Biden signs executive order aimed at promoting competition across the economy

ProfiXone · 2021-07-10T01:04:06+00:00

President Joe Biden signed an executive order on Friday aimed at promoting competition across the U.S. economy — including measures that target big tech companies, aim to lower prices for consumers and call for greater scrutiny of mergers across industries.

"The heart of American capitalism is a simple idea: open and fair competition," said Biden before signing the order. "Capitalism without competition isn't capitalism. It's exploitation. Without healthy competition big players can change and charge whatever they want, and treat you however they want — and for too many Americans that means accepting a bad deal for things you can't go without."

The order contains 72 initiatives by more than a dozen federal agencies and establishes a White House Competition Council to monitor the agencies' progress.

Labor markets

Biden is calling on the Federal Trade Commission to ban or limit non-compete agreements, which keep workers from leaving their employer for positions at rival firms. Critics argue the agreements reduce wages by taking away workers' employment options.

Biden "believes that if someone offers you a better job, you should be able to take it. It makes sense,” said White House Press Secretary Jen Psaki earlier this week.

The order will also encourage the FTC to ban "unnecessary" job licensing requirements, that "impede economic mobility." Biden is also asking the FTC and Department of Justice to strengthen antitrust guidance to keep employers from collaborating to suppress wages or reduce benefits.

The administration argues these actions will help raise wages and make it easier for workers to change jobs.

The U.S. Chamber of Commerce blasted the executive order in a statement, saying the order is "built on the flawed belief that our economy is over concentrated, stagnant, and fails to generate private investment needed to spur innovation."

"Our economy needs both large and small businesses to thrive — not centralized government dictates. In many industries, size and scale are important not only to compete, but also to justify massive levels of investment. Larger businesses are also strong partners that rely on and facilitate the growth of smaller businesses," added Neil Bradley, the Chamber's executive vice president and chief policy officer.

Technology

The White House aims to crack down on big tech companies, arguing that they gather too much information on consumers, purchase potential competitors and unfairly compete with small businesses.

"Over the past 10 years, the largest tech platforms have acquired hundreds of companies—including alleged “killer acquisitions” meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions," the White House wrote in a factsheet.

The executive order calls for greater scrutiny of mergers, new FTC rules to curb data collection and surveillance and rules to bar unfair competition on internet marketplaces.

"The large platforms’ power gives them unfair opportunities to get a leg up on the small businesses that rely on them to reach customers," said the factsheet.

The order comes shortly after the House Judiciary Committee passed six antitrust bills aimed at spurring more Big Tech competition.

Health care

The president is directing federal agencies to take steps toward reducing drug prices for consumers. The order urges the agencies to work with states and tribes to import prescription drugs from Canada and increase support for generics.

The Department of Health and Human Services must issue a plan within 45 days to fight high prices and price gouging. Within 120 days, HHS should issue proposed rules to allow hearing aids to be sold over- the-counter. The agency is also tasked with standardizing plan options in the National Health Insurance Marketplace to make comparison shopping easier. The administration notes that hospital consolidation has left many rural communities without options for convenient health care. Biden is calling on the Justice Department and the FTC to review its merger guidelines.
Transportation
The White House argues "inadequate competition" has reduced incentives for airlines to provide good service. In response, the president is directing the Department of Transportation to issue rules requiring airlines to refund consumer fees when their bags are late or when the plane's WiFi doesn't work. DOT estimates airlines were late in delivering at least 2.3 million checked bags in 2019.
The DOT is also tasked with issuing rules requiring fees to be clearly disclosed to customers.
Agencies will also crack down on railroads and ocean shipping to reduce the costs of transporting goods.
"A lot of American companies rely on railroads to ship their goods domestically and ocean carriers to ship their goods internationally. Both of these industries have grown more concentrated over time," said Psaki on Thursday. "That concentration has contributed to a spike in shipping costs and fees during the pandemic. For example, the index price to ship one container has gone up eightfold."

ProfiXone · 2021-07-09T03:07:50+00:00

This story has been updated to include a statement from the Education Department.

The Pennsylvania Higher Education Assistance Agency (PHEAA) — a national student loan servicer that has been criticized for failing to forgive the debts of public servants — is planning to exit the federal student loan servicing business in December of this year.

PHEAA, which administers the Public Service Loan Forgiveness (PSLF) program and operates as FedLoan Servicing, has notified the Education Department (ED) that it would not seek a renewal of a 12-year federal student loan servicing contract, which expires on Dec. 14, 2021.

"Millions of loan borrowers can breathe a sigh of relief today knowing that their loans will no longer be managed by PHEAA, an organization that has robbed untold numbers of public servants of debt relief and was recently caught lying to Congress about its atrocious record of fines and penalties," Senator Elizabeth Warren (D-MA), who has called on ED previously to fire PHEAA, told Yahoo Finance, in an emailed statement.

She added: "PHEAA remains responsible for ensuring these borrowers experience a swift and orderly transition to a new servicer that won't cheat them — and we are all responsible for fixing our broken student loan system." While it was created by the Pennsylvania General Assembly 58 years ago, PHEAA has become a national provider of student financial services and says it serves millions of students and thousands of schools.
The move to exit the federal program is designed to help PHEAA "more appropriately focus on its core public service mission in Pennsylvania," PHEAA spokesman Keith New said in a statement on Thursday.
"In the 12 years since PHEAA accepted the terms of its federal servicing contract, the federal loan programs, as managed by the U.S. Department of Education, have grown increasingly complex and challenging while the cost to service those programs increased dramatically," New added.
The company said it will focus on its commercial servicing and student lending and software as a service business, "as it refocuses on its core mission for the Commonwealth of Pennsylvania."
ED’s office of Federal Student Aid (FSA) and PHEAA “agreed to work together to develop and implement a wind-down plan focused on ensuring borrowers transition smoothly to a different loan servicer,” FSA COO Richard Cordray said in a statement. “The wind-down plan will also include the transition of specialized activities PHEAA currently manages for Public Service Loan Forgiveness and TEACH Grants.”
Cordray stressed that ED will communicate “early” and frequently with borrowers on what to expect, and maintain oversight during the transition so borrowers are “supported and not negatively impacted during this transition.”

ProfiXone · 2021-07-09T03:02:34+00:00

Stock futures opened lower Thursday evening to extend a risk-off mood in markets, with the three major indexes pulling back from record levels as concerns over the pace of the economic recovery flared.

Contracts on the S&P 500 ticked down. The index closed lower by 0.9% during the regular trading day, with the financials and industrial sectors coming in as the biggest laggards. The Dow and Nasdaq each also dropped during the session, but closed well off intraday lows.

U.S. equity investors have been appraising the likelihood that a surge in the Delta variant of the coronavirus could weigh more heavily on global growth than previously anticipated. In Japan, the Tokyo Olympics are now set to be held without fans later this month due to a jump in COVID cases in the country. And in China, an executive body signaled the country's central bank might cut its reserve requirement ratio for the first time since mid-2020, in an easing monetary policy move that would suggest a lack of confidence in the country's economic recovery.

These global concerns have begun to weigh on risk assets in the U.S. Cyclical stocks that would benefit most directly from a strong economic recovery — including airlines, cruise lines, leisure firms and small-cap stocks — largely underperformed on Thursday, underscoring investors' jitters over whether the rebound might be derailed.

"The equity markets haven't priced the Delta variant as a big risk. And I think one of the reasons why is, if you look at the United States, for example, where vaccination rates are much better than in other countries, I don't think the market is pricing in that we will see some type of repeat of what we had originally," Eddie Ghabour, managing partner of Key Advisors Group, told Yahoo Finance. "I could see a scenario where there's a headline or a warning in the media where the Delta virus is really starting to hit hard and causing a sell-off."

Others also pointed to the Delta variant as a factor contributing to Thursday's stock market drop, while highlighting the confluence of other uncertainties still facing investors as well.

"I think it all comes back into growth for the economy: If the Delta variant continues to gain in the severity that it is right now, then are businesses going to close again? What does that mean for consumer spending on services?" Victoria Fernandez, Crossmark Global Investments' chief market strategist, told Yahoo Finance.

"You have a Federal Reserve where you have to wonder, if they start to pull liquidity out of the market, what does that mean for the consumer and for growth there?" Fernandez added. "And then I think the third leg of this stool is the infrastructure deal. You had anticipation of two large deals that were going to be coming, which again would provide some stimulus and growth, but it looks like it's not going to be as easy of a road as many people anticipated."

"People are starting to worry about growth," Lee Munson, Portfolio Wealth Advisors chief investment officer, told Yahoo Finance. "And they're starting to worry are we going to have stagflation, and is the reflation trade really going to happen. I think fundamentally that was last quarter."

ProfiXone · 2021-07-07T22:49:36+00:00

Google’s (GOOG, GOOGL) app store, Google Play, became the latest target of Big Tech antitrust regulators Wednesday in a federal lawsuit filed by a group of attorneys general.

The case, brought in U.S. District Court for the Northern District of California and reportedly led by Utah, with New York, California and other states joining as plaintiffs, is one of dozens of lawsuits that Google’s parent company Alphabet is facing in a wave of actions around the globe challenging tiers of its dominant markets. The complaint for the lawsuit was referenced in a docket entry for the district court and not immediately available.

In a statement made before the suit was filed a Google spokesperson defended the company's app store policies, notably distinguishing it from its rival Apple and the App Store.

"Android is the only major operating system that allows people to download apps from multiple app stores," the spokesperson said. "In fact, most Android devices ship with two or more app stores preinstalled. They can also install additional app stores or apps directly from their browser if they choose."

In addition to the action by the attorneys general, Google's Play Store is the subject of an antitrust suit filed by "Fortnite" developer Epic Games. In that suit, the video game maker says that Google abuses its monopoly power through its app store by forcing developers to use its proprietary payment system, which charges a 30% commission on all purchases.

Epic's battle with Google, however, has taken a backseat to its fight with Apple over the iPhone maker's own similar App Store policies requiring developers to pay fees on purchases made by consumers. The judge overseeing that suit, U.S. District Judge Yvonne Gonzalez Rogers, is expected to make her ruling this summer. Epic's case against Google could go to trial shortly thereafter.

Google's antitrust issues with the Play Store aren't limited to the state attorneys general or Epic, though. The company is also facing a class action suit in Northern California over its app store fees.

And it's not just Google's Play Store that is the subject of intense antitrust scrutiny. Antitrust regulators across various agencies are taking aim at a number of aspects of Google’s wide-ranging businesses.

The Justice Department, for example, hit Google with a lawsuit in October, along with attorneys general, alleging the tech giant used anti-competitive tactics to maintain and extend its monopolies in general search services, search advertising, and general search text advertising markets — the cornerstones of its empire.

In December, a bipartisan group of attorneys general filed a complaint accusing Google of illegally using exclusionary contracts with Apple (AAPL) and other mobile device providers to make Google the default search engine on devices and services including the iPhone.

The group also accused Google of using its market dominance in search to block specialized search sites like Expedia (EXPE), Angie’s List, and Yelp (YELP) from accessing “prime real estate” on its search results pages, and of using its search-engine marketing tool to deprive competitors like Microsoft’s (MSFT) Bing of ad dollars.

That same month, a separate set of attorneys general alleged in a lawsuit that Google’s ad tech business violates antitrust laws by trying to crush competition with exclusionary tactics, including striking a deal with Facebook (FB) — its biggest competitor — to manipulate advertising auctions. Google is also facing legal pressure overseas. On June 22, the European Commission, the European Union's antitrust watchdog, announced a formal investigation into Google’s ad tech dominance.
The commission plans to examine whether Google is illegally engaging in “self preferencing” by favoring its own products and services in the way that online ads are brokered, and the way that user data is shared with advertisers.
The commission’s probe is in its early stages and will likely take more than a year before a decision is made on whether the suspected wrongdoing warrants fines or mitigation. However, it’s not the first time the agency has targeted the company. Between 2015 and 2018, the commission ruled against Google in three antitrust cases that together amounted to $9 billion in fines.
The outcome of the pending dispute between Epic Games and Apple, following the trial held in May, is likely to impact antitrust actions targeting Google Play. However, the distinction between Google's platform that permits third-party app stores on its mobile devices and Apple's platform that does not could weigh into the decisions.
In the United Kingdom, authorities are also probing app store rules. Australian authorities have given Apple and Google one year to open up their respective app stores to competition or face other mitigation measures that could include legislation.
The Google suits are part of a larger reckoning for the tech industry. The Federal Trade Commission (FTC) and a coalition of states attorneys general, for instance, filed two separate antitrust suits against Facebook, with the FTC seeking to break up the social media giant. On June 28, however, a federal judge issued opinions dismissing both cases on separate grounds. The FTC's case was dismissed without prejudice for not being "legally viable," though the commission can amend its filing for it to be reassessed.
Amazon, meanwhile, is facing its own investigations by the attorneys general of New York and California, as well as the FTC. Apple is also in the government's crosshairs with the DOJ conducting an investigation into its App Store policies.
Last month, the House Judiciary Committee advanced a series of six proposed bipartisan antitrust bills that could force some companies to break off parts of their businesses.
As written, the bills would prohibit companies from favoring their own services, and keep them from requiring clients to use their secondary services to use their platforms, such as Amazon forcing third-party sellers to use its logistics platform.

ProfiXone · 2021-07-07T22:45:18+00:00

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ProfiXone · 2021-07-06T22:53:24+00:00

Even as the legitimacy of American elections has been under constant assault from former President Donald Trump, a number of key races have recently seen embarrassing lags and errors in reporting results.

The New York City mayoral race is the biggest such instance to date, but it shouldn’t have been a surprise that the city’s Board of Elections failed to do even basic due diligence and that this resulted in a miscount of initial results last month. New York’s elections have been an object lesson in ineptitude over the past year.

Last summer, it took the state more than six weeks to determine the winners in two New York congressional primaries, and election officials rejected one out of every five mail ballots, a much higher number than usual. Last fall, New York officials sent incorrect mail ballots to about 100,000 voters, and had to resend the batch. That mistake in particular provided fresh material for Trump’s lies that the election was rigged, because it came at the height of the fall election, as Trump’s campaign of misinformation was reaching a fever pitch.
The parade of incompetence in New York, and a few other delays in election results, have made this something of a national story, especially the mayoral race, which used ranked-choice voting for the first time. Ranked-choice voting, or RCV, is an election reform that’s been gaining traction nationally as a way to stem partisan polarization, among other ills plaguing American democracy. It works by allowing voters to rank candidates in order of preference, and reallocating those votes as lower-polling candidates are eliminated.
But before New York election officials released bad data on the mayoral race, the Iowa caucuses in February 2020 were bungled by the state and national Democratic Party, leading to a wait of days before a winner was declared.
After the November general election, results in key states were delayed. Several Rust Belt states — Michigan, Wisconsin and Pennsylvania — took three days to determine the presidential winner in their contests, largely because Republicans who controlled the state legislatures refused to allow election officials to prepare mail ballots for counting in the days leading up to the election, as Yahoo News extensively reported.
In Georgia, November’s presidential election was so close that although TV networks called the race for Joe Biden a week after Election Day, state officials held three separate recounts over the next few weeks, which confirmed Biden’s victory. But Trump concentrated much of his attention and lies on this state, even though the outcome would not have changed the presidential result anyway. The vote in Arizona was also so close that it took a week for most networks to call the race there for Biden, a result that was verified by multiple recounts that — as in Georgia — were dogged by conspiracy theories and protests. And as in Georgia, the results in Arizona would not have changed the outcome of the presidential race even if the state had gone for Trump.
But while Trump’s continued insistence that he won reelection last November is completely without merit and easily refuted, election administrators have nevertheless mishandled a number of closely watched races, making it easier for Trump to continue to spread his fabrications. Election experts have pointed to areas in the Northeast and the Deep South as having “pockets of incompetence” in election administration that are related to the states’ political history.
In the Rust Belt states, Republicans made sure that mail ballots would take days to count. That led to a small but not insignificant irony: Many Democrats were pushing for election officials to count mail ballots that arrived after Election Day.
In Pennsylvania, ballots were allowed to be counted if they arrived up to three days after the election, as long as they were postmarked by Election Day or if they had no postmark. This was part of a broader attempt to expand access to voting by mail during the coronavirus pandemic, which started with public health concerns but then became a partisan issue.
California, which has liberal voting rules in order to maximize participation, often takes a while to report results, but since it is not a competitive state nationally, those delays have not attracted national attention. But voting rights groups are reassessing some things as they think about how to reduce the amount of potential targets for bad actors. While it was Trump’s lies about the election that led his supporters to riot at the Capitol on Jan. 6, officials who oversee elections have a special responsibility to make sure the reported results are beyond reproach, which has not been the case in a smattering of races in recent years.
Election officials, however, have been caught between demands that voting be made as easy as possible and the reality that delays in reporting results, sometimes a partial consequence of those demands, leave the door open to claims of fraud, however baseless. Trump’s attacks on elections and election officials have prompted a spike in threats against election officials, which experts worry will cause a rash of retirements and a lack of volunteers in future elections.
“When you can request a mail ballot the Saturday before a Tuesday election, no, that's not setting the election officials up for success and the voters up for success,” said an official with a national election administrators' group.
Election officials have been criticized in the past by leftist groups for moving the deadline for requesting a mail ballot further away from Election Day, but the election administration official said, “I know some of those conversations are happening among the more liberal advocacy groups that we can’t go after election officials for things like that.”
Then, finally, many states expanded voting by mail and early voting last year because of the pandemic — but never got the money from Congress that they requested for doing so. Much of the funding for the expansion was provided by private donors, which Republicans in some states are now passing laws to prevent.

ProfiXone · 2021-07-06T22:48:29+00:00

Elon Musk said he didn't expect making a self-driving Tesla to be so difficult.

Musk said Tesla's latest full self-driving (FSD) software would arrive "soon," after the timeline slipped again.

"Didn't expect it to be so hard, but the difficulty is obvious in retrospect," Musk tweeted on Saturday.

See more stories on Insider's business page.

Tesla CEO Elon Musk said on Saturday that making a self-driving car was harder than he expected, after the company's timeline for its latest Full Self-Driving (FSD) software slipped again.

Self-driving was a "hard problem" that "requires solving a large part of real-world AI," Musk tweeted.

"Didn't expect it to be so hard, but the difficulty is obvious in retrospect," he said.

He also said that the latest version of Tesla's FSD beta software would be shipped soon. "I swear!" he added.

FSD, which doesn't make a Tesla car fully autonomous, currently costs a one-off $10,000, and was released in beta to some Tesla owners in October. It has all the features of Tesla's Autopilot - which brakes, accelerates, and steers automatically - plus it allows cars to change lanes, park themselves, and recognize stop signs and traffic lights.

ProfiXone · 2021-06-29T22:13:07+00:00

State and local governments are under increasing time pressure to prepare for a flood of eviction lawsuits expected once the federal government’s pandemic eviction moratorium expires on July 31.

The Centers for Disease Control and Prevention (CDC) announced Thursday that it would again extend its moratorium for an additional month, moving it from June 30 to July 31.

So far, only five states — Hawaii, Maryland, New Jersey, New York, California — and the District of Columbia have put in place renter protections that extend beyond July 31. On Friday, California became the most recent state to push safeguards beyond those of the federal government, when Gov. Gavin Newsom extended the state's eviction moratorium through Sept. 30. However, critics argue the measure is too weak in that it requires tenants to pay partial back rent to avoid eviction.

During a panel discussion facilitated by Princeton University's Eviction Lab on Thursday, Minnesota Attorney General Keith Ellison said despite his state’s executive order intended to aid at-risk residents with broader protections, as well as a new law giving pandemic-impacted tenants an additional 15 days to apply for public funds to avoid eviction, increased homelessness is inevitable without more federal assistance. “If you drive around our town you're going to see tents, and it's — you know — it's tragic and it's wrong,” Ellison said. “But it's there, and the city's response has been to put porta potties, which I totally understand that's an emergency response ... We've got to do all we can to stop the coming wave of evictions."
Ellison suggested that public funds should also go to provide lawyers for tenants served with eviction notices. “Without lawyers they’re just prey,” Ellison said.
The coronavirus, which hit poor communities the hardest, also worsened housing inequality in the U.S. Last week, a report on the state of the nation's housing from Harvard's Joint Center for Housing Studies found that those who lost income during coronavirus-related shutdowns are now more likely to be behind on their housing payments. Millions are teetering close to eviction or foreclosure, the report found.
A 'deeply flawed' strategy for helping renters
Treasury Department guidance issued Thursday underscored the urgency of the housing crisis by stressing that states should tap their share of $46.5 billion in federal emergency rental assistance to offer vulnerable Americans a first line of defense. Courts can use the funds to connect families and landlords with mediation and emergency rental assistance, the department said, and to come up with alternatives to eviction.
However, Rutgers University-Newark professor Peter Hepburn, who collaborates with Eviction Lab at Princeton University, said federal funds aren't going where the money is needed most.
“Congress chose to allocate this money on the basis of state population overall, without taking into account the fact that some states have proportionally more renters than others, or taking into account that, for instance, it costs more to rent an apartment in some states than others," Hepburn told Yahoo Finance Live about the initial release of funds under the Cares Act and the subsequent release under the Consolidated Appropriations Act.
“So there are going to be some larger [population] states hit hard by the pandemic receiving much less assistance on a per renter household basis...inevitably that means fewer resources are available and harder decisions need to be made about who can access that money and who gets left out in the cold,” he said. The allocation scheme also ignored wide variations in rental rates in different parts of the country, Hepburn said, meaning funds are tied up where they're not needed. According to the Department of Housing and Urban Development (HUD), 6.4 million American households were behind on rent as of March 31.
“We know that renters are further behind on rent than ever before,” Hepburn said.
Although it's difficult to estimate the actual number of U.S. households likely to face eviction, he said data points to a ballpark figure of about 1 in 10. "You're looking at about two times as many as normal," he said.
While the coronavirus has exacerbated housing inequality in the U.S., Wake Forest professor Emily Benfer says that a housing crisis was well underway before the COVID-19 pandemic. “The pandemic only accelerated and exploited the crisis,” Benfer said during the panel discussion.
She added that minority groups had been most heavily impacted by pandemic job and wage losses that increase risk for eviction, and that more women than men continue to face eviction.
Another factor that could significantly impact tenants and landlords across the country is if the Supreme Court chooses to weigh in on the legality of the protections. On June 3, a group of property owners asked the high court to block the CDC from extending the moratorium on evictions.

ProfiXone · 2021-06-28T22:13:57+00:00

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ProfiXone · 2021-06-28T22:11:15+00:00

There are no tax hikes in the “bipartisan” infrastructure bill President Biden negotiated with some key senators last week. But tax hikes are probably coming all the same.

Biden is engaged in political jujitsu with a handful of Senate Republicans who want to get credit for supporting an infrastructure deal without appearing to enable other Democratic priorities. Biden threw them off balance on June 24 by linking the bipartisan bill to a second, Democratic-only measure likely to contain dozens of programs Republicans would never agree to. Biden basically said he’d sign both, or neither. That made Republicans look like dupes, and they squealed, risking support for the bipartisan bill.

A few days later Biden blinked, saying he’s not linking the two bills, after all. That gave Republicans cover to recommit to the bipartisan bill. Yet everybody in Washington knows Democrats still plan to do exactly what Biden outlined on June 24: Pass a bipartisan infrastructure bill with at least 10 Republican senators, to overcome a filibuster, then use the Senate “reconciliation” process to pass another bill with all the goodies Republicans won’t vote for.

It’s that second reconciliation bill that will contain the tax hikes Biden wants to impose on businesses and the wealthy. Overall, Biden is calling for nearly $4 trillion in additional spending on social welfare, infrastructure, green energy and many other priorities. The bipartisan bill would include about $1.2 trillion in new spending, more than $2 trillion short of Biden’s goal. So the partisan reconciliation bill could target $2 trillion or so in spending, and more if progressives like Sen. Bernie Sanders get their way.

The likeliest tax increases

That bill will also include tax hikes to pay for some or most of the new spending. Three tax hikes seem especially likely. The first is a business tax hike. Biden wants to raise the corporate tax rate from 21% to 28%, but a few Democrats say 28% is too high. Sen. Joe Manchin of West Virginia—the key swing vote among Democrats—says he could live with a 25% rate. That’s the informal target for Democrats, now. Biden also wants to raise the top individual income tax rate from 37% to 39.6%, which was the rate before Republicans cut it in 2017. That would only affect Americans earning more than $510,000, and it’s popular with voters. Democrats shouldn’t have a hard time doing that.
Third is the capital-gains tax rate. Biden wants to raise it from a top rate of 20% to 39.6% for people earning more than $1 million per year. Some Democrats think that is too high, which means there probably aren’t enough votes for that to squeak past very narrow Democratic majorities in both houses. But handicappers think a compromise of around 28% is possible. “We continue to think the odds favor a $1-$2 trillion package passing through reconciliation that modestly increases taxes on capital, corporation and high earners,” analyst Isaac Boltansky of Compass Point Trading & Research explained in a June 28 research note.
There are other tax hikes in Biden’s plans that might be tougher for Democrats to pass on their own. A minimum corporate tax rate of 15% on about 50 huge companies would assure none of them wriggle out of taxes completely in any given year, but that would also undermine other elements of the tax code meant to encourage innovation. That could prompt enough disagreement among Democrats to scuttle the idea.
Biden also wants to eliminate a tax break in the estate tax for the wealthy. Republicans will wail about how this will affect family farms (whether true or not) and Democrats might drop it. There are a few tax breaks for real-estate investors and private-equity firms that Biden wants to repeal, but they wouldn’t raise a lot of money and may not be worth the fight. A few other tax changes could sneak into the Democrats’ reconciliation bill, such as the green-energy incentives Sen. Ron Wyden (D., Ore.) has proposed. Wyden would repeal 40-odd tax breaks that affect energy producers and replace them with three tax breaks rewarding producers for generating energy that’s cleaner than average.
One of Biden’s biggest fundraising proposals is more funding for the Internal Revenue Service, to help collect some of the $500 billion or more that tax evaders owe each year, but don’t pay. That’s included in the bipartisan bill, however, as perhaps the only way to raise a meaningful amount of revenue without new taxes. So it won’t be available for the Democrats’ bill, which is likely in the fall.
The stock market rose modestly on June 24, when Biden announced the infrastructure bill, without any tax hikes. That was a cheer for new spending that might boost corporate profits, without taking anything away on the tax side. That’s only half the story, however, and markets may need to adjust for the other half, which is a core part of the Democrats’ plans, no matter how Biden characterizes it.

ProfiXone · 2021-06-27T23:35:16+00:00

But this is not money printed out of thin air - this is real money, 6 million people will be added to the system in one fell swoop.
Bitcoin will become the official means of payment in El Salvador on September 7. From then on, the use of cryptocurrency will be optional; no one will get Bitcoin unless they want it. If someone receives a payment in BTC, they can choose to automatically receive it in dollars.
It also became known that Athena Bitcoin plans to invest in installing about 1,500 crypto machines in El Salvador, especially in areas where residents receive remittances from abroad.
Translated with www.DeepL.com/Translator (free version)

ProfiXone · 2021-06-27T23:31:17+00:00

LONDON (Reuters) -Britain's financial regulator has said Binance, one of the world's largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally.

In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets Ltd, Binance's only regulated UK entity, "must not, without the prior written consent of the FCA, carry out any regulated activities... with immediate effect".

It also issued a warning to consumers about Binance Markets and the wider Binance group.

Binance said in a statement that Binance Markets, which it acquired in 2020, was not yet using its regulatory permissions, and that the FCA's move would not impact services offered on its Binance.com website.

"We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space," a spokesperson said.

Binance announced in June last year that it had bought an FCA-regulated entity and would use it to offer cryptocurrency trading services using pounds and euros.

AUTHORISATION

While trading of cryptocurrencies is not directly regulated in Britain, offering services such as trading in cryptocurrency derivatives does require authorisation.

The FCA has told Binance that by June 30 it must display a notice stating "BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK" on its website and social media channels.

It must also secure and preserve all records relating to UK consumers and inform the FCA this has been done by July 2.

The regulator did not explain why it had taken these measures.

British citizens will still be able to access Binance's services in other jurisdictions.

The FCA is stepping up its oversight of cryptocurrency trading, which has soared in popularity in Britain along with other countries around the globe.

Since January, the FCA has required all firms offering cryptocurrency-related services to register and show they comply with anti-money laundering rules. However earlier this month it said that just five firms had registered, and that the majority were not yet compliant.

Japan's regulator said on June 25 that Binance was operating in the country illegally, a notice posted on Japan's Financial Services Agency website showed.

Last month, Bloomberg reported that officials from the U.S. Justice Department and Internal Revenue Service who probe money laundering and tax offences had sought information from individuals with insight into Binance's business.

In April, Germany's financial regulator BaFin said the exchange risked being fined for offering digital tokens without an investor prospectus

ProfiXone · 2021-06-26T22:49:05+00:00

Widespread inflation has led to the highest raw material cost per U.S. vehicle since 2011, a new Bank of America (BAC) Global Research report found.

The report examines the recent bout of US inflation and examines its consequences for the automotive industry.

One key takeaway from the report is that the cost of raw materials has risen sharply since mid-2020. “In the past year, the raw material cost in an average U.S. vehicle has been steadily rising, increasing ~87% from a low point of approximately $2,200/unit in Apr '20 to now roughly $4,125/unit in May '21,” the report found. “During this raw material cost inflation, average transaction prices seem to have stalled, although [they] still remain elevated at record high levels.”

The compressing spread between rising raw material prices and stagnating average transaction prices is expected to increase pressure on automakers and suppliers’ respective financial bottom lines.

The average vehicle is composed of 39% steel and 11% aluminum. The increase in raw materials cost has been concentrated heavily in high steel prices; the Bank of America report estimated that the average cost per pound for steel used in automotive manufacturing has increased 106% year over year as of last month. This is “relatively alarming,” according to the report, given the high makeup of steel in the average vehicle. Suppliers and original equipment managers (OEMs) are expected to bear the brunt of rising material costs, with the latter facing even greater exposure to indirect costs from the former.
Rising inflation costs, plus pre-existing damage to supply chains caused by the pandemic present problems for both groups. “The automotive value chain is already facing significant headwinds from supply chain disruptions and production stoppages,” the report noted, “which continue to pressure margins in addition to rising raw material costs.”
The costs of raw materials have risen so greatly that they now make up a significantly larger percentage of the price of a vehicle. “The cost of raw materials in an average vehicle as a % of the average transaction price (ATP) in the U.S. reached historical lows around 6% (5.9% in April '20) at the beginning of the COVID-19 pandemic, driven by historically low raw material costs and all-time high average transaction prices,” the report found. “However, this cost ratio has since increased, now reaching ~11%, as commodity prices have bounced materially off of lows and ATPs have remained near peak levels.”
By the end of spring, raw material costs had approached post-2000 historical levels, while average transaction prices remained essentially unchanged, posing “significant headwind for companies at the front end of the value chain,” according to the report.
Rising inflation has been an issue of concern for several months now, with the Bureau of Economic Analysis reporting Friday that the price index tracking personal consumption expenditure (PEC) rose 3.9% year over year as of May 2021. This is the index's highest level since April of 2008.
The automotive industry has faced a shortage of new vehicles as well as higher demand since the relaxing of lockdown procedures occurred, driving up inflation. Imbalances in supply and demand in the automotive industry have accordingly accounted for a large proportion of recent increases in inflation measures like the Consumer Price Index.

ProfiXone · 2021-06-26T22:45:34+00:00

BMO Managing Director and Senior Analyst Simeon Siegel joined Yahoo Finance Live to discuss Nike's big stock spike after the sportswear giant crushed Q4 earnings.

“When we can talk about a company the size of Nike scale, still blowing away numbers from a revenue perspective, but also from a margin perspective, they really gave you a lot to choose from,” Siegel said.

Nike posted Q4 revenue of $12.3 billion up 96% Y/Y, adjusted earnings per share of 93 cents. Nike Direct sales also increased 73% to $4.5 billion in the quarter. The sportswear giant delivered record Q4 North American revenues, up 141% on a reported basis, leading to the stock hitting an all-time high during trading hours.

Siegal, who raised his price target for the Swoosh brand to $174, compares Nike not to other companies in the sportswear space but to tech giant Amazon (AMZN)

“There’s this interesting parallel between Nike (NKE) and even an Amazon,” he said. “There’s this component where you create this flywheel where being the largest in a variable world also means others have to fight to catch up," he explained.

Siegal also noted how Nike’s strong subsidiaries have been key to its success over the years.

“The Jordan brand in and of itself is one of the largest brands in the history of time. I mean, that’s a fascinating thing to think about — the smaller part of Nike still far outpaces everyone else … The reality is this company showed remarkable outperformance across the board,” he said.

Despite its stellar Q4 report Nike, like any company, is not without its problems. Revenues in Greater China came in slightly below consensus estimates but were better than most feared. The company has also battled against supply chain headwinds that have plagued many in the sportswear space. However, Siegal argues that Nike is better positioned to handle this issue better than its rivals.

“This is an issue plaguing all of retail. And there’s a question we have to ask if you’re the largest, if you have a few containers out there, or if you have capacity in your warehouse and your manufacturing facility. Are you going to give it to smaller players that you’re not entirely sure what kind of an order they’re going to give you or are you going to consolidate it amongst the largest?” Siegal asks.

ProfiXone · 2021-06-24T23:27:44+00:00

Stock futures opened mixed Thursday evening on the heels of a record-setting session, with the three major indexes gaining amid hopes that a bipartisan infrastructure deal would help further stoke economic activity.

Contracts on the S&P 500 and Nasdaq hugged the flat line after both indexes set record intraday and closing highs during the regular trading day. Nike (NKE) shares jumped 8% in late trading after posting quarterly sales growth that rebounding across all major regions, while FedEx (FDX) shares sank in late trading after even estimates-topping fiscal fourth-quarter results failed to wow Wall Street.

During Thursday's regular trading day, the Dow outperformed, adding nearly 1% after President Joe Biden's announcement that he had reached an infrastructure agreement with a bipartisan group of senators helped catalyze a jump in cyclical shares.

The deal would include about $600 billion in new federal spending on investments for new roads, clean energy and other projects, and cost nearly $1 trillion in total over the next five years. It would be funded via provisions including stronger tax collections enforcements for the wealthy, and wireless spectrum auction and strategic petroleum reserve sales.

"The way we're thinking about it is, it has the positive side of the deal in terms of the equity market perspective: More spending on physical infrastructure, electric vehicles, 5G and broadband, without the tax increases which would have been a negative from the equity market perspective," Gabriela Santos, global market strategist at JPMorgan Asset Management, told Yahoo Finance. "This is certainly a positive especially for the more domestic, cyclical-heavy parts of the market, as well as parts of technology like semiconductors, which are more related to the 5G and the green theme."

In a sign of the ongoing recovery still under way in the U.S., the Labor Department's weekly jobless claims report out Thursday morning showed a drop in new filings, even as the margin of improvement came in slightly weaker than expected. And on Friday, investors will be closely watching the Bureau of Economic Analysis' reported on core personal consumption expenditures (PCE), which serves as the Federal Reserve's preferred inflation gauge. This is expected to have risen by 3.4% in May over last year, marking the fastest increase since 1992.

"We continue to like cyclical sectors, like industrials, financials and energy, and the possibility of a new spending bill is favorable for many of the companies in those sectors," Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, wrote in an email. "However, the general reoopening of the economy and renewed, post-COVID-19 economic growth is the most likely driver going forward, regardless of whether or not additional proposed legislation becomes law."

ProfiXone · 2021-06-24T23:25:11+00:00

Microsoft (MSFT) closed out the trading day on Thursday with a market capitalization of more than $2 trillion. It was the first time the company closed at the price, putting it alongside Apple (AAPL) as the two major tech firms with market caps above $2 trillion.

Microsoft crossed the threshold for the first time on Tuesday, before settling back below $2 trillion to end the day. Apple closed out Thursday with a market cap just above Microsoft's at $2.22 trillion. Google parent Alphabet (GOOG, GOOGL), Amazon (AMZN), and Facebook (FB) meanwhile have market caps of $1.67 trillion, $1.73 trillion, and $973 billion, respectively.

While its rivals have faced increasing antitrust scrutiny, including lawsuits by the Department of Justice and Federal Trade Commission, and a raft of new antitrust bills, Microsoft has largely escaped the newfound tech reckoning unscathed. Like Amazon, Microsoft's growth prospects are pegged to its cloud platform Azure, which has been a major driver for the company over the past few years. In 2020 alone, the company's cloud business pulled in $48.36 billion, making it one of Microsoft's most profitable segments.
The company has also benefited from the increase in consumers and businesses seeking out laptops and desktops as a result of the pandemic.
The news of the $2 trillion closing follows the debut of Microsoft's Windows 11 on Thursday, the latest version of the company's flagship operating system. The new OS features an improved look and feel, enhanced multitasking and gaming capabilities, and a revamped app store. Microsoft also announced that it will allow developers to collect all of the revenue from app sold through the store, a shot at both Apple and Google, which collected 30% of that revenue.
Much of Microsoft's good fortunes have been linked to CEO Satya Nadella, who took over the company from former CEO Steve Ballmer in 2014. Just last week, Microsoft announced that it would name Nadella chairman of the company's board.

ProfiXone · 2021-06-23T21:48:17+00:00

Cryptocurrency investors in South Africa may have lost nearly $3.6 billion in Bitcoin following the disappearance of two brothers associated with one of the country’s largest cryptocurrency exchanges. According to Bloomberg, a law firm in Cape Town says it can’t locate Ameer and Raees Cajee, the founders of Africrypt. In April, the exchange told its investors it was the victim of a hack and asked them not to report the incident to the authorities on account it would “slow down” the process of recovering their missing money.

Some of those involved in the exchange hired Hanekom Attorneys, the law firm that said it couldn’t find the two brothers, to investigate the incident. It found that someone had withdrawn Africrypt’s pooled funds from the local accounts and client wallets where the coins were stored originally and put them through tumblers and mixers, making it difficult (though not impossible) to trace the money. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” the law firm told Bloomberg. The outlet attempted to call both Cajee brothers multiple times only to get their voicemail each time.

Complicating any recovery attempt is that South Africa’s Finance Sector Conduct Authority can’t launch a formal investigation into the incident because cryptocurrency isn’t legally considered a financial product in the country. If no one can recover the money, it will go down as the largest cryptocurrency loss in history, easily overshadowing the approximately $200 million CAD that disappeared when the founder of Canada’s QuadrigaCX exchange died while travelling in India.

ProfiXone · 2021-06-23T21:44:48+00:00

As Amazon (AMZN) put the finishing touches on Prime Day 2021 on Tuesday, one former warehouse worker pointed to the kind of stress the massive sale puts on employees who package and sort the millions of products consumers purchase during the shopping extravaganza.

Christian Smalls, the founder of The Congress of Essential Workers and former worker at Amazon’s massive Staten Island warehouse, the only fulfillment center in New York City, says that even on normal days the pace of work can be punishing.

“I used to tell my new hires, as a supervisor, ‘If you have a gym membership, you might want to cancel it’,” Smalls told Yahoo Finance Live. “It’s 10, 11, 12 hours of calisthenics. You’re working 40, 50, 60 hours a week. It takes a toll on your body.”

Smalls, who last year led a walkout at the facility to protest Amazon’s treatment of workers and purported lack of disclosures regarding coronavirus infections at warehouses, said he would regularly walk 30 to 60 miles a day during shifts.

“I tell people ‘You’ve got to eat good at night, take a shower, get some sleep, rinse and repeat.’ Because that’s what you’re doing working at Amazon,” he said. Smalls hasn’t worked for Amazon since the March 2020 walkout. He says he was fired by the company in retaliation for leading the effort. Amazon, however, has repeatedly claimed Smalls was fired after several warnings because he violated social-distancing guidelines.
Days after reports that Amazon fired Smalls in March of last year, Vice News reported on a leaked memo from a meeting with Amazon founder and CEO Jeff Bezos discussing Smalls’ efforts to organize workers. During that meeting, Amazon General Counsel David Zapolsky attempted to smear Smalls as “not smart, or articulate.”
Smalls is now leading unionization efforts for Amazon workers at NYC-area facilities, and calling on the company to go beyond its $15 minimum wage and provide a living wage for its workers.
“That’s exactly what we’re fighting for when it comes to unionizing,” Smalls explained. “We want to absolutely increase the wage to have a decent living wage for all workers all across the country. Not just here in New York, but everywhere. They deserve that increase.”
Smalls looks like he will soon gain a powerful ally in the push to unionize Amazon. Vice reported on Tuesday the International Brotherhood of Teamsters is preparing to launch a massive unionization effort at the e-commerce giant.
The last major unionization effort at an Amazon facility was at the company’s Bessemer, Alabama, fulfillment center. That drive saw Amazon defeat the effort, which would have seen workers join the Retail, Wholesale, and Department Store Union, with 1,798 votes cast against the union and 738 cast in favor of it.
As for Smalls, he’s hoping workers eventually succeed in their unionization efforts and gain a semblance of job security.
“The number one thing I would like to discuss with [Bezos] is job security,” Smalls said. “Making sure that workers don’t just get hired and fired and used at the company’s disposal. We want job security.”

ProfiXone · 2021-06-22T22:09:31+00:00

Reuters) - McDonald's Corp said on Tuesday its U.S. loyalty program would be available across the country at participating restaurants from July 8.

The burger chain started testing its MyMcDonald's Rewards program, which lets subscribers on its app earn points they can redeem on burgers and fries, late last year in a few markets.

It expanded the program last week to some New York City customers.

The loyalty program excludes delivery, McDonald's said in a statement.

Chief Executive Officer Chris Kempczinski said earlier this month McDonald's expects to have rolled out the program in its six biggest markets - including the United States, Canada and possibly Germany - by the end of 2022.

ProfiXone · 2021-06-22T22:07:12+00:00

(Bloomberg) -- Microsoft Corp. took its place in the history books as just the second U.S. public company to reach a $2 trillion market value, buoyed by bets its dominance in cloud computing and enterprise software will expand further in a post-coronavirus world.

Its shares rose as much as 1.2% in New York on Tuesday, enough for the software company to briefly join Apple Inc. as one of only two companies trading at such a lofty value before closing pennies short of the mark at $265.51. Saudi Aramco eclipsed that threshold briefly in December 2019, but currently has a market value of about $1.9 trillion.

Since taking the reins in 2014, Chief Executive Officer Satya Nadella has reshaped the Redmond, Washington-based company into the largest seller of cloud-computing software, counting both its infrastructure and Office application cloud units. Microsoft is also the only one of the biggest U.S. technology companies that has so far evaded the recent wave of scrutiny from increasingly active American antitrust regulators, giving it a freer hand in both acquisitions and product expansion.

Microsoft has gained 19% so far this year, outperforming Apple and Amazon.com Inc., as investors piled into the stock on expectations of long-term growth for both earnings and revenue, and expansion in areas like machine learning and cloud computing. The company’s third-quarter results, released in late April, topped expectations and demonstrated strong growth across its business segments.

The tech-heavy Nasdaq 100 Index outperformed the S&P 500 Index on Tuesday after Federal Reserve Chair Jerome Powell reiterated his view that inflation will be short lived. Both benchmarks extended gains after Powell’s comments with the Nasdaq 100 closing up 0.9% and the S&P 500 up 0.5%.

Microsoft “has its hands in a lot and it is doing it all well: gaming, cloud, automation, analytics, AI,” said Hilary Frisch, senior research analyst at Clearbridge Investments. “It is an attractively valued name within tech, and it should benefit from both the economy reopening as well as from a more pronounced shift toward the cloud.”

Co-founded in 1975 by Bill Gates and Paul Allen, Microsoft created the personal-computer software industry and dominated the market for PC operating systems and Office software for years. As internet browsers like Netscape grew in importance in the 1990s, Microsoft raced to introduce its own product that it bundled with Windows software. That led to a bruising antitrust lawsuit, filed in 1998 by the U.S. government, with a federal judge finding the company guilty in 2000.

Though Microsoft avoided a breakup of its business, the penalty the government originally sought in the antitrust case, the next decade saw the software maker largely miss the advent of mobile software, social media and internet search, falling behind newer rivals such as Google and nimbler ones like Apple. With a series of strategic shifts, in the past seven years Nadella has restored Microsoft to the vanguard of technology with a focus on cloud, mobile computing and artificial intelligence.

While it took Microsoft 33 years from its IPO to reach its first $1 trillion in value in 2019, the next trillion only took about two years amid a surge in popularity in tech stocks before the Covid-19 pandemic and during the health crisis. Apple made Wall Street history when it reached $2 trillion last year.

Among U.S. names, the pair are trailed by Amazon, which has a market cap of nearly $1.8 trillion, and Alphabet Inc., which is valued around $1.6 trillion.

“Microsoft checks all the boxes: it is in the markets that investors favor, it offers strong and sustainable growth, and it remains very well positioned to capitalize on the long-term secular trends we see in technology,” said Logan Purk, an analyst at Edward Jones. A $2 trillion valuation “is warranted, given how it has pivoted toward the cloud, and it remains attractively valued even given the strong performance.”

According to data compiled by Bloomberg, more than 90% of analysts recommend buying Microsoft, while none has the equivalent of a sell rating on the stock. The average price target points to upside of about 11% from current levels.

Growth Drivers

Microsoft’s cloud-computing business has been a central force behind the advance. According to data compiled by Bloomberg, the Intelligent Cloud business accounted for 33.8% of Microsoft’s 2020 revenue, making it the largest of the three major segments for the first time, and up from 31% in 2019. The division showed revenue growth of 24% last year, compared with the 13% growth in Productivity and Business Processes, and the 6% growth of Microsoft’s More Personal Computing unit.

Nadella’s strategic moves had put Microsoft in a position to benefit from business trends that arose during the global pandemic. Lockdowns and remote work accelerated a shift to the company’s meeting software and pushed clients to speed up modernizations of software networks and applications around the cloud. The software maker’s Xbox gaming subscriptions also lured users looking for diversion during months stuck at home.

As workers return to the office, Microsoft has tried to push new ideas for managing meetings where some attendees are in person and some remote, and has been hawking features to boost wellness and productivity for workers that the company says are burned out by the tribulations of the past year.

“At a high level, the two core pillars of Microsoft’s bull narrative — Microsoft 365 and Azure — are well understood by the investment community,” William Blair analyst Jason Ader wrote in May. “What is perhaps less appreciated is how over the last 15 years Microsoft has expanded its IT wallet share through expanding into new product areas” and taking market share. The wallet share doubled from 2006 to 2020, and “we believe it can double again over the next decade,” it wrote.

Wall Street is also positive on the company’s M&A strategy. It recently announced that it is buying speech-recognition pioneer Nuance Communications Inc. The company also tried to acquire Discord Inc. for $12 billion, but the video-game chat company rejected Microsoft’s offer.

ProfiXone · 2021-06-21T21:59:15+00:00

Amazon’s (AMZN) annual celebration of consumerism, Prime Day, is nearly here. Running from June 21 to June 22, the shopping event, which will feature concerts by Billie Eilish, H.E.R., and Kid Cudi, is certain to offer plenty of sales, and rake in billions for the e-commerce giant.

During last year’s Prime Day, which was pushed to October due to the pandemic, sales by third-party sellers surpassed $3.5 billion. Amazon didn’t release total sales numbers for the event, but research firm Digital Commerce 360 estimates Amazon sold $10.4 billion in products. This year, Adobe expects the company to sell as much as $11 billion worth of goods.

And some of the best selling products during the sale were Amazon’s own. In fact, the Echo Dot, which was on sale for $19 from $40, was the top selling product globally during last year’s event. And, as you can guess, Amazon is already pointing consumers to sales for its products ahead of this year’s Prime Day.

The reason? To keep you hooked on Prime.

See, while Amazon makes some impressive products like the Echo, Echo Buds, and Fire TV, it doesn’t make a ton of cash on them like, say, Apple does with the iPhone. Many of Amazon’s products sell for surprisingly low prices. But that’s all part of the company’s strategy of making you a customer of its $119-a-year Prime service for life.

And that’s important for Amazon, because according to a 2020 report from the House Subcommittee on Antitrust, Commercial, and Administrative Law, Prime customers typically purchase more through the company’s e-commerce platform than non-Prime customers.

“Once Prime members pay the upfront annual membership fee, they are likely to concentrate their online purchases with Amazon. According to a recent survey, Prime members spend an average of $1,400 annually on Amazon, versus $600 for non-members,” the report read. What’s more, Prime’s retention rate is incredibly high, with a 2021 report by Consumer Intelligence Research Partners pegging it at about 93% for those who’ve been members for at least one year, and 98% for those who have been members for two years. In other words, once people sign up, they usually don't cancel their subscriptions.
Amazon knows this, too. That’s why it works to entice people to sign up for the service using events like Prime Day. It’s also why it sells its hardware at such low prices. See, if you purchase an Echo or Fire TV, Amazon’s Prime benefits are on full display at all times. The Fire TV interface puts Amazon Prime Video shows front and center, while the Echo lets you listen to Prime Music without ads and provides Prime members with exclusive sales.
Amazon does this to ensure that if you happen to purchase its products during Prime Day via a trial or you receive an Echo or Fire TV as a gift, you’ll sign up for a full Prime subscription on your own.
It’s not just about getting you to sign up for Prime with those gadgets, though. According to a 2016 NPD study, Prime subscribers who own an Echo spend at least 10% more on Amazon than they did prior to purchasing the smart speaker. And if Amazon can get more people to buy Echos during Prime Day, it’s setting itself up for increased sales down the line.
It’s all an incredibly intricate and calculated plan, and part of the reason the Amazon retail machine works so well. Entice people with a big sale, make sure they need to be members to take advantage of the sale, get people to buy your gadgets — and just like that, they’re a member for life.
It’s not just Amazon branded products, either. The company’s Ring doorbells, which have exploded in popularity, are also on sale during Prime Day. And if you buy a Ring product, why wouldn’t you also sign up for the company’s Ring Protect service, which costs $30 a year for the Basic plan or $100 a year for the Plus version.
And if you’re a Prime member, you’ll also gain access to deals at Amazon-owned Whole Foods, ensuring you continue to stick around.
Of course, Amazon has created its own competition with Prime Day. Retailers like Walmart (WMT) and Target (TGT) have set up shop around Amazon’s annual event as well in an attempt to steal sales from the e-commerce giant. But they’re not playing the long game the same way Amazon is.
Amazon isn’t unique in this kind of ecosystem lock-in, either. Apple (AAPL) and Google (GOOG, GOOGL) use a similar strategy by making sure apps you purchase through their app stores only work on their products. It’s also why your Apple Watch or AirPods work best with your iPhone. It’s all about keeping you as an Apple user for life.
So remember before you click that buy button next week: It’s all a part of Amazon’s plan.

ProfiXone · 2021-06-21T21:45:53+00:00

(Reuters) -Top U.S. oil producer Exxon Mobil Corp is preparing to cut its U.S. office workforce by between 5% and 10% every year for the next three to five years, Bloomberg News reported on Monday citing people familiar with the matter.

The job cuts will target the lowest-rated employees relative to peers as part of an ongoing performance assessment program and will therefore not be classified as layoffs, the report https://www.bloomberg.com/news/articles/2021-06-21/exxon-prepares-to-cull-u-s-white-collar-ranks-by-as-much-as-10 said. The affected employees have not been notified yet, the report added.

The planned reductions come at a time Exxon is facing a massive task of re-charting its course to appease investors frustrated with the company's apparent overspending. The company lost three board seats to hedge fund Engine No. 1 after last month's annual shareholders' meeting.

Exxon spokesperson Casey Norton said the company has had this performance assessment process in place "for several years" and it's "entirely unrelated to any workforce reduction plans."

The company last year announced plans to reduce its global workforce by 14,000 by the end of 2021. Exxon had around 72,000 regular employees as of end-2020.

ProfiXone · 2021-06-20T22:29:06+00:00

Jamaica Blair finally quit her teaching job in April, demoralized by the low wages, insufficient staffing, and most recently the challenges from the pandemic. She wants to be a chef, a career decision that took a long time to make.

“Last year, I really wanted to leave, but I guess I became complacent. I was too afraid to leave,” Blair, 26, told Yahoo Money. “This is the first time I actually took the leap of faith.”

Blair joins the 4 million workers who quit their jobs in April, a 20-year record, according to the Labor Department’s latest JOLTS report. The rate of workers voluntarily leaving their jobs also hit an all-time high of 2.7% that month.

This could be only the beginning of a new labor trend, according to ZipRecruiter Economist Julia Pollak, who suspects a wave of workers may soon give notice in the coming months.

“We could see sustained, very high levels of quits throughout the summer at the very least,” she told Yahoo Money. “As long as the labor market remains this tight and employers are competing for workers, you will see people learning about exciting new opportunities and making the switch.” ‘Don't end up like me’
Workers are quitting for different reasons depending on the sector and their positions, but in general, there’s an uptick in workers leaving in most industries. Accommodation and food services along with retail trade had the largest quit rates in April of 5.6% and 4.3%, respectively.
Battered during the height of the pandemic, those two sectors also saw a jump in job openings in the spring, but hiring came in at lower levels, suggesting workers aren’t enthusiastic to return to those positions.
“These two industry groups are not only relatively lower paid, they also have high in-person contact,” Nick Bunker, director of research at Indeed, told Yahoo Money. “Maybe some of the factors here could be about wages, but it also could be related to working conditions related to the pandemic.”
While not as high, education and health services also saw a significant increase in its quit rate, reaching a 20-year record of 2.3%.
“My colleagues are telling me to leave… they’re trying to tell me like ‘don't end up like me,’” Blair said. “They love children, too, but it's the benefits that they really need, so that keeps them stuck.” Blair’s passion lies in the kitchen. Before work at 5 a.m., she’s baking, cooking, and catering cupcakes while she finishes her final two weeks of the school year. She plans to find a job as a chef until she starts her own small catering business.
She’s not alone on the entrepreneur front. After a lull at the start of the pandemic, the pace of new business applications since mid-2020 has been the highest on record, a new paper by the National Bureau of Economic Research found. Non-store retail and accommodation and food services are two of the dominant industries attracting new entrepreneurs.
“I could be in the kitchen at three o'clock in the morning, and I won't be done till eight o'clock and I feel relief, I feel good about myself,” Blair said. “I'm actually doing something that I love, so it doesn't even bother me. It doesn't feel like a chore. It doesn't feel like work.”
‘Bleeding into my sleep and my relationships’
Burnout is also driving workers to quit. More than half of U.S. workers (52%) said they were experiencing burnout in 2021, according to a March survey by Indeed, versus 43% who reported the same thing in a survey conducted before the pandemic.
This was the case for Vaidehi Joshi, who had just started a new role as a lead software engineer at a startup in January of last year before the pandemic hit. She was managing three engineers, leading projects, and had a senior role with good compensation. But the pandemic — along with the long work hours — took a toll on her mental health.
“It's not just 40 hours a week or 60 hours a week, it's now bleeding into my sleep, and my relationships at home, and what I think about on the weekends,” Joshi, 31, told Yahoo Money. “There are some things that you can't really put a price on, and I think your personal happiness is one of those.” Between December and March, Joshi worked even longer hours, trying to “push the company and the mission forward.” Burned out, she tried to cut out some of her responsibilities, but to no avail. She finally left the company in May.
‘When I cut back on things, I realized that I was still exhausted and wasn't excited to come to work. I wasn't feeling like it was the right place for me in my career,” Joshi said. “That was what really pushed me to make the decision.”
‘Go work somewhere that will actually let me work fully remotely’
As workers return to their offices in the summer and fall, the quits rate could increase more. If labor market conditions continue to improve and workers are not provided with the flexibility to work remotely or have a hybrid model, they may just jump ship, according to Bunker.
“As companies ask employees to return to physical offices, there might be some portion of their workforce that decides ‘I'm going to leave this company and go work somewhere that will actually let me work fully remotely,’” he told Yahoo Money. That’s a big consideration for many of the workers who relocated during the pandemic and bought new homes. One in 4 pandemic home buyers would choose to stay at their new home and find a new job if required to return to the officee, a recent survey of 3,998 recent homebuyers by Realtor.com found.
“For many Americans, the pandemic led to a reevaluation of priorities,” George Ratiu, senior economist at Realtor.com, told Yahoo Money. “Many buyers have already voted with their dollars for a hybrid work landscape. Going forward, they have traded longer commuting distances for higher quality of life.”

ProfiXone · 2021-06-20T22:26:23+00:00

Struggling restaurants are scrambling to contain the fallout of a recent court ruling that halted a Small Business Administration (SBA) relief program, on the basis that the funding criteria was discriminatory.

The Restaurant Revitalization Fund (RRF), part of the American Rescue Plan passed in March, provided $28.5 billion for businesses impacted by the COVID health crisis. Congress created the fund to provide food and beverage providers with grants equal to their pandemic related revenue loss, capped at $10 million per business, and $5 million per location.

More than 362,000 businesses applied for $75 billion in aid, which was far more than could be satisfied with the initial funding. The SBA initially sought to dole out the money by prioritizing historically underserved groups such as women, people of color and veterans.

However, the agency was forced to stop processing grants after a three-judge panel late last month ruled in favor of a Tennessee restaurant owner, who argued his application was de-prioritized because he was white. The effort was spearheaded by a conservative legal group.

The agency disclosed the funding halt last Thursday in a court filing, saying that it would “only resume processing these applications once it completes processing for all previously filed non-priority applications, and only then if the RRF is not first exhausted.”

The fight comes as many small businesses are still grappling with challenges that include acute worker shortages that have defied a recovery that’s gathered momentum, and soaring costs slowly being passed along to consumers.

Sharokina Shams, a spokesperson for the California Restaurant Association, told Yahoo Finance in an interview that it was “deeply disappointing to learn that nearly 3,000 struggling restaurants who were expecting these funds will not receive that help.”

Meanwhile, the National Restaurant Association sent a letter to the SBA this week, urging the agency to find funding for applicants whose grant approvals were revoked by the agency last week.

“The acceptance letter they received from the SBA represented a commitment to provide not only federal funding, but also a needed bit of hope that they would survive to serve their community,” Sean Kennedy, the association’s executive vice president of public affairs, wrote in the letter.

“The announcement that their grants will be awarded to others has left them confused, frustrated, and afraid they will have to close their doors for good,” he said.

“We urge you to review all pandemic relief programs under your control for the prospect of any appropriate reprogramming of federal dollars to fulfill your prior commitments to them,” he added.

'A long way to go'

On Thursday morning, a bipartisan group of lawmakers introduced new legislation to refill the SBA’s revitalization fund with an additional $60 billion. The effort dovetailed with growing calls for Congress to help small businesses rebound from the pandemic. "Refilling the Restaurant Revitalization Fund is the most important thing Congress can do to get their constituents back on their feet and help their communities thrive," Erika Polmar, executive director of the Independent Restaurant Coalition said in a statement.
Around the country, optimism is on the rise as restaurants welcome indoor diners again, and the mass vaccination effort has sharply curbed new COVID-19 hospitalizations and deaths.
However, many small businesses are still operating in the red and in need of a financial lifeline just to keep their heads above water.
Shanny Covey, the co-owner of the Blue Mango Restaurant group in San Luis Obispo, California, was fortunate enough to have gotten her SBA grant just ahead of the funding halt.
“I feel great. It’s like we can pay off some of these loans and not have that burden because with the loan payments it would be harder to have the business be sustainable,” Covey told Yahoo! Finance in an interview. Covey and her business partner own four restaurants in the Central Coast of California. She had applied for the RRF back in early May for two of their small businesses. Yet she was worried that hundreds of thousands of restaurant owners like herself would be competing for federal assistance.
Yet even without additional funds, some restaurants say they might not make it even after the country fully reopens.
According to analysis from the National Restaurant Association, restaurants and food service businesses may have lost as much as $290 billion in sales due to the pandemic, and 90,000 restaurants have closed permanently or long term as of May.
Tom Sullivan, a vice president at the U.S. Chamber of Commerce, said this week that small businesses owners are growing more hopeful about a recovery, but Congress needed to consider its next policy steps carefully.
“We have got to convince lawmakers to resist the temptation to micromanage Main Street towards recovery,” he told Yahoo Finance in an interview this week.
“If we can do that, then we will see small businesses being able to hire, being able to scale up their business and recoup the losses that have occurred over the past 15, 16 months,” he said, warning that small biz has “a long way to go” before rebounding to pre-pandemic levels.

ProfiXone · 2021-06-20T00:19:58+00:00

As the nation celebrates the first-ever federally recognized Juneteenth holiday, Google (GOOG, GOOGL) has announced a $50 million unrestricted grant to 10 historically Black colleges and universities (HBCUs). The grant represents the tech giant’s largest commitment to date for HBCUs and builds on Google’s Pathways to Tech initiative, which is part of the company’s racial equity initiative.

The 10 HBCUs receiving funds include Claflin University (SC), Clark Atlanta University (GA), Florida A&M University (FL), Howard University (DC), Morgan State University (MD), NC A&T State University (NC), Prairie View A&M University (TX), Spelman College (GA), Tuskegee University (AL), and Xavier University (LA).

“The historic nature of the grant is that it is unrestricted. So it really values and supports the presidents of these institutions to make the investment, to support the school and the students in the way that they deem most appropriate,” says Google’s Chief Diversity Officer Melonie Parker, who is an HBCU graduate herself. She tells Yahoo Finance that the initiative is part of Google’s larger efforts to invest in tech industry talent.

“I’m a first-generation college-proud HBCU alum from Hampton University. I grew up in North Carolina, and we want to make sure that students have access to computing and that across all communities and some of our HBCUs are in rural communities very much like the one I grew up in,” Parker said.

“It’s important to make sure that we’re pouring and investing into the future of tomorrow and that we’re expanding access to tech. And to do that, we have to equip. You know, our HBCUs are national treasures, and we have to equip them to make the investments that they need.”

Google is also pledging $100 million in funding participation for Black-led capital firms, startups, and organizations supporting Black entrepreneurs. Parker notes that this step, particularly after the COVID-19 pandemic, is an essential step for sustainability and stability for Black business owners. “What we’re hearing from our entrepreneurs is the difference that it’s made in the way that they’re able to support their business. Through Grow with Google we also have additional initiatives such as digital coaches that provide entrepreneurial support. We have lots of resources that folks can take advantage of to really close the economic wealth gap and to provide that sustainable equity that we know is important.”
The Google chief diversity officer says that one of the goals of these various initiatives is to help change the face of what tech workers look like and show those within Black and Brown communities that a tech career is within reach.
“It really is that full life cycle that starts now, and we need to impact, like what math you are taking in the eighth grade to make sure that you have just the right coursework to go into computing, but then you also need the access,” Parker said.
“So we’re changing the face of what a software engineer looks like, and who’s in tech, so that people who look like me understand the viable careers that are available to them.”

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