Federal Reserve May Have More Rate Cuts Planned | Business Matters (November 15)

Welcome back for today's business matters. We're joined by Don Ma. Don, good to see you. Yeah, good to see you guys. What's happening? All right. Let me give you guys a stock update to start off the show. A super micro stock is down 85% and come Monday, it could be kicked off the NASDAQ. The server company has been riding alongside the rise of AI. Its shares soared to its peak in March this year, but has nosedived since. Now, the company could be delisted off the NASDAQ. It needs to file a viable compliance plan by Monday. The plan will explain how and when Supermicro will file its 2024 year-end report with the Securities and Exchange Commission, and as well, explain why it was late. Supermicro could get delisted from the NASDAQ if it missed the deadline or if the SEC rejects its submission. The company is also trying to replace its accounting firm after Ernst & Young stepped down last month. Bumper-to-bumper competition in the auto market has pushed General Motors to lay off about 1,000 workers worldwide. The company confirmed the layoffs but gave few additional details. The layoffs mostly impact white-collar workers, and the company said those affected were notified today. GM is trying to shed costs to remain competitive while also navigating an uncharted journey to EV. Meanwhile, precious metals on the decline this week. Today, gold prices aren't on track for their biggest weekly dip in over three years. That's because expectations have receded that the Federal Reserve will be making aggressive rate cuts. The CME FedWatch tool has markets now seeing a 60 percent chance of a 25 basis point cut, and this is down from 80 percent just a day before. Gold is less attractive when there are higher interest rates. Spot silver, platinum and palladium are down for the week as well. And the Commerce Department has finalized a $6.6 billion government subsidy for Taiwan's semiconductor manufacturing company. The funding will go toward the construction of a semiconductor production facility in Phoenix, Arizona. In 2022, Congress passed the Chips and Science Act to boost domestic semiconductor output. Taiwan produces more than 60 percent of the world's semiconductors. No leading edge chips are produced in the United States at the moment. The Commerce Department has allocated $36 billion for chips projects. Those initiatives include $6.4 billion for Samsung in Texas, $8.5 billion for Intel and $6.1 billion for microtechnology. The department is working to finalize those agreements before Biden leaves office on January 20th. And more interest rates are likely coming, that's according to Federal Reserve Chair Jerome Powell. Now, Powell suggested the cuts might not be that much lower, though, over the next few months. Powell said more rate cuts are likely underway because the economy's current trends and dynamics are expected to remain in place, at least that is in the short run. That includes a slowing job market and cooling inflation facilitated by rates that are still pretty high. Now, holding borrowing costs at current rates could push up unemployment. Powell also addressed the impact of President-elect Trump's victory on the economy. He cautioned against any rash decisions. We don't actually really know what policies will be put in place. I think we have time to to make assessments about what the what the net effects of policy changes will be on the economy before we react with policy. Trump was a regular critic of the Fed during his last term in the White House, he actively criticized the central bank's monetary policy decisions. Trump and his allies have also weighed the idea of subordinating Fed decision making to their political authority. Now, striking in Sin City just before dawn, hundreds of hotel workers at a casino near the iconic Las Vegas Strip walked off the job. This is the first open ended strike to hit the Virgin Hotels Las Vegas in two decades. The Culinary Workers Union is the largest labor union in the state and has about 60,000 members. The union says there will be picket lines around the property around the clock to fight for a fair contract. In response to the labor action, Virgin Hotels said it's dedicated to its team members and is fully committed to a fair resolution. Eli Lilly is suing the Health Resources and Services Administration for allegedly blocking a plan to change how it offers drug discounts to hospitals. The case centers on a federal program known as 340B. The policy allows drug makers to provide discounts to some health care providers that serve people on a low income. Pharmaceutical companies have to take part in the program to receive funds from government health insurance programs like Medicare and Medicaid. Fellow drug maker Johnson and Johnson sued the Health and Human Services Department this Tuesday, this week. The company also accused the agency of blocking its plan. General Motors self-driving car unit Cruz admitted to submitting a false report yesterday to influence a federal investigation. The Justice Department said Cruz will pay a $500,000 criminal fine as part of a deferred prosecution agreement. The department said the automaker failed to disclose key details of an October 2023 crash to the National Highway Traffic Safety Administration. In that accident, one of its robo taxis in San Francisco struck a pedestrian and dragged her 20 feet under the agreement. Cruz must cooperate with government investigations, implement a safety compliance program and provide annual reports to the U.S. Attorney's Office. A commissioner for the Federal Trade Commission says the agency should look into how artificial intelligence products use data gathered from younger users. Melissa Holyoke is one of two Republicans who could end up as its acting chair after President-elect Trump takes office in January. The FTC enforces the Children's Online Privacy Protection Act. Legislation regulates how platforms collect younger users' data. The FTC has sued TikTok over alleged violations. The agency is headed for a shakeup when its current chair, Lina Khan, steps down or is replaced by a Trump-appointed successor. Holyoke addressed other issues as well, including the FTC's approach towards mergers and acquisitions and the agency's worker non-compete ban. Now, Ben & Jerry's, the ice cream company, is suing its parent company, Unilever. The ice cream maker claims Unilever stopped it from making public statements supporting Palestinians. Unilever rejects the claims, saying it would defend its case very strongly. NTD's Sean Marshall brings us more. Ice cream brand Ben & Jerry's said in a lawsuit filed Wednesday that parent company Unilever has silenced its attempts to express support for Palestinian refugees and threatened to dismantle its board and sue its members over the issue. The lawsuit is the latest sign of the long simmering tensions between Ben & Jerry's and consumer products maker Unilever, which is planning to spin out its ice cream business next year. In its new lawsuit, Ben & Jerry's says that Unilever has breached the terms of the 2022 settlement, which has remained confidential, according to the lawsuit. As part of the agreement, Unilever is required to respect and acknowledge the Ben & Jerry's independent board's primary responsibility over Ben & Jerry's social mission. The lawsuit also states that Ben & Jerry's has on four occasions attempted to publicly speak out in support of peace and human rights, but that Unilever has silenced each of these efforts. In response to a Reuters story, Unilever said in an emailed statement, our heart goes out to all victims of the tragic events in the Middle East. We reject the claims made by B&J's social mission board and we will defend our case very strongly. Ben & Jerry's said in an email, we are confident that these issues will ultimately be resolved due to the ongoing nature of the litigation. We are unable to comment on the specifics. Part of the family, but not the payroll. Some bosses are drawing the line at so-called paternity leave, while the city of New York aims to solidify pet benefits. New York City council members introduced a bill to let non-government workers use their paid sick time for pet-related medical care. With a cooled job market and companies under pressure to cut costs, pet benefits have been dialed back. A MetLife survey showed the number of employers offering pet insurance has fallen since last year. The proposed bill in New York wouldn't require additional paid time off for pet purposes, but would extend the city's existing sick time loss. And staying in New York, the city plans a congestion mitigation charge for driving in Manhattan starting in January, reviving a move that the state indefinitely put on hold earlier this year. Here's more. New York Governor Kathy Hochul says her congestion pricing plan for drivers coming into parts of Manhattan is back, but this time set at nine dollars. Hochul said the new change will begin in January. She's reviving the program after putting it on hold in June when it was set at a higher toll of 15 dollars. Hochul said that the charge would be crucial to making new investments in subways and buses in New York and support 15 billion dollars in debt financing to improve mass transit. We'll also begin to drive down gridlock and the emissions as intended. And we'll deliver major environmental improvements for places like the Bronx. Hochul is racing to implement the charge before President-elect Donald Trump takes office. This week, a group of five New York Republicans in the U.S. House of Representatives urged Trump to kill the charge, something he has vowed to do, asking him to end what they call a, quote, absurd congestion pricing cash grab. A Trump spokesman did not immediately comment. New York's director of state operations, Catherine Garcia, responded to reporter questions about the threat of Trump killing the charge because he has vowed to kill it. We believe that we are on solid legal ground. New York's Metropolitan Transportation Authority is expected to vote on the measure next week. The MTA has said congestion pricing would cut traffic by 17 percent, improve air quality and increase mass transit use by one to two percent. And the holiday travel season is ramping up with millions of travelers set to pass through security checkpoints. The Transportation Security Administration is sharing 10 things travelers need to remember to simplify the screening process. Now, first and likely most surprising one is don't forget to bring your ID. It might be hard to believe, but TSA says people do really say they left their ID at home. Next up, leave your gun behind. Same goes for knives and all other weapons. And as well, finish your beverage and make sure any reusable water bottles are empty. Be sure to remove everything from your pockets, not just metallic items. Most travelers have to remove their shoes as well at the checkpoint. So don't forget to wear socks. Make sure your luggage lock is TSA compliant. And remember, you can bring medications, but you'll need to let an agent know if it's liquid. There are some additional reminders. This is good for travelers of a certain age. If you have TSA pre-check children under 12 and under don't need it, they can get in line with you and passengers who appear 12 and under or 75 and older don't need to remove their shoes and jackets. Now, check this out. Airbnb is gearing up to host a one of a kind experience. It's offering the chance for you to unleash your inner gladiator inside Rome's legendary arena after hours. For the first time in nearly 2000 years, the Coliseum will become a venue for performances inside the arena. Visitors will get to suit up in historic armor and put their skills to the test in battle. Airbnb says guests will be able to book a free three hour experience for next May. There are 16 spots in total, but you can also bring a plus one to watch online booking requests for this limited Airbnb gladiator experience. It begins on November 27th. Guests are responsible for their own travel to and from Rome, Italy. Former heavyweight champion Mike Tyson is set to square off against YouTuber turned boxer Jake Paul tonight in Arlington, Texas. The 58 year old will go toe to toe against his much younger opponent at AT&T Stadium. Tyson and the 27 year old will fight eight two minute rounds. Iron Mike retired in 2005 with a record of 50 wins and six losses, including 44 knockouts. Paul debuted as a pro boxer about four years ago and is 10 and one with seven KOs. The fight was originally scheduled for July 20th, but had to be postponed after Tyson was treated for a stomach ulcer. Coverage of the event from the home of the NFL's Dallas Cowboys will be streamed on Netflix starting at 8 p.m. And before any turkeys hit the oven, home cooks will be busy shopping for early Black Friday deals. While Black Friday is technically only one day, November 29th, that is, many major retailers have already unveiled some deep discounts, prices being slashed early on everything from fashion and home goods to tech and toys. Amazon's Black Friday week starts this week before Thanksgiving. Walmart's early deal started this past Monday, and Target is doing weekly deals through the season that started the first week of the month. Elon Musk gives his version of the details in an updated lawsuit against OpenAI. Here's that story. Elon Musk has updated his lawsuit against OpenAI, now including Microsoft as a defendant. He says the two now have a 70 percent share of the generated AI market as a result of monopolistic practices, such as by having a de facto merger, by working closely together, and by extracting promises from investors not to fund other AI firms, such as Elon Musk's competing XAI. The original lawsuit focused on OpenAI CEO Sam Altman. Musk says Altman swayed him into joining the company by persuading him it was going to be like a charity. In the updated lawsuit, Musk says Altman had for-profit motives. He says Altman wanted to sell an OpenAI cryptocurrency and have an ICO, or initial coin offering, back in January 2018. Musk also accuses OpenAI of driving out security researchers and replacing them with personnel to facilitate military contracting. Musk wants the courts to order OpenAI and Microsoft to end their monopolistic practices and award him triple damages, which is three times the amount of damage he claims to have suffered. And just real quick before we go here, Wall Street's main indexes closed lower today. And this comes after Federal Reserve Chair Jerome Powell pointed to a slower pace of interest rate cuts. Traders increased bets that the Fed will not change rates at its December meeting next month. The pricing in a roughly around a 42 percent chance that there will not be rate cuts versus roughly around a 14 percent a month ago. All right. And that's all the things happening in business matters today. Back to you guys. I have to say, quite interesting that Netflix, not known for sports at all, they don't broadcast any of the major four professional sports leagues, found a very unusual fight. They found, you know, probably the most interesting boxer of all time outside of Muhammad Ali, certainly a Gen X athlete, to now take on somebody that's a millennial athlete. I don't even know how they conceptualize this, but they just seem to do things differently. It's very interesting. I'm interested as well. I'm interested in seeing who comes out on top at the end of this fight. You know, Mike Tyson has his experience, of course, but he is a bit older, so he might get tired faster. On the other hand, Jake Paul, he's younger, so he has that advantage. But, you know, he's definitely less experienced than Mike Tyson. But personally, I'm rooting for Mike Tyson because I've known him longer. Yeah. I'd love to be a fly on the wall to understand how they even got him out of retirement. He hasn't done a professional fight in so long. But, yeah, Netflix does some really unusual things. Yeah, yeah, for sure. I mean, I don't know. I have to admit, I don't know too much about boxing. I know who these two individuals are. I know what Netflix is. And that's about the extent of my knowledge there. We'll have to sit and watch and see what happens with the fight tonight. Yeah. All right. Well, thanks, Don. We'll see you back on Monday.