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- Wednesday's Scoop: Steady 🌤️
Wednesday's Scoop: Steady 🌤️
UnitedHealth faces investigations & J&J pays cancer victims
Hey friend - it’s officially May. We’re on the doorstep of summer.
Here’s what you need to know today to inform your work, spending, and investments…
🌎 Big picture
The number of available jobs keeps shrinking.
Policymakers don’t expect to make borrowing more expensive.
Crypto’s most prominent CEO is going to jail.
How are you feeling about the economy? |
💼 Work trends
Unemployment Rate: 3.8%
Still near the lowest rate in 50+ years
Job openings have fallen significantly this past year. The Labor Department's Job Openings and Labor Turnover Summary indicated that available roles fell to 8.5 million in March, the lowest level in three years but still above the pre-pandemic average of 7 million. Available positions peaked above 12 million in March 2022, with two open positions for every unemployed worker. Now, there are only 1.3. Construction, finance, and healthcare cut back their hiring plans. State and local government education roles surged as the teacher shortage continued. Fewer people are quitting their jobs as the hiring market gets more competitive.
👜 Cost of living trends
Inflation Rate: +3.5% (YoY), +0.4% (MoM)
Policymakers aim for 2% YoY inflation. (CPI)
Persistent inflation has delayed policymakers’ plans to reduce nationwide borrowing costs, but they’re no longer considering raising rates. The Federal Reserve decided to keep baseline interest rates the same after this week's policy meeting. They believe the economy is doing pretty well and that inflation will continue to fall this year, even though it’s taking longer than expected. High rates will make it more expensive for businesses to borrow and for you to charge your credit card, lease a new car, borrow for school, or take out a mortgage. Less spending and lower demand for goods and services can ease the pressure on businesses to raise prices.
📈 Investment trends
The Market: ⬇️ -0.3%
S&P 500: 5,018.39
1Mo: -4% | 1Yr: +20% | 5Yr: +70%
The market wavered on Wednesday as policymakers reassured investors that things aren't getting much worse—they're just not getting better as quickly as they hoped. The Fed plans to keep borrowing costs higher for longer. Investors had worried that stubborn inflation could not only prevent interest rate cuts but also encourage rate hikes. Chairman Powell firmly dismissed that idea.
The founder and CEO of the world’s biggest cryptocurrency exchange is going to jail. Binance’s Changpeng Zhao, better known as CZ, was just sentenced to four months in prison for not doing enough to prevent money laundering for sex trafficking and terrorism through his crypto exchange. This comes after a settlement where Binance, the world's largest crypto exchange by far, agreed to pay $4.3 billion to the US Department of Justice. Despite stepping down as CEO, CZ's personal wealth remains largely intact. His case, along with the 25-year sentence for FTX founder Sam Bankman-Fried, underscores a major cleanup in the industry and tightening regulatory compliance.
🤓 Inside Scoop: What does it mean to be hawkish or dovish?
You might hear people talk about the Federal Reserve being hawkish or dovish. The Federal Reserve, aka the Central Bank, controls our money system and will stimulate or restrict the economy to keep it running at a healthy pace.
Policy hawks advocate tighter or more restrictive action, while policy doves advocate looser or more supportive and stimulative action. It's all relative, so one person could see a policy action as hawkish if they feel the economy needs more help. In contrast, another person could call the same policy dovish if they think the economy is overheating.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Vote and practice your board member voice. It accelerates your comprehension and comfort with these topics. (+2 pts)
![]() UnitedHealth | Cashing Out Executives at America's biggest healthcare company face potential investigations into stock sales of over $100M made between the time they were notified of an antitrust investigation and its public release. UnitedHealth faces regulatory scrutiny over its control across the entire healthcare industry.
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💭 Broader perspectives… (+ 2pts)
Should companies be required to report their market share to regulators? |
![]() Johnson & Johnson | Cancer Compensation Johnson & Johnson agreed to pay $6.5B over 25 years to tens of thousands of cancer victims claiming that its baby powder caused their ovarian cancer. The healthcare giant discontinued the product in 2022 but maintained that it was safe.
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![]() Kraft Heinz | Sensitive Shoppers Kraft Heinz reported sinking sales last quarter as its ongoing price hikes forced customers to reduce purchases of lunch foods and snacks. The food and snack giant has raised prices by 2.7% over the past year and 8.1% over three years.
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![]() CVS Health | Costly Care CVS's rapid expansion into healthcare and insurance ran into trouble as medical procedures and costs surged while the government took steps to curb Medicare prices. The healthcare giant added over 700,000 Medicare Advantage customers last quarter.
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![]() Yum Brands | Fewer Orders The fast food giant behind Pizza Hut and KFC reported slumping sales worldwide last quarter, except for Taco Bell, which posted solid growth in the US. Yum opened 808 new restaurants in three months and plans to expand artificial intelligence drive-thrus.
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