🐂Work Drama

Markets

After Jerome Powell delivered his significant speech at the central bankers' meeting in Jackson Hole yesterday, investors released the tension they had been holding throughout the week. This led to an increase in stock prices, breaking the three-week downtrends for both the S&P 500 and Nasdaq. Details about his speech will be discussed shortly.

Despite What Powell Says, the Fed Is Likely Done

Federal Reserve Chair Jerome Powell refrained from celebrating the central bank's success in tempering the economy and signaled a cautious stance on potential rate hikes.

Speaking at the annual symposium held by the Kansas City Fed in Jackson Hole, Wyoming, Powell delivered a balanced speech that presented both sides of the situation. On one hand, he highlighted that the normalization of pandemic-induced distortions and the Federal Reserve's rate adjustments "are effectively collaborating to reduce inflation." However, he also emphasized that there is still a considerable journey ahead in this process. While bank lending standards have become stricter and growth in industrial production has moderated, there have been positive indicators such as higher-than-expected GDP growth and a resurgence in the housing sector.

Although Powell's remarks included some elements that sounded more hawkish, such as a commitment to further rate hikes if deemed necessary, this initially unsettled investors, causing an initial drop in stock prices. Nonetheless, a deeper analysis of his statements suggests that if another rate hike does materialize, it's unlikely to occur during the upcoming month's policy meeting. His assertion that the central bank is now "in a position to proceed carefully" implies a deliberate approach rather than a rush to action. Consequently, stock prices rebounded and ended the day on an upward trajectory.

Tech

The auto industry may be speeding over toward a big strike

Next month, American automotive workers might trade their positions on assembly lines for spots on picket lines. The approximately 150,000 members of the United Auto Workers (UAW) employed by the major car manufacturers in Michigan, commonly known as the Big 3—Ford, GM, and Stellantis—have voted decisively this week to grant authority for a strike. This action would be taken if the mentioned automakers fail to come to an agreement with the union before the existing contract expires on September 14.

The potential halt in work at the nation's largest car producers could have substantial economic repercussions, akin to a direct collision. An assessment by the Anderson Economic Group estimates that a 10-day strike affecting all three companies could lead to an astonishing cost of $5 billion.

Additionally, consumers could encounter challenges in purchasing new vehicles, as an extended strike might result in dealer lots being emptied. Given that car supplies are already at a historically low level and car prices are at or near record highs, the situation could exacerbate.

The picket signs of the protesting workers might convey various demands. The UAW contends that employees deserve to partake in the successes of the trio of automakers. With GM and Stellantis having recorded substantial profits in recent years, and Ford also experiencing robust earnings, the union is advocating for:

1. A 40% increase in wages over the course of the next four-year contract.

2. A reduction in the workweek from 40 to 32 hours without corresponding pay cuts.

3. The reinstatement of benefits such as company-sponsored pension plans and adjustments in pay linked to the cost of living. These were lost by workers shortly before the government intervened to rescue the auto industry during the 2008 financial crisis.

4. In consideration of the shift towards electric vehicle (EV) production, which often requires less labor and is associated with lower wages, the UAW is seeking safeguards to protect workers during this transition.

Anticipating the future course of action, the union might opt to initiate a work stoppage at only one or two of the car manufacturers, or at all three simultaneously (which would be an unprecedented move). Analysts believe that a strike at Stellantis is the most likely scenario, given the confrontational stance of UAW's president, Shawn Fain, who symbolically discarded the company's contract proposal during a Facebook Live broadcast.

Business

Heineken sold its Russian business for €1.

Heineken, the Dutch beer company, is set to incur a cost of €300 million ($325 million) due to its sale to a Russian conglomerate. However, this transaction will mark Heineken's complete withdrawal from the Russian market. In the wake of Russia's invasion of Ukraine, numerous Western enterprises swiftly exited the country. Heineken faced criticism for its relatively slower disengagement, highlighting the complexities foreign companies encounter when attempting to disentangle from Russia. Yet, navigating the Russian business landscape remains challenging for foreign corporations. Just last month, Russia took control of assets belonging to Carlsberg, another European brewing company, and Danone, a yogurt producer.

Entertainment

Here’s what’s up with Scooter Braun’s work drama

The individual who faced a decline in public favor due to his control over Taylor Swift's original album masters has come under scrutiny this week for what seems to be the loss of several notable artists from his prestigious management roster.

Confirmed reports reveal that Demi Lovato, Carly Rae Jepsen, BabyJake, Asher Roth, Idina Menzel, and J Balvin have parted ways with Scooter Braun's management firm, SB Projects. Furthermore, according to undisclosed sources cited in various publications:

• Justin Bieber is reportedly attempting to terminate his contract with Braun, the individual who discovered the singer with his distinctive swept bangs in 2008. Their agreement is originally set to continue until 2027, according to Billboard.

• Ariana Grande, who has been associated with SB Projects since 2013, is rumored to have also decided to move on from Braun's representation, perhaps echoing her sentiment of "thank you, next."

Although a source in proximity to SB Projects refuted the speculations regarding Bieber and Grande, Braun himself took a lighthearted approach to the apparent departures, humorously tweeting, "Breaking news... I’m no longer managing myself."

It's worth noting that any transitions might not involve any animosity. Following the sale of his holding company in a billion-dollar merger with HYBE, the entertainment entity behind the K-pop sensation BTS, Braun assumed the role of CEO for its U.S. division in January. An insider close to SB Projects informed Rolling Stone that Braun is moving from his phase as a manager to his tenure as a chief executive.

Sports

College football starts a season of lasts

The college football season is commencing today, but it's already known that this will mark the end of an era. Amidst the flurry of conference realignment driven by financial motivations over the summer, this season serves as a farewell to numerous time-honored rivalries, cherished tailgating traditions, and conference names that once held a semblance of logic.

Week 0 has begun in Dublin, Ireland, featuring a matchup between Notre Dame's Fighting Irish (aptly named) and the Navy Midshipmen. However, the focus has shifted to the following year.

In the upcoming season, significant changes are on the horizon. The Big 10, which currently comprises 14 teams, is expanding to accommodate 18 teams, while both the Southeastern Conference (SEC) and the Big 12 are growing from 14 to 16 schools each. Consequently:

• This year's iconic clashes such as Oklahoma versus Oklahoma State and Washington against Washington State are likely drawing to a close.

• Athletes representing Oregon and Rutgers will embark on the longest in-conference journey in history, covering a distance of 2,463 miles.

With these sweeping transformations looming, former Big 12 Commissioner Bob Bowlsby expressed to the Associated Press that there's a sense that the upcoming year might eventually feel like a period of transition.

Further changes are afoot. Since 2014, the college football championship has been determined through a four-team elimination tournament. However, in the 2024 season, an audacious expansion of the College Football Playoff is set to involve 12 teams.