by tyler | May 30, 2023 | CNN, investing
Cryptocurrencies are often characterized by their wild price swings and volatility, but stablecoins are digital currencies designed to do the opposite — to hold a steady value.
If you have a stablecoin that is supposed to be equal to $1, then you can theoretically trust that it will always be worth one dollar. It’s like having a digital version of a dollar bill. That makes it easier to use cryptocurrencies for everyday things like buying goods or services, and reduces the risks associated with regular cryptocurrencies, which can go up or down in value very quickly.
These coins have become a crucial part of the overall crypto system — they currently have a market value nearing $130 billion, up from about $11 billion in June 2020. A lot of money is on the line, and with just days left until the US reaches its so-called X date — when the Treasury says the government must raise the debt ceiling or risk defaulting on its obligations — stablecoin companies are worried.
Circle, a financial service company that issues one of the world’s largest stablecoins tied to the US dollar, known as a USDC, has been preparing for months.
Before the Bell sat down with Circle CEO Jeremy Allaire to discuss what the company has been doing, regulation of stablecoins, the regional banking crisis and more.
This interview has been edited for length and clarity.
Before the Bell: President Joe Biden and House Speaker Kevin McCarthy have come to a deal, but lawmakers still have to approve it before the government runs out of cash. How are you prepping for a potential government default?
Jeremy Allaire: At the highest level, USDC is designed to always be redeemed at $1. The way that the regulatory guidance around this is is set up, and our own self imposed approach to this, has been to hold the reserves in the the most safe, most liquid dollar assets in the world — so historically 80% of USDC reserves had been in short term US government Treasury bonds, so 90-day or less Treasury bonds. When people talk about the value of the dollar, that’s generally the anchor point, short duration Treasury bills.
Months ago, when this X date was established, we faced a situation where, in theory, if you’re holding Treasury bills that mature after May 31, and the government can’t pay them, and they’re not able to pay their debt, the dollar itself would de-peg because short term Treasury bonds are the reference point for cash and collateral in the broader financial system. So, we took measures to proactively ensure that we held no T-bills that matured beyond May 31.
There are a few bills to regulate stablecoins making their way through Congress. How do you see things progressing?
There’s still important unfinished work on what we think of as the first phase of what we’re trying to do. We need a protocol for dollars on the internet to become enshrined in law as a $1 cash equivalent instrument that is acceptable to financial institutions, to households, to firms and the like. That’s what we’re talking about with the stablecoin bill. We’re talking about making this legally part of the global financial system.
We absolutely see movement. It’s very clear that both sides of the aisle would like to get something done and they’d like to come together to do that. There seems to be a consensus view that this is important and needs to get done.
Circle had $3.3 billion invested in Silicon Valley Bank before its failure. What are you doing to protect Circle from future banking problems?
We’ve always been concerned about exposure to the fractional reserve banking system [banks that are required to hold only a fraction of customer deposits as reserves, allowing them to lend out the majority] where cash is tied into longer duration lending. We don’t think that’s a good foundation for a digital dollar that runs on the internet.
We’d like some portion of the cash that sits behind USDC to be held with the Fed and Treasury bonds and the like, then you’d have something extraordinarily safe that everyone understood and could depend on. We were moving towards that prior to SVB’s collapse. But as part of our efforts to continue to do that, we’ve been bringing online larger and larger cash custodians [a financial institution that safeguards and manages cash and other financial assets on behalf of clients]. Bank of New York Mellon, which is one of the largest and safest cash custodians in the world, holds our cash reserves.
President Biden and Republican House Speaker McCarthy put their long weekend to good use, coming to an agreement to raise the debt ceiling in the hope of avoiding a self imposed default on US government debt.
Now comes the hard part. Lawmakers have to also approve the deal. If Congress doesn’t raise the debt ceiling by June 5, Treasury Secretary Janet Yellen warns the government will not have enough funds to pay all of the nation’s obligations in full and on time.
Here’s a breakdown by my colleague Tami Luhby of what the deal would do (you can also read the bill in full here):
> Address the debt ceiling: The agreement would suspend the nation’s $31.4 trillion debt limit through January 1, 2025. This removes it as a potential issue in the 2024 presidential election.
> Cap non-defense spending: Under the deal, non-defense spending would remain relatively flat in fiscal 2024 and increase by 1% in fiscal 2025, after certain adjustments to appropriations were made. After fiscal 2025, there would be no budget caps.
> Cut Internal Revenue Service funding: House Republicans have been determined to jettison money allotted to the IRS to fight fraud. The debt ceiling bill does that, rescinding $1.4 billion in IRS funding.
> Expand work requirements: The agreement calls for temporarily broadening of work requirements for certain adults receiving food stamps.
> Claw back some Covid-19 relief funds: The deal would rescind roughly $28 billion in uncommitted funds from the Covid-19 relief packages that Congress passed to respond to the pandemic.
> Restart student loan repayments: Under the deal, borrowers would have to begin paying back their student loans at the end of the summer, as the Biden administration has already announced. The pause has been in effect since the Covid-19 pandemic began.
> Expedite a pipeline in West Virginia: The agreement would also speed the creation of the Mountain Valley Pipeline, a natural gas pipeline in West Virginia.
It appears that US industry is pleased with the debt ceiling deal, and would like Congress to pass it quickly.
Leading business groups praised Biden and McCarthy for forging a bipartisan agreement over the weekend, reports my colleague Matt Egan.
“With the US at risk of defaulting in less than 10 days, there is no time to spare. We urge members of Congress to give the legislation their strong support,” Josh Bolten, the CEO of the Business Roundtable and former chief of staff to President George W. Bush, said in a statement on Sunday.
Bolten applauded the agreement for not only raising the debt ceiling through January 1, 2025, but for making a “down payment” on permitting reform and taking steps towards putting America on a “more sustainable fiscal trajectory.”
Suzanne Clark, president and CEO of the US Chamber of Commerce, said in a separate statement that by reaching a compromise, Biden and congressional leaders have “shown they can come together on a bipartisan basis and act in the best interests of our country.”
“Members of Congress must finish the job and send the bill to the President’s desk to be signed into law without delay. The gravity of this moment cannot be overstated,” said Clark, who added the Chamber will consider this a “key vote” for lawmakers.
The House vote is expected to take place Wednesday.
by tyler | May 25, 2023 | CNN, investing
There are just four trading days left until the United States hits its “X” day — the ominous-sounding hard deadline for the government to raise the debt ceiling or risk defaulting on its obligations, according to the US Treasury. Investors are starting to squirm.
It’s not like this took Wall Street by surprise. The US government hit its self-imposed debt ceiling back in January, forcing the Treasury to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default. Treasury Secretary Janet Yellen has been warning of a June 1 deadline for nearly a month.
US markets have largely shrugged off talk of a default. All three major indexes climbed higher last week. And analyst notes discussing the topic have been heavily caveated that there’s a near-zero chance of an actual default. “A debt ceiling deal is a certainty and every market actor knows it,” wrote David Bahnsen, chief investment officer of The Bahnsen Group on Wednesday.
But markets have experienced a vibe shift in the last 24-48 hours. The Dow plummeted more than 250 points Wednesday as investors were appeared to wake up to the reality that for the first time in US history, the government could renege on its bills. Treasury yields, which move in the opposite direction to prices, were higher as worries of a default grew.
What’s happening: Negotiations between President Joe Biden and Republican House Speaker Kevin McCarthy are hitting snags and time is running out.
House Republicans are insisting on spending cuts before they will agree to raise the nation’s debt ceiling past $31 trillion. Democrats argue that Congress already spent the money and must be allowed to repay America’s debt holders without an embarrassing and economically disastrous default.
Fitch — one of the top three credit rating agencies along with Moody’s and S&P — signaled on Wednesday evening that it could downgrade the United States’ perfect rating if lawmakers do not agree to raise the debt limit.
The warning is “just the latest sign that policy brinkmanship over the debt ceiling is extracting a growing price on the US economy and placing in jeopardy well-functioning financial markets that are critical to the health of the American real economy,” said Joseph Brusuelas, chief economist at RSM LLC.
Market reaction: As it becomes less certain that an agreement will be reached and more likely that a default could occur, investors have soured on markets quickly.
“In the absence of a deal, we’re gonna see the markets pay more and more attention to this,” said Megan Greene, global chief economist of the Kroll Institute. “But even with just brinkmanship, you end up having an impact on the markets and the economy.”
It’s hard to say what comes next, said Greene. There’s so much uncertainty around what would happen if the US did default on some of its debt obligations, simply because it never has before, she said. “It’s hard to price that in the markets.”
Stock futures were mixed on Thursday morning, largely because of a nearly 30% surge in shares of chipmaker Nvidia
(NVDA). The Dow, however, was still in the red on debt ceiling fears.
What comes next: Even if the US avoids a default, markets could remain moody, said Steve Sosnick, chief strategist at Interactive Brokers. “If a debt resolution results in tighter fiscal policies, it would create yet another hurdle for stocks and the economy,” he wrote in a note. Tight fiscal policy means less government spending or higher taxes.
If there’s concern over a slowdown or even a recession, he said, “then a fiscal bump would be a boon, while a fiscal cut would be an additional headwind — at least in the short-term.”
Federal Reserve officials are feeling uncertain about the path forward for monetary policy, according to minutes from the central bank’s May meeting.
The notes, released on Wednesday, show a Fed divided over what comes next, after more than a year of rising interest rates.
While the decision to raise benchmark rates by a quarter of a percentage point in May was ultimately unanimous, policymakers stressed the need to keep all options on the table as they debated whether to hike again or pause.
“Participants generally expressed uncertainty about how much more policy tightening may be appropriate,” the Fed minutes noted. “Many participants focused on the need to retain optionality after this meeting.”
The Fed’s economists also reaffirmed their forecast of a mild recession later in the year.
The path forward: In light of these comments, Gregory Daco, chief economist at EY, said he expects the Fed will hold rates steady through the rest of the year “as it assesses the impact of tightening to date on the economy and inflation.”
Still, “with several Fed participants on the fence regarding the need to tighten policy further, and given the Fed’s excessive data dependence, one ‘hotter-than-expected’ data read could still push the Fed to tighten policy further,” he added.
Shares of Abercrombie & Fitch
(ANF) soared more than 30% after the mall retailer released a stellar first-quarter earnings report.
Abercrombie beat analysts’ estimates, reported a surprise profit and boosted its outlook for the full year. The numbers show that despite growing economic uncertainty, the American consumer is willing to spend money on discretionary items like acid-washed jeans and polo shirts.
The company reported a net income of $16.57 million in the first quarter. That’s an improvement on a loss of $16.46 million a year earlier. The retailer also said it expects net sales to grow between 2% and 4% this year, up from previous estimates of between 1% and 3%.
The gangbusters report comes as other retailers have reported a pullback in consumer spending this season: Some of the largest stores are warning of trouble ahead, American bank accounts are dwindling and debt is growing.
So why is Abercrombie & Fitch outperforming this quarter?
“At a high level, the answer can be found in the skills and attitude of management,” wrote Neil Saunders, managing director of GlobalData, on Wednesday. “Executives are very focused on the consumer and are ever keen to understand what they want. Once they have discerned this, they know how to go about delivering this in an efficient and effective way.”
by tyler | May 23, 2023 | CNN, investing
Economists are concerned about the $20 trillion commercial real estate (CRE) industry and so is JPMorgan Chase CEO Jamie Dimon.
The regional banking crisis is having a knock-on effect on commercial real estate lending, Dimon warned at his company’s shareholder meeting on Monday.
What’s happening: “There’s always an off-sides,” Dimon said, using Wall Street jargon for an indirect consequence. “The off-sides in this case will probably be real estate. It’ll be certain locations, certain office properties, certain construction loans. It could be very isolated; it won’t be every bank.”
Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.
Recent banking stress has significantly added to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.
“You’re already seeing credit tighten up because the easiest way for a bank to retain capital is not to make the next loan,” said Dimon.
Regulatory changes made in response to the collapse of Silicon Valley Bank and Signature Bank will also likely lead small banks to tighten access to their credit, he said.
As capital tightens up, added Dimon, interest rates could go even higher. “I think everyone should be prepared for rates going higher from here,” he said.
Nearly 85% of investors are pricing in a pause in interest rate hikes at the next Federal Reserve meeting, according to the CME FedWatch Tool.
What else: A US debt limit crisis is looming, regional banks are still contending with their own turmoil and recession predictions abound. But Dimon, arguably the most powerful executive in the United States, seemed fairly relaxed about it all on Monday.
Dimon, who heads the largest bank in the country, appeared upbeat in an open-collar shirt as he answered questions from investors. He walked on stage to the theme from Rocky.
Dimon, 67, also spoke candidly about his succession plans. While there are plenty of qualified and competent internal candidates for his spot, he said, he doesn’t plan to step down anytime soon.
“I still love what I do,” he told investors Monday. “I can’t do this forever, I know that. My intensity is the same. I think when I don’t have that intensity, I should leave.”
It’s been a big year for high-profile corporate bankruptcies.
From Bed Bath & Beyond and Vice Media to David’s Bridal and Party City, companies have been going belly-up at an alarming rate. And it’s not getting any better. Last week, corporate America had its worst 48-hour stretch of bankruptcies since at least 2008, reports my colleague Samantha Delouya.
The tally of companies that went bankrupt between January and April was higher than the first four months of any year since 2010, according to data from S&P Global Intelligence.
So what’s going on?
James Gellert, CEO of Rapid Ratings International, a company that evaluates the financial health of public and private companies, said many of these troubled businesses have similar traits.
“The big themes are that they have degraded in operational quality and have debt that has been unsustainable,” he said. “That is the formula for bankruptcy in this market.”
The Federal Reserve may have also played a role in the collapses.
Elevated interest rates have led to a credit crunch, making it difficult for companies in need to borrow funds from banks. That effect will likely continue even after the Fed has finished its current round of rate hikes, said Gellert.
“If you look back to the financial crisis, the market bottomed in March 2009, and you were still seeing bankruptcies throughout that year, even as the market was doing better,” he said. “There’s still going to be trouble going forward,” he said.
US President Joe Biden and Republican House Speaker Kevin McCarthy met at the White House again on Monday evening to try and hammer out a deal to avoid a catastrophic government default on debt.
But after hours of negotiating the pair emerged without one.
Still, McCarthy said talks would continue every day until a deal was made, striking a more optimistic tone than he had after previous meetings.
“We literally talked about where we are having disagreements and ideas,” McCarthy told the press. “So to me that’s productive. Not progress, but productive.”
“We’re optimistic we may be able to make some progress,” Biden added.
US Treasury Secretary Janet Yellen reaffirmed on Sunday that June 1 is the “hard deadline” for the United States to raise the debt ceiling or risk defaulting on its obligations.
Still, Wall Street appears to be shaking off the approaching X-date, now just nine days away.
by tyler | May 23, 2023 | CNN, investing
Americans turned into DIY fanatics during the pandemic, beautifying their apartments, homes and condos while they were stuck inside and tired of looking at the same drab interior every day. But the Covid emergency is over, prices are (much) higher, consumers are growing fearful of a recession and people are spending less at Lowe’s and Home Depot.
Lowe’s on Tuesday lowered its profit and sales outlook for the year, saying consumers were spending less on home improvement. It comes on the heels of rival Home Depot also posting disappointing sales and a somber forecast last week.
“We are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases,” said Marvin Ellison, Lowe’s CEO, in a statement. “We remain optimistic about the medium-to-long-term outlook for home improvement.”
Shares of Lowe’s
(LOW) fell 1.3% in premarket trading.
“Lowe’s is suffering from a case of the home improvement blues,” said retail expert Neil Saunders, managing director at Global Data, in a note Tuesday.
On the consumer side, a slowing housing market is dragging down the number of people undertaking projects, Saunders said.
“This has been unhelpful to Lowe’s, although arguably the burden falls more on Home Depot as movers tend to undertake heavier and more serious DIY, which traditionally favors Lowe’s larger rival,” he said.
Bill Darcy, CEO of the National Kitchen & Bath Association, said homeowners are nervous about the economy. Some have paused large-scale projects, while others are shifting towards smaller, lower-cost projects, he said.
Among the trends he’s observed: Consumers are downgrading brand names in favor of lower prices, they’re using factory-made cabinetry as opposed to custom carpentry and buying less expensive countertops.
Darcy said project completions are beginning to waver. “Year-over-year project completions are up 1.8% in the first quarter of 2023 on a year-over-year basis, decelerating from 6.5% in the fourth quarter of 2022. Consumers are pausing large-scale projects until economic conditions stabilize,” he said.
Lowe’s said sales at stores open at least a year fell 4.3% in the past quarter. Ellison noted lumber prices have fallen through the floor as supply and demand have finally rebalanced after years of supply chain constraints. The CEO also blamed poor weather, as rain storms in the West weren’t exactly the most favorable conditions for building a shed or installing new soffits.
But discretionary purchases at retailers all over America are saying the same thing in unison: Consumers aren’t spending on stuff they don’t need anymore. Target, Walmart and Home Depot over the past couple weeks all noted that discretionary purchases are down across the board. People are spending more on groceries and other essentials and less on clothes and gutters.
Consumers aren’t completely throwing in the towel yet: Travel spending remains higher. But it seems inflation has finally caught up with America. Prices are 4.9% higher now than they were a year ago, the Labor Department reported earlier this month.
For the first quarter, Lowe’s said overall sales fell 5.5% to $22.3 billion. Profit fell 3% to $2.3 billion.
The company now expects annual sales to come in somewhere between $87 billion and $89 billion this year, down from its previous estimate of $88 billion to $90 billion.
At stores open at least a year, Lowe’s now predicts sales will fall as much as 4%. It had previously expected sales to be flat to down 2%. And Lowe’s lowered its profit guidance by 3% from its original forecast.
by tyler | May 22, 2023 | CNN, investing
The White House and congressional Republicans have yet to reach a debt ceiling deal, and the possibility of a US default looms on the horizon. Business owners, along with the rest of the country, are in wait-and-see mode, bracing for a possible recession and job losses in the event of a prolonged default.
But there are some things they can do to prepare.
To help protect themselves, companies should evaluate their exposure to government contracts, consider holding onto more cash and offloading short-term Treasury bills that mature within a year, according to experts.
While some still think a default is unlikely, the nonpartisan Congressional Budget Office said earlier this month that there is a “significant risk” the federal government won’t be able to pay all of its obligations in the first two weeks of June. Treasury Secretary Janet Yellen warned that could happen as soon as June 1.
“We all hope that we don’t default. But hope is not a plan,” said Joshua White, assistant professor of finance at Vanderbilt’s school of management. “Companies need to have a plan.”
Some companies may not be immediately impacted by a default. But those that have contracts with the government could see delays in their payments as soon as the US runs out of cash.
In the event of a default, there could be a few weeks of delayed payments. In that period, landlords, vendors and others may be more flexible and accept later payments, said Harry Mamaysky, a professor of professional practice at Columbia’s business school.
Businesses that rely on government payments should be prepared for delays. “You have to make contingency plans,” he said.
Defense and health care could be particularly vulnerable to a default, because they tend to depend on government funding. Private companies, like tech companies, may also hold government contracts.
White recommends companies in those industries, especially, hold regular meetings to figure out a plan in case payments are delayed. JPMorgan Chase CEO Jamie Dimon told Bloomberg earlier this month that the bank was holding weekly meetings to prepare for a possible default.
“At some point, [the government will] work it out,” White said. But until then, companies “need to know, can we last until that point? And how long would that be? How hard would that hit us for our cash position?”
Even businesses that aren’t directly exposed to government funding should have a plan, he said.
If your customers or suppliers aren’t getting paid, chances are they’ll pull back on spending or may run into their own disruptions that could impact your business.
In “military towns, towns that are heavily dependent on government funding … that would spill over to the local community,” White said.
Smaller businesses in this position might not need to hold weekly meetings, he said. But they might want to consider holding onto more cash, and perhaps diversify into holding non-US currencies in case the value of the dollar falls.
A government default would likely push interest rates up, making it more expensive to borrow money. “Having a strong cash position now I think would be very helpful,” White said. Companies can do that by hitting pause on big projects.
Plus, a default could make it hard to access credit, noted Kent Smetters, professor of business economics and public policy at Wharton.
Small- and medium-sized businesses often use lines of credit to help them make payments to suppliers when they’re short on cash, like after wholesale goods are purchased but before sales are made to consumers.
“If I’m a bank, probably I’m going to cut back quite a bit on credit,” Smetters said. That’s because banks’ deposits are often themselves often tied up in Treasury securities — which the government may not pay in a timely fashion in the event of a default.
Just as banks will likely be mindful of their government bonds, so should companies that hold Treasury bills themselves.
If you own a Treasury bill that’s set to mature in early or mid June, “and you’re relying on receiving that money because you need to pay that money to a vendor … you may be stuck for a week or two, while Congress haggles about raising the debt ceiling,” said Columbia’s Mamaysky.
Companies in that situation who need their payments immediately might consider placing that money into an FDIC-insured account instead of risking a delayed payment, he said, even though they are likely to lose money on the trade.
Cynthia Franklin, director of entrepreneurship for the W. R. Berkley Innovation Labs at New York University, works primarily with small companies and startups. The advice she’d give businesses now is the same she gives to those early stage businesses, she said.
“If there were a default on the US debt, it would make borrowing costs higher, it would mean consumer confidence might go down,” she said. “There are a lot of areas where it would be appropriate for a company to do a little belt tightening.” But, she noted, “that’s just what a business should do anyway.”
Franklin tells companies to “be agile and adaptable,” and to diversify their customers so they don’t rely too heavily on one source of income. Companies should also be as efficient as possible so they’re not spending more than they need to, she said.
“When we talk about preparing for an economic downturn or economic uncertainty, it really is doing those things that we should have been doing all along,” she said.
“When we encounter these rough periods, they’re less forgiving of those businesses that haven’t been minding the basics,” she said. “But companies should always be minding the basics.”
by tyler | May 18, 2023 | CNN, investing
New data this week shows that US consumers are starting to scale back spending, the largest retailers are warning of trouble ahead, bank accounts are dwindling and debt is growing.
That’s bad news for the economy.
What’s happening: Retail sales for April were a mixed bag. Spending at US retailers rose in April following two months of declines. That means the US consumer is still fueling the economy.
But sales grew by a muted 0.4% in April from March, the Department of Commerce reported on Tuesday, and were up just 0.2% on the same month last year.
“Retail growth held on by the skin of its teeth this month,” said Neil Saunders, managing director of GlobalData. “While any growth is welcome, this was the shallowest increase in 31 months and marks a very significant deterioration compared to recent performance.”
The evidence, he said, “suggests that a consumer slowdown is now firmly underway.”
Home Depot
(HD) broke a three-year growth streak this week after it reported a dismal quarter. The retailer posted disappointing sales for its first quarter and lowered its outlook for the year as customers slowed their spending.
“After a three-year period of unprecedented growth for our sector, during which we grew sales by over $47 billion, we expected that fiscal 2023 would be a year of moderation for the home improvement market,” Home Depot CEO Ted Decker said Tuesday.
Target
(TGT) also reported lackluster earnings this week. Total sales ticked up 0.5% during its latest quarter from a year ago, the company said Wednesday. But digital sales fell, and the company said shoppers pulled back on discretionary purchases in what CEO Brian Cornell called a “very challenging environment” for consumers.
At the same time, Americans’ debt levels have grown to new heights. With inflation high and savings dwindling, household debt balances set a record high of $17.05 trillion during the first quarter, growing $148 billion or 0.9% from the fourth quarter of last year, the Federal Reserve Bank of New York reported Monday.
That debt load has spiked by $2.9 trillion since the end of 2019.
Why it matters: Bank executives, debt ceiling negotiators and Fed economists are all very important people, but the fate of the US economy rests on the shoulders of consumers.
An American armed with a credit card and a shopping list does more to swing the economy than most people crunching numbers in Wall Street offices.
That’s because consumer spending accounts for about 70% of America’s gross domestic product, the broadest measure of economic activity, so it’s nearly impossible to enter a recession when spending is growing.
Despite elevated inflation and interest rates, teetering regional banks and a possible US debt default, the economy has remained resilient because Americans keep shopping. That resiliency now appears to be waning, supporting the consensus among analysts that a recession is likely to begin in the second half of 2023.
What’s next: Walmart reports earnings on Thursday morning. Last quarter the mega-retailer managed to beat Wall Street estimates, and analysts expect the company to report another strong quarter as consumers spend more on necessities.
But Walmart is a something of an anomaly — the retailer’s shares are up more than 5% year-to-date, outperforming the broader consumer staples sector by about 1.5%.
Do you hear that sound? It’s the collective cries of teens across the state of Montana.
Montana Gov. Greg Gianforte signed a bill Wednesday banning TikTok in the state. The controversial law marks the furthest step yet by a state government to restrict TikTok over perceived security concerns, reports my colleague Samantha Delouya.
Gianforte tweeted that he has banned TikTok in Montana “to protect Montanans’ personal and private data from the Chinese Communist Party,” officially making it the first state to ban the social media application.
The bill, which will take effect in January, specifically names TikTok as its target, prohibiting the app from operating within state lines. The law also outlines potential fines of $10,000 per day for violators, including app stores found to host the social media application.
The aggressive bill comes as some federal lawmakers call for a national ban of TikTok. Montana’s action is expected to be challenged in court.
In a statement to CNN, TikTok said it would push to defend the rights of users in Montana.
“Governor Gianforte has signed a bill that infringes on the First Amendment rights of the people of Montana by unlawfully banning TikTok, a platform that empowers hundreds of thousands of people across the state,” a spokesperson wrote.
“We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana.”
Former vice president Mike Pence, currently weighing the possibility of a 2024 presidential run, doesn’t like the dual mandate of the Federal Reserve to foster maximum employment and price stability.
He thinks the Fed should leave employment concerns to Congress.
In an interview with Bloomberg Tuesday, Pence said that the United States would “do well as a nation to return the Federal Reserve to its historic mission of ensuring sound monetary policy and look after the strength of our currency and let elected officials worry about full employment.”
At the event hosted by the Josiah Bartlett Center for Public Policy in Concord, Pence also said that entitlement programs like Social Security and Medicare need to be reformed.
“Joe Biden’s policy is insolvency,” Pence said.
Pence said he expects to come to a decision about a presidential run before the end of June.
