US financial news summary | 9 August 2023
Headlines: Wednesday 9 August 2023
- Consumer Price Index report with latest inflation numbers to come out Thursday
- Inflation in the US was at 3% in June, as Fed bids to cut rate to 2%
- Gas prices are up this summer as extreme heat hampers oil refinery operations
- 187,000 jobs added in July, unemployment falls to 3.5%
- Treasury Secretary Yellen calls US credit rating downgrade "entirely unwarranted"
- Biden administration launches new student debt repayment plan
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“Taco Tuesday” is a phrase that has become popular in the US to refer to a promotion where tacos are offered at a discounted price or featured on a menu on Tuesdays.
However, the phrase itself was trademarked years ago by the Mexican fast food chain Taco John’s.
Last month, the phrase was finally liberated by the restaurant, which decided to drop its trademark ownership of “Taco Tuesday”,after a campaign by Taco Bell to free the popular term.
To celebrate the event, Taco Bell is giving away a free Nacho Cheese Doritos Locos Taco to their customers every Tuesday from Aug. 15 to Sept. 5.
Subway to pick the lucky 'Subway' who'll receive subs for life
Subway had announced a contest to encourage people to legally change their name to the sandwich chain's to win free sandwiches for life, and nearly 10,000 people joined the sweepstakes.
The company will soon choose the person who will have their first name formally changed to "Subway" and win free subs for life.
The Name Change Challenge entry period ran from Aug. 1 to Aug 4.
Apple customers are very loyal to the brand, and iPhone users are particularly famous for their loyalty. Studies have shown that majority of them are satisfied with their devices, and that they have no plans of switching brands.
This loyalty could translate to some resistance to change, especially if it involves a feature that they have used, model after iPhone model.
Apple will be tweaking the phone’s software and this tiny change could challenge the user’s muscle memory.
If you have a child who is about to enter college in the fall and you want to help them out financially so they don’t have be burdened by student debt for most of their adult life, you may want to take out a loan for them.
Student loans are not the only way to finance a college education; there are also parent student loans available to those who are willing and able to help their children.
Federal parent loans are known as Parent PLUS loans, which are designed to help parents or legal guardians of dependent undergraduate students pay for their child’s education.
Amazon launches nationwide delivery of Whole Foods products
Amazon will now ship specialty grocer Whole Foods products to shoppers in all 50 states for the first time. Prime members will have access to free delivery.
More than 600 of the store's private label items are now available for shipping as Amazon continues to update its grocery ecosystem.
The products include non-perishable goods such as coffees and teas, trail mix, pasta, rolled oats and multivitamins.
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Walmart is offering refunds for unwanted charges suffered by customers at the American retail giant’s self-service checkouts, after many shoppers accidentally registered for the Walmart+ rewards scheme.
If you’re among those who signed up for Walmart+ without meaning to, you can get your money back.
After coming in for heavy criticism on social media, Walmart removed the prompt from its self-service checkouts and is offering refunds on its $49 promotion - but only to those customers who haven’t yet activated their Walmart+ membership.
At stores across the US, self-service checkouts have become a staple element of the shopping experience. More and more outlets have embraced a way of paying that seemingly offers customers greater speed and privacy when they make their purchases, as well as helping businesses to get some savings on staff requirements.
However, lawyer Lindsey Granados is warning consumers of the risks of doing it yourselfwhen it’s time to pay.
Wall St. ends lower after bank rating cuts spark wider sell-off
All three major Wall Street benchmarks finished lower on Tuesday in a broad sell-off after the downgrading of several lenders by credit rating agency Moody's reignited fears about the health of US banks and the economy.
After a five-month rally pushed the benchmark S&P 500 and Nasdaq Composite within 5% of their lifetime highs, August has now recorded five losing sessions out of six. The S&P is down 2% this month, with the Nasdaq dropping 3.2%.
The decline was triggered after the agency cut ratings on 10 small- to mid-sized lenders by one notch and placed six banking giants, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial, on review for potential downgrades.
Moody's also warned that the sector's credit strength would likely be tested by funding risks and weaker profitability.
(REUTERS)
A “soft landing” refers to a scenario in economics where a country’s economy transitions from a period of rapid economic growth or expansion to a more sustainable and stable growth rate, without experiencing a sharp downturn or recession.
The goal of a soft landing is to avoid the negative consequences of an abrupt economic slowdown, such as rising unemployment, falling consumer spending, and declining business activity.
Much will depend on where inflation is along with a host of other factors such as unemployment figures, commodity prices and other data in the CPI report for July. US inflation figures have declined in each of the last 12 months but the figures are still a way off the 2% figure which the Fed is aiming for.
Why does the US have such large medical debt?
Widespread medical debt is a uniquely American problem, with medical debt totaling at least $195 billion in 2019. It was once thought that the problem was that Americans were largely uninsured, but even those with health coverage can run into problems.
For a start, medical debt rarely exists in countries with socialised healthcare, that is everyone's care is paid for by taxes instead of personally. There are few to no charges for taking an ambulance or having surgery.
Medical debt is a serious problem in the US, a country without socialised medicine. According to research from the Kaiser Family Foundation, 41% of adults in the country face healthcare debt - 100 million people.
Get the wrong insurance or make a mistake in a filing and you could be staring down the barrel of a life-ruining bill that could throw you out of your house.
Best ways for Americans to pay off their credit card debt
The numbers don't look great. The average credit card rate is now at an all-time high, 47% of borrowers carry over card balances each month and of those who are carrying a balance, 60%, or roughly 54 million people, have been in debt for at least a year.
That's all according to a Bankrate report.
So, what can those affected do?
Stocks suggest the AI bubble could be popping
Artificial Intelligence has been the talk of the town for much of the year which has had an effect on stocks, which soared heading into the summer. However, recent trends have led to suggestions that the AI stock bubble may be "popping".
Is interest in the technology really fading? The AI boom could be in its "late innings", according to Morgan Stanley equity strategist Edward Stanley.
Despite the Fed raising interest rates to their highest level in 22 years, economists have been stating that they no longer expect a recession. Last week, the Bank of America became the first large Wall Street bank to backtrack on its recession forecast.
Instead, hopes are high that the country is heading towards a “soft landing”.
he Internal Revenue Service has launched a campaign to digitize all tax returns that are filed on paper by 2025. When this is done, taxpayers are expected to receive their refunds up to four weeks earlier, while the time to process returns is projected to be cut in half.
Many taxpayers already file their returns electronically, but there are those who still mail in paper returns, which the IRS has had difficulty in digitally processing.
This, however, will change next year.
Trucking company Yellow files for bankruptcy
Some 30,000 workers at Yellow Corp. are looking for jobs after the major trucking company filed for Chapter 11 bankruptcy protection, potentially saddling taxpayers with losses from a government rescue of the long-troubled carrier.
The nearly 100-year-old company, which halted operations on 30 July, has been a dominant player in the "less-than-truckload" segment that hauls cargo for multiple customers on a single truck.
It laid blame for the bankruptcy, likely the largest ever for a US trucking firm, at the feet of the International Brotherhood of Teamsters union that represents about 22,000 of its employees.
Teamsters leadership "was able to halt our business plan, literally driving our company out of business," Yellow CEO Darren Hawkins said in a statement.
Meanwhile, the International Brotherhood of Teamsters blamed Yellow executives for the company's demise.
(REUTERS)
After being extended multiple times, the moratorium will end at the end of August with student debt payments resuming on 1 September. With 70% of borrowers not knowing that payments are to resume, this will be a worry for many having to trump up hundreds of extra dollars a month. Debt forgiveness plans died in the Supreme Court earlier this year.
However, there is a one-year leniency program that will begin 1 October, 2023 and end on 30 September, 2024 to help borrowers avoid the harshest consequences of missed, partial or late payments,” according to the Education Department.
Good morning and welcome to AS USA's live financial blog!
This week, we will be awaiting the Consumer Price Index report that will come out on Thursday for the latest inflation update.
Gas prices are up this summer as heat waves affect oil refinery operations.
Latest figures from the Labor Department show that 187,000 jobs were added in July, while the unemployment rate went down to 3.5%.