🐂 Unintended purchases

Markets

Stocks experienced a decline following the Federal Reserve's suggestion that there will be an additional interest rate increase before the year concludes, even though the central bank chose to keep rates unchanged, as anticipated, during its meeting yesterday.

Rising Bond Yields, Interest-Rate Worries Drag Stocks Lower

A surge in bond yields, reaching their highest levels in over a decade, led to another significant stock market decline on Thursday. This drop was driven by the realization across Wall Street that the possibility of an extended period of elevated interest rates was becoming more likely.

On Thursday, the S&P 500 experienced a 1.6% decrease, with all 11 sectors ending the day in negative territory. The Nasdaq Composite, which is heavily influenced by tech stocks, declined by 1.8%, while the Dow Jones Industrial Average, composed of established blue-chip companies, dipped by 1.1%, equivalent to approximately 370 points. All three major indexes are set to conclude the week with losses.

The rise in yields was triggered by a selloff in government bonds, driven by unexpectedly robust economic data. The 30-year Treasury bond yield reached 4.55%, marking its highest level since 2011 and the most substantial single-day increase since June 2022. Meanwhile, the 10-year Treasury yield settled at 4.479%, the highest it has been since 2007, and the two-year yield climbed to 5.148%, reaching its highest point since 2006.

Stock markets had been performing well in 2023 following a steep decline the previous year. This resurgence was fueled by investor optimism that the Federal Reserve would conclude its efforts to raise interest rates, and it was also supported by enthusiasm for artificial intelligence technology.

Politics

POV: You are an impending government shutdown

The deadline to prevent a government shutdown is rapidly approaching, and the House of Representatives is grappling with internal divisions.

Within the House, moderate and ultra-conservative Republicans are at odds, and if Speaker Kevin McCarthy fails to secure sufficient votes to pass a new spending bill by October 1, which marks the government's fiscal New Year's, funding for most federal agencies will be cut off.

A potential government shutdown could have various consequences:

1. FEMA's Disaster Relief Fund could run dry, leading to potential delays in food stamp payments, the closure of national parks, and the suspension of clinical trials for new medications.

2. Hundreds of thousands of government employees might face furloughs, while essential workers like air traffic controllers and TSA agents might be required to work without pay, potentially causing disruptions in travel.

3. Depending on the duration of the shutdown, the pause in federal workers' paychecks could negatively impact consumer spending and cost the US economy an estimated $6 billion per week, as per EY estimates. The previous record-breaking shutdown in 2018 lasted for 34 days, and analysts believe a shutdown now could also extend for weeks.

So, why is there discord within the House GOP?

While McCarthy and President Joe Biden previously agreed on a $1.6 trillion budget cap earlier this year, some far-right Republican holdouts are pushing to lower it to $1.4 trillion. Members of the House Freedom Caucus, a group of hardline Republican legislators, including Rep. Matt Gaetz, who recently threatened to attempt McCarthy's removal, have stated they will not support any budget that includes additional aid to Ukraine. This is one of the reasons why some lawmakers believe a government shutdown is becoming increasingly likely.

Looking ahead, one potential solution to avert a shutdown could involve moderate Republicans rallying around a new short-term funding plan with bipartisan support. However, McCarthy has recently attempted to work with the right-wing of his party, aiming for a bill with significant spending cuts that is unlikely to pass the Senate even if it clears the House.

Gaming

Time to get your Fortnite refund

If your child ended up using your credit card to purchase a virtual banana suit in a video game, it's time to put that behind you. Starting on Tuesday, Fortnite players, along with their parents, have the opportunity to request a refund for unintentional in-game purchases.

These refunds, totaling $245 million, are part of an agreement reached earlier this year between the Federal Trade Commission (FTC) and Epic Games, the company behind Fortnite. The FTC accused Epic Games of engaging in deceptive billing practices, asserting that Fortnite players were misled into spending real money within the game due to the use of "dark patterns" in the game's interface design, which encouraged users to make purchases they didn't necessarily intend to.

You might be eligible for a refund if:

1. Your child made purchases in Fortnite using your credit card without your knowledge between January 2017 and November 2018.

2. You were wrongly charged by Fortnite, or your account was locked after you reported to your credit card company that you were wrongly charged by Fortnite between January 2017 and September 2022.

It's worth noting that in addition to the refunds, the FTC's settlement with Epic Games also included a substantial $275 million fine, the largest penalty ever imposed for violating one of the agency's rules. This fine was related to the collection of data on users under the age of 13 without obtaining parental consent. Microsoft faced a smaller fine for a similar violation in June.

Business

Starbucks wants to speed things up

Those cringe-worthy memes your dad keeps sending about 98-step coffee orders at Starbucks might have a point. According to Bloomberg, Starbucks boasts a staggering 383 billion unique latte combinations and is investing in changes to expedite the preparation of these customizable drinks.

Why the need for speed, you ask? Starbucks is grappling with the challenge of keeping customer wait times at bay. Many customers have continued the pandemic-era trend of ordering their morning beverages through the Starbucks app, allowing for a multitude of customizations, such as extra pumps of various ingredients. Starbucks can't simply eliminate these customizations, as they generate over $1 billion in revenue annually, as reported by the President of Starbucks North America.

To address this issue, Starbucks is pouring billions into reducing wait times, including:

1. Introducing smaller ice cubes for easier handling and quicker drink preparation.

2. Rolling out portable cold foamers to free up prep space and reduce congestion at the large blenders.

3. Filing a patent for a machine earlier this year that could automate the process of making drinks.

The company asserts that these changes will not only enhance customer service but also make baristas' jobs easier. However, some employees are skeptical. The ongoing issue of understaffing remains a driving force behind unionization efforts among Starbucks locations, rather than a lack of advanced coffee machines.

In the bigger picture, other restaurant chains are also striving to streamline their order preparation processes to accommodate larger menus and higher sales volumes. For instance, Popeyes is revamping its kitchens for the first time in a decade to expedite the creation of its popular chicken sandwiches

Sports

The ‘Mini-Bombs’ Blowing Up the Elbows of Baseball’s Top Pitchers

At the beginning of the baseball season, Max Scherzer had a bleak prediction, and it appears he was right about at least one aspect. Pitcher injuries, which were already at elevated levels, have intensified. Scherzer had repeatedly voiced his concern about the introduction of the pitch clock, and now it seems the consequences are unfolding.

This season has been another painful one for pitchers, with notable starters like Jacob deGrom, Shohei Ohtani, Shane McClanahan, and Tony Gonsolin undergoing elbow surgeries that are expected to keep them off the mound until 2025. Scherzer himself suffered a shoulder muscle strain recently, depriving the Texas Rangers of their ace during a crucial stretch in a fiercely competitive postseason race.

Now, there is a collective search for answers involving players, teams, league officials, and the top doctors responsible for treating these injuries.

In some ways, what has transpired in recent months is a continuation of a troubling trend. The significant increase in star pitchers requiring elbow ligament surgery has been a prominent storyline over the past decade.

However, top orthopedic surgeons who regularly work with major league players are raising alarms about what they view as a worrisome development. It's not just the quantity of significant injuries that concerns them but also the severity of these injuries.

Dr. Keith Meister, the team physician for the Rangers, described the MRIs of some of his recent patients as resembling "a friggin' mini-bomb going off on the medial side of the elbow." And he is not the only expert who has taken notice of this troubling trend.