Home Sellers Win $1.8 Billion After Jury Finds Conspiracy Among Realtors - The New York Times

The influential National Association of Realtors and several brokerages were ordered to pay damages to home sellers who said they were forced to pay excessive fees to real estate agents.

A federal jury ruled on Tuesday that the powerful National Association of Realtors and several large brokerages had conspired to artificially inflate the commissions paid to real estate agents, a decision that could radically alter the home-buying process in the United States.

The realtors’ group and brokerages were ordered to pay damages of nearly $1.8 billion. The verdict allows the court to issue treble damages, which means they could swell to more than $5 billion.

It’s a decision that has the potential to rewrite the entire structure of the real estate industry in the United States, lowering the cost of moving homes by reducing commissions. Under a N.A.R. rule, a home seller is required to pay commissions to the agent representing the buyer, which sellers claimed forced them to pay excessive fees to the agents. The home sellers said the brokerages collaborated with N.A.R. to enforce what is called the “cooperative compensation rule.”

But under the verdict, the sellers would no longer be required to pay their buyers’ agents, and agents would be free to set their own commission rates, which could be slashed in half or less. For example, a home seller with a $1 million home can now pay as much as $60,000 in agent commissions — $30,000 to their agent and $30,000 to the buyers’ agent.

N.A.R., alongside Keller Williams, Anywhere (formerly, Realogy), Re/Max and HomeServices of America, had been on trial in Kansas City in an antitrust suit brought by nearly half a million Missouri home sellers.

The home sellers asked for damages of $1.78 billion. Before heading to trial, both Re/Max and Anywhere Real Estate opted to settle, with Re/Max paying $55 million and Anywhere Real Estate, whose subsidiaries include Coldwell Banker, Century 21 Real Estate, and Sotheby’s International Realty, paying $83.5 million in damages.

But N.A.R., as well as Keller Williams and HomeServices, headed to trial. And on Tuesday morning, after deliberating for less than three hours, an eight-person jury delivered the verdict: Yes, there had been a conspiracy, and not only would the defendants be required to pay damages, but those damages could triple.

The Chicago-based N.A.R. is the largest professional organization in the United States. It has more than $1 billion in assets and owns the trademark to the word “Realtor,” making a real estate agent’s ability to buy and sell homes contingent upon the payment of membership dues in much of the country.

N.A.R. said it plans to appeal the verdict, and in an internal memo sent to some members on Tuesday and obtained by The New York Times, the current N.A.R. president, Tracy Kasper wrote, “We remain confident we will ultimately prevail.”

“This verdict does not require a change in our rules,” she continued.

How the ruling plays out remains to be seen, but it’s clear that the verdict — and the size of the damages — point to a shift in the way agent commissions are now paid. Redfin, which earlier this month exited the National Association of Realtors, said that the decision will prompt home buyers and home sellers to now question the standard practice of setting commissions between 5 and 6 percent.

“Traditional brokers will undoubtedly now train their agents to welcome conversations about fees,” said Glenn Kelman, Redfin’s chief executive, in a statement following the verdict. “But it’s also possible that buyers will become the ones who decide how much to pay a buyer’s agent.”

More than 1.5 million real estate agents across the United States pay dues to the organization in order to call themselves Realtors and assure home sellers and home buyers that they are aligned with the organization’s strict policies on ethics and home transactions. But after a series of sexual harassment allegations led to the resignation of the organization’s president this summer, Tuesday’s ruling threatens to further diminish their influence and could, according to some real estate agents, prompt many to abandon them entirely.

“This is an earthquake,” said Jason Haber, a real estate agent with Compass who has been one of the most outspoken critics of N.A.R. in recent months. “I’m disappointed in today’s verdict and I’m even more disappointed in N.A.R. This was their Super Bowl and World Series rolled up into one and not even Taylor Swift could have saved them.”

Mr. Haber, who created a grass-roots organization demanding the resignation of N.A.R.’s top leadership after the sexual harassment allegations came to light this summer, said he believed that there was no conspiracy when it comes to agent commissions, and that N.A.R. had let down its members by failing to present a stronger defense in court.

“As a dues-paying agent, they failed me, they failed all of my colleagues. Had they spent more time focusing on the trial and less time silencing women, maybe the outcome would have been different,” he said.

In an emailed statement, Mantill Williams, a spokesman for N.A.R., said the case will likely not be settled for a long time.

“We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved,” he said.

Makenzy Mohrman, a financial services analyst at Capstone LLC, said the verdict was just the beginning of changes in the industry, noting the U.S. Department of Justice is likely to pursue a more thorough investigation of how real estate transactions are handled in the United States.

“Antitrust has been a top issue for the administration. This is something that will affect a lot of consumers,” she said in an emailed statement.

“We believe this is a significant hit for real estate brokers, but we don’t think this is over yet at all. There are more battles to be had,” she wrote. “This is the first domino to fall, but the National Association of Realtors is still on the hook.”

Brokerages who chose to settle ahead of the trial said they were pleased with their decision.

“The settlement releases our company, affiliated agents, and franchisees from liability related to these claims. The jury verdict, while disappointing, does not alter our settlement,” said Trey Sarten, a spokesman for Anywhere Real Estate, in an emailed statement.

Those who had lost previous court battles with N.A.R. were celebrating.

Jack Ryan, the chief executive of REX Real Estate, which in August lost an antitrust lawsuit against N.A.R., Zillow and Trulia, has been outspoken about setting commissions lower. In a text message on Tuesday, he hailed the verdict as “extremely good news for Americans.”

If commissions can be lowered, “the price of every home will come down, jobs and wages will go up, tax revenues will increase, people can easily move to better and more fulfilling jobs,” he wrote.

Other lawsuits are now imminent. Within minutes of receiving the verdict on Tuesday, the lawyers for the plaintiffs entered another class-action suit into U.S. District Court in Missouri. That case, filed on behalf of three new home sellers, also claims the practice of having home sellers pay sales commissions to buyers’ agents is a violation of the Sherman Antitrust Act. It names N.A.R. as a defendant, as well as several major brokerages including Compass, eXp World Holdings, Redfin and Douglas Elliman.

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Home Sellers Win $1.8 Billion After Jury Finds Conspiracy Among Realtors - The New York Times
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Bud Light parent Anheuser-Busch InBev's sales tumble further in US - Fox Business

UFC president reacts to making Bud Light UFC5's official beer after the beer giant faced intense backlash as a result of its partnership with trans activist Dylan Mulvaney on "Hannity."

Anheuser-Busch InBev on Tuesday reported a staggering 13.5% decline in U.S. revenue in the third quarter as the company's Bud Light brand continues to suffer in the country after a controversial partnership with transgender activist Dylan Mulvaney in the spring.

Sales of Bud Light began to tumble in the U.S. in April, not long after the brand created and sent custom beer cans to Mulvaney to mark her "365 days of girlhood." That move and comments from Bud Light's marketing vice president at the time sparked calls for beer drinkers to shun the brand, and the boycott took hold.

The global brewing conglomerate also reported a 17.1% decline in North American sales volume during the third quarter. Its North American sales fell 14.5% in the prior quarter, when the Bud Light brand lost its long-standing title as the best-selling beer in the U.S. after being eclipsed by Modelo Especial, which is owned by Constellation Brands.

Anheuser-Busch InBev's North American sales fell by double digits for the second consecutive quarter. (Jakub Porzycki / NurPhoto / Getty Images)

Outside North America, AB InBev experienced growth in roughly 80% of its markets, including the Middle Americas and Africa. Total volumes fell by 3.4%, mostly due to the significant drop in U.S. sales.

Anheuser-Busch InBev SA

As AB InBev attempts to rehabilitate the Bud Light brand's image in the North American market, the company recently scored a victory of its own over Modelo after replacing the Mexican lager as the official beer partner of the UFC.

Constellation Brands Inc.

BUD LIGHT ANNOUNCES $3M SCHOLARSHIP PLEDGE TO AMERICA'S FALLEN OR DISABLED FIRST RESPONDERS: ‘POWERFUL IMPACT’

UFC CEO Dana White announced last week that the mixed martial arts organization inked a six-year deal with Anheuser-Busch that will involve the Bud Light brand having a heavy presence in UFC's content in its broadcasts and online beginning in 2024.

PublicSq. and RedBalloon have received resumes from laid-off Bud Light employees after the conservative companies offered to help them find new jobs.

EX-YANKEES GREAT HURLS FASTBALL AT NIKE, BUD FOR PUTTING ‘REALLY BIG DAMPER’ ON SPORTS: ‘SCREWED UP BIG TIME’

Sources close to the UFC's deal with Anheuser-Busch reportedly told ESPN it is the largest sponsorship agreement in UFC history, but White told FOX News' Sean Hannity that money was not the deciding factor in the move to bring Bud Light back as UFC's official beer sponsor.

UFC CEO Dana White (Louis Grasse / PxImages / Icon Sportswire / Getty Images)

"They were the first beer company that we really did business with. They were our first real big sponsor when we were getting started, and now we're back with them," White said. "I know all the controversy and everything else, but for myself, going into a long-term deal with another sponsor, I want to be with somebody that I'm actually aligned with."

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The UFC CEO noted, "They employ 65,000 Americans. They have thousands of vets that work for them. They spend $700 million a year with U.S. farmers, using their crops to make their products, and many, many other great things that Anheuser-Busch has done in this country."

FOX Business' Joseph Wulfsohn and Kristen Altus contributed to this report.

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UAW, GM, Ford, Stellantis deals: What happened and what's next - POLITICO

The UAW’s tentative agreement with Ford also includes a cost-of-living adjustment that was nixed back in 2009 as Detroit carmakers teetered on insolvency. | Michael Swensen/Getty Images

The United Auto Workers have a deal. Deals, that is.

If the tentative agreements reached in recent days between the United Auto Workers and the Big Three automakers cross the finish line, it will mark a turning point in a year of labor unrest.

Union President Shawn Fain will have delivered his promised record economic contract — though falling short of his original ambitions — using the unconventional strategy of bargaining with all three companies at once, and perhaps accelerating growing support for unions.

It would also end a perilous chapter for President Joe Biden, a champion of the EV transition who has leaned on organized labor as a key political ally — but who risked seeing the economy take a substantial hit from a prolonged walkout.

Over the strike’s more than six weeks, the companies and the industries that supply it hemorrhaged billions of dollars — $800 million at GM alone, as of last week according to the company.

The deals, which still need to be ratified, mark some of the final steps in ending the UAW’s strike against the companies.

Here’s what the union won, what it means politically and where things go from here.

What’s in the deals?

Though the final product would fall short of some of the the union’s most ambitious initial demands over the summer, including a 40 percent wage increase and 32-hour workweek, the UAW maintains the deals with Detroit’s car makers will be life-changing for members who made economic sacrifices during the Great Recession, as well as for an old-school union that’s sought what it sees as a just industry transition to electric vehicles.

The three automakers have each agreed to a top-line wage increase of 25 percent for workers across the life of their respective four-year contracts.

The UAW’s tentative agreement with Ford also includes a cost-of-living adjustment that was nixed back in 2009 as Detroit carmakers teetered on insolvency. It raises starting pay for temporary workers from $16.67 per hour to upwards of $40 by the end of the contract and speeds up their conversion to full-fledged employees. It also sweetens 401(k) terms and extends the right to strike over plant closures.

Stellantis and GM’s agreements are not yet public, but are expected to broadly align with what Ford offered. All three still need to be ratified by UAW members in the coming weeks.

The UAW has made a point of saying that the gains included in the tentative agreements eclipse those in every contract since the turn of the century, combined.

What about EVs?

The industry’s growing fleet of electric vehicles hovered over the negotiations, with the UAW fearing the transition will benefit non-union plants and displace workers since EVs require fewer parts than internal combustion engines.

GM workers for its joint venture battery company, Ultium Cells, would be included in the union’s master agreement under the agreement reached Monday, the UAW said. Workers at GM Subsystems LLC, a company subsidiary that wasn’t previously included in the master agreement, would also be added, according to the union.

Whether a plant is included in the master agreement is important because it would bring all the plant’s workers into the terms that the UAW went on strike for, rather than having to organize and bargain for individual agreements at the plants.

The union has provided the most detailed information about its agreement on EV workers at Ford. There, EV plant workers’ inclusion in its master labor contract with the UAW wouldn’t be automatic, but it would be made easier on the union.

To be included in the master agreement, a majority of workers at Ford’s battery plant in Marshall, Mich., or its EV assembly plant in Tennessee could submit cards saying they want a union, in a process known as a card check. It’s less of a hurdle to organizing than a full-blown union election.

The Tennessee plant, to which UAW members at other plants could get asked to transfer, might also come under the master agreement if a majority of its workforce is eventually made up of UAW members, Fain said Sunday. (Neither plant is open yet, and construction on the Marshall plant is currently paused.)

“We demanded a longer contract because one of our biggest goals coming out of this historic contract victory is to organize like we've never organized before,” Shawn Fain said Sunday on Facebook Live. | Jim Vondruska/Getty Images

Labor movement consequences

Labor strategists, on both the worker and management sides, have been for weeks dissecting the UAW’s novel “Stand Up Strike” strategy — in which the union would periodically select a subset of targets with minimal notice to maximize pressure on the companies while conserving its war chest — for lessons that could be applied to other labor standoffs.

There are several factors unique to the UAW and the Big Three that could make the tactics difficult to apply elsewhere, even in other heavily unionized sectors. For instance, there are not many other industries where a union could play three large competitors off one another simultaneously, and not all businesses’ operations are as highly interconnected as auto plants — where a stoppage at one can quickly upend work at several others, multiplying the pain.

But the autoworkers’ success lends credence to activists who have advocated for new and more aggressive approaches to contract battles as a way to reinvigorate the labor movement.

The UAW’s tentative agreements come in the wake of the Teamsters’ deal with UPS that similarly saw the union win large pay increases and claw back some concessions made in previous contracts. Like the UAW, the Teamsters had recently elected a brash new president who argued that previous leaders had been too pliant in high-stakes negotiations.

Public support for labor unions has been at, or near, record highs for several years. However, union membership as a share of the overall workforce continues to wane, and organized labor is still seeking ways to reconcile those conflicting trends and reverse its decline.

View from the White House

Biden showed unprecedented support for the union during the strike: He took the essentially unheard-of step of joining workers at the picket line in September, after Fain called for his support. Biden’s alignment with the union means the relatively favorable deals now could be seen as a boon to his handling of economic issues for the working class.

“Today’s historic agreement is yet another piece of good economic news showing something I’ve always believed,” Biden said Monday. “Worker power, worker power is critical to building an economy from the middle out and the bottom up, and so is economic growth.”

There are still pieces left to fall into place, beyond just needing the contracts ratified. The union still hasn’t endorsed Biden in his reelection bid, making it an outlier among large labor groups after the AFL-CIO delivered its earliest-ever endorsement in favor of Biden. And with the contract details on the EV issue still not clear, particularly at GM and Stellantis, there’s still the possibility of a clash down the road between the union and the president, who has spent significant domestic political capital backing that very transition.

What’s next for UAW?

Part of the UAW’s ferocity at the bargaining table was done with an eye toward its future. Landing strong deals with the Big Three would give officials something to tout to non-unionized workers, demonstrating their ability to deliver on promises of better pay and job security.

In recent years, the UAW has been dealt a number of stinging losses in various attempts at organizing other car manufacturers, particularly in the South where “right-to-work” laws hamstring unions.

The UAW over time has evolved greatly, with roughly half of its membership coming from outside the car industry, including such disparate workplaces as hospitals, universities and casinos.

As the center of gravity for the domestic car industry continues to expand beyond just Michigan and its other traditional homes in the Midwest, the UAW’s ability to organize will be key to its continued survival, particularly as new facilities come online to produce electric vehicles.

“We demanded a longer contract because one of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said Sunday on Facebook Live, referring to the contract’s 4.5-year duration, six months longer than the union’s last agreement. “When we return to the bargaining table in 2028 it won’t just be with the Big Three, but with the Big Five or Big Six.”

At the same time, other U.S. car companies and foreign automakers may become even more resistant to unionization campaigns. These companies already have lower labor costs than the Big Three, and that gap is expected to widen if the tentative agreements are ratified.

Some, like Tesla, which has already faced accusations of illegal anti-union actions, may dig in their heels even more rather than give up those competitive advantages over the Big Three.

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SolarWinds charged by SEC for failing to disclose cybersecurity problems - The Washington Post

The Securities and Exchange Commission sued software company SolarWinds on Monday for failing to publicly disclose alleged cybersecurity failures that led to one of history’s biggest computer breaches.

In a complaint filed in the Southern District of New York, the SEC contends that SolarWinds and the company’s chief information security officer, Tim Brown, repeatedly violated the antifraud disclosure and internal controls provisions of federal securities law by not disclosing vulnerabilities that the company knew could lead to a hack.

Later, SolarWinds suffered a breach of its network monitoring software, Orion, that allowed hackers suspected to be connected to the Russian government to infiltrate thousands of customer organizations that included nine federal agencies. The breach began as early as 2019 but only became public in 2020.

On Monday, the company accused the SEC of “overreach” and described itself as “disappointed by the SEC’s unfounded charges related to a Russian cyberattack on an American company.” It said it was “deeply concerned this action will put our national security at risk” by seeming to require companies to publicly reveal vulnerabilities before they have had a chance to fix them.

SolarWinds, which is headquartered in Austin, claims it has more than 300,000 customers, including 96 percent of the Fortune 500, and bills itself as a leading provider of software that manages and monitors an organization’s information technology. The Government Accountability Office called the breach “one of the most widespread and sophisticated hacking campaigns ever conducted against the federal government and private sector.”

“Dating back to at least October 2018, when SolarWinds conducted its [initial public offering] continuing through at least December 2020, SolarWinds and/or Brown made materially false and misleading statements and omissions related to SolarWinds securities risks and practices in at least three types of public disclosures,” the SEC complaint says.

In a briefing with reporters, the SEC said the complaint is not “Monday morning quarterbacking.” It said the company would have violated federal securities law even if the breach had not happened.

According to the SEC, Brown and others had received ample warning of vulnerabilities at SolarWinds but did not disclose those problems publicly. In one internal warning in September 2020, SolarWinds executives were told “the volume of security issues being identified over the last month have outstripped the capacity of engineering teams to resolve.” In another, in November of that year, a senior manager noted that, “We’re so far from being a security-minded company.” The warnings date back as far as 2018, according to the SEC.

The SEC said that SolarWinds also failed to disclose in December 2020 that attackers already had successfully exploited vulnerabilities against SolarWinds customers multiple times over the prior six months. The company could be ordered to pay a fine, the amount of which a judge would decide.

Because the SEC sent notices this summer to the company about a potential enforcement action, SolarWinds had already vowed to fight it.

“We disagree that any such action is warranted against either the company or any employees, and we will continue to explore a potential resolution of this matter before the SEC makes any final decision,” SolarWinds CEO Sudhakar Ramakrishna wrote in an internal email in June. “And if the SEC does ultimately decide to initiate any legal action, we intend to vigorously defend ourselves.”

correction

An earlier version of this story incorrectly reported that SolarWinds was headquartered in Tulsa. It's headquartered in Austin. It was founded in Tulsa. This version has been corrected.

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Eye drops sold at CVS, Rite Aid, Target could cause eye infections and vision loss, FDA says - Fox Business

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The Food and Drug Administration (FDA) is telling consumers to avoid two dozen eye drop products sold at major retailers including CVS and Rite Aid, because they could cause eye infections and potentially lead to vision loss. 

The 26 products treat dry or irritated eyes and were marketed under the brands CVS Health, Leader (Cardinal Health), Rugby (Cardinal Health), Rite Aid, Velocity Pharma and Target's Up & Up brand. They pose a "potential risk of eye infections that could result in partial vision loss or blindness," according to the FDA.

The warnings from the FDA were prompted after investigators discovered that there were "insanitary conditions" in the manufacturer's facility. There were also positive bacterial test results from environmental sampling of critical drug production areas in the facility, the FDA said.

The FDA did not name the manufacturer, but CVS and Cardinal Health noted that the products in question were supplied by Velocity Pharma. 

EYE DROP RECALL: WHAT IS PSEUDOMONAS AERUGINOSA BACTERIA?

Federal health officials said CVS, Rite Aid and Target are already removing the products from store shelves and their online marketplaces. However, regulators cautioned that "products branded as Leader, Rugby and Velocity may still be available to purchase in stores and online."

A spokesperson for CVS told FOX Business in a statement that it immediately stopped the sale of all products supplied by Velocity Pharma within the CVS Health Brand Eye Products portfolio after being notified by the FDA. CVS said that consumers who already purchased it could return the product for a refund.

A person uses a dropper to put artificial tears in their eye. (iStock / iStock)

"We’re committed to ensuring the products we offer are safe, work as intended and satisfy customers, and are fully cooperating with the FDA on this matter," the CVS spokesperson said.

Cardinal Health also told FOX Business that it "placed all identified impacted eye drop products in our inventory on hold" and is working with Velocity Pharma and FDA to initiate a recall of all impacted Rugby Laboratories and Cardinal Health Leader branded eye drop products. 

"We are working with Velocity Pharma, the supplier of the impacted eye drop products to gain additional insight regarding the unsanitary conditions identified by the FDA at the manufacturing facility," Cardinal Health said in a statement. 

Target, Rite Aid and Velocity Pharma did not immediately respond to FOX Business' request for comment.

EYE DROP RECALL: FDA FINDS STERILIZATION ISSUES AT GLOBAL HEALTH PHARMA FACILITY

The FDA told the manufacturers of the affected products to recall all lots on Oct. 25. The FDA did not specify the type of bacteria that was found during testing.

To date, the agency also has not tied this warning to the prior outbreak of antibiotic-resistant bacteria pseudomonas aeruginosa linked to eye products from Global Pharma Healthcare. 

A close-up view of a person's eye. (Maciej Luczniewski/NurPhoto via Getty Images / Getty Images)

The products "are intended to be sterile." However, the FDA said that there is a "heightened risk of harm" with ophthalmic drug products, or products pertaining to the eye, due to the fact that drugs that are applied to the eyes bypass some of the body’s natural defenses. 

There have not been any reports of eye infections related to these products to date. However, consumers who have signs or symptoms of an eye infection after using these products are told to seek medical care "immediately." 

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Symptoms of an eye infection include irritated or red eyes, worsening pain in or around the eyes – even after contact lens removal, light sensitivity, sudden blurry vision or unusually watery eyes or discharge, according to the Centers for Disease Control and Prevention. 

Patients are encouraged to report any adverse events or quality problems they have with any medicine to the agency's MedWatch Adverse Event Reporting program. 

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Meta to Offer Ad-Free Facebook, Instagram Subscriptions in Europe - Bloomberg

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1. Meta to Offer Ad-Free Facebook, Instagram Subscriptions in Europe  Bloomberg
2. Meta introduces ad-free subscription service in the EU  Yahoo Finance
3. Facebook and Instagram launch a paid ad-free subscription  The Verge
4. Facebook and Instagram to Offer Subscription for No Ads in Europe  Meta Store
5. Ad-free subscription versions of Facebook and Instagram to start in the EU  euronews
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Fed Meeting: Consumer Resilience Is About to Be Tested by Rate Decision - Bloomberg

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Fed Meeting: Consumer Resilience Is About to Be Tested by Rate Decision  BloombergView Full Coverage on Google News
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S&P 500 and Nasdaq are in correction territory. What it means for you and your 401(k). - USA TODAY

If you're taking a fearful peek at your 401(k) following the stock market's recent plunge, you're not alone.

The S&P 500 ended last week down more than 10% from its most recent high in July, which put the stock index in correction territory, a worrying milestone for millions of Americans who invest in one of the many mutual funds that use the index as a benchmark, mirroring its performance. 

The index, which includes 500 of the leading publicly traded companies in the U.S., ended at 4,117.37 on Friday, down 10.3% from its recent peak on July 31. The tech-heavy Nasdaq Composite index, which entered a correction earlier in the week, closed at 12,643.01.

While the plunge in the S&P 500 may have people fretting over their 401(k)’s performance, market experts say investors should keep in mind that dips are often short lived.

“Although the last three months haven’t been fun for investors, it is important to remember that corrections are normal and they happen quite often,” said Ryan Detrick, chief market strategist at financial services firm Carson Group.

What is correction territory?

Corrections take place when a market experiences a drop of at least 10% from its most recent peak, a sign that investors are skeptical of what lies ahead for stocks.

It’s more severe than a pullback (typically a short-lived drop of less than 10%) but not quite a bear market (a drop of 20% or more, which can result in significant losses for investors.)

Corrections take place every couple of years, on average, including during the bull run between 2009 and 2020.

Why is the stock market falling?

The plunge comes as soaring Treasury yields make bonds more appealing for investors, who are getting out of stocks now that the 10-year bond recently exceeded 5% for the first time since 2007, and amid various economic and geopolitical concerns like the escalating tensions in the Middle East.

Detrick said that while the recent weakness has hurt stocks, investors should remember that between January and July, the S&P 500 notched its best first seven-month performance at the start of a new year since 1997. And that "some type of 'give back' wasn’t overly surprising."

Stock market moves:Big tech earnings send S&P 500 lower.

What does a correction mean for me and my 401(k)?

Investors should remember how quickly the market tends to recover, according to Sam Stovall, chief investment strategist at investment research and analytics firm CFRA Research. He said pullbacks tend to take about a month and a half to get back to breakeven, corrections take four months and bear markets with a drop between 20% and 40% take 13 months. 

Will the stock market recover?

“The phrase that they should keep in mind is, ‘This too shall pass,’” he said. “If an investor does not have 13 months, they probably should not own stocks.”

If investors do take some sort of action while the stock market is down, Stovall suggested they should consider:

• Rebalancing their portfolio
• Buying high-quality stocks that have fallen in price with the market
• Tax loss harvesting, which means selling stocks that are losing money and using the loss to offset capital gains, or profits made from other holdings.

But his final suggestion?

“Sit on your hands. Because the last thing you want to do is make an emotional decision," he said. "You want to make sure that you stop your emotions from becoming your portfolio's worst enemy.” 

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One Last Make-or-Break Week of 2023 Has Treasury Traders on Edge - Bloomberg

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1. One Last Make-or-Break Week of 2023 Has Treasury Traders on Edge  Bloomberg
2. Hold onto your hats because it's going to be a very big Fed week  TheStreet
3. Wall St Week Ahead Frazzled U.S. stock investors eye frothy Treasury market as Fed looms  Reuters
4. Cramer's week ahead: Federal Reserve meeting, Apple and Eli Lilly earnings  CNBC
5. All eyes on the Fed committee as it meets to decide interest rates  Detroit Free Press
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One Last Make-or-Break Week of 2023 Has Treasury Traders on Edge - Bloomberg
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Stellantis, UAW Reach Tentative Agreement to End Six-Week Strike - Bloomberg

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1. Stellantis, UAW Reach Tentative Agreement to End Six-Week Strike  Bloomberg
2. UAW expected to announce tentative agreement with Stellantis to end labor strike  CNBC
3. AP Sources: Auto workers and Stellantis reach tentative contract deal that follows model set by Ford  The Associated Press
4. Stellantis, UAW reach tentative deal on new contract, sources say  Detroit Free Press
5. Unifor maintains blackout on talks with Stellantis as Sunday strike deadline approaches  WSWS
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5 things to know about a stunning week for the economy - NPR

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A shopper carries a shopping bag while walking through an outdoor shopping center in Corte Madera, Calif., on Oct. 17. Strong consumer spending is helping to power the economy — but it may not last. Justin Sullivan/Getty Images

Justin Sullivan/Getty Images

The U.S. economy continues to defy gravity.

Data this week showed the economy growing at the fastest pace in nearly two years from July to September. Other reports have also showcased the resilience of the economy.

It's a stunning development, considering that at the beginning of the year, many economists predicted that the economy would tip into a recession as a result of the Federal Reserve's aggressive interest rate hikes.

So what gives?

Here are five takeaways about today's economy, including why forecasters are cautioning that the strong growth may not last.

The economy's strength has been a surprise

The economy got its latest report card this week — and it was very good.

The U.S. economy grew at an annual pace of 4.9% in the third quarter, according to figures released by the Commerce Department on Thursday.

That was the strongest performance since the final months of 2021 — and more than twice the growth rate of the previous quarter.

"It's a good, strong number, and it shows an economy that's doing very well," Treasury Secretary Janet Yellen told Bloomberg TV.

The economic growth is particularly remarkable given that high interest rates would typically result in slower growth — but not this time.

"The economy is just incredibly resilient, navigating through lots of different headwinds and posting a really boomy-like quarter," said Chief Economist Mark Zandi of Moody's Analytics.

And it all thanks to the consumer

There's a key reason why growth has been so strong: all of us.

Americans have been opening their pocketbooks in a major way, buying more cars and Taylor Swift concert tickets.

Data on Friday showed spending on goods rose by a healthy 0.7% during September, while spending on services — things like eating out or travel — rose slightly faster.

"Consumers are resilient," said Matthew Shay, CEO of the National Retail Federation. "They're still powering the economy."

Personal spending is being propped up by a very strong job market, with an unemployment rate below 4% for 20 months in a row.

Workers with paychecks to spend have enabled the economy to withstand speed bumps like falling business investment.

"The consumer is kind of the fire wall between a recession or an economy that keeps on growing," said Zandi. "And that fire wall is hanging tough."

Enlarge this image

Taylor Swift performs during her Eras Tour at SoFi Stadium in Inglewood, Calif., on Aug. 7. Data shows Americans continue to spend big on things like high-profile concerts. Michael Tran/AFP via Getty Images

Michael Tran/AFP via Getty Images

But inflation still remains higher than desired

It's not all rosy for the economy.

Inflation has fallen by more than half since hitting a four-decade high last year, but prices are still climbing faster than most people were used to before the COVID-19 pandemic and Russia's invasion of Ukraine.

According to the Commerce Department's yardstick, which is closely watched by the Federal Reserve, consumer prices were 3.4% higher in September than a year ago.

That means the Fed is not ready yet to declare victory against inflation.

Forecasters think the central bank will hold rates steady when policymakers meet next week, but the Fed is expected to leave the door open to future rate hikes if necessary to get inflation back down to its target of 2%.

Higher prices are clouding the country's mood

Here's another less encouraging report card: Despite solid GDP growth and low unemployment, many people are unhappy with the economy.

A poll by Gallup this month found that 47% of Americans rate the economy as "poor," while only 19% rate it as "good" or "excellent."

Gallup's index of economic confidence shows some improvement from last summer, when inflation was at its peak. But high prices grate on people, even as they continue to pay them.

While inflation has come down a lot, many prices are still much higher than they were before the pandemic. Gasoline is no longer $5 a gallon like it was last summer. But it's not $2.60 either, as it was in 2019.

"Unlike GDP that's very abstract, everybody feels the effects of inflation," said Lydia Saad, director of U.S. social research at Gallup. "That creates a real wet blanket on consumer attitudes. That's just probably not going away until we get back to that kind of pre-pandemic normal inflation that people got used to."

Meanwhile, Zandi at Moody's thinks people are also still scared by the economic upheaval of the last three years.

"We never got our groove back from the pandemic," he said. "People are shellshocked and nervous and skittish."

And the good economic numbers may not last

The economy is almost certain to cool as higher interest rates for things like home mortgages continue to take a toll. The question is how much the economy will slow.

The Treasury's Yellen said she doesn't expect the economy to keep growing at the blistering pace it did in the third quarter. But she doesn't expect it to shift into reverse, either.

"You don't really see any sign of a recession here," Yellen told Bloomberg. "What we have looks like a soft landing with very good outcomes for the U.S. economy, so I think there's a lot to be pleased about."

Other forecasters still think a mild recession is on the horizon, once consumer spending falters.

Friday's data showed that spending grew more than incomes in September — a trend that can't continue indefinitely.

"Obviously, you can eat into savings for a while. You can borrow from the credit card for a while," said economist Tim Quinlan of Wells Fargo. "But this is not a sustainable framework for long-term spending growth."

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Oil Price Rally Reverses Despite Tightening Market Fundamentals - OilPrice.com

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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By Alex Kimani - Oct 26, 2023, 7:00 PM CDT

• Fears of a spillover in the conflict between Israel and Hamas, which could embroil Iran and its allies in the region, have offered considerable support to oil prices.
• Global oil supply has continued tightening despite record production by U.S. shale.
• Commodity analysts at Standard Chartered have predicted a further 120 mb reduction in global inventories in Q4.

The oil price rally has failed to gain any kind of momentum three weeks after tensions in the Middle East escalated despite market fundamentals strengthening. Brent crude for December delivery was down 1.8% to trade at $88.49 per barrel at 1400 hrs ET in Thursday’s intraday session while the December WTI contract fell by a similar margin to change hands at $83.88 per barrel. Brent has now declined 7.0% over the past week while WTI is down 4.8% over the timeframe as worries about the global economy and energy demand weighed on sentiment.

Oil prices have been a rollercoaster over the past couple of months as negative catalysts frequently outshine the positive ones and vice-versa. In recent times, fears of a spillover in the conflict between Israel and Hamas, which could embroil Iran and its allies in the region, have offered considerable support to oil prices. However, the U.S. and other countries have been urging Israel to delay a full invasion of Gaza, which the Middle East nation has so far complied with.

Meanwhile, global oil supply has continued tightening despite record production by U.S. shale. The latest Energy Information Administration (EIA) weekly data was highly bullish with crude oil inventories falling 4.49 mb to 419.75 mb, taking the deficit below the five-year average to 20.91 mb. Crude oil inventories in the WTI pricing hub at Cushing, Oklahoma, fell 0.76 mb to a nine-year low of 21.01 mb. Meanwhile, gasoline inventories fell 2.37 mb to 223.90 mb, thereby cutting the surplus above the five-year average to just 0.40 mb. Implied demand improved significantly w/w, with total demand climbing 2.231 mb/d to 21.897 mb/d and gasoline demand rising 362 kb/d to 8.943 mb/d. Gasoline demand for October-to-date stands at 8.792 mb/d, a mere 0.2% Y/Y contraction and good for a sharp improvement from the 5.6% decline Recorded in September. Gasoline demand is 0.4% higher in the year-to-date.

Related: Warren Buffet Snaps Up More Occidental Petroleum

Even better, commodity analysts are predicting that oil markets will continue to tighten for the rest of the year.

Commodity analysts at Standard Chartered have predicted a further 120 mb reduction in global inventories in Q4, on top of the 172 mb reduction in Q3. The experts expect the rate of inventory draw to accelerate from 0.52 mb/d in October to 1.38 mb/d in November and 1.99 mb/d in December. StanChart says it’s possible that the current dominance of Middle East headline trading has led to lower prices by distracting the market from both falling inventories and from producer policies aimed at achieving a soft landing for the market at higher price levels. In other words, the recent tendency towards higher prices with lower volatility has been replaced by a downwards drift with higher volatility.

That’s a remarkable trend considering surging U.S. production. Data by the U.S. Energy Information Administration (EIA) shows that U.S. crude production grew 0.7% to 12.99 million barrels per day (bpd) in July, its highest since November 2019, when production hit a peak of 13 million bpd. Texas production grew 1.3% to 5.6 million bpd in July, its highest on record; North Dakota's output increased 1.2% to 1.2 million bpd while production from New Mexico climbed 0.6% to 1.8 million bpd.

The demand side of the equation is equally encouraging. According toStanChart, global oil demand has already exceeded the pre-Covid oil demand set in August 2019, averaging 102.33 million barrels per day (mb/d), good for a m/m increase of 1.2 mb/d and a y/y increase of 2.3 mb/d.  The analysts have refuted arguments by some Wall Street analysts that high oil prices have already triggered demand destruction.

Underpricing Middle East Risk

Last week, Standard Chartered pointed to a medium-term reduction in Iranian oil exports as being the most likely consequence of shifts in the geopolitical landscape. It’s not a far-fetched notion either: last week, the Biden administration slapped new tariffs on Iran due to its ballistic missile and drone programs.

Back in August, we reported that Iran's oil exports had hit record highs thanks in large part to the Biden administration opting to look the other way as Tehran boosts production ostensibly in a bid to keep markets well supplied and oil prices low. The price response to the escalation in the Middle East tensions has so far been modest; however, the Israel-Gaza war is likely to cause a significant shift in U.S. policy on Iran due to its open support and backing for Hamas. 

Constraints on Iranian oil exports were eased after the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015 but tightened again after the U.S. withdrew from the JCPOA during the Trump administration, with output falling below 2 mb/d in 2020 when waivers given to consuming countries were withdrawn. Iran’s oil output and exports have increased sharply under the Biden administration, with production hitting 3 mb/d, including 500,000 b/d in the current year, while exports sit just under 2 mb/d.

StanChart says that changes in positioning in the oil futures markets have been modest despite a significant increase in volatility. The analysts note that it is not an extreme tail of the distribution as might be expected in a full-blown Middle East crisis, adding that speculative positioning is also not extreme, particularly in Brent. The latest fund manager data shows that prices are about USD 6 per barrel (bbl) lower than in late September, despite no significant loosening in fundamentals. StanChart says that the Middle East geopolitical risk is currently being significantly under-priced and that current fundamentals alone are enough to justify a complete reversal of this month’s price undershooting. 

By Alex Kimani for Oilprice.com

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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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Morning Bid: Ominous signal - Wall St slides despite yield slump - Reuters

Oct 27 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.

Asian markets look to round off a difficult week with a flourish on Friday, but ominous signals from U.S. trading on Thursday - stocks closed in the red again despite a steep decline in bond yields - do not auger well.

The conditions for a sharp rebound on Wall Street were in place - third quarter U.S. GDP beat forecasts, and the 'soft landing' narrative was bolstered by some signs of cooling inflation and sharp pullback in yields.

But not only did stocks fail to claw back any of Wednesday's heavy losses, they fell almost as much again, pushing the S&P 500 and Nasdaq to new lows since May.

This is the backdrop to Friday's open in Asia, where Japanese economic data, bonds, and currency will again be under intense scrutiny ahead of next week's Bank of Japan policy meeting.

The main data release in Asia on Friday will be consumer price inflation in Tokyo for September. Core consumer inflation in the Japanese capital is expected to have held steady at a 2.5% annual rate in October, according to a Reuters poll, the lowest since July last year.

The BOJ next week is set to raise its national core consumer inflation forecast for the fiscal year ending in March 2024 to near 3% from the current 2.5% projection made in July, sources told Reuters.

The BOJ is inching closer to ending negative interest rates and phasing out ultra-accommodative monetary policy. Twenty-five of 28 economists polled by Reuters expect no policy change next week, but the remaining three - at Barclays, JP Morgan and UBS - think the BOJ will begin unwinding its easy stance then.

Japanese Prime Minister Fumio Kishida on Thursday called for Japan to make a "total break" from its deflationary past, and markets continue to test the BOJ's resolve.

The yen on Thursday sank below 150.00 per dollar to its weakest since October 21 last year. The low that particular day near 152 per dollar was the yen's weakest level in 32 years.

There has been no yen-supporting intervention to temper the current exchange rate depreciation, but the BOJ has been more active in the bond market, where the 10-year yield hit a decade-high on Thursday at 0.89%.

In China, meanwhile, industrial sector profit figures for the first nine months of the year are on the docket Friday.

Year-to-date profits at China's industrial firms have been falling every month since July last year, and at a double-digit pace every month this year. The good news, however, is the pace of decline has been easing since March.

China's main CSI 300 index is flat for the week but down almost 5% this month, while the MSCI Asia ex-Japan index is down 1.75% and 4.5%, respectively.

Here are key developments that could provide more direction to markets on Friday:

- Tokyo CPI inflation (September)

- China industrial profits (Sept, YTD)

- Australia producer price inflation (Q3)

By Jamie McGeever; Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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Jamie McGeever

Thomson Reuters

Jamie McGeever has been a financial journalist since 1998, reporting from Brazil, Spain, New York, London, and now back in the U.S. again. Focus on economics, central banks, policymakers, and global markets - especially FX and fixed income. Follow me on Twitter: @ReutersJamie

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