Sept. Inflation Up More Than Expected; JPMorgan Cuts Ties With Kanye: Report | NTD Business

Thank you for watching NTD Business. Coming up, new consumer price numbers out today. The bad news is inflation likely not going down anytime soon. But good news for people on social security. They're going to see the biggest increase in four decades next year. And a major US bank apparently cutting ties with Kanye West and his business after the rapper posted some controversial tweets. That and much more coming up on NTD Business. The White House confirmed today that it did ask Saudi Arabia to delay an oil production cut earlier. The Biden administration is trying to keep gas prices from going up, and one way to do that is to ensure oil supply, including getting the oil cartel OPEC to keep pumping. But OPEC wants to keep prices high, so the group planned for production cuts, which the White House wasn't happy about. In a statement today, National Security Council spokesman John Kirby said they showed Saudi Arabia why there's no reason to cut production right now. But he didn't say directly that the White House asked the Saudis to delay the cut after the midterm elections. Kirby said they asked the Saudis to wait until after the next OPEC meeting, which could be in early December. Despite the White House's request, OPEC went ahead and announced the production cut last week anyway. And yesterday, President Biden said Saudi Arabia would face consequences because of the cuts. But he didn't say what those would be. Just earlier today, Secretary of State Antony Blinken said the U.S. is reviewing consequences for Saudi Arabia. And JPMorgan Chase has decided to end its business relationship with rapper Kanye West's company easy. This is according to conservative commentator Candace Owens. West was earlier suspended from social media after posting content accused of being anti-Semitic. Candace Owens shared a letter reportedly from JPMorgan Chase. The letter says the bank will terminate its business relationship with easy and its affiliated entities by November 21st. The letter, though, didn't explain why the bank is cutting the ties. Owens suggested it may be related to the broader trend of de-platforming people who express controversial views. West recently wore a white Lives Matter t-shirt at a fashion event. He was also locked out of his Twitter and Instagram accounts over posts alleged to be anti-Semitic. And new inflation data shows something you already know. High prices are hitting us hard. The Bureau of Labor Statistics shows people are still struggling with high prices. Overall, consumer prices went up 0.4 percent in September, more than economists expected, and was up 8.2 percent from the year before. If we break down the numbers, gas prices fell a bit, but food and shelter prices kept going up. As the inflation numbers tick up, there is concern the Federal Reserve will continue with historic rate hikes. The Fed has already raised its benchmark interest rate five times this year in hopes to cool the economy by lowering demand. And Wall Street, despite the hot inflation number, U.S. stocks ended sharply higher today. The Dow Jones jumped 828 points, or 2.8 percent. The S&P 500 rose 93 points, or 2.6 percent. The Nasdaq gained 232 points, or 2.2 percent. And we talked with an American manufacturer to get an on-the-ground look of the impacts of inflation. Here's Andrew Cherland. He's the owner of Cherland Products. He's also a top seller on Amazon with a quarter billion dollars in sales. Andrew, great having you on today. Now, we just got the CPI numbers, still very high, it looks like. Is there any relief on the horizon in your eyes? I don't see it coming anytime soon, not in the foreseeable future, not through the rest of this year, and probably not in the beginning. We're seeing at both the raw goods level and our direct manufacturer level, prices still going up, people still asking for price increases, even for things that have gone through many rounds of price increases already. And what's behind that? Why are prices still going up? There's all sorts of different issues. Although a lot of inputs, like container shipping costs and things like that, I know are down. Overall, there's still labor challenges that are causing price increases. There's still lots of shortages that are causing increases. Basically, you have to imagine that with all the shortages that are happening and continue to happen, that people are having to choose higher price or more difficult suppliers that aren't quite as efficient. And so, those are only starting to come into the system now from actions that they may have taken and suppliers they may have brought on board several months ago. Do you feel if the Fed is successful at cooling the labor market, that inflation might come down a little bit? It could come down a little bit. There's still a lot of pent-up issues in the system. And so, really, the issue that the Fed is fighting is probably especially difficult because they can't pinpoint one thing. And you can see that different people in the Biden administration and all throughout have pointed to different things, whether it's war in Ukraine, whether it's overall energy prices, whether it's material costs, whether it's shipping difficulties, whether it's labor costs. There's so many different factors that trying to solve just one thing like just the labor market is going to potentially ease things, but it doesn't solve it writ large. Now, I know you're a manufacturer, also a big seller on Amazon. So, tell me, what are the impacts on businesses from these rate hikes from the Fed? Well, the overall part that the consumer doesn't necessarily see directly is that you had two choices in the last year. You could either buy a bunch in inventory to try to buy before the price increases went into effect or as the price increases went into effect, or you could wait and then buy now. Well, what the issue is, is right now, if you want to buy now, the cost of money is becoming more and more expensive. Lines of credits have double or tripled on their interest rate. So, if you're trying to buy now, things are more expensive. And if you tried to buy previously, you avoided some of the inflation costs, but you're sitting on excess inventory. And so, it's been very difficult to manage this situation and figure out how to use your cash. And overall, what ends up happening when cash isn't used perfectly is that in order to protect their margins, people raise prices. And so, for lots of our products, we've seen price increases go up 20%, 30% because of various issues. And I know through lots of other Amazon sellers I talked to, no one's talking about price decreases. Everybody's talking about price increases and their excess inventory. Besides a few possible liquidations here and there because of extreme excess inventory, overall, people are staying strong and maintaining price integrity because they need to offset the cost of money or the cost of storing inventory. All right. Just one last thing. Now, you as a manufacturer, you may have certain advantages over economists. That is, you might have an on-the-ground view of inflation. So, let me ask you, do you have confidence in rate hikes bringing down inflation? Only with an extremely hard landing. That's the phrase we've been using, soft landing, for a long time. I think the only way these rate hikes ultimately have a result on inflation is because consumer demand is crippled. Things become way too expensive. There's not enough wealth effect and a feeling of wealth in consumers' pockets. And it'll get a lot worse before it gets better. But ultimately, after a year or two, I expect things to normalize and get back to a more comfortable inflation print. It's just, it may be a very ugly situation until we get there. All right. Thank you very much, Andrew Chernland, owner of Chernland Products. Pleasure speaking with you today. Thanks, Don. And healthcare inflation doesn't seem to be coming down anytime soon either. Experts say most employees can expect to pay more for health insurance coverage and out-of-pocket doctor visits next year. Insurance premiums are usually set in advance and last for 12 months, but now there are new contracts. So, you'll have to take a closer look during your open enrollment period this month and next month. Meanwhile, hospitals, doctors and other providers are feeling the price increases too. Their costs for labor and supplies have gone up sharply due to inflation and demand. At the same time, they're seeing more patients who might have put off checkups during the pandemic. So often, patients are now coming in sicker. And this might make providers push insurers to hike their reimbursement rates when contracts are up for renewal. And now on to housing. Foreclosures in the United States are increasing from July through September. Foreclosure processes have been started on more than 67,000 properties. That's according to Atom Data Solutions. That's up 1% from the previous quarter and up a whopping 167% from a year ago. While this means more houses going on the market, there's also bad news. Mortgage rates have hit a 20-year high. Freddie Mac says in the week ending Thursday, their average rate for a 30-year fixed rate mortgage was 6.9%. That's more than double than a year ago. Freddie Mac says home sales are already dropping and prices are cooling. In today's special report, as the Federal Reserve raises interest rates, the U.S. Treasury Secretary is warning that there could be trouble ahead for the U.S. financial system. It seems there aren't enough investors willing to buy government bonds, while yields or interest rates on those bonds is so much lower than inflation. This has caused yields to rapidly rise recently. Here's the finance professor Michael Busler. Now, this is a good thing if you're waiting to buy treasury bonds because when the interest rate or yield goes up, you get more bang for your buck, i.e. government bonds are cheaper to buy now. But what about the investor like your pension fund who uses bonds as collateral for loans? The collateral is worth less now. This could destabilize its portfolio, that is, your retirement fund. The chief investment strategist for RIA Advisors, Lance Roberts, says the big danger here is that this could make pension holders panic. If the pensionees start getting worried, and we have a lot of pensionees that are working well past retirement age, they haven't retired, they're not drawing on their pension yet, or they're close to retirement, and they get worried about whether or not that pension is going to be there. Then what they do is they go, I'm retiring, I'm gonna take my pension now. And you have what's called a run on the pension. And just to note, Roberts is not recommending you do that. But American pension funds already have a lot to worry about. Many are underfunded, it'll be difficult for them to pay all their contributors. Their investment strategies haven't really worked. They've jumped from one failed strategy to another, from stocks to bonds to private equity. A pension run like a bank run would make things far worse. But worries about pension funds aside, Secretary Yellen could also be concerned about what rising interest rates mean for the government. It will make interest payments on the federal debt much more expensive. The rate on the 30-year treasury has doubled this year. And that's significant when you're talking about trillions of dollars of federal debt. Until inflation really took hold, the Federal Reserve was buying government bonds to keep borrowing costs down for the government. And that's been curtailed. AIER economist Pete Earl says the government may have to resort to tax increases to make ends meet. If inflation proves persistent, and the Fed has to raise rates longer or higher, the U.S. government may have to rely on fiscal measures. And fiscal measures mean issuing bonds. The kicker there is if the U.S. can't issue bonds, and if the Federal Reserve is preoccupied with raising rates, there's only one place left to go to make ends meet, and that's the U.S. taxpayer. And nobody wants to raise taxes in the middle of a recession. So let's see who blinks first, the government or the Federal Reserve. And moving on, some good news for retirees who get Social Security. There will be about $150 extra in each month's check next year. It's an 8.7% boost in light of rampant inflation and the largest increase since 1981. For the 70 million people who depend on Social Security monthly, payments will go up around $146. And we're officially in a bear market, and economists say it's likely markets will remain volatile for a while. Coupled with soaring inflation and interest rates, it has some Americans worried about their nest egg. So what can you do now to protect your portfolio? Here's some tips for the concerned investor. Anxiety is high for both investors on Wall Street and Americans trying to protect their retirement and savings in this bear market, meaning many stock prices are falling, driving down Americans' wealth. What I see for a lot of people is panicking. Should I even be investing in the market? And it comes as Americans continue to face soaring inflation and interest rates, a mix that has consumers concerned. Folks are really struggling to make ends meet. And then the idea of putting money into the market when it's so volatile at this point, I think is causing a lot of people a lot of anxiety. Money expert Janice Torres has these five tips to protect your nest egg. Number one, check your existing assets and be realistic about how much you're investing. I like to tell folks, don't invest any money that you don't need for at least 10 years. Two, prioritize your emergency fund. Cash is king for rainy days ahead. So have a good cushion to weather any potential financial storm ahead. There's a lot of possibilities for folks to lose their jobs. Increasing your cash savings in case you do end up losing your job is a great position to be in. Three, reconsider your contributions to your 401k and Roth IRA and other retirement accounts and make adjustments to make sure you can boost your cash savings. Number four, if you're in good financial footing, then this may be a good time to take advantage of the volatile pricing of the stock market. When things are on sale, it's a great time to buy. As a consumer, we like to buy things on sale. And so the stock market is pretty much the same concept. And finally, stay calm. Avoid checking your accounts too much if it's causing you panic. The Google Play Store has approved a social media app from former President Trump. Truth Social will now be downloadable to Android smartphones through Google's App Store. The social media platform's implementation of stronger content moderation policies likely helped it get approved. Specifically, Google had insisted on policies that sufficiently address incitement and threats of violence. The search giant had also said social media apps on the Google Play Store must provide an in-app system for reporting objectionable content. And one of the world's most important companies in the semiconductor space is telling staff to stop servicing Chinese customers. It's in response to Washington's latest export restrictions. ASML is the only company in the world that makes a certain machine that is needed to make the most advanced chips. In a memo, ASML told its U.S. staff that they can no longer provide certain service to advanced chip plants in China. It's after Washington last week enacted new rules aiming to cut China off from key chips and equipment. The concern is the Chinese Communist Party will get its hands on the most advanced chips and give them to the Chinese military. The new rules mean people in the U.S. who support chipmaking in China now have to get a license. But for now, the U.S. has granted exemptions to some of the biggest chipmakers so they can keep sending equipment to China. And TSMC, the world's largest contract chipmaker, says it's being more conservative in planning investments for 2023, even though the company had the strongest growth in two years in the third quarter. NTD's John Marshall reports. Taiwanese chipmaker TSMC cut its annual investment budget by at least 10% for 2022, raising a more vigilant alert than usual, pointing to challenges from rising inflationary costs and predicting a chip downturn next year. Speaking on the latest set of U.S. export controls aimed at slowing China's progress in advanced chip manufacturing, TSMC's CEO, C.C. Wei, said Thursday it had obtained a one-year authorization that covered its factory in Nanjing, China. Electronics company Samsung also obtained the one-year authorization. The new rules require companies looking to supply China chipmakers with advanced gear to obtain a license from the U.S. Department of Commerce. It's expected that Washington will spare some foreign companies operating in China. Taiwanese company's commentary on Thursday had its main concerns aimed at decades-high inflation, rising interest rates, and COVID-19 lockdowns in China that have squeezed the consumer electronics market. Sean Marshall, NTD News. If you have any news tips or feedback for the show, you can email us at business at ntd.com. And welcome back. The Centers for Disease Control and Prevention published data today showing upwards of a third of adults in the U.S. use telemedicine last year. Women were significantly more likely than men to use telemedicine. The use also increased with age. Seniors 65 and older were the most likely to say they used telemedicine in the past 12 months. About 40 percent of white and American Indian people used telemedicine in 2021. That's compared to roughly 33 percent of Black, Hispanic, and Asian adults. It was also more commonly used by those with a higher family income and higher education, as well as by those living in more urban areas. And you'll soon be able to get a Netflix subscription for less, if you're willing to put up with some ads, that is. Today, the streaming giant unveiled its Basic with Ads tier. Netflix said the new option will air commercials before and during the thing you're watching. Each ad will be 15 or 30 seconds long. Viewers can expect to see an average of 4 to 5 minutes of commercials per hour. The Basic with Ads option will cost $6.99 a month in the U.S. $3 less than the Basic plan without ads. You can get the new option starting November 3rd. Some people pay top dollar for vintage clothes. But a recent purchase in New Mexico is on a new level. This pair of Levi's from the 1880s just sold at an auction for more than $87,000. Two men bought the jeans together. They are 23-year-old Kyle Hunter and Zip Stephenson. He's the owner of a vintage denim store. The Levi's were found in an abandoned mine several years ago. Only a couple of similar pairs exist, but they're kept in museums and are too delicate to wear. Stephenson says this pair, though, is surprisingly durable and can be worn. They are a 38-inch waist, 32-inch length. Stephenson said they would consider selling it to a private buyer, but they'd prefer the jeans be bought and displayed in a museum. British metamorbelia company Prop Store will hold its annual live auction next month in London. This year's event features over 1,500 lots worth an estimated total of $12 million. NTT's Andrew Thomas has more on the items up for grabs. Highlights of the sale include the complete Superman costume worn by Christopher Reed, Darth Vader's black gloves from Star Wars Episode IV, and the Rockhammer Bible from Shawshank Redemption. So there are a number of different things that collectors are looking for when they're sort of understanding where the value should be for something and how much in demand it's going to be. So it's how popular the film is, for starters, you know, was it a big successful blockbuster movie? How much was it seen on screen? Was it worn by a principal actor or even used as a hand prop by a principal actor? This year, music memorabilia is being introduced as a new category music fans will have a chance to bid for items such as David Bowie's Major Tom space suit from the Ashes to Ashes music video, Elvis Presley's signed gun license application, and Dave Grohl's handwritten set list from Nirvana's Nevermind tour with a ticket stub. So music is a brand new category for Prop Store this year and I'm really excited to see what's actually come into us on consignment. I think one of the headline pieces is Noel Gallagher's guitar from the Be Here Now album. It's a Gibson Les Paul Silver Sparkle Florentine. It's a custom guitar that was made specially by Gibson for Noel Gallagher and gifted to him. Lane said the current economic climate contributed to the popularity of the company's sales. Prop Store's June auction in Los Angeles was a record breaker with 2,000 lots selling for over 10 million dollars. So the economy is tough for a lot of people right now, but it's very interesting. We've seen this similarly in 2007 and 2008 when we had the big financial crash that actually where there's volatility in the markets, people look for fixed assets and items like these to invest their money into. So they take it out of stocks and shares, they take it out of the currency markets and actually put in something that's more tangible. Prop Store's Entertainment Memorabilia live auction will be held at the BAFTA headquarters in central London from November 3rd through the 6th. Andrew Thomas, NTD News. And that's the latest from the NTD business team and myself, Don Ma. You can follow me on Twitter too. And if you have any news tips or feedback for the show, you can email us at business at ntd.com. That's all for today. Thank you for watching. We'll see you tomorrow.