The daily business briefing: October 26, 2023
The UAW and Ford reach a tentative deal on ending strike, the Nasdaq falls into correction territory, and more
1. UAW reaches tentative deal with Ford to end strike
The United Auto Workers reached a tentative deal with Ford on Wednesday night to end the union's targeted six-week strike against the automaker, although it was still negotiating with General Motors and Chrysler-owner Stellantis. The agreement, which must still be ratified by union members, includes a 25% wage hike over the course of a four-year contract that will bring the top pay for assembly workers to $40 an hour. Ford, Stellantis and General Motors — Detroit's Big Three automakers — previously offered 23%. The agreement was expected to increase the odds of ending the UAW's unprecedented simultaneous partial strikes at all three automakers. The Wall Street Journal, The Associated Press
2. Nasdaq drops into correction territory
The Nasdaq on Wednesday fell into correction territory, down 10.7% since a July high, as the tech-heavy index suffered its biggest daily drop since February. The losses were fueled by Google-parent Alphabet's nearly 10% plunge following its release of disappointing quarterly results. Bond yields hovering near recent highs also spooked investors in technology companies that depend on growth and take a big hit when borrowing costs rise. The Nasdaq tumbled 2.4% Wednesday. The S&P 500 and the Dow Jones Industrial Average dropped 1.4% and 0.3%, respectively. Stock futures continued to struggle early Thursday. The Nasdaq was down 0.8% at 6:30 a.m. ET. The S&P 500 and the Dow were down 0.5% and 0.2%, respectively. Morningstar
3. Meta shares struggle on warning of 'softening' ad market
Meta reported better-than-expected third-quarter earnings on Wednesday, but the social media giant's shares fell in pre-market trading early Thursday after it issued a conservative fourth-quarter guidance. Shares of Meta, which owns Facebook and Instagram, jumped 4% in after-hours trading on Wednesday as the results fueled investor optimism, then reversed course after Meta CFO Susan Li warned that geopolitical unrest, including the Middle East conflict, was causing a "softening" of the ad market. The shares were down 3% in pre-market trading Thursday. Meta is seeing accelerating growth in its core digital ads business "as clients rebound from a tough 2022, when revenue dropped for three straight quarters," CNBC reported. Yahoo Finance, CNBC
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
4. Mercedes warns price cuts, supply problems making EV market 'brutal'
Mercedes-Benz on Thursday reported a drop in third-quarter earnings and warned that the price cuts and supply chain clogs of a "brutal" electric vehicle market would drag the adjusted return on car sales to the lower end of its 12% to 14% range. Mercedes said it was sticking with its commitment to meet EV delivery targets and could boost returns from its traditional combustion-engine models if EV margins fell short of expectations. The EV market has become "a pretty brutal space" as weak demand forces some automakers to slash prices of battery-powered cars below those of gas-powered models, CFO Harald Wilhelm said. Reuters, Bloomberg
5. Economists expect 3rd quarter GDP report to show strong growth
The Commerce Department is expected to report Thursday morning that the U.S. economy grew at a 4.7% annual rate in the third quarter, according to a Dow Jones consensus estimate. If that projection proves accurate, it will be the fastest jump in output since the nearly 7% growth in the fourth quarter of 2021. But Federal Reserve policymakers are expected to focus more on forecasts for coming quarters as they decide when they can stop raising interest rates to curb inflation. "GDP doesn't tell us where we’re going. We can feel all warm and fuzzy about a good number," said Joseph LaVorgna, chief economist at SMBC Nikko Securities America. "But the real problem is what's next." CNBC
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
-
Understanding and saving the biocrust, Earth's living skin
The Explainer The planet's protective layer is being destroyed
By Devika Rao, The Week US Published
-
Crossword: September 10, 2024
The Week's daily crossword
By The Week Staff Published
-
Sudoku hard: September 10, 2024
The Week's daily hard sudoku puzzle
By The Week Staff Published
-
The government's growing concern over a potential US Steel takeover
In the Spotlight Japan's largest steelmaker, Nippon Steel, is attempting to buy the company
By Justin Klawans, The Week US Published
-
Luxe landlords: High-end brands are moving into real estate
Under the Radar Luxury brands are investing in both commercial and residential property.
By Justin Klawans, The Week US Published
-
Can Starbucks' new CEO revive the company?
Today's Big Question Brian Niccol has been the CEO of Chipotle since 2018 but is now moving to the coffee chain
By Justin Klawans, The Week US Published
-
US inflation drops below 3%, teeing up rate cuts
Speed Read This solidifies expectations that the Federal Reserve will finally cut interest rates in September
By Peter Weber, The Week US Published
-
Google loses antitrust suit, declared 'monopolist'
Speed Read A federal court has ruled that Google illegally dominated the internet search industry
By Rafi Schwartz, The Week US Published
-
The inconvenience store: Why are shops locking up even more merchandise?
Under the Radar You may have noticed a surge in items stowed behind security glass
By Anya Jaremko-Greenwold, The Week US Published
-
It's not your imagination — restaurant reservations are becoming harder to get
In the Spotlight Bots, scalpers and even credit card companies are making reservations a rare commodity
By Justin Klawans, The Week US Published
-
A massive copper shortage is on the horizon
Under the Radar It is estimated that mines will only meet 80% of copper needs by 2030
By Justin Klawans, The Week US Published