…and retail's pre-holiday Earnings Wrap
| Workers are increasingly on the line for training costs (Jeff Barger/Getty Images) | |
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Yesterday's Market Moves | | Dow Jones
35,088 (-0.18%) | S&P 500
4,538 (-0.20%) | Nasdaq
14,200 (-0.59%) | Bitcoin
$36,392 (-2.93%) |
| Dow Jones
35,088 (-0.18%) | S&P 500
4,538 (-0.20%) | Nasdaq
14,200 (-0.59%) | Bitcoin
$36,392 (-2.93%) |
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Hey Snackers, It's time to dig through your drawer of old devices: Urban Outfitters is selling "vintage" and "retro" iPods for $200 to $350. Well, * was * selling. Its supply of 2000s-era MP3 players sold out. Tech shares dragged down markets yesterday as investors continued to digest the OpenAI drama. Meanwhile, crypto deflated like underproofed pumpkin rolls after Binance's founder pleaded guilty to money laundering. 🦃 Turkey Day note: US markets are closed tomorrow for Thanksgiving and will be open a half day on Friday. Snacks'll be back in your inbox Monday. Happy feasting! | |
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"Stay or pay" clauses spread as watchdogs consider a crackdown on worker contracts | You can always throw in the towel… but your job might sue you for the dry-cleaning. American employers are increasingly including "stay or pay" clauses in contracts. They require quitting workers to reimburse their soon-to-be ex-employers for hiring and training costs. Once primarily found in high-paying jobs (think: execs), the clauses have spread to thousands of typically mid- and low-wage gigs like teaching and pet grooming. In 2020, 10% of US workers were under a stay-or-pay clause. Now experts say the clauses can be found in industries covering a third of US workers. Orientation $$: A common stay-or-pay clause is called a "training repayment agreement provision" —or, ominously, TRAP. Labor advocates say that TRAPs are fines for quitting. Bark and bite: Last year a former employee sued PetSmart after the biz required groomers to pay $5K if they quit within two years. Earlier this year, a pilot sued Ameriflight after she said the cargo airline billed her $20K for quitting within 18 months.
Wait — don't go… Stay-or-pay arrangements may be employers' response to a regulator crackdown on noncompete clauses, which can restrict workers from switching to a competitor company. In recent years, noncompetes have spread from big banks to lower-wage industries like fast food — but not without pushback. President Biden spoke out against noncompete clauses in his State of the Union this year, and the FTC is set to vote next year on a rule to ban them. The regulator says doing away with noncompetes would affect 30M workers and boost wages by $300B/year. |  | THE TAKEAWAY |
| Contract Whac-A-Mole doesn't end… Private employment contracts are notoriously difficult to regulate proactively. Instead, contract changes often come as worker-driven litigation — especially costly for low-wage workers — piles up. And it's piling: in September, the National Labor Relations Board took a firm stance against stay-or-pay clauses in a filing against a med spa chain. Bills limiting the clauses have been intro'd in CA, PA, and NY. | |
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Clothing retailers' pre-holiday Earnings Wrap: | 👗 Bargains beat… As budgets get pinched, budget buys are in: TJ Maxx and HomeGoods parent TJX topped expectations last week, raising its annual sales guidance as more Americans treasure-hunted for $10 Levi's and discount Michael Kors. Rival Ross had a strong Q3 after sales jumped 5% to $4.9B. Burlington shares soared 20% yesterday after the discount-jacket giant dropped a big beat and noted a "solid" start to the month. 👖Teen spirit… is Fitch again. Abercrombie raised its annual revenue guidance yesterday after Q3 sales jumped 20% to $1B+. The (not-so-distressed) denim icon has found success even as overall clothing spend slips. Rival Urban Outfitters notched a record $1.3B in sales thanks to strong demand for its Nuuly rental service and Free People line. Aerie owner American Eagle also had a record $1.3B in sales, but its stock sank 16% after an underwhelming holiday forecast. 🛍️ Department drop-off… Macy's beat expectations as trimmer inventory and fatter margins helped offset a 7% quarterly sales dip. The department store hopes having an extra weekend to shop before Christmas this year will boost holiday #s. Rivals Nordstrom and Kohl's also reported a slump in sales, even as they cleared out inventory. Kohl's scaled back full-year sales expectations. Looking forward → Retail bottom lines are benefiting as once bloated inventory levels (finally) normalize. Now stores are prepping for Black Friday, with over a third of Americans planning to shop this week. While overall holiday spending is expected to hit a record of up to $966B, it's the slowest pace of growth in five years. | |
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| 💰 Spendy… Binance CEO Changpeng "CZ" Zhao pleaded guilty to violating US anti-money-laundering laws and is stepping down as CEO. His crypto exchange — the world's largest — agreed to pay $4.3B in fines to settle a variety of regulators' allegations. 📜 Policy… Bitcoin's price popped after Argentina elected the pro-crypto Javier Milei as its next president. The self-proclaimed "anarcho-capitalist" wants to shutter the country's central bank and dollarize the economy to curb rampant inflation. 🌶️ Spicy… The SEC sued Kraken, alleging the exchange paid expenses from accounts holding customers' cash and that it operated an unregistered exchange. The regulator's continuing its crypto crackdown as it argues that lots of coins are securities (read: under its oversight). | |
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What else we're Snackin' | Chipper: Nvidia's quarterly revenue tripled from a year earlier thanks to sizzling demand for its AI chips. But its stock fell after the biz said sales would take a hit from US export restrictions to China. Pullback: Ford downsized plans for a new EV-battery factory in Michigan. Ford, GM, and Tesla have put tens of billions in electric investments on ice, citing slower demand and econ jitters. Haul: From January to September, Shein's sales are said to have surged more than 40% to $24B. The Chinese ecomm giant could reportedly try to go public next year, though US lawmakers' scrutiny could present a hurdle. Reorg: Citigroup cut 300 senior-manager roles as part of its biggest restructuring in 20 years (it's done away with 7K+ positions this year). Companies are laying off middle management in pursuit of efficiency. CrossCheck: American Airlines flight attendants and Southwest pilots are considering striking over pay raises. Unions argue the ongoing travel boom should give airlines the $$ to meet their asks.
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Snack Fact Of the Day | A million people participate in Turkey Trots | | |
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Wednesday | Authors of this Snacks own bitcoin and shares of: GM, Tesla, and Nvidia | |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more | |
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