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Yellow employees getting paid a day late; $92.9M in vacation time in limbo 2023-08-10 - Former Yellow employees told FreightWaves they're still waiting for pay for accrued vacation time. (Photo: Jim Allen/FreightWaves) Yellow employees who were expecting what are likely their final paychecks Thursday will instead receive them Friday, according to a company official. “Employees who are on a weekly pay schedule and are normally paid on Thursday will be paid on Friday this week, one day late due to the court hearing,” the official told FreightWaves in an emailed statement. Four truck drivers and dockworkers based around the U.S. told FreightWaves that they had not received their final paychecks, which they expected Thursday. Some former employees of Yellow sounded off on social media and messaging boards Thursday, frustrated that they had not received their final paychecks. Yellow, which filed for bankruptcy on Monday, laid off most of its staff of about 30,000 employees over the past few weeks. Approximately 23,000 of those workers are represented by the Teamsters, according to its Monday bankruptcy filing. The company ceased regular operations on July 28, as FreightWaves first reported. Truck driver William Stephens is one of those laid-off employees represented by Teamsters. He worked for the trucking giant for seven years at a Columbus, Ohio, terminal. When he checked his payroll portal on Tuesday, he was happy to see a final pay stub from Yellow. The payment, according to a document viewed by FreightWaves, was supposed to cover days worked between July 23 and July 29. However, when Stephens checked his bank account on Thursday, there was no payment from Yellow. And his employee portal access was shut down. The Yellow company official wrote in a statement that the company is doing “all it can to provide employees with compensation to which they are entitled.” Yellow also pointedly blamed Teamsters leadership for the company’s closure. “IBT leadership is solely responsible for destroying 30,000 jobs,” the spokesperson said. “Yellow was forced to file for bankruptcy on August 6th as a result of the IBT’s nine month refusal to negotiate the company’s long-planned modernization effort, One Yellow, which included significant pay raises for employees. Sadly, Teamster leaders did not care enough about Yellow’s union employees to discuss their contract until after the IBT had driven away all business and it was too late. Yellow fought until the end to save employees’ jobs. Yellow is working through the bankruptcy process. The timing of this process and legal determinations are not under the company’s control. Yellow will do all it can to provide employees with compensation to which they are entitled.” Story continues Meanwhile, the Teamsters wrote in a statement on Sunday that Yellow “abandoned its entire workforce” with its Chapter 11 filing. The organization noted that it would support members through the bankruptcy proceedings. “Our members’ loss of work at Yellow was no fault of their own. They should be the first in line for real relief as bankruptcy moves forward,” said John A. Murphy, Teamsters national freight director. “While Yellow’s closure represents one last shameful act by a greedy employer, the Teamsters will never desert our brothers and sisters. We will do everything we can to prioritize our members at Yellow and their families during forthcoming bankruptcy proceedings.” Yellow nearly filed for bankruptcy several times over the past 15 years. Teamsters estimates that, since 2009, its members have given away more than $5 billion in wage and benefit concessions to support Yellow. Most recently, the trucking company received a $700 million loan from the U.S. Treasury in 2020 to avoid collapse. For Stephens, the lack of communication has come as yet another disappointment during these last few weeks of Yellow’s shutdown. “No one ever called me or anyone in Columbus or anything about being laid off,” Stephens said. “We never got a notice in the mail. Nothing. We went to work and saw the gates locked. It’s just disappointing – you would think a big company like that would at least notify you that you don’t have a job anymore.” A dockworker in Oklahoma City, who asked that her name not be printed as she looks for another job, is also waiting for her last check. She said she learned she was out of a job from a piece of paper taped to a stop sign at her terminal stating company operations had ceased. Vacation time pay remains in limbo for former Yellow employees Two laid-off Yellow employees who were not represented by Teamsters told FreightWaves that they did receive their final paychecks last Friday. However, they said they did not receive payment for unused vacation time. Yellow wrote in its separation agreement dated July 28 that laid-off employees would receive payment for unused vacation “[a]s soon as administratively practicable.” Eight Teamsters members who previously worked at Yellow also said they had not received payment for accrued vacation time. Another truck driver based near Columbus, Ohio, who had worked for Yellow for 19 years said he has about four weeks of unused PTO. Arcadio Gonzlalez, a former Yellow employee based in Wheeling, Illinois, said he has some 130 hours unpaid — roughly equal to more than three weeks of unpaid vacation. Yellow revealed in a Monday bankruptcy filing that it would seek $92.9 million to pay outstanding PTO. However, it’s immediately asking $8,725,000 to pay wages. It’s unclear how much of those wages will go toward recently laid-off employees or Yellow’s “core group” of around 1,650 remaining employees. Do you have a story to share about Yellow’s shutdown and bankruptcy? Email firstname.lastname@example.org. The post Yellow employees getting paid a day late; $92.9M in vacation time in limbo appeared first on FreightWaves.
Guggenheim CIO Says Credit Market Is ‘Next Shoe to Drop’ 2023-08-10 - (Bloomberg) -- While calls for a soft-landing are piling up on Wall Street, Anne Walsh is staying on the defensive. Most Read from Bloomberg The chief investment officer of Guggenheim Partners Investment Management, which manages more than $225 billion, is hiding out in high quality bonds while bracing for lower quality parts of the credit market to get hit. “I don’t think the market is really pricing in the next shoe to drop, and that’s credit,” she said on Bloomberg Television. “Recession seems to be off everybody’s mind, but I think that’s probably a mistake at this point in time.” Walsh sees lower-quality borrowers at risk with the prospect of a higher-for-longer Federal Reserve and rising downgrades, defaults and bankruptcies. Higher quality credit is less of a concern. Yields over 5.5% on investment grade bonds are “attractive,” and the spread widening that happens in recessions is not likely to have a big impact on that space, she explained. “For those borrowers and credit takers who have cash and have the wherewithal for repayment right now, they’re going to come through the cycle pretty well,” she said. “The problem is the weaker credits, those that don’t have a lot of cash sitting on the sidelines,” Walsh said. “They’re not able to offset these higher costs of capital with reinvestment in cash instruments.” Walsh also likes US government bonds, as yields have remained in a relatively stable trading range and offer investors the opportunity to wait on the sidelines, investing in lower rated credit in the future if spreads get more attractive. “I think it’s a really good time to be defensive and thoughtful and wait for the next opportunity set,” said the CIO. Story continues Walsh expects the US recession to be a “rolling one,” where different parts of the economy are hit and other, stronger capitalized parts are spared. She also highlighted that the market hasn’t yet reacted to the commercial real estate cycle, where the cost of leverage is still high for borrowers and some tenants are vulnerable. “If you are a small developer who owns a handful of small office buildings in a suburban location, and you’re now paying 6% for your debt, and all of a sudden your tenants are starting to walk out the door, now you’ve got a problem,” Walsh said in a separate interview. She will be closely assessing the health of consumer spending over the next several months to determine the extent of policy tightening working its way through the economy. She also said that while Thursday’s CPI print means the Federal Reserve is done hiking interest rates, the central bank is still tightening through shrinking its balance sheet. “I think we’re done with the hikes right now, but then there’s QT still going on,” said Walsh. “Don’t ignore that.” --With assistance from Alix Steel. Most Read from Bloomberg Businessweek ©2023 Bloomberg L.P.
GM Shares Drop After Warning Battery Issues Are Slowing EV Production, Again 2023-08-10 - Key Takeaways GM once again noted that issues in producing new Ultium battery packs is slowing the manufacturing of its electric vehicles. CFO Paul Jacobson and CEO Mary Barra have both talked about the battery problem recently. Production of the Cadillac Lyriq has been especially impacted by the battery issue. General Motors (GM) shares fell almost 6% on Thursday after the carmaker once again warned that production of its electric vehicle (EV) lineup is being slowed by issues assembling updated battery modules. At a conference, CFO Paul Jacobson repeated concerns that he and CEO Mary Barra had expressed when the company released its second quarter earnings report last month. The battery issue was especially impacting manufacturing of the Cadillac Lyriq. Jacobson said that more than 1,000 were produced in July, but that was well below the rate GM had originally estimated. The company missed production targets last year, and delivered fewer than 2,400 of the luxury SUVs in the first half of this year. Overall, GM produced just 50,000 EVs from January through June, with a large majority of them being the Chevrolet Bolts that use an older battery pack. The new, modular Ultium batteries are made at a plant in Lordstown, Ohio that GM owns with Korea’s LG Energy Solution. Two more battery factories are under construction. Shares of General Motors slipped to their lowest level in more than two months following the news.
Gen Z and millennials are outpacing older generations in 401(k) contributions because they’re so worried they’ll never be able to retire 2023-08-10 - If building wealth is an obstacle course for Gen Z and millennials, they’re willing to jump all the hurdles. The youngest generations contributed more to their 401(k)s last quarter than anyone else at a time when the promise of retirement has never felt less hollow. That’s according to Bank of America’s Q2 2023 Participant Pulse report, released Tuesday, which found that Americans’ average 401(k) balances have increased by $7,250—nearly 10%—since the end of 2022. This quarter, many more of the 4 million workers BofA analyzed increased their contribution rate than decreased it. That push was led by the youngest workers, who contributed more than any other age group: 19.3% of Gen Zers upped their contributions, as did 11% of millennials, compared to 9.7% of Gen Xers and just 7.8% of baby boomers. The momentum among Gen Z and millennials (fewer than 3% of them decreased contribution rates this year) contributing to their 401(k)s is exciting given that older generations usually outpace their younger colleagues both in 401(k) plan participation and contribution, says Lisa Margeson, managing director of external affairs, retirement research, and insights at BofA. Contribution rates can give us a glimpse into how 401(k) plan participants feel about retirement, she tells Fortune. For young professionals, those feelings stem from the economic hardships they’ve weathered in early adulthood. Millennials, who grappled with two recessions before the age of 40, have struggled to accrue wealth amid a volatile housing market, crushing student debt crisis, and a soaring cost of living. Gen Z—many of whom don’t think they’ll ever be able to retire—have borne witness to millennials’ strife and are anxious to avoid falling victim to their same pitfalls. “The onset of the COVID-19 pandemic rocked the economy as Gen Z entered young adulthood,” Charlie Pastor, a financial planner, told Fortune’s Alicia Adamczyk. “Older generations should understand that the next generation of savers has seen a lot of economic turbulence in a short period of time.” Story continues Considering that $1 million is no longer enough to retire in today’s economy, retirement feels far out of reach for many young adults, who want to start saving as early as possible (no wonder Americans’ number one financial regret is not saving enough for retirement). The share of workers unsure they’ll ever be able to retire has grown from 10% to 24% since 2021, a BlackRock report found, with Gen Zers feeling the least confident. It explains why they invest in their company’s retirement plans at significantly higher rates than their older colleagues did when they were their age. Yet, at the same time, a growing number of workers are withdrawing “hardship distributions” from their retirement accounts in an economy that has been marred by sky-high inflation. Thirty-six percent more people have done so this year than last year, BofA found. “The data from our report tells two stories—one of balance growth, optimism from younger employees and maintaining contributions, contrasted with a trend of increased plan withdrawals,” Lorna Sabbia, who leads BofA’s retirement and personal wealth solutions, wrote in the report. But despite dire straits, she added, employees must continue investing in “life’s biggest expense”: retirement. Start ’em young Of course, Gen Z and millennials might be a bit better at saving for retirement because the benefits of saving early have become more widespread over the years. “While saving for retirement is important for all employees, we want to encourage younger employees to get started as soon as possible,” BofA’s Margeson says. “Saving and investing your money early in life will put you on the best path forward.” It’s hard to undersell how crucial investing early really is thanks to the power of compound interest, which has "the potential to magnify regrets about foregone savings over time as a ‘what could have been’ realization becomes more stark,” Greg McBride, Bankrate’s chief financial analyst explained in a recent report on Americans' financial regrets. “At a modest 6.5% annual return, every dollar you put away in your twenties becomes $17 by the time you retire.” Most experts advise contributing at least up to the full employer match to maximize your benefits. But if you’re on an entry-level salary, putting away as little as 1% to 2% of your monthly earnings—if you can afford it—is better than nothing. That compound interest might just be enough to convince Gen Z to save instead of spend, even if it means ditching their rich friends or suffering from vacation FOMO. After all, there will be plenty of time to travel if you can eke out an early retirement. This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
‘Don’t be fooled’ by the uptick in inflation, economist says. Prices are falling, and the Fed now has the ammo to pause its rate hikes 2023-08-10 - The latest inflation data could be a bit misleading to the untrained eye. But “don’t be fooled by the uptick,” said Julia Pollak, ZipRecruiter’s chief economist. “Inflation is slowing, and doing so across a broader range of goods and services.” Headline inflation rose from 3% in June to 3.2% last month, the Bureau of Labor Statistics (BLS) reported Thursday. But the rise was partly caused by changing year-over-year comparisons, and monthly data showed inflationary pressures are stabilizing. Pollak noted that if you annualized the latest inflation data instead of comparing it with last year, when inflation hit a four-decade high, it looks far less intimidating. In July, inflation was 2.52% on a six-month annualized basis and just 1.89% on a three-month annualized basis, she noted. That’s right around the Fed’s 2% target rate. Backing up that view was Rick Rieder, BlackRock’s CIO of global fixed income and head of the BlackRock global allocation investment team. “Today’s CPI [consumer price index] data depicted continued softening in the elevated inflation levels we have witnessed over the past couple of years,” he said, adding that “it’s not just encouraging that today’s report was softer, but also that the three- and six-month trends of these inflationary indicators are decisively lower.” Core inflation—which excludes more volatile food and energy prices and is often seen as a stronger indicator of true underlying inflation—also rose just 0.2% for the second straight month in July, marking the smallest back-to-back gain in the measure in over two years. Year-over-year core inflation remained elevated at 4.7%, again in part owing to base effects, but the trend there was “encouraging” as well, Pollak said. “Wage growth continues to outpace inflation,” she added. “As workers see their purchasing power improve, expect to see consumer spending continue to grow and the labor market continue to be resilient.” For BlackRock’s Rieder, the current inflationary trend should be “encouraging to consumers, as well as to Federal Reserve policymakers.” Fed officials have raised interest rates to a 22-year high in their attempt to quash inflation since March of last year, leading to a flood of recession predictions from Wall Street. But with underlying inflationary pressures fading, Chair Jerome Powell and company may be nearing the end of the painful rate hiking process. Story continues “We remember last year’s soaring prices like they were yesterday, and consequently the Fed will not cut interest rates for a while, but hopefully the central bank can stay on hold for an extended period of time, before presumably starting to cut rates later in 2024, as today’s high prices become merely stable over the coming months and quarters,” Rieder said. A boost for the soft landing narrative Pollak and Rieder aren’t the only ones who saw the bright side of the latest inflation report. Investors celebrated the data on Thursday, with the S&P 500 rising 0.6% by midday. And Charlie Ripley, a senior investment strategist at Allianz Investment Management, argued that the inflation data showed “the soft landing narrative”—that idea that inflation can fade without the need for the Fed to create a job-killing recession—continues to gain traction. Several price categories that had worried economists and the Fed continued to fall in July, including airfare, which sank for the fourth consecutive month, this time by 8.1% month over month, and used cars and trucks, which dropped 5.6% from a year ago. “A building trend of disinflation will certainly be welcomed by the Fed as they prepare for a policy decision at the September meeting,” Ripley said, arguing “the case continues to build” for the end of the interest rate hiking cycle. George Mateyo, CIO at Key Private Bank, which manages $50.2 billion, said that July’s consumer price index data was even “reminiscent of the good old days” before the pandemic, when inflation was far from a problem. “In 2019, the average monthly increase in inflation was 0.2%, and that’s what we’ve experienced in the past two months in 2023,” he noted. “The Fed, therefore, might feel as if they’ve ‘stuck the landing’ and can pause as planned and not raise interest rates in September.” ‘Grounds for caution’ amid inflation’s last stand While there were a number of positive signs in the latest consumer price index data, some economists are still worried that inflation could become “sticky.” Brian Coulton, chief economist at Fitch Ratings, said that although the slowdown in core inflation is clearly “good news,” the CPI report wasn’t all positive. “The pickup in core services inflation to 0.4% month over month from 0.3% in June will be seen by the Fed as grounds for caution,” he warned. “Rents just don’t seem to be slowing by much at all on a month-over-month basis and, given the 34% weight of shelter in the CPI, this is significant.” To Coulton’s point, the index for shelter accounted for over 90% of the increase in inflation last month, according to the BLS. Rent prices have continued to rise throughout the year, even as the average sales price for U.S. homes declined for the second straight quarter over the summer. Morning Consult chief economist John Leer also said that shelter inflation could accelerate by the end of the year. He warned that demand for housing remains “resilient” as the chronic undersupply of homes in the U.S. is overpowering the cooling effect of higher rents and mortgage rates. “While core CPI is showing signs of slower trend growth, future progress in the fight against inflation will be harder, not easier,” he said. “The longer inflation remains elevated, the more entrenched it becomes. The question we should all be asking is how long the Fed is willing to accept core inflation above 4%. My sense is that their tolerance is pretty low, meaning that we shouldn’t expect rate cuts this year.” This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
Stocks close higher after inflation data, Disney pops: Stock market news today 2023-08-10 - Stocks inched higher Thursday as newly released data showed inflation ticked up on an annual basis for the first time in over a year but disinflationary trends remained positive. At the close, the Dow Jones Industrial Average (^DJI) had gained about 0.2%. The S&P 500 (^GSPC) was roughly flat, while the tech-heavy Nasdaq Composite (^IXIC) was up 0.1%. All three indexes had pared larger gains from earlier in the session. The Consumer Price Index (CPI) rose 0.2% over last month and 3.2% over the prior year in July, in line with June's 0.2% month-over-month increase but higher than June's 3% annual increase. Economists surveyed by Bloomberg had expected a 3.3% yearly increase in July. On a "core" basis, which strips out the more volatile costs of food and gas, prices in July climbed 0.2% over the prior month and 4.7% over last year. Both measures were also slightly better than economist expectations. Core inflation increased at its slowest pace since October 2021. Meanwhile, earnings season nears its close, with Alibaba (BABA) and Ralph Lauren (RL) releasing quarterly reports. Shares of Disney (DIS) closed up almost 5% after the media giant said it will raise monthly prices for its ad-free streaming plans. More Yahoo Finance inflation coverage:
California agency to vote on San Francisco robotaxi expansion amid heavy opposition 2023-08-10 - A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company's headquarters in San Francisco where it does most of its testing, in California, U.S., September 26, 2018. REUTERS/Heather Somerville/File Photo SAN FRANCISCO, Aug 10 (Reuters) - Amid strenuous pushback from San Francisco officials and many residents, a California state agency is set to vote on Thursday on a proposal to allow the city to be blanketed in self-driving taxis at all hours. Approval would grant General Motors' Cruise and Alphabet Inc's (GOOGL.O) Waymo the right to expand testing of their autonomous vehicles as paid taxis across the city, putting them in direct competition with ride-hailing providers Uber and Lyft (LYFT.O). The California Public Utilities Commission (CPUC), which has statewide jurisdiction over autonomous vehicle regulation, drafted the proposal after Waymo and Cruise applied for permits that would allow for broader testing of the robotaxis. The companies, which have plowed billions into developing the vehicles, with little revenue, see the vote as a critical next step to broader regulation as they eye expanding into new cities and states. But the vote at the meeting that begins at 11 a.m. PDT (1800 GMT) comes amid vigorous opposition from transportation and safety agencies in San Francisco. They say the robot cars' sometimes unpredictable driving has interfered with fire officials, caused traffic jams and violated other rules of the road and that the companies fail to fully disclose data showing hiccups. They have sought a slower rollout. Cruise and Waymo, in contrast, have asserted their robotaxis are safer than distractable human drivers, have not caused any deaths or life-threatening injuries over millions of collective miles driven and that real-world testing is critical to perfecting the technology. Cruise said at a recent public hearing that it has about 300 vehicles in operation at night and 100 during the day, while Waymo said it has roughly 250. Both are expected to add to that number if the CPUC approves the proposal. The measure has divided San Francisco between locals who resent their city being used as a testing lab for what they say is an unproven technology and those who say they feel the symbolic technology capital ought to be the leader in developing what could lead to fewer traffic accidents and injuries. The CPUC has twice delayed the vote, in part because of the mounting opposition. The CPUC on Tuesday heard testimony from the San Francisco Municipal Transportation Agency that it had logged close to 600 incidents involving autonomous vehicles since spring of 2022 and that they believe that is "a fraction" of the total due to what they say are lax reporting requirements. Outfitted with spinning sensors, Waymo and Cruise vehicles are an arresting sight around San Francisco, particularly to visitors unaccustomed to cars with no human driver behind the wheel. Summoned by app, like ride-hailing trips, the vehicles are allowed to take passengers for free around much of the city, with some restrictions, and can only charge at night. Reporting by Greg Bensinger; Editing by Jamie Freed Our Standards: The Thomson Reuters Trust Principles.
China hailed a property developer with $64 billion in revenue as a role model. Now the country’s property crisis threatens to send it into default too 2023-08-10 - Country Garden was supposed to be a survivor of China’s property crisis. Officials hailed the company, led by chair Yang Huiyan, as a model developer. It avoided default even as competitors missed payments in late 2021 and early 2022. It delivered its audited results on time, while auditors were busy bailing on the sector. And investors were hopeful that Country Garden, which generated $64 billion in revenue last year, would benefit from Beijing’s promised support measures for the housing market. Yet now China’s property crisis is getting so bad that even this role model is now under threat, and it doesn’t bode well for the industry. “If Country Garden, the biggest privately owned developer in China goes down, that could trigger a crisis in confidence for the property sector,” Edward Moya, a senior market analyst for Oanda, wrote in a Tuesday note. On Tuesday, Country Garden confirmed that it failed to make a $22.5 million interest payment on some of its dollar-denominated bonds. If it doesn’t pay within a 30-day grace period, it will be in default for the very first time. “The developer’s struggle to address even a modest coupon payment underscores the extent of its cash crunch,” Sandra Chow, head of Asia-Pacific research at CreditSights, told the New York Times. The bonds in question are now trading at just 8 cents to the dollar, according to the Wall Street Journal citing Tradeweb data, a sign that traders have all but priced in a default. In a stock filing to Hong Kong’s exchange on July 31, the developer had warned of a net loss in the first half of 2023, down from a net profit of $264 million in the previous year’s period. It blamed the loss on charges incurred from writing down the value of its properties following a downward slide in home prices. In its filing, Country Garden said it would “actively seek guidance and support from the government and regulatory authorities.” The very next day, however, the developer abruptly canceled a $300 million share sale, citing a failure to come to a “final agreement.” Story continues Investors now fear that Country Garden could be the next major developer to fall in China’s already yearslong property crisis. Shares in the developer are down by over 60% since the start of January. Country Garden vs. Evergrande Founded in 1992, Country Garden stood in contrast to China Evergrande Group, the massive property developer whose default in 2021 arguably marked the start of China’s property crisis. Evergrande, at one point China’s largest developer, loaded up on debt to fuel its rapid expansion. The company splurged on big, expensive projects, like Ocean Flower Island, a $35 billion set of artificial islands similar to Dubai’s Palm Jumeirah. Yet new rules on how much debt developers could hold sent Evergrande into a liquidity crisis, and the company defaulted on its foreign-held debt in December 2021. Other developers, like Kaisa Group and Shimao Group Holdings, also defaulted on their payments. Last month, Evergrande finally revealed that it has lost a combined $81 billion in 2021 and 2022. The developer also reported $340 billion in liabilities, including $85 billion in more short-term borrowings. Unlike Evergrande, investors saw Country Garden as far more financially prudent. The developer didn’t borrow as heavily as its peers, and focused on building affordable homes in China’s less prominent and less developed cities. The developer had $199 billion in liabilities at the end of 2022, according to Bloomberg. Still, Country Garden could not escape the overall slowdown in China’s property sector, and the developer was forced to report a $900 million loss for 2022 after revenue slumped by a fifth. Yet the hopes of Country Garden’s investors had initially been buoyed by official promises of support for the property sector late last year. The sector received access to billions of dollars in loans from Chinese state-owned banks, as part of a broader scheme to provide liquidity to developers. Now, more than halfway through 2023, the story is far different. Home prices are falling again: An official index of home prices in 70 cities reported a 2.2% year-on-year decline last month, and investment bank Goldman Sachs is warning of “persistent weakness” in the real estate sector. Country Garden’s decision to focus on China’s poorer areas may also be backfiring, since home price declines have been steeper in less developed cities. Wealthier cities are also considering easing restrictions on property purchases, threatening to soak up demand from low tier cities, which account for 70% of national new home sales volume, analysts at Nomura noted in a report last week. This story was originally featured on Fortune.com More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
New ferry linking El Salvador and Costa Rica aims to cut shipping times, avoid border problems 2023-08-10 - LA UNION, El Salvador (AP) — A new commercial ferry line moving through Central America began operating Thursday, directly connecting El Salvador and Costa Rica to the exclusion of Nicaragua and Honduras. The Blue Wave Harmony sailed out of La Union, El Salvador, headed for Caldera, Costa Rica, a trip that its backers say will save shipping time, avoid border closures and eliminate delays at two extra border crossings between the two countries. Officials launching the new service in El Salvador were diplomatic, avoiding direct references to the increasingly authoritarian government of Nicaraguan President Daniel Ortega. Federico Anliker, president of El Salvador’s Executive Port Commission, said the new ferry will help ensure that traffic keeps flowing “when certain countries close their borders.” In 2020, early in the coronavirus pandemic, Nicaragua closed its border with Costa Rica in protest of health measures implemented by Costa Rican authorities, specifically testing truck drivers for COVID-19. In February, Nicaragua expelled more than 200 prisoners that human rights groups and foreign governments had described as political, putting them on a plane to the United States. Tens of thousands of Nicaraguans have fled to Costa Rica since Ortega’s government violently cracked down on national protests in 2018, leading to several rounds of sanctions from the U.S. government and the European Union. While some business associations in El Salvador said they were optimistic about the ferry, transport companies downplayed it, saying it would not be viable because it would be more expensive than moving merchandise by land. Ferry operators say it will be able to move some 100 tractor trailers over the 430 miles (691 kilometers) by sea in less than 24 hours. “You avoid the red tape and waiting hours at the border crossings, you reduce the risks of theft, assaults, roadblocks and highway problems,” said Silvia Cuellar, president of COEXPORT, a private association of El Salvador exporters. “Above all it reduces the transit time, arriving to your destination in less time.” Cuellar said it was not meant to isolate Nicaragua. “Here both modalities will coexist,” she said. In fact, the ferry will be able to carry very little of the commerce that moves through the region. Cristian Flores, El Salvador’s presidential commissioner for strategic projects, said that the ferry would only be able to move about 3% to 5% of the existing transport market. Marvin Altamirano, president of the Association of Nicaraguan Truck Drivers, told local press this week that the new ferry service was worrisome and an irresponsible act by El Salvador and Costa Rica, but downplayed its impact. He did not immediately respond to an email request for comment.
Mexico’s army-run airline to take off in September, but the flight attendants won’t be soldiers 2023-08-10 - MEXICO CITY (AP) — Mexico announced Thursday that its army-run airline will start up in September — but the flight attendants won’t be soldiers. The administration of President Andrés Manuel López Obrador has also put trains, law enforcement, tourism and infrastructure projects under the army’s command. That includes one tourist ferry line serving the Isla Marias islands that is manned by navy personnel. But on the new Mexicana airline, you won’t have to worry about being told to “Fasten your seatbelt, and that’s an order!” The Defense Department said the airline will lease 10 Boeing 737-800 jets from the manufacturer, which will provide pilots and cabin crew. Defense Secretary Luis Cresencio Sandoval originally said the contract with Boeing would be for $4 billion, but later corrected himself to say he meant 4 billion pesos, or about $235 million. He said the airline is looking at 20 potential routes between Mexico City and large and mid-size Mexican cities, some of which have limited service at present, as well as tourist resorts like Cancun. Sandoval promised ticket prices would be 18% to 20% below private competitors, but was unsure if the airline would profitable. If not, it presumably would have to operate with government subsidies. The airline has been named Mexicana after a partly state-owned carrier that went into bankruptcy in 2010 and closed. The 8,500 laid-off former employees of Mexicana are longtime supporters of the president, and his administration agreed to pay them almost $50 million for the commercial rights to the old airline’s brand name and some decrepit properties. Experts have said the amount far exceeded the market value. The new airline combines López Obrador’s love of state-owned companies — he has criticized decisions by previous administrations to sell off once-extensive government companies — and his near-total reliance on the armed forces, which he views as honest and a bulwark against corruption. A military-led company operates the new Felipe Angeles airport that the president had built as a third airport serving Mexico City and is constructing a new airport at the Caribbean coast resort of Tulum. Apart from boosting traffic at the underused Felipe Angeles airport, the army-run Mexicana apparently will provide flights to feed passengers into the president’s Maya Train tourism project. The army is also building that train line, which will connect beach resorts and archaeological sites on the Yucatan Peninsula. The army, which has no experience running commercial flights, has created a subsidiary ito be in charge of Mexicana. López Obrador has suggested the new airline might also serve one of the classic roles of state-owned carriers: providing service to provincial airports on routes considered unprofitable by commercial airlines. That idea could run afoul of regulations that now prohibit airlines from running Mexican airports, or vice versa.
Statewide preschool initiative gets permanent approval as it enters 25th year in South Carolina 2023-08-10 - COLUMBIA, S.C. (AP) — South Carolina is cementing a public-private partnership that has been expanding preschool services statewide over the past quarter century. The First Steps initiative enters its 25th year with a novel permanent status that state leaders hope will bolster school preparedness for kids ages 5 and younger. The partnership has served over 1 million children since its adoption in 1999, according to Georgia Mjartan, executive director of South Carolina First Steps, but previously required occasional reauthorization. Government officials and South Carolina First Steps participants celebrated the new stability at a ceremonial bill signing Thursday. Lawmakers unanimously approved the measure this year in a strong show of bipartisan support for the initiative, which began under the last Democrat to serve as governor. “With this legislation, we reaffirm our commitment to building a strong early childhood education system and further ensure our children enter school ready to learn — setting them and our state up for a bright future,” Gov. Henry McMaster said in a statement. Kindergarten for 4-year-olds is available four days a week at no cost in private and charter schools through South Carolina First Steps, according to Mjartan. Local partnerships also enable services like one allowing incoming students to develop relationships with kindergarten teachers before the school year starts. The initiative also has programs in pediatric and child care centers. Families can now trust that such support will be “unwavering,” Mjartan said Thursday in a statement. Frederick Fuller Jr., McCormick County First Steps board chair, applauded the governor’s affirmation of the initiative. He hopes the attention compels officials to increase education funding so youth in poor, rural areas like his community do not get left behind. “It’s very important to give them a head start in life, to make them ready to be able to go to school and be successful,” he told The Associated Press. —- James Pollard is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
Suburban Detroit woman says she found a live frog in a spinach container 2023-08-10 - SOUTHFIELD, Mich. (AP) — A woman in suburban Detroit said she got a scare when she discovered a live frog in a container of spinach purchased from a grocery store. Amber Worrick of Southfield said she bought the sealed Earthbound Farm spinach package earlier this week from a Meijer store, WJBK-TV reported. When she got home, her daughter found a live frog in the container and screamed, Worrick said. “It was alive and moving,” Worrick said. “Just thank God I didn’t eat the frog.” Worrick said she immediately returned the package and the frog to the store. Workers there released the frog and gave her a refund, she said. The TV station’s video showed the frog in a sealed container. Jennifer Holton, a spokesperson with the Michigan Department of Agricultural and Rural Development, told the Detroit Free Press that the store shouldn’t have released the frog because authorities now don’t know whether it’s native to the state. She said the department referred the incident to the U.S. Food and Drug Administration. Meijer officials said the frog was relocated to a new home outdoors. Officials at California-based Taylor Farms, which owns Earthbound Farm, apologized in a statement and promised to continue to provide “the freshest, finest quality veggies for consumers.”
How to help or donate in response to the deadly wildfire in Maui 2023-08-10 - While rescue and emergency operations continued Thursday at the deadly wildfires that swept across the Hawaiian island of Maui, many people are already looking for ways to support the response and provide relief to those affected. The full extent of the damage and the recovery needs may not be known for up to a week, said Regine Webster, vice president of the Center for Disaster Philanthropy, and she urged people to be patient before deciding where to give their support. “You literally have to wait for the firefighters to complete their work before that damage assessment can be fully realized,” she said. Philanthropy experts recommend giving to experienced organizations that are well-situated to respond to a specific disaster. Major disaster response organizations like the American Red Cross have said they are already communicating with local and federal governments to provide assistance. Webster also urged potential donors to support organizations with deep local ties and knowledge of the impacted communities. “To the extent that we can all slow down, wait a week, wait two weeks, to understand where the greatest needs are, and then look toward organizations that are really meeting those needs, again, prioritizing organizations with specific disaster expertise and organizations that are local in nature,” Webster said. The Council for Native Hawaiian Advancement pledged to match donations — up to $100,000 initially, then increased to $250,000 — for a campaign they began Wednesday, with initial support from the Alakaʻina Foundation Family of Companies. An online tracker shows that more than $331,000 has been given from almost 2,500 people as of Thursday. The crowdfunding site, GoFundMe, has vetted fundraisers for individuals and families who lost property or were injured in the fires. That means they’ve taken steps to verify the identify of the organizer and have collected those campaigns on a hub on their website. GoFundMe will take additional verification steps before releasing the funds to the organizer, as well as deduct a transaction fee. Direct donations to individuals or families can be a powerful way to make an impact, but potential donors should be careful in responding to appeals on social media for donations to individuals, through electronic payment apps like Venmo or Cash App, experts say. Potential donors should also consider if it’s important to them to claim a tax benefit for their donation. Only tax-exempt nonprofit organizations will provide a receipt that people who itemize their taxes can use to claim a deduction. The Hawaii Community Foundation has also announced $1 million in support for its Maui Strong Fund. It is collaborating with other nonprofits and the county mayor to deploy those funds to pay for food, shelter and financial assistance, the foundation said in a statement, adding it is also accepting donations and would not collect any fees on gifts to the fund. The Center for Disaster Philanthropy will work closely with the foundation, Webster said, as it launches a fund specific to the Hawaii wildfires that prioritizes equity in recovery. “We actually will wait several months before we understand the full range of needs that exist on Maui and other islands that are also facing wildfires,” she said. “And we will not invest our funds until such time as we understand what those medium- and long-term needs are.” ___ Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
49ers CEO Jed York is being sued over insider trading accusations 2023-08-10 - SANTA CLARA, Calif. (AP) — San Francisco 49ers chief executive Jed York is being sued over accusations of insider trading related to his role on the board of an online educational company. The San Francisco Chronicle reported that two shareholder lawsuits have been filed against York and other directors of Santa Clara-based Chegg Inc. The suits allege that York and other directors of Chegg hid the company’s role in helping college students cheat on online exams during the pandemic. The company’s revenues and stock price fell sharply once colleges resumed in-person testing and students couldn’t use Chegg to cheat, according to the lawsuits. The suits also accuse York, Chegg CEO Dan Rosensweig and other company executives of illegal insider trading for selling Chegg stock before investors were told about the extent of the cheating scandal. The suits claim York made $1.4 million in profit on the sale of 20,000 shares “at artificially inflated prices.” Team spokesperson Brian Brokaw didn’t address specifics of the lawsuits, saying in a statement that “the 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students.” A Chegg spokesman told the Chronicle that the “suits are without merit and Chegg is vigorously defending itself.” The Chronicle reported that York has been paid cash and stock worth about $2 million for his part-time work over 10 years as a board member and he made a profit of $4.9 million on sales of company stock. ___ AP NFL: https://apnews.com/hub/nfl
US Supreme Court halts Purdue Pharma bankruptcy settlement pending review 2023-08-10 - A pharmacist holds a bottle OxyContin made by Purdue Pharma at a pharmacy in Provo, Utah, U.S., May 9, 2019. REUTERS/George Frey/File Photo Companies Purdue Pharma LP Follow WASHINGTON, Aug 10 (Reuters) - The U.S. Supreme Court on Thursday agreed to hear a challenge by President Joe Biden's administration to the legality of OxyContin maker Purdue Pharma's bankruptcy settlement, putting on hold a deal that would shield its wealthy Sackler family owners from lawsuits over their role in the country's opioid epidemic. The justices paused bankruptcy proceedings concerning Purdue and its affiliates and said they would hold oral arguments in December in the administration's appeal of a lower court's ruling upholding the settlement. The Supreme Court's new term begins in October. Purdue's owners under the settlement would receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Stamford, Connecticut-based company over its misleading marketing of the powerful pain medication OxyContin. In a statement, Purdue said it was disappointed that the U.S. Trustee, the Justice Department's bankruptcy watchdog that filed the challenge at the Supreme Court, has been able to "single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country and overdose rescue medicines." "We are confident in the legality of our nearly universally supported plan of reorganization, and optimistic that the Supreme Court will agree," the company added. The Justice Department declined to comment. At issue is whether U.S. bankruptcy law allows Purdue's restructuring to include legal protections for the members of the Sackler family, who have not filed for personal bankruptcy. Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of lawsuits alleging that OxyContin helped kickstart an opioid epidemic that has caused more than 500,000 U.S. overdose deaths over two decades. Purdue estimates that its bankruptcy settlement, approved by a U.S. bankruptcy judge in 2021, would provide $10 billion in value to its creditors, including state and local governments, individual victims of addiction, hospitals, and others who have sued the company. The Biden administration and eight states challenged the settlement, but all of the states dropped their opposition after the Sacklers agreed to contribute more to the settlement fund. In May, the 2nd Circuit upheld the settlement, concluding that federal bankruptcy law allows legal protections for non-bankrupt parties like the Sacklers in extraordinary circumstances. The 2nd Circuit ruled that the legal claims against Purdue were inextricably linked to claims against its owners, and that allowing lawsuits to continue targeting the Sacklers would undermine Purdue's efforts to reach a bankruptcy settlement. Members of the Sackler family have denied wrongdoing but expressed regret that OxyContin "unexpectedly became part of an opioid crisis." They said in May that the bankruptcy settlement would provide "substantial resources for people and communities in need." In a court filing, the administration told the Supreme Court that Purdue's settlement is an abuse of bankruptcy protections meant for debtors in "financial distress," not people like the Sacklers. According to the administration, Sackler family members withdrew $11 billion from Purdue before agreeing to contribute $6 billion to its opioid settlement. Many other stakeholders have responded in opposition to the administration's request to halt the settlement. A group comprising more than 60,000 people who have filed personal injury claims stemming from their exposure to Purdue opioid products told the Supreme Court they support the settlement, including legal immunity for members of the Sackler family. "Regardless of how one feels about the role of the Sackler family in the creation and escalation of the opioid crisis," the group told the justices, "the fact remains that the billions of dollars in abatement and victim compensation funds hinge on confirmation and consummation of the existing plan." Reporting by John Kruzel in Washington and Andrew Chung in New York; Additional reporting by Dietrich Knauth in New York; Editing by Will Dunham Our Standards: The Thomson Reuters Trust Principles.
Flying taxi maker Archer settles Boeing Wisk lawsuits, secures new investment 2023-08-10 - Flying taxi company Archer Aviation prepare for the debut of their all-electric aircraft from a facility in Hawthorne, California, U.S. June 8, 2021. Picture taken June 8, 2021. REUTERS/Mike Blake Aug 10 (Reuters) - Air taxi maker Archer Aviation (ACHR.N) has reached an agreement with Boeing (BA.N) and its Wisk air taxi unit to settle litigation and collaborate on autonomous technology, the companies said on Thursday. Separately, Archer said it completed a $215 million equity investment round that includes Stellantis (STLAM.MI), Boeing, United Airlines (UAL.O), and ARK Investment Management, increasing Archer’s total funding to date to over $1.1 billion as it works to win Federal Aviation Administration certification and begin commercial operations in 2025. In a joint statement with Boeing and Wisk, Archer said it "has agreed to make Wisk its exclusive provider of autonomy technology for future variants of Archer’s aircraft." Boeing said it is making an investment in Archer "that will support the integration of Wisk’s autonomous technology in future variants of Archer’s aircraft." The agreement settles several lawsuits. Wisk was formed through a joint venture between Boeing and Google co-founder Larry Page's Kitty Hawk Corp, which is now wholly owned by Boeing. Wisk sued rival Archer in 2021 accusing it of stealing trade secrets and infringing on its patents. Archer counter sued Wisk in 2021 "for its false and malicious extra-judicial smear campaign" and Boeing in 2022. Archer will issue warrants to Wisk for up to 13.2 million shares as part of the settlement and autonomy agreement. Electric vertical takeoff and landing aircraft (eVTOL) have been touted as the future of urban air mobility. Low-altitude urban air mobility aircraft has drawn intense global interest. The $215 million funding includes an acceleration of $70 million from Chrysler-parent Stellantis under a 2023 strategic funding agreement. In January, carmaker Stellantis said it would help build Archer Aviation's electric aircraft and increase its stake in the U.S. company. Airlines and other companies are looking at developing transport services using battery-powered aircraft that can take off and land vertically to ferry travelers to airports or for short city trips, allowing them to beat traffic. Reporting by David Shepardson in Washington Editing by Matthew Lewis and Lisa Shumaker Our Standards: The Thomson Reuters Trust Principles.
US mortgage delinquency rates fall to all-time low 2023-08-10 - Real estate signs advertise new homes for sale in multiple new developments in York County, South Carolina, U.S., February 29, 2020. REUTERS/Lucas Jackson/File Photo Aug 10 (Reuters) - U.S. mortgage delinquency rates fell to a record low in the second quarter due to a strong job market and low interest rates prevailing on most home loans despite the big jump in mortgage rates over the last two years, a report on Thursday said. Delinquency rates fell to 3.37% at the end of the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey, their lowest since the MBA began collecting data in 1979 and down from 3.64% year-on-year. Seriously delinquent loans, which are 90 days or more past due or in the process of foreclosure, fell to the lowest non-seasonally adjusted rate in 23 years at 1.61%. Economists are watching mortgage delinquency rates closely for signs of weakness amidst the Federal Reserve's aggressive 525 basis point interest rate increase since March 2022, which increased the cost of borrowing across the board. While the MBA said many borrowers have been able to withstand surging mortgage costs in large part due to a resilient job market and strong wage growth throughout the year, most homeowners are also paying interest rates well below those charged on new loans. Real estate brokers estimated in June that more than eight in 10 loans outstanding featured at rate below 5% at the end of 2022, well below the MBA's most recent contract rate above 7%. More than six in 10 pay 4% or less. While the share of those paying such low rates is declining, many homeowners are opting to remain where they are rather than move and take on a new loan at current rates, which are approaching a 22-year high. Despite the historically low delinquency rate, the MBA said not every borrower has been able to withstand the recent stress of hiked interest rates. The delinquency rate on loans for low-income and first-time buyers, backed by the Federal Housing Administration (FHA), edged up 10 basis points annually to 8.95% in the second quarter. Separately on Thursday, the National Association of Realtors released a report showing that the median home price in the second quarter fell 2.4% year-on-year to $406,000, albeit with significant variations nationwide. “Home sales were down due to higher mortgage rates and limited inventory,” said NAR chief economist Lawrence Yun. “Affordability challenges are easing due to moderating and, in some cases, falling home prices, while the number of jobs and incomes are increasing.” Reporting by Safiyah Riddle; Editing by Dan Burns and Marguerita Choy Our Standards: The Thomson Reuters Trust Principles.
Tutoring firm settles US agency's first bias lawsuit involving AI software 2023-08-10 - [1/2] AI (Artificial Intelligence) letters and robot miniature in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration/File photo Aug 10 (Reuters) - A China-based tutoring company has agreed to settle a U.S. government agency's novel lawsuit claiming it used hiring software powered by artificial intelligence to illegally weed out older job applicants. The 2022 lawsuit against iTutorGroup Inc was the first by the U.S. Equal Employment Opportunity Commission (EEOC) involving a company's use of AI to make employment decisions. The commission, which enforces workplace bias laws, in 2021 launched an initiative to ensure that AI software used by U.S. employers complies with anti-discrimination laws. The EEOC has warned that it will focus enforcement efforts on companies that misuse AI. ITutorGroup agreed to pay $365,000 to more than 200 job applicants allegedly passed over because of their age, according to a joint filing made in New York federal court on Wednesday. The settlement must be approved by a federal judge. The company, which provides English-language tutoring to students in China, denied wrongdoing in the settlement. The EEOC had alleged that iTutorGroup in 2020 programmed online recruitment software to screen out women aged 55 or older and men who were 60 or older. ITutorGroup, a unit of Ping An Insurance Group Co of China (601318.SS), did not immediately respond to a request for comment. An EEOC spokesperson said the agency would not comment until the settlement is approved. At least 85% of large U.S. employers are using AI in some aspects of employment, according to recent surveys. That includes software that screens out job applicants before a human reviews any applications, human resources "chatbots," and programs that conduct performance reviews and make recommendations for promotions. Many worker advocates and policymakers are concerned about the potential for existing biases to be baked into AI software, even unintentionally. In a pending proposed class action in California federal court, Workday (WDAY.O) is accused of designing hiring software used by scores of large companies that screens out Black, disabled and older applicants. Workday has denied wrongdoing. Experts expect an increasing number of lawsuits accusing employers of discriminating through their use of AI software. Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Andy Sullivan Our Standards: The Thomson Reuters Trust Principles.
Analysis: US stock gains may grow elusive as boost from inflation slowdown wanes 2023-08-10 - The Charging Bull or Wall Street Bull is pictured in the Manhattan borough of New York City, New York, U.S., January 16, 2019. REUTERS/Carlo Allegri/File Photo NEW YORK, Aug 10 (Reuters) - As inflation worries ease, U.S. stocks may need a fresh source of fuel to propel further gains this year, investors said. Data released on Thursday showed annual inflation, which had been running at 40-year highs a year ago, rose at a more moderate pace than expected in July, supporting the so-called "Goldilocks" narrative of disinflation and resilient growth that has won over bearish investors and boosted risk assets this year. The S&P 500 (.SPX) has gained more than 16% on a year-to-date basis, though it was last trading largely flat on Thursday. But with many traders now betting the Federal Reserve is unlikely to raise interest rates again this year and fears of a U.S. recession receding, an improving inflationary picture may become less of a driver for stock prices going forward. That may make it more challenging for stocks to continue their recent rise, with high Treasury yields offering an attractive alternative, equity valuations stretched and investors' stock exposure far higher than it had been at the beginning of the year. The latest CPI report "is good news. At the same time, I think that the S&P is pretty fully valued," said Jack Ablin, chief investment officer at Cresset Capital. "With stocks priced where they are, they are going to need a tailwind of lower rates to keep this momentum going." Indeed, stock moves have been more constrained on the CPI release dates in 2023 compared to last year, with the S&P 500 moving at least 1% in either direction just once so far this year, compared to six times in 2022, when it was far less clear how far prices would rise and how aggressively the U.S. central bank would respond. Individual CPI reports have not had "a material and lasting impact" on markets for several months, said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. "I suspect that's because, very simply, the crisis period of inflation is over and really has been for a few months," LeBas said. Some investors also said the July CPI report, while encouraging, was not enough to take more Fed rate hikes decisively off the table. Traders of futures tied to the Fed's policy rate saw less than a 10% chance the central bank will lift that rate from the current 5.25%-5.50% range at its Sept. 19-20 policy meeting, according to CME Group's FedWatch Tool. However, another CPI report is due to be released before that meeting. The Fed's annual economic policy gathering in Jackson Hole, Wyoming later this month also could influence markets. The CPI report is "obviously positive for the markets," said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest Wealth Management. "But I think when you look at the overall picture, it still keeps the Fed engaged," he said, noting that the latest annual inflation rate of 3.2% remained above the Fed's 2% target. END OF RELIEF RALLY? Meanwhile, with the S&P 500 about 2.5% off the year-to-date high it hit last month, investors have cast a wary eye on the market's stretched valuations. The index's forward price-to-earnings ratio has risen to 19 times, well above its long-term average of 15.6 times, according to Refinitiv Datastream. That reduces the attractiveness of stocks compared to bonds, with the benchmark 10-year US Treasury note yielding more than 4.00% and six-month Treasuries offering about 5.5%. The equity risk premium, which compares the attractiveness of stocks over risk-free government bonds, has been shrinking for most of 2023 and was around its lowest levels in well over a decade this week. At the same time, stocks will have to contend with what has historically been a challenging calendar period for equities. The month of August has delivered on average the third-lowest return for the S&P 500 since 1945, with September ranking as the lowest, according to CFRA Research. Stifel equity strategist Barry Bannister is among those who expect the U.S. stock market will be hard-pressed to climb from its current levels. In a note on Wednesday, he said the S&P 500 would likely "trade sideways" in the second half of the year and end 2023 at 4,400 points, which was about 1.5% below Wednesday's closing level. "We believe the relief rally that was predicated on 'no recession in 2023' is now over," Bannister wrote. Reporting by Lewis Krauskopf; additional reporting by Karen Brettell; Editing by Ira Iosebashvili and Paul Simao Our Standards: The Thomson Reuters Trust Principles.
Dassault confident of 2023 target for Falcon deliveries 2023-08-10 - SAO PAULO, Aug 10 (Reuters) - Dassault Aviation (AM.PA) is confident it will be able to meet its target to deliver 35 Falcon business jets in 2023, but its order backlog is not likely to expand this year as much as it did in 2022, an executive said in an interview. Private aviation boomed during the COVID-19 pandemic as wealthy travelers sought to reduce exposure to the coronavirus, helping business jet makers post strong figures. Dassault added 64 Falcon orders to its backlog in 2022, up 25.5% from the year before. Since then, it saw signs of a cooling market, but things are starting to heat up again. "We noticed a little slowdown at the end of last year, still in place this year as the first half was not crazy on our side," Dassault's vice president of civil aircraft, Carlos Brana, told Reuters at Sao Paulo's LABACE airshow late Wednesday afternoon. "But now we see little turbulences - meaning, an improvement - compared to what we saw in the first few months," he said. "I'm not saying that we'll have the same figures as last year. I think that would be very optimistic, but we see the market coming back again. Slowly, but coming back." Dassault is a major player in the super mid-size, large and long-range categories of business jets, with products such as the Falcons 2000 and 8X that it showcased in Sao Paulo. Its newest developments include the Falcon 6X, which it hopes will be certified within weeks, and the 10X, a "game changer" for which it expects certification in 2025. Brana highlighted a wave of new customers in the business jet market as a result of the pandemic, saying that about 20% of Falcon buyers last year were first-time purchasers of a private aircraft. Dassault delivered 32 Falcon aircraft in 2022 and aims for 35 this year, as it works to overcome supply-chain issues affecting the sector in recent years. "We are doing our best with the supply chain constraints," Brana said. "We're still targeting the 35." Reporting by Gabriel Araujo Editing by Brad Haynes and Leslie Adler Our Standards: The Thomson Reuters Trust Principles.