linking to external payments but now imposes a 20% fee on all off-platform sales made within a year.
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💭Broader perspectives… (+2pts)
Does Apple’s gated ecosystem stifle innovation? |
 Home Depot | Project Procrastination Home Depot reported falling sales for the seventh straight quarter as homeowners delay renovations amid high borrowing costs and economic uncertainty. The home improvement chain expects its recent purchase of professional construction supply company SRS Distribution to support sales this year as consumers cut back.
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 Samsung | Workers Revolt Thousands of Samsung workers will begin a four-day strike to demand increased wages and better working conditions after failed negotiations. The world's largest phone and chip manufacturer could suffer great impacts, as the strike is strategically aimed at disrupting production during a national holiday.
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🛠️ Recommended resources (+2pts)
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