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Stocks making the biggest moves after hours: Meta Platforms, Chipotle Mexican Grill, ServiceNow and more 2023-07-26 - Check out the companies making headlines after the bell: Meta Platforms – Shares of Meta Platforms jumped nearly 6% on stronger-than-expected quarterly results. The social media company issued optimistic sales guidance for the third quarter and showed an 11% uptick in revenue. Chipotle Mexican Grill — The burrito chain's stock tumbled 9% in extended trading after sales fell short of Wall Street expectations. Chipotle reported adjusted earnings of $12.65 a share on $2.51 billion in revenue. Analysts polled by Refinitiv had expected EPS of $12.31 and revenues of $2.53 billion. Imax — Imax shares added 5% after reporting better-than-expected quarterly results. The entertainment technology company reported adjusted earnings of 26 cents a share. That topped the 16 cents expected by analysts, per Refinitiv. Revenue came in at $98 million, above the $86.6 billion expected. Lam Research – Shares of the semiconductor firm got a more than 2% boost after the company reported a strong quarter. Lam posted adjusted earnings of $5.98 per share, beating estimates by 91 cents per share, per Refinitiv. Revenue of $3.21 billion beat expectations of $3.13 billion. Financial guidance topped estimates as well. ServiceNow — ServiceNow dropped 3% despite reporting a beat on the top and bottom lines. The cloud computing company posted second-quarter adjusted earnings of $2.37 per share on revenue of $2.15 billion. Analysts had expected per-share earnings of $2.05 on revenue of $2.13 billion. The company also unveiled new generative artificial intelligence tools. eBay – The e-commerce stock slid about 5% after eBay issued weak guidance for the current quarter. The company said it anticipates third-quarter adjusted earnings per share of 96 cents to $1.01 per share, while analysts polled by FactSet anticipated $1.02 in earnings. The company posted $1.03 in adjusted earnings per share on revenue of $2.54 billion. Analysts called for earnings of 99 cents per share on revenue of $2.51 billion, according to Refinitiv. Sunnova Energy – Shares of the solar company slid more than 7% after hours following weaker-than-expected financial results for the second quarter. Sunnova posted a wider-than-expected loss of 74 cents per share, while analysts expected a loss of 42 cents per share, according to FactSet. Revenue came in at $166.4 million compared to expectations of $195.5 million. Align Technology – The orthodontics company saw its shares pop 12% after it posted adjusted earnings of $2.22 per share for the second quarter, beating estimates of $2.03 per share, according to Refinitiv. Revenue for the quarter also topped estimates, and revenue guidance for the year was above analyst expectations. Mattel – Shares of the toymaker were flat. Mattel announced the departure of Richard Dickson, chief operating officer, who is leaving to become CEO of Gap. The company also posted second-quarter adjusted earnings of 10 cents a share on revenue of $1.09 billion. Analysts called for a per-share loss of 2 cents and revenue of $1 billion, according to Refinitiv. Seagate Technology — Shares fell 2% in extended trading. The data storage company posted revenue for the fourth fiscal quarter that came in at $1.60 billion, while analysts called for revenue of $1.68 billion, per FactSet. L3Harris Technologies — The aerospace and defense stock fell more than 2% even after earnings came in above expectations. L3Harris reported adjusted earnings of $2.97 a share on $4.69 billion in revenue, and lifted earnings and revenue guidance. Analysts anticipated $2.94 in EPS on revenue of $4.37 billion for the latest quarter, according to Refinitiv. Aerojet Rocketdyne shares added more than 1% on news the Federal Trade Commission will not block its acquisition by L3Harris. — CNBC's Tanaya Macheel, Sarah Min and Darla Mercado contributed reporting

Tesla under investigation by California attorney general over Autopilot safety, marketing 2023-07-26 - Elon Musk, Tesla boss, runs to a Tesla at the Tesla Gigafactory construction site. In Grünheide near Berlin, a maximum of 500,000 vehicles per year are to roll off the assembly line starting in July 2021. The California attorney general's office is investigating Tesla , seeking information from customers and former employees about Autopilot safety issues and false advertising complaints, CNBC has learned. Greg Wester, the owner of a 2018 Tesla Model 3, filed a complaint with the Federal Trade Commission in August 2022, regarding "phantom braking" — sudden, automatic braking by a car for no apparent reason — that he would experience when using the company's driver assistance systems, or Autopilot, on the highway. Wester also told the FTC that he felt misled by Tesla after paying thousands of dollars for the company's premium driver assistance option, marketed as Full Self Driving capability (FSD) in the U.S. By the second quarter of this year, an analyst with California Attorney General Rob Bonta's office left Wester a voicemail seeking to interview him about the issues referenced in the complaint. Wester shared the voice message with CNBC, and provided a copy of the FTC's automated response acknowledging receipt of his complaint. CNBC confirmed that the person who called from the California AG's office works as an analyst there. The government employee did not request confidentiality in the voicemail. The California attorney general's press office issued the following statement to CNBC: "To protect its integrity, we're unable to comment on, even to confirm or deny, a potential or ongoing investigation." Phantom braking, a known issue that Tesla customers have complained about to federal agencies for years, can leave drivers susceptible to being rear-ended, among other dangers. Musk has long promised investors and customers that features and functions would be added to Tesla vehicles over time, via over-the-air software updates, that would turn their cars into self-driving or autonomous vehicles. On Tesla's second-quarter earnings call, Musk called himself "the boy who cried FSD." To this day, Tesla has not delivered a self-driving car and sells "level 2" systems, which require an attentive driver behind the wheel who is ready to steer or brake at any time. "Tesla should offer customers the option to receive a full refund of Autopilot features if they are unsatisfied with the product," Wester said in an interview. In purchasing FSD, he said, "we bought a full autonomy product and we received a driver monitoring product with partial autonomy." Wester isn't the only Tesla customer to be contacted by analysts with the attorney general's office after voicing safety and related concerns. A former Tesla employee, whose family owns a 2021 Model 3 with the FSD option, was contacted by email in July 2023 by a senior legal analyst in the California AG's consumer protection division. In the email, reviewed by CNBC, the analyst said she was seeking information from the person for an unspecified but active investigation into Tesla. The former Tesla employee, whose identity is known to CNBC, asked to remain unnamed to protect his privacy. The person had previously voiced concerns about Autopilot and FSD safety issues at Tesla and publicly. Tesla didn't respond to CNBC's request for comment. The FTC declined to comment. It's not unusual for law enforcement offices in the U.S. to obtain consumer complaints filed to the FTC via an online database called the Consumer Sentinel Network. According to the federal agency's website, the network "gives law enforcement members access to reports submitted directly to the Federal Trade Commission by consumers," and to other reports shared by "data contributors." In its second-quarter financial filing, Tesla said it receives "requests for information from regulators and governmental authorities, such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice ('DOJ') and various state, federal, and international agencies." While the company has previously identified "requests from the DOJ for documents related to Tesla's Autopilot and FSD features," Tesla has not disclosed that the California attorney general was investigating the company. "Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows and financial position," Tesla said in the filing. California has been Tesla's largest U.S. market for its electric vehicles and is home to the company's first vehicle assembly plant in Fremont. The company relocated its corporate headquarters to Austin, Texas from Palo Alto, California, in 2021. The California Department of Motor Vehicles has been investigating Tesla's driver assistance systems for years, and has formally accused the company of deceptive practices in marketing its Autopilot and FSD technology. WATCH: Tesla's limited product line makes pricing power key to growth

AWS announces generative A.I. tool to save doctors time on paperwork 2023-07-26 - Attendees walk through an expo hall during Amazon Web Services' Reinvent conference at the Venetian in Las Vegas on Nov. 29, 2022. "It is clear that generative AI has the power to transform the health-care and life sciences industry in many ways," Swami Sivasubramanian, AWS's vice president of database, analytics and machine-learning services said at during a keynote speech at AWS Summit New York Wednesday. As a result, several companies like Microsoft's Nuance Communications , and now AWS, have been working to build solutions to reduce this administrative burden. Clinical documentation is a major pain point for doctors and nurses. A study funded by the American Medical Association in 2016 found that for every hour a physician spent with a patient, they spent an additional two hours on administrative work. The study said physicians also tend to spend an additional one to two hours doing clerical work outside of working hours, which many in the industry refer to as "pajama time." The service aims to save health-care workers time using AI-generated transcripts and summaries of patient visits, which can then be entered into the electronic health record system. AWS HealthScribe can also extract notable medical terms, medications and other key details, according to the company, and physicians can double-check each line of generated text with the original transcript. Amazon Web Services on Wednesday announced a new service for health-care software providers called AWS HealthScribe, which uses generative artificial intelligence and speech recognition to automatically draft clinical documentation. Microsoft's Nuance announced its generative clinical notes application, DAX Express, in March. Similar to AWS HealthScribe, Dax Express automatically generates a draft of a clinical note within seconds after a patient visit. It can record a conversation between a doctor and a patient in real time and create a note using a combination of existing AI and OpenAI's newest model, GPT-4. With both services, physicians can review the AI-generated notes before entering them into the electronic health record system. AWS HealthScribe is powered by Amazon Bedrock, which is the company's service for building generative AI applications. AWS said Wednesday that AWS HealthScribe is compliant with HIPAA and does not retain any customer information. Customers can also choose where they would like to store their clinical documentation. The cost of the service will vary, as AWS HealthScribe is available on a pay-as-you-go basis, according to a company blog post. Customers will be charged based on the seconds of audio processed per month. Several organizations are already using HealthScribe, according to AWS, including the software company 3M Health Information Systems. Detlef Koll, 3M's vice president of global R&D, said the company has been working with AWS since this past fall to introduce the technology responsibly, ideally without causing disruptions in documentation quality. Koll said the technology is "excellent," in his experience, and that the tool will not function as decision support or change the care that patients receive. "Technology is an enabler for a solution, it's not the solution," Koll told CNBC in an interview Wednesday. The initial use cases for AWS HealthScribe were geared toward general medicine and orthopedics specialties, according to an AWS company release. The technology is available in a limited private preview capacity starting Wednesday, and Tehsin Syed, general manager of health AI at AWS, said the company plans to work closely with its customers to determine plans for expanding access. "We update the underlying technology based on the feedback that we're getting," Syed told CNBC. He added, "From an adoption perspective, I think there's a lot of interest, and we want to be very careful about making sure it's going to work at scale in the right way."

Mitch McConnell freezes at Senate press conference, is briefly unable to speak 2023-07-26 - Sen. John Barrasso (R-WY) reaches out to help Senate Minority Leader Mitch McConnell (R-KY) after McConnell froze and stopped talking at the microphones during a news conference after a lunch meeting with Senate Republicans U.S. Capitol 26, 2023 in Washington, DC. WASHINGTON — Senate Minority Leader Mitch McConnell abruptly froze and was briefly unable to speak at a Senate press conference Wednesday, prompting his colleagues to rush in and help him walk a few feet away from the cameras. The chilling moments came during the Senate GOP leadership's weekly press conference in the Capitol, where McConnell, 81, was standing at a lectern when he fell silent all of a sudden. Fellow senators appeared to quickly realize what was happening to the Kentucky Republican, and within moments Wyoming Sen. John Barrasso and South Dakota's John Thune stepped in to support McConnell's elbows. Thune and Barrasso walked the GOP leader off to one side of the long, marble hallway, but after a few minutes, McConnell returned to the lectern and finished the press conference. He dismissed reporters' questions about his health, however, and whether his brief inability to speak or move was related to a concussion the senator had suffered earlier this year. "No. I'm fine. I'm fine," McConnell replied. NBC News' Frank Thorp captured the incident on camera. A McConnell aide later sought to play down the scary moment, telling NBC that the Republican senator merely "felt light headed and stepped away for a moment." The staffer noted how McConnell "came back to handle Q and A, which as everyone observed, was sharp." The incident Wednesday occurred four months after McConnell suffered a serious fall at a Washington hotel that fractured his rib, in addition to giving him a concussion. After a week in the hospital, McConnell was released to rehab and spent the next month recuperating at home before he was able to return to the Senate in mid-April. It was unclear whether McConnell received any medical treatment after the Wednesday incident. Any significant change to McConnell's health would have potentially major political implications for Congress and the White House. This is especially true given how narrow each party's margins are in the House and Senate. In the unfortunate event that McConnell were unable to lead the GOP caucus on a daily basis, or cast in-person votes in the Capitol, there is no obvious successor waiting to take his place. This potential leadership vacuum was on stark display Wednesday when a reporter asked McConnell whether he had "anybody in mind to replace you when you're no longer conference leader?" McConnell did not respond. Instead, he just smiled and walked away.

Chipotle shares slide as sales fall short of Wall Street's expectations 2023-07-26 - A Chipotle restaurant in New York, US, on Monday, July 3, 2023. Chipotle Mexican Grill on Wednesday reported quarterly earnings that crushed expectations, but the burrito chain's sales fell short. The stock fell more than 9% in extended trading. Shares were up 50% this year through Wednesday's close. Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv: Earnings per share: $12.65 adjusted vs. $12.31 expected Revenue: $2.51 billion vs. $2.53 billion expected Chipotle reported second-quarter net income of $341.8 million, or $12.32 per share, up from $259.9 million, or $9.25 per share, a year earlier. Excluding restructuring costs, closure expenses and other items, the burrito chain earned $12.65 per share. Restaurant-level operating margins expanded to 27.5% from 25.2% in the year-ago period. Avocado prices were lower this quarter, but higher prices for tortillas, dairy, beef and other ingredients put some pressure on the company's profits. Last quarter, Chipotle said it was done raising menu prices after hiking them earlier to mitigate rising labor and commodity costs. But executives seemed more open on Wednesday to another round of price increases. "As we get closer to that fourth quarter, we'll make a decision exactly on what we want to do on the pricing front," CEO Brian Niccol said. Chipotle's net sales rose 13.6% to $2.51 billion in the second quarter. The company's same-store sales grew 7.4%, falling shy of StreetAccount estimates of 7.5%. But Niccol said the chain isn't seeing weaker demand from low-income or high-income consumers. In March, Chipotle introduced Chicken al pastor. Executives said the menu item brought new customers to its restaurants in the second quarter, but the limited-time item will wrap up in August. However, Chipotle already has plans to release a new menu item for later in the quarter. The company has also been training employees to improve how many burritos, bowls and tacos they can make during a shift. Niccol also shared that the company is rolling out a dual-sided grill, which can cook chicken three times faster and steak four times faster. Chipotle has added the new grills to 10 high-volume restaurants. Digital sales accounted for 38% of the company's food and beverage revenue this quarter. Chipotle opened 47 new locations, 40 of which included drive-thru lanes to pick up digital orders. The company also shut down its remaining Pizzeria Locale restaurants during the quarter. Founder Steve Ells, then still chief executive of Chipotle, partnered with two Colorado entrepreneurs on the fast-casual chain more than a decade ago. The company recently reorganized its corporate structure, according to Niccol. Changes included more investment in digital marketing and its international expansion and putting Chief Customer and Technology Officer Curt Garner in charge of product design, analytics and the customer experience. The company reiterated its full-year forecast of same-store sales growth in the mid- to high-single digit range. However, for the third quarter, Chipotle anticipates same-store sales growth in the low- to mid-single digit range. Wall Street is anticipating same-store sales next quarter of 5.9%, according to StreetAccount. Read the earnings release.

Major League Pickleball founder looks to capitalize on the sport's growing 'cool' factor 2023-07-26 - Just a few years ago, pickleball was barely known to most people. Today, it's America's fastest growing sport. With courts popping up in cities and parks across the country, celebrities and pro athletes buying up pro teams, and more than 36 million people giving it a shot last year, it's hard to escape the pickleball buzz. One of the sport's biggest boosters is Steve Kuhn, a former hedge fund manager who founded Major League Pickleball. He spoke this week at CNBC's Game Plan conference about the sport's rapid rise and some of their biggest challenges on the horizon. "I think there was a time when pickleball was considered a sport that was not really a sport. There was almost like a hushed, embarrassed tone, when talking about it," said Kuhn, who is known to wear red, white and blue cap saying "Pickleball will save America." "But today, when Kevin Durant, Lebron James and Tom Brady say it's cool, I think that changes everybody's opinion," he said. The billionaire, who lives in Austin, has gotten the pro league off the ground by growing the business with sponsorships, media deals and expansion teams. Major League Pickleball teams today are going for as much as $10 million. Just a year ago, teams were being scooped up for as little as $100,000. Professional Pickleball can be seen on almost every major television network and many streamers.

Nvidia wins again — plus two more takeaways from this week's mega-cap earnings 2023-07-26 - Earnings reports from Alphabet (GOOGL) and Microsoft (MSFT) on Tuesday revealed that both tech giants are doubling down on their investments in artificial intelligence — a strategy that benefits another one of our favorite holdings: Nvidia (NVDA). The guidance further reinforced our view that Nvidia is an "own it, don't trade it" stock, and was in-line with the company's own bullish forward guidance for this past quarter delivered back in May . It bodes well for the chipmaker's earnings, set to release Aug. 23, but perhaps more importantly management's ability to keep forward guidance the same, or even raise it. It was also one of several conclusions we made combing through the results and listening to the conference calls with investors. On Wall Street, it's called a "read-through" — a quick analysis using financial information and guidance from one company to make predictions about an upcoming release from a competitor, a strategy we regularly use at the Club. We are basically looking for results or management commentary that speaks to peer companies or the industry as a whole. Here then are 3 read-throughs from Tuesday's big earnings reports: 1. Nvidia stays on top. This was easily the most obvious takeaway. Microsoft and Alphabet are separately working to weave artificial reality into core products — such as Office 365 and internet search — while developing enterprise-level tools in the cloud to help customers across industries. Not only have both spend tens of billions already to get to where they are now with generative AI, both are also gearing up to spend a boatload more as the AI arms race shows no signs of stopping. Let's start with Google parent Alphabet, which reported second-quarter capital expenditures below expectations, but said the largest spend was for servers, including a "meaningful increase in our investments in AI compute." The team expects elevated levels of investment in its technical infrastructure increasing through the back half of 2023 and growing more in 2024. The primary driver is to support opportunities in AI across Alphabet, including investments in GPUs and proprietary TPUs as well as data center capacity." CEO Sundar Pichai even mentioned the Nvidia's H100 as the chip powering the company's new "A3 AI supercomputers." Meanwhile, Microsoft reported capex that was above what the Street's estimates and up 30% versus the year-ago period. On the call, management said it was "to support cloud demand, including investments in AI infrastructure." Microsoft, too, said it expects to spend more through the year to ramp up purchases of data center GPUs, and though they didn't state it as plainly as Pichai, we can assume the H100 is going to comprise a good deal of that spending as it's the most powerful AI-oriented chip on the market today. This is all welcome news for Nvidia. First, the results show the company's aggressive guidance provided for the second quarter is achievable. Second, it increases the likelihood management can provide a forward outlook at least on par with current third-quarter estimates. With shares now up nearly 50% just since the last report, the guide is going to prove even more important than the results in terms of the stock's ability to continue its upward trajectory. 2. AMD should win, too — just not right away. Though this commentary is also a positive for AMD since you can't build a data center without CPUs, the chipmaker's specialty. But we don't see AMD benefiting in the near term on the GPU front, which is where the bulk of the spending is likely to be targeted. That could change in coming quarters when MI300 production starts to ramp up. Nvidia's H100 chip really is the Generative AI gold standard at the moment and as a result stands to soak up much of the money going into AI-oriented GPUs. Of course, as Microsoft highlighted, data center buildouts do require CPUs and as we know AMD continues to take share from Intel on the data center CPU front, so they do stand to benefit, even if not quite to the extent Nvidia will. We also think that Microsoft's disappointing guide for the current quarter points to a bottoming out in the PC market, another pain point for AMD that may soon ease. It's not bullish for AMD near-term, the more personal computing guide does point to a sequential decline in sales, however, if we really are looking at a bottom this quarter then it could mean that we're now in the last bad quarter for AMD's Client segment (which was down 65% annually in the first quarter) before things start to improve. That would indicate a possible buying opportunity once earnings are released and guidance is quantified. 3. We're more worried about spending at Amazon and Meta Platforms. While the reports were clearly positive, they're a bit more mixed in terms of what we can expect from Amazon's AWS unity and Meta Platforms, which reports after the bell Wednesday. Amazon (AMZN) reports next week. The same commentary that gives us confidence in Nvidia's revenue momentum also makes us concerned about what Amazon and Meta Platforms will have to say about their own capital expenditure expectations. While Alphabet's report clearly bodes well for Meta's own advertising revenues, and Microsoft's Azure results give us reason to believe that the AWS results can at least match Street expectations (even with customer optimization efforts still underway), it's clear that the AI spending is only getting started. And if Alphabet and Microsoft are about to ramp up spending, it stands to reason that Amazon and Meta Platforms could be looking to do the same. Wall Street still wants to see cost rationalization, which is why we were so happy to finally see Alphabet's expense growth come in below revenue growth. That means that if Amazon and Meta Platforms are going to guide for capital expenditure to increase in coming quarters, they need to explain to investors how those investments are going to pay off. What is increased AI spending going to do for Meta's engagement and Reels monetization efforts? Can we get assurance that an intense focus on efficiency remains even should additional AI-oriented investments be required? What will it do for Amazon shopping recommendations and the value AWS can offer users? These are topics will be listening out for when the company's report. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. Nvidia chief Jensen Huang (centre L) poses for photographs before attending a press conference at Computex 2023 in Taipei on May 30, 2023. Sam Yeh | Afp | Getty Images

Two more McDonald's franchisees fined for child labor violations in Louisiana and Texas 2023-07-26 - Separate owners of McDonald's locations in Louisiana and Texas have been fined a combined $77,500 for letting minors work more hours than federal guidelines allow. CLB Investments has been fined $56,106 after federal investigations found that it allowed 14- and 15-year-old employees at its 12 McDonald's locations in the New Orleans area to work longer and later hours than permitted by law, the U.S. Department of Labor said. Three of those teenagers were also allowed to operate deep fryers, a hazardous task legally prohibited for workers under 16, the agency added. Chris Bardell of La Place, Louisiana, owns CLB Investments, business records show. "Since learning of these violations, I've introduced mandatory child labor law trainings for my restaurant managers and conducted regular audits to ensure we're in compliance with labor regulations," Bardell told the Associated Press. Laws restricting the number of hours and times of day minors can work were enacted to ensure teenagers' safety in the workplace and that they have enough time to focus on school, said Betty Campbell, a Labor Department regional administrator in Dallas. "While learning new skills in the workforce is an important part of growing up, an employer's first obligation is to make sure minor-aged children are protected from potential workplace hazards," Campbell said in a statement Tuesday. The Labor Department said 14- and 15-year-olds in Texas also worked longer hours at four McDonald's locations owned by Marwen & Son. Ten minors on staff were allowed to operate a deep fryer, oven and use a trash compactor — all federal violations. Marwen & Son, owned by Martin Washington of Cedar Park, was fined $21,466. Washington didn't immediately respond to a request for comment Wednesday. Labor regulators didn't specify how many extra hours teens had been working in those restaurants. Still, the Louisiana and Texas violations add to the agency's announcement of similar infractions roughly two months ago at McDonald's locations near Kentucky. Three separate franchisees, which were fined $212,544 in all, employed 305 minors to work longer hours at 62 restaurants across Kentucky, Indiana, Maryland and Ohio, the department said. Investigators also determined that Bauer Food, a Louisville-based operator, illegally employed two 10-year-old children without pay to prepare food, clean the store and work at the cash register, sometimes working as late as 2 a.m. One of the underaged children was also allowed to operate the deep fryer, investigators found. McDonald's franchisees operate with some degree of autonomy from corporate-owned restaurants. A McDonald's executive said Tuesday that the company is aware of the violations at some locations. "We take this issue seriously and are committed to ensuring our franchisees have the resources they need to maintain compliance with all U.S. labor laws," McDonald's USA Chief People Officer Tiffanie Boyd told the Associated Press. Spike in child labor violations The McDonald's violations come amid signs that more companies are employing underage employees. Labor Department officials said they found 3,876 violations across all U.S. employers last year, up more than 60% from 2018. At the same time, local lawmakers are moving to loosen child labor protections. Some states, including Arkansas, Iowa, Minnesota and Missouri, have proposed legislation that would increase the number of hours teenagers could work. Representatives in those states argue that teens already stay out late for school athletics, so longer work hours is no different and could even help young people explore potential careers. The Biden administration in April urged U.S. meat companies to make sure they aren't using child labor after an investigation found more than 100 kids working overnight for a third-party company that cleans slaughterhouses, including handling dangerous equipment such as skull-splitters and bone saws. More recent incidents include the accidental death of a 16-year-old boy while on the job as a sanitation worker at a poultry plant in Mississippi. In Wisconsin, a 16-year-old boy was recently killed in an accident at a sawmill after getting pinned down while attempting to unjam a wood-stacking machine.

Major automakers to build new nationwide electric vehicle charging network 2023-07-26 - “Range anxiety” not an issue says some electric vehicle owners “Range anxiety” not an issue says some EV owners “Range anxiety” not an issue says some EV owners Seven of the world's largest automakers said Wednesday that they're working together to build a new nationwide network of 30,000 electric vehicle charging stations, an effort to stoke already growing consumer demand for EVs. BMW, General Motors, Honda, Hyundai, Kia, Mercedes and Stellantis said the first batch of their "high-powered charging" stations will be available next summer. EV owners have long complained about a shortage of places to charge their vehicle. The automakers said they hope the stations will "make zero-emission driving even more attractive for millions of customers." The charging system would be public and open to all electric vehicle owners and have connectors for both Tesla's North American Charging Standard plugs as well as the Combined Charging System plugs used by other automakers. Motorists remain concerned about finding a charging station, while also having question about electric cars' range and how long it takes to reach full power, auto industry experts have told CBS MoneyWatch. Automakers will need to pay as much attention to adding chargers as they have to lowering prices, Jessica Caldwell, executive director of insights at Edmunds, said this week. The car manufacturers wouldn't disclose financial details of the network or how long it will take to build all 30,000 stations. Automakers told the Associated Press that they will "work as equals to ensure the success of the joint venture." There are currently just under 8,700 direct-current, fast-charging stations in the U.S. and Canada, with nearly 36,000 charging plugs, according to the U.S. Department of Energy. Tesla, by far the market leader ins EVs, accounts for 2,050 of the stations across the U.S. and Canada. The new network is expected to have 10 to 20 charging plugs per station. The network is likely to boost electric vehicle sales in North America by helping ease drive concerns about long-distance travel, said Stephanie Brinley, an analyst with S&P Global Mobility. "It's stopping them from even exploring what EV life is like," she said. The announcement of the network "is giving them confidence that this is going to work out." In their statement, the automakers said they would use renewable energy as much as possible to power the chargers, and they will be in convenient locations with canopies and amenities such as restrooms, food service and stores. In the U.S., consumers bought 557,000 electric cars in the first half of the year, accounting for 7.2% of all new vehicle sales. Most industry analysts predict continued growth in EV sales for the next decade or more. —The Associated Press contributed to this report.

Federal Reserve hikes key interest rate to highest level in 22 years 2023-07-26 - After briefly pausing its war on inflation last month, the Federal Reserve is resuming the battle by hiking its benchmark interest rate to the highest level in 22 years. The central bank concluded a two-day policy meeting on Wednesday by announcing that it is raising the federal funds rate by a quarter of a percentage point, lifting the Fed's target rate to between 5.25% and 5.5%. The Fed left the door open to further rate hikes this year, with Chair Jerome Powell telling reporters in a news conference that additional tightening is possible unless inflation continues to cool rapidly. "What our eyes are telling us is policy has not been restrictive enough for long enough to have its full desired effects. So we intend to keep policy restrictive until we're confident that inflation is coming down sustainably to our 2% target, and we're prepared to further tighten if that is appropriate," he said. "The process still probably has a long way to go." The Fed's current rate-hiking cycle, its most aggressive push to tighten monetary policy since the 1980s, has proved effective in dousing the hottest bout of inflation in four decades by raising borrowing costs for consumers and businesses. Since the central bank began tightening in March 2022, mortgage rates have more than doubled while the costs of car loans and credit cards have surged. The hikes have also squeezed technology companies and banks that were reliant on low interest rates, putting some out of business and forcing others to cut tens of thousands of workers. Inflation around the U.S. is now just half its level from a year ago, with prices rising at a roughly 3% annual rate — lower than the pace of workers' pay increases. Still, the Fed has expressed concern that core inflation, which leaves out food and fuel prices, remains well above the bank's 2% target. Core inflation was at 4.8% last month. Although prices have fallen, the country continues to enjoy solid job growth and consumer spending, which could raise concerns the economy is still running hot enough to cause inflation to rebound. On the other hand, some economists and business leaders say that raising rates too high may increase the risk that the U.S. could plunge into a recession. "It remains uncertain whether the Fed is going to raise rates again this year, but if they do there is a real risk that they will overshoot, weakening the labor market and sending the economy into recession," Lisa Sturtevant, chief economist at Bright MLS, said in an email. The stock market remained generally flat in Wednesday afternoon trading, with most investors having expected the latest rate hike.

In America's "internal colonies," the poor die far younger than richer Americans 2023-07-26 - Nonprofit fights homelessness by building support networks Nonprofit fights homelessness by building support networks 02:58 Millions of Americans are living in communities mired in "deep disadvantage," mostly rural locations stuck in generational poverty, but where some residents experience health outcomes that shorten average life expectancies to that of poor nations. These are America's "internal colonies," according to a new book, "The Injustice of Place" (Mariner Books, August 2023), about the geography of poverty. Researchers and co-authors Kathryn J. Edin, a sociology professor at Princeton University; H. Luke Shaefer, a professor of social justice and social policy at the University of Michigan; and Timothy Nelson, director of undergraduate studies in sociology and a lecturer of public affairs at Princeton, have taken a deep dive into community-level data to create the "Index of Deep Disadvantage," which combines poverty statistics with health measures, such as life expectancy, to examine trends across the nation. The resulting map shows huge swaths of deeply disadvantaged locations across the nation's 3,000 counties, places that are mostly located outside of the largest U.S. cities yet which share some traits: A history of resource extraction, unequal educational opportunities, a breakdown of social bonds, violence and local corruption. These locations also were linked to some of the most brutal aspects of U.S. history, from slavery to Appalachia's coal mining practices, the authors note. The authors and their researchers visited poor locations and talked with residents, and they came away with an observation: These regions effectively operate as "internal colonies" within the U.S., where residents lack access to the same opportunities as other Americans. "It dawned on us, and we would have had to have been pretty foolish not to have noticed, that these places look like colonies — colonies within the United States," Edin told CBS MoneyWatch. "We call them America's internal colonies, and they really do have this history of extreme exploitation and extraction that you just don't see to the same degree elsewhere in the U.S." This map, created by the authors of "The Injustice of Place," illustrates where "deep disadvantage" exists across the U.S. The term describes poverty as well as poor health outcomes, such as lowered life expectancy, of its residents. The regions are primarily in South Texas, Appalachia and the Cotton Belt of the American South. Kathryn Edin These regions — Appalachia, the Tobacco Belt of Virginia and the Carolinas, the Cotton Belt in the South and South Texas — share additional economic traits that limit the social mobility of its residents. "They were all mono-economies, are organized from one industry, and there are very few haves — and scores of have-nots," Edin said. "There was really no middle class." She noted, "Nobody should be left behind to this extent." "The most unequal places in our nation" The researchers opted for the term "deep disadvantage" to describe the intergenerational poverty in these regions because it implies a "moral sense of people being held back unfairly," Edin noted. The researchers, who previously examined the millions of Americans living on $2 a day, visited more than 130 of the 200 places of deepest disadvantage, going to diners and asking residents to sit with them and share their experiences, or meeting with local leaders. One aspect of these locations that surprised her was that great wealth often sits side-by-side with deep poverty. "The Injustice of Place," from HarperCollins' Mariner imprint, examines the most disadvantaged places in the U.S. Most of them are rural, and have suffered from generations of poverty and neglect, the authors found. HarperCollins "You'd say, 'Oh my goodness, what is this huge mansion doing in the midst of all of these tiny shotgun shacks?'" she recounted. "You think all these places are poor, but what you don't realize is that they are the most unequal places in our nation. Wealth and poverty have always lived hand in hand in these places, but the wealth is in the hands of a very few." Some of the disadvantaged regions have markedly lower life expectancies than the U.S. as a whole and compared with wealthier counties. Men who live in McDowell, West Virginia, in the heart of Appalachia's coal country, have an average life expectancy of 64 years old, on par with what is found in Bolivia or Ghana. By comparison, men who live in wealthy counties such as Fairfax, Virginia, or Marin, California, can expect to live to 81 years on average. "There's nothing to do but drugs" Appalachia has been devastated by the opioid epidemic. Traveling throughout the region, the researchers heard the same complaint again and again, Edin noted. "'There's nothing to do but drugs,'" were the things coming out of everyone's mouth and we were like, 'Oh, come on, that can't be important,'" she recounted. "But communities can only protect people if they have the key institutions that allow people to build social bonds, like the bowling alley." Edin added, "It wasn't that the people weren't going to the bowling alley — it was that there was no bowling alley any longer to go to. And it wasn't just the bowling alley. It was the movie theater, it was the barbershop, it was the beauty salon. The roller rink was sitting vacant." The finding, which Edin said was one of the most unexpected things they hit upon, is reminiscent of sociologist Robert Putnam's widely lauded 2000 book "Bowling Alone," which explored the collapse of social institutions like bowling leagues and community groups, along with the consequent sense of alienation reported by many Americans. The researchers counted the activities Appalachian residents engaged in to "test this claim," she noted. "We did find that people did things, but there are almost all these solitary pursuits," like fishing, hunting or watching TV, she noted. "Social infrastructure is as critical a life-and-death matter as is adequate physical infrastructure." Decades ago, pharmaceutical firms that make opioids had specifically targeted Appalachia, which had a combination of high disability claims and family physicians. That was attractive to drugmakers because people on disability automatically qualify for Medicaid, which meant their prescription painkillers would be covered. And they believed that family physicians would be more likely to prescribe painkillers to their patients. Combining an already sick population with tattered social bonds added fuel to the opioid crisis, the researchers contend. Segregation academies Meanwhile, residents in deeply disadvantaged areas in the South still have unequal school systems, which stems from decades of disinvestment in education for Black children, the researchers said. After Brown v. Board of education, which ruled that segregated schools were unconstitutional, many White communities created "segregation academies" — private schools geared for White children. "They were just everywhere because Whites had degraded Black education to such an extent — Black kids were only getting 4 to 5 months of education a year because of the demands of sharecropping," Edin noted. "Whites couldn't imagine their children sharing schools with Black kids." But these academies, which still exist, pulled resources away from public schools, while funneling White students into private schools that often lacked rigorous teaching or educational standards. "Segregation has actually deepened. It's not gotten better," Edin said of these areas. Meanwhile, poor Southern residents, also feeling the impact of climate change — with stronger storms and punishing heat — are sometimes left out of government aid programs like FEMA's disaster relief because they lack access to paperwork like property titles, the researchers found. Other communities are plagued by gun violence, which is linked to premature death and injuries, and also damages community bonds. On top of that, funds for poor residents are sometimes siphoned by local corruption, such as in the recent case of fraud in Mississippi, in which officials allegedly stole millions of welfare dollars to squander on pet projects like drug rehab for a pro wrestler. "A lot of government dollars flow to the local elites, who are the very extractors who will ensure that their pockets are aligned at the expense of the community," Edin said. Places that work The U.S. also has regions where opportunity is more equally distributed, many of which are also rural, Edin noted. Such pockets of advantage are largely located in the Midwest in Nebraska, Iowa, Minnesota and Wisconsin. "These places are just engines of mobility for generations," Edin said. "These are places that work in the way we think America ought to, like they send tons of kids to college. A kid born poor has the same chance of reaching the middle class as a middle-class kid does — and this is the way America is supposed to work." The defining difference between these counties and America's "internal colonies" can be found in social infrastructure, a strong middle class and lower inequality than in the nation's poorest regions, she added. The authors have some suggestions for aiding the regions of deep disadvantage, such as raising teacher pay, which would help lift the quality of public education, as well as tackling continued segregation in U.S. schools. More investment in public infrastructure and eradicating political corruption would also help, they note. "Americans have a lot of fears about people being dependent and living off the government dollar, but they still believe that America should be a place that's fair and where children have an equal chance of getting ahead, no matter what part of the income distribution they grew up in," Edin said. "We're not saying give everyone a handout. We're talking about specific policies that will allow people more of a fighting chance to achieve the American Dream."

Cigna accused of using an algorithm to reject patients' health insurance claims 2023-07-26 - Cigna is using an algorithm to review — and often reject — hundreds of thousands of patient health insurance claims, a new lawsuit claims, with doctors rubber-stamping those denials without individually reviewing each case. The class-action suit, filed in the U.S. District Court in Sacramento, alleges that Cigna's actions violate California state law, which requires that insurers conduct a "thorough, fair and objective" investigation into each patient claim. Instead, the lawsuit alleges, Cigna is relying on an algorithm, called PxDx, that saves the insurer money by denying claims. The system also reduces the company's labor costs by cutting the time needed by doctors to look at each claim, according to the complaint. One California woman with Cigna health insurance, Suzanne Kisting-Leung, underwent an ultrasound ordered by her doctor because of concerns about ovarian cancer. The ultrasound found a cyst on her left ovary, the lawsuit states. Cigna denied her claim for the ultrasound and a follow-up procedure, claiming neither were medically necessary and leaving her on the hook for $723 in costs for the two ultrasounds, the claim alleges. Another Cigna customer in California had a vitamin D test to check for a deficiency, a procedure that was ordered by her doctor. Cigna denied her claim, but didn't provide an explanation about why the test was rejected, the suit claims. The litigation highlights the growing use of algorithms and artificial intelligence to handle tasks that were once routinely handled by human workers. At issue in health care is whether a computer program can provide the kind of "thorough, fair, and objective" decision that a human medical professional would bring in evaluating a patient's claim. "Relying on the PXDX system, Cigna's doctors instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills," the suit alleges. It added, "The scope of this problem is massive. For example, over a period of two months in 2022, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of just 1.2 seconds 'reviewing' each request." The case was brought by Clarkson Law Firm, which has also sued Google-parent Alphabet over its use of AI, claiming that the search giant stole data from millions of users to train the program. Cigna defends PXDX In a statement to CBS News, Cigna called the lawsuit "highly questionable." "Based on our initial research, we cannot confirm that these individuals were impacted by PxDx at all," the insurer said. "To be clear, Cigna uses technology to verify that the codes on some of the most common, low-cost procedures are submitted correctly based on our publicly available coverage policies, and this is done to help expedite physician reimbursement." The insurance claims review occurs after patients have received treatment and "does not result in any denials of care," Cigna added. The lawsuit's allegations follow a recent investigation by ProPublica that flagged similar denials of payment to Cigna customers. Typically, a patient obtains treatment from a doctor or health care facility, which then submits a claim to the insurer. Cigna's statement that its process doesn't result in denials of care may be correct — the patient, after all, gets the treatment — but some customers are allegedly left with bills that they believed would have been covered under their health plan. One doctor who had worked at Cigna told ProPublica that they sign off on the denials from PxDx in batches, without reviewing the individual claims. "We literally click and submit," the doctor told the investigative news outlet. "It takes all of 10 seconds to do 50 at a time." Kisting-Leung has appealed her two denials, but still hasn't received payment for the ultrasounds, the suit claims. The case is asking for damages as well as an order to stop Cigna from "continuing its improper and unlawful claim handling practices," as alleged by the complaint.

Dwayne "The Rock" Johnson makes 7-figure donation to SAG-AFTRA relief fund amid actors' strike 2023-07-26 - How the Hollywood strikes of 1960 and 2023 compare Superstar Dwayne "The Rock" Johnson made a "milestone" seven-figure donation to a relief fund for actors amid their ongoing strike against major Hollywood studios. Following the announcement that thousands of film and television actors in SAG-AFTRA were going on strike beginning July 13, leaders of the SAG-AFTRA Foundation — a nonprofit group associated with the union which provides emergency assistance to members — sent a letter to 2,700 of the union's highest-earning actors, explaining the financial strains the strike would cause, Variety reported Monday. Shortly after, Johnson's team made an undisclosed seven-figure donation to the SAG-AFTRA Foundation Emergency Financial Assistance and Disaster Relief Fund, the union confirmed to CBS News Tuesday. "While the Foundation does not disclose amounts from its donors, we can reconfirm Dwayne Johnson contributed a 7-figure to its charitable Emergency Financial Assistance Program," a SAG-AFTRA representative said in a statement, calling it the "single largest donation" since the foundation was created in 1985. For the first time since 1960, both Hollywood actors and writers are on strike simultaneously, a move which has effectively shut down scripted production across the industry. The Screen Actors Guild has more than 160,000 members, although the strike only affects the union's roughly 65,000 actors.

As strike continues, working actors describe a job far removed from the glamour of Hollywood 2023-07-26 - The strike that has paralyzed the entertainment industry has drawn outspoken support from some of Hollywood's biggest stars. Yet the festering issues animating the walkout are far more likely to affect the thousands of ordinary working actors trying to eke out a living in the age of streaming and artificial intelligence. Far from the glitz often associated with the movie business, many such "journeymen" actors live paycheck to paycheck, struggle to afford health insurance and often have to take on non-acting jobs to pay the bills. "For most of those years, I've had to have a second job and source of income," Moises Acevedo told CBS MoneyWatch. The New York actor's credits include the TV shows "Blue Bloods" and "Orange Is the New Black" and a recurring character in "Betty." Only in recent years has Acevedo been able to rely exclusively on his income as an actor on shows that have aired on streaming platforms including Netflix and Amazon. But when TV and movie writers staged their own strike in May, Acevedo said he knew the Screen Actors Guild-American Federation of Television and Radio Artists, which is leading the actors' strike, would follow suit. (Some CBS News staff are SAG-AFTRA members. But they work under a different contract than the actors and are not affected by the strike.) "So I went back to the restaurant where I worked years prior, and that's how I'm living now," he said, noting that he's learned not to rely on the often measly residual checks from productions he's appeared in to tide him over in between jobs. Moises Acevedo has long maintained a co-career to supplement his income as an actor. Courtesy of Moises Acevedo $5 check A sticking point in the negotiations between SAG-AFTRA and Hollywood studios, represented by the Alliance of Motion Picture and Television Producers, is the residual payments actors get for their work in streaming content — long-term compensation for what used to be re-runs on cable television. Streaming services aren't transparent about viewership numbers, which means actors are often in the dark about whether they're being paid fairly — or at all — for repeated airings of a show they appear in, Acevedo said. For guest-starring in an episode of hit Netflix series "Orange Is the New Black," Acevedo was paid a one-time fee and also earned residuals for overseas streams of the episode. But the residual payments were paltry. "The most recent check I got was for foreign territories in Europe. It had all these different territories — the UK, Italy — it equalled up to, like, $5. What am I supposed to do with that?" said Acevedo, a SAG-AFTRA member since 2007. As his fellow actors head into the second week of the strike, his biggest demand is for the studios to openly disclose their viewership data so performers can better gauge how fairly they're being paid. "It's that simple. We want to know what people are watching and how many times they're watching it. From there on, we can get what's right," he said. "We do not make Tom Cruise money" Veteran actor Nicole Bilderback considers herself lucky compared to many of her peers, noting that she meets the minimum $26,470 annual income threshold to qualify for health insurance offered through SAG-AFTRA. She has worked steadily in the industry for three decades, recently appearing in streaming series "Brooklyn Nine-Nine" and "Cruel Summer" and also in movies such as "Clueless" and "Bring it On" as well as in TV shows "Dawson's Creek" and "The Fresh Prince of Bel-Air." Still, none of her work in movies and TV has made her rich. "I'm a blue-collar, working-class actor. I'm notable and recognizable because I have worked a lot over a 30-year career span, but that doesn't mean I am well-off and can go months without working. Actors like myself go from paycheck to paycheck," she told CBS MoneyWatch. "The general public has this false sense that if you work a lot, or are a series regular on a hit TV show, that you must be making millions and be well off. But we do not make Tom Cruise money," said actor Nicole Bilderback. Courtesy of Nicole Bilderback "The general public has this false sense that if you work a lot, or are a series regular on a hit TV show, that you must be making millions and be well-off. But we do not make Tom Cruise money," Bilderback added. Like Acevedo, she's not counting on residuals to tide her over until SAG-AFTRA reaches an agreement with AMPTP. Instead, to supplement her income Bilderback recently trained to become a corporate flight attendant on private aircraft. "I have to take care of myself now that the industry is shut down," she said. "Pretty much all actors across the board have taken on second jobs, or are about to." "It doesn't need to be millions" Harry Ford, 40, has a supporting role opposite Cate Blanchett in the upcoming film "Borderlands" and was also a series regular on CBS medical drama series "Code Black." Ford noted that, even when he's working and getting paid, he only takes home a fraction of the money. "We are in one of the few professions where it costs a lot of money to make money. You have to pay 10% to your agent, 10% to your manager — if you have one, 5% if an attorney negotiated the deal, 5% if you have an accountant. You're automatically paying 30% off the top," he said. And that's before taxes. "There was a time when I was making 31 cents to the dollar," Ford added. Actor Harry Ford said he has applied for roughly 100 different non-acting jobs in recent months. Courtesy of Harry Ford Ford said that for him, the union's message is simple: "We are collectively saying, 'If you want to continue to make money with our talents and time, we have to be fairly compensated.'" "It doesn't need to be millions; I'd just like to pay my phone bill, my electric bill and the insurance for my apartment," he added. Meantime, finding work outside of acting has proved challenging. Ford estimates that he's applied for roughly 100 different administrative positions over the past five months. "I've applied to be a desk agent for an airline, to work for a telecom corporation, to university positions all over country, to work in dispatch for a trucking company," said Ford, who has a Master of Fine Arts degree from New York University. "But at a certain point, when you have a master's degree you're overqualified."

White House Condemns Fox News Over Host’s Holocaust Comments 2023-07-26 - The News The White House denounced Fox News this week over comments by one of its hosts, Greg Gutfeld, that some Jews “had to be useful” as a means for survival in Nazi concentration camps, calling his remarks “an obscenity.” Mr. Gutfeld, who took over the 10 p.m. time slot last week as part of a reshuffling of programming at Fox, made the comments during a debate on “The Five” about Florida’s new African American history curriculum. New instructions for middle school students, championed by the state’s governor, Ron DeSantis, say students should be instructed that “slaves developed skills which, in some instances, could be applied for their personal benefit,” a depiction that has drawn widespread rebuke. During an exchange with Jessica Tarlov, a co-host who equated the new history standards to saying Jews derived some benefit from being imprisoned during the Holocaust, Mr. Gutfeld asked her about the work of Viktor Frankl, a Jewish psychiatrist who wrote about his struggle for survival at Auschwitz and other Nazi camps. “Did you ever read ‘Man’s Search for Meaning’?” Mr. Gutfeld said. “Vik Frankl talks about how you had to survive in a concentration camp by having skills. You had to be useful. Utility. Utility kept you alive.” Ms. Tarlov did not address Mr. Gutfeld’s question directly, instead saying she was concerned about middle school children being taught what Florida had set in its new curriculum. A White House spokesman, Andrew Bates, released a statement on Tuesday condemning Fox News for broadcasting Mr. Gutfeld’s comments, calling them “a horrid, dangerous, extreme lie that insults the memory of the millions of Americans who suffered from the evil of enslavement.” He added, “There was nothing good about slavery; there was nothing good about the Holocaust.” Fox News has not commented on Mr. Gutfeld’s statement.

Fed Raises Rates After a Pause and Leaves Door Open to More 2023-07-26 - Fed policymakers began to raise rates from near-zero in March 2022 and pushed them up rapidly last year before adjusting them more slowly in 2023, even taking a break last month. Because officials think rates are now high enough to weigh on the economy, they have been moving more gradually to give themselves time to see how growth, the job market and inflation are responding to the shift in policy. Inflation as measured by the Consumer Price Index cooled in June to 3 percent from a peak of 9.1 percent, though it remains faster than that after stripping out food and fuel prices, which are volatile. The moderation has been welcome news at a time when the unemployment rate is hovering at 3.6 percent — a historically low level, and essentially unchanged from when the Fed began to push rates higher more than a year ago. But inflation has previously slowed and then picked back up, and the Fed is not yet ready to take a victory lap. Mr. Powell said officials would be watching incoming data ahead of the Fed’s Sept. 20 meeting to decide whether they need to raise interest rates further at that gathering. He avoided explaining what precisely would prompt the Fed to either lift rates or hold them steady, noting that the Fed has eight weeks and a substantial amount of incoming data to review before it must decide. “We’ve come a long way,” Mr. Powell said at one point. “Inflation repeatedly has proved stronger than we and other forecasters have expected — and at some point that may change. We have to be ready to follow the data and given how far we’ve come, we can afford to be a little patient as well as resolute as we let this unfold.” Higher interest rates cool the economy by making it more expensive to borrow money, discouraging business expansions and making it costlier to take out a mortgage or a car loan. But it takes time for them to trickle through the economy, so the full effects of the moves so far most likely have not been felt. Policymakers want to make sure that they temper demand enough to put an end to rapid price increases, but they would prefer to avoid plunging the economy into a recession if they can avoid it.

A Brexit Champion’s Feud With His Elite Bank Brings a C.E.O. Down 2023-07-26 - When Nigel Farage campaigned for a fellow populist, Donald J. Trump, in Arizona in 2020, he seemed like a faded star seeking the spotlight abroad after it had swung past him at home. Having helped mobilize the pro-Brexit vote in 2016, Mr. Farage was marginalized in Britain, then consumed by the pandemic. No longer: For three weeks, Mr. Farage, has been back on the front pages of British papers, with an attention-grabbing claim that his exclusive private bank, Coutts, dropped him as a customer because of his polarizing politics. Early on Wednesday, after Mr. Farage’s allegations were largely vindicated, the chief executive of his bank’s parent, NatWest Group, resigned after she admitted improperly discussing his bank account with a BBC journalist. The chief executive, Alison Rose, said she was guilty of a “serious error of judgment.” For Mr. Farage, who expertly stoked the dispute on social media and with appearances on the TV network GB News, the drama catapulted him back into the limelight. It was a striking turn of events for a political insurgent who became, for many, a reviled symbol of Brexit, and later, a culture warrior on right-wing television.

Federal Reserve Meeting Fed Raises Rates Again 2023-07-26 - A house for sale in Chicago. Some types of home loans are closely tethered to actions by the Federal Reserve. The Federal Reserve is expected to raise interest rates on Wednesday, the latest in a series of increases that have squeezed the budgets of debt-laden Americans, while rewarding those with money to stash in savings. The Federal Reserve has already raised its benchmark rate, the federal funds rate, to a range of 5 to 5.25 percent to rein in inflation, which is showing signs of slowing. But prices remain elevated, leading the Fed to keep rates high for a prolonged period of time. That means the cost of credit cards and mortgages may remain relatively high, making it more difficult for people who want to pay down debt — as well as those who want to take out new loans to renovate their kitchen or buy a new car. “We were very spoiled for a while with low rates, and that lulled us into a false sense of security in terms of what the true cost of debt can be,” said Anna N’Jie-Konte, president of Re-Envision Wealth, a wealth management firm. Here’s how different rates are affected by the Fed’s decisions — and where they stand now. Credit cards Credit card rates are closely linked to the Fed’s actions, which means consumers with revolving debt have seen those rates rise over the past year — and quickly (increases usually occur within one or two billing cycles). The average credit card rate was 20.44 percent as of July 19, according to Bankrate.com, up from around 16 percent in March last year, when the Fed began its series of rate increases. People carrying credit card debt should focus on paying it down and assume rates will continue to rise. Zero-percent balance transfer offers can help when used carefully (they still exist for people with good credit, but come with fees), or you might try negotiating a lower rate with your card issuer, said Matt Schulz, chief credit analyst at LendingTree. His research found that such a tactic often works. Car loans Higher loan rates have been dampening auto sales, particularly in the used-car market, because loans are more expensive and prices remain high, experts said. Qualifying for car loans has also become more challenging than it was a year ago. “The vehicle market has challenges with affordability,” said Jonathan Smoke, chief economist at Cox Automotive, a market research firm. The average rate on new car loans in June was 7.2 percent, up slightly from the start of the year, according to Edmunds.com. Used-car rates were even higher: The average loan carried a 11 percent rate in June, down from a recent high of 11.4 percent in March. Car loans tend to track the five-year Treasury note, which is influenced by the Fed’s key rate — but that’s not the only factor that determines how much you’ll pay. A borrower’s credit history, the type of vehicle, loan term and down payment are all baked into that rate calculation. Mortgages Rates on 30-year fixed-rate mortgages don’t move in tandem with the Fed’s benchmark rate, but instead generally track the yield on 10-year Treasury bonds, which are influenced by a variety of factors, including expectations around inflation, the Fed’s actions and how investors react to all of it. Mortgage rates have been volatile. After climbing above 7 percent in late October — for the first time since 2002 — mortgage rates dipped close to 6 percent in February before drifting back up again to 6.78 percent as of July 20, according to Freddie Mac. The average rate for an identical loan was 5 percent the same week in 2022. Other home loans are more closely tethered to the Fed’s moves. Home-equity lines of credit and adjustable-rate mortgages — which each carry variable interest rates — generally rise within two billing cycles after a change in the Fed’s rates. The average rate on a home-equity loan was 8.47 percent as of July 19, according to Bankrate.com, up from 5 percent a year ago. Student Loans Borrowers who already hold federal student loans are not affected by the Fed’s actions because that debt carries a fixed rate set by the government. (Payments on most of these loans have been paused for the past three years as part of a pandemic relief measure, and are set to become due again in October.) But new batches of federal student loans are priced each July, based on the 10-year Treasury bond auction in May. And those loan rates have climbed: Borrowers with federal undergraduate loans disbursed after July 1 (and before July 1, 2024) will pay 5.5 percent, up from 4.99 percent for loans disbursed in the year-earlier period. Just three years ago, rates were below 3 percent. Graduate students taking out federal loans will also pay about half a point more, or about 7.05 percent on average, as will parents, at 8.05 percent on average. Borrowers of private student loans have already seen those rates climb thanks to the prior increases. Both fixed- and variable-rate loans are linked to benchmarks that track the federal funds rate. Savings Vehicles Savers seeking a better return on their money have had an easier time: Rates on online savings accounts, along with one-year certificates of deposit, have reached their highest levels in more than a decade. But the pace of those increases is slowing. “Consumers now have several options to earn over 5 percent yield on their cash,” said Ken Tumin, founder of DepositAccounts.com, part of LendingTree. An increase in the Fed’s key rate often means banks will pay more interest on their deposits, though it does not always happen right away. They tend to raise their rates when they want to bring more money in. The average yield on an online savings account was 4.08 percent as of July 1, according to DepositAccounts.com, up from 1.04 percent a year ago. But yields on money market funds offered by brokerage firms are even more alluring because they have tracked the federal funds rate more closely. The yield on the Crane 100 Money Fund Index, which tracks the largest money market funds, was recently 4.96 percent. Rates on certificates of deposit, which tend to track similarly dated Treasury securities, have also been ticking higher. The average one-year C.D. at online banks was 4.89 percent as of July 1, up from 1.75 percent a year earlier, according to DepositAccounts.com.

Markets Trade Cautiously Ahead of Pivotal Fed Meeting 2023-07-26 - Stock markets slipped on Wednesday morning, as cautious investors parsed mixed earnings reports and prepared for the Federal Reserve to resume raising interest rates. The S&P 500 fell 0.2 percent ahead of the Fed’s announcement. The index has gained nearly 20 percent since the start of the year, but the rally has slowed this month from its earlier breakneck pace. The Dow Jones industrial average, a collection of 30 stocks that are intended to track the broader economy, was on course for a 13th consecutive day of gains, posting a small gain in early trading Wednesday. Stock markets often exhibit caution ahead of major events like Fed meetings, waiting until there is clarity over the central bank’s next move.

Big Consumer Companies Keep Raising Prices, Complicating Fed’s Job 2023-07-26 - Some of the largest consumer brands in the country have continued to raise prices aggressively this year while raking in large profits, posing a tough problem for the Federal Reserve as it aims to tame inflation. Coca-Cola, PepsiCo and Unilever have each reported raising prices significantly in the second quarter, from about 8 percent at Unilever to 15 percent at Pepsi. The price increases powered sales growth last quarter, keeping earnings strong even as the volume of products they sold either went down or remained flat versus the same period last year. The companies raised their full-year forecasts for various measures, pushing up their share prices. The Fed’s main tool to tackle inflation is raising interest rates, which reduces demand for goods and services. But food prices can be particularly sticky: Unlike other goods, food is something that consumers cannot stop buying, and food prices are particularly sensitive to external factors like supply shocks, ingredient prices and geopolitics. Escalating Russian attacks in Ukraine and the recent breakdown of a deal to export grain from Black Sea ports have put pressure on prices for key commodities like corn and wheat. “The Fed really has no ability to resolve those issues,” said David Ortega, a food economist at Michigan State University.