ExclusiveWhite House Responds to China's DeepSeek Disruption | Business Matters (Jan. 29)

And for today's business matters, after three consecutive cuts, the Federal Reserve has hit pause and held rates steady. The central bank left its overnight borrowing rate unchanged between 4.25 and 4.5 percent. The move follows three straight cuts that were made since September worth a full percentage point. So tasked with balancing price, stability and employment, Chairman Jerome Powell said he's not in a hurry to push more rate cuts. He noted that the Fed expects to see further progress on inflation and is keeping a close watch on the health of the labor market. Meanwhile, Spirit Airlines today rejected another bid to merge with rival Frontier, saying it wasn't favorable. Spirit added that it expects to exit bankruptcy in the first quarter. Frontier tried to merge with Spirit in 2022 but was outbid by JetBlue. The Justice Department ultimately sued to block the $3.8 billion JetBlue deal, saying it would drive up prices for Spirit customers who depend on low fares. A federal judge agreed, and JetBlue and Spirit dropped their merger bid two months later. In November, Spirit filed for Chapter 11 bankruptcy protection after working out terms with bondholders. And Starbucks has harvested its first four full quarter results under new CEO Brian Nickel. The coffee giant posted declines across the board but beat Wall Street expectations. Revenue was flat year-over-year, around $9.5 billion. And earnings per share dropped more than 20 percent compared to the same quarter a year ago. But both numbers came in above estimates. Nickel said the results met expectations and there was a positive response to its back-to-Starbucks plan, which focuses on core coffee products, better pricing and faster service. And coffee lovers heading to Starbucks can expect to see a scaled-down menu. The coffee giant is cutting about 30 percent of its drink and food items. CEO Brian Nickel made the announcement in an earnings call yesterday. The new streamlined menu is expected to simplify ordering and speed up service. It's unclear what specific items are going away, but the company has already gotten rid of its lineup of olive oil drinks and ice energy beverages. The changes are part of Nickel's plan to make Starbucks more profitable. And that's after the company saw its fourth consecutive quarter of declines at the end of last year. Starbucks' new menu is expected to be rolled out in the coming months. Doubling Expectations T-Mobile projects that its wireless subscriber growth this year will be double Wall Street estimates. The telecom company is forecasting strong demand for its premium 5G plans. Customers have been drawn to T-Mobile's Go 5G Next and Go 5G Plus plans that bundle high-speed internet with popular streaming services. T-Mobile's positive outlook came after a strong fourth quarter. It reported postpaid phone net additions of over 900,000. FactSet reports that the company expects postpaid net customer additions to be up 6 million this year, compared with an estimate of less than 3 million. And Apple's latest iPhone software update can now test Starlink's internet service via T-Mobile. Starlink is Elon Musk's satellite internet service. He posted on X that the service's iPhone currently supports medium-resolution images, music and audio podcasts. He says later updates will add medium-resolution video. Apple already offers satellite connectivity through GlobalStar. The service allows some iPhones to send texts and contact emergency responders via satellite when out of normal connectivity range. iPhone users with iOS 18.3 and T-Mobile now have settings that allow them to manage Starlink access. The White House, AI and crypto czar says DeepSeek is a wake-up call on the need for America to lead in AI. David Sachs told Fox News Chinese companies are catching up very fast. He says U.S.-based OpenAI hasn't lost dominance to China's DeepSeek, but the U.S. company is only a few months ahead. He also said DeepSeek has learned to be more efficient since China had to make the most of a ban on having the most advanced chips. But he said the U.S. can still lead based on having the most advanced chips. Cigna Group has announced plans to help lower the out-of-pocket costs for prescription drugs. The changes will allow patients to access lower prices negotiated by Cigna's pharmacy benefit manager, as well as express scripts. Pharmacy benefit managers, or PBMs, have come under fire. A recent FTC report showed the nation's three largest PBMs have allegedly marked up prices significantly on certain medications. Cigna is responding to the criticism and says its actions will enhance transparency. It also said this will help those with employer-sponsored plans to receive the savings that express scripts negotiate. Japanese Finance Minister Katsunobu Kaito and U.S. Treasury Secretary Scott Besant have agreed on cooperation on issues including foreign exchange. Kaito shared the news after a video call between the two officials. This was Besant's first video call with another country since he took the role. Kaito said Japan and the U.S. would work more closely on various issues being discussed in bilateral and multilateral forums, such as the G7 and G20. Kaito did not say whether tariffs were discussed. Top computer chip equipment maker ASML reported fourth quarter bookings that far exceeded expectations. Here's a look at why the boom reassured investors. ASML beat market expectations in the fourth quarter. The Dutch computer chip equipment maker scored bookings of $7.39 billion. A boom in AI drove demand for the company's most advanced equipment. The number was almost double analysts' projections and much higher than the third quarter's total. ASML also reported net income of $2.8 billion. Investors were delighted by the news and shares jumped 11% early Wednesday. The large order influx may reassure ASML and other chip stock investors that AI chip prospects might stay healthy. That after a tumultuous week dominated by the global emergence of Chinese AI firm DeepSeek. Large chip makers like NVIDIA endured a brutal sell-off after the model's release. ASML's top customer, Taiwan's giant TSMC, manufactures most chips designed by NVIDIA and the software firms. And strong demand for auto insurance boosted Progressive's fourth quarter profits, rising nearly 20%. The company's net income climbed to approximately $2.4 billion, while net premiums written surged 20%. Despite rising policy costs, insurance spending has remained resilient as businesses and individuals continue prioritizing coverage. This has helped insurers attract and retain customers. Premium prices have spiked due to the increasing frequency of severe weather, helping companies offset growing risks. Progressive's combined ratio also indicates the company earned more in premiums than it paid out in claims. And coffee prices hit a new high this week compared to last week. Tuesday, futures prices for Arabica coffee from Latin America jumped nearly 2%. The increase came after President Trump said he would impose a 25% tariff on Colombia before pausing on the decision. Colombia is the third-largest coffee-producing country in the world. According to the World Bank, Arabica coffee had already increased 13% in December. Bad weather has been a factor for coffee production in regions like Brazil and Colombia since 2011. Trade experts say the region's next crop isn't expected to produce a bigger yield. History has been made over the Mojave Desert. Boom, the American company working to build the world's fastest airliner, made its first supersonic flight yesterday. There we are. XB-1 is supersonic, faster than the speed of sound. Today was just a huge, huge day. This is the first civilian supersonic flight in 22 years. The first time a civil supersonic jet built in America has broken the sound barrier. And also, the first time a civil supersonic jet has been built outside of a nation state. We were a little disappointed there was no boom. In today's flight conditions, we only thought there was about a 10% chance that there was an audible boom. And there was a lot of cheering, but no sonic boom. Boom's XB-1 demonstrator aircraft has now completed 12 successful test flights since it first took to the air in March 2024. U.S. regulators prohibit supersonic flight over land outside of test conditions. So Boom's CEO says their planes will fly just under the speed of sound over land and pick up to supersonic speed over the ocean. The plane already has 130 orders and pre-orders from American Airlines, United Airlines, and Japan Airlines. Meanwhile, visitors to the Louvre will eventually need a separate ticket to see the Mona Lisa. Leonardo da Vinci's famed 16th century painting is getting its own room at the Paris Museum. It's part of an expansion and renovation that will also see a new entrance for the world's largest museum. The goal is to ease overcrowding. Right now, about 9 million people visit the Louvre each year. French President Emmanuel Macron wants to grow that number to 12 million. And to pay for it, the attraction is raising ticket prices for non-European Union visitors starting next year. The renovation, though, is years away, with a goal for the new entrance to be completed by 2031. Spotify says it paid $10 billion to the music industry last year. That's a billion more than the streaming service paid out the previous year. It brings the grand total up to $60 billion since Spotify started in 2006. One caveat is that artists don't necessarily see all that money. Spotify pays music rights holders, which are usually record label and publishers, and it's up to them to then distribute money to their musicians and songwriters. The company also points out that before streaming started, illegal downloading of music was rampant. Boeing is sharing details of a meeting with Elon Musk about a long-delayed project involving two 747 jets. On Tuesday, Boeing's CEO told CNBC they're still working with Musk and the team to figure out a way to speed up the schedule. Musk visited the struggling aircraft manufacturer company back in December. He asked about efforts to renovate two jets that would become Air Force One planes. The planes were supposed to have been delivered in 2022, but now aren't expected until at least 2027. Musk was named the head of the Department of Government Efficiency under the new Trump administration. The billionaire's new job includes finding ways to cut down on government spending. Trump media is entering financial services. It says the move is to protect American patriots from cancellation and censorship. Here's the story. Trump media is expanding into financial services, partnering with Charles Schwab. CEO Devin Nunez says Trump.fi will offer investment products and decentralized finance for American patriots. It's an idea that a lot of people are excited about because financial services is going to be disrupted, just like every industry that software has disrupted. But this is supercharged software, which is the bitcoin or blockchain technology. Financial expert Vijay Muralia says this is a smart move because he believes blockchain tech will grow faster in the coming years. Truth.fi says cryptocurrency investments will be among its offerings. Nunez says this is part of creating an ecosystem where quote American patriots can protect themselves from the ever present threat of cancellation, censorship and debanking. Debanking is for real. Debanking is serious. It's anti-American to debank somebody for the way that they feel, especially if it's a feeling about a political situation. President Trump is the majority owner of Trump media, which owns social media platform Truth Social. NTD reached out to Trump media but didn't hear back before airtime. Nunez says Trump.fi is expected to launch sometime in 2025. Now tax filing season is underway. The IRS began accepting 2020 for federal tax returns on Monday. The deadline to file is April 15th. The agency's direct file program will also be open in 25 states. It's going to allow eligible tax filers to file their taxes directly with the IRS for free. And this year, some filers may get a separate check from the IRS in the next several weeks. The agency is sending money to one million people who are eligible for the 2021 recovery rebate credit and didn't claim it on their taxes that year. And the Kansas City Chiefs took home a double victory during its Sunday game against the Buffalo Bills. Patrick Mahomes led the team to a 32 to 29 win. On top of that, the Chiefs and It was a record 57.4 million viewers. This is being reported by the Sports Business Journal and other outlets. This is the highest number for any AFC or NFC title game since a 2012 game between the New York Giants and San Francisco 49ers. Potential reasons for the bigger audience include later time slot, two high-profile quarterbacks, and pop star Taylor Swift being in attendance for her boyfriend Chiefs tight end Travis Kelce. And CVS is testing out their new app to let users unlock merchandise display cabinets. They're calling it a simple solution to help customers save time and money. NTD Sean Marshall takes a look. Locked up merchandise is common in most New York City drug stores if you want to buy a number of items. The CVS is testing a solution at a few locations. Extra care customers can use the CVS app to open locked display cabinets at three stores in New York City. Went to the Manhattan Lexington Avenue location to test out the new app, but I ran into some technical difficulties when using its unlocking feature. Luckily a staff member helped me out in less than 10 seconds and I didn't even have to hit the help button. In most drug stores in New York City if you want to buy personal care items or supplements you might have to wait for secured items to be unlocked. Data analytics firm RD Solutions visited over 600 drug stores in the U.S. and Canada and says the average wait time is 7.7 and in two cases associates told the researchers who pose as everyday shoppers they were too busy to unlock the cases. A consumer world reader poll found that two out of three shoppers didn't bother to summon an associate when an item they were shopping for was locked up. We'll have to wait and see if CVS expands the use of the unlock feature on their app or if other companies will try this approach or if a similar more centralized app will be released that works at multiple types of stores. Sean Marshall, NTD News. Now on to markets. U.S. stocks ended lower but off their lows of the day today as the Federal Reserve held interest rates steady. This was very much expected and Fed Chair Powell offered soothing comments on the economy as well. So technology shares were actually the biggest drags on the S&P 500 and that's with Nvidia, Microsoft among stocks leading the way down. Now Nvidia led a tech sell-off on Monday if you remember that after Chinese startup DeepSeek launched AI models which it said were cost effective and ran on less advanced chips compared to open AI. So stocks initially extended losses after the Fed statement. You know with the dropping language saying inflation has made progress towards that's 2% inflation goal as well noting only the pace of price increases remains elevated. All right and that's all today on Business Matters.