This Week in Finance: May 25th, 2023 | Money News Bites

By Chika


Last Updated: May 25, 2023


Every week, we bring you bite sized pieces of news from the world of finance. In this week's finance snippets we have: 

  • Adidas will sell last generation of Yeezy products and donate proceeds to social change and antidefamation causes
  • BlackRock calls staff back to the office, ending open work from home options
  • Content creators suing state of Montana over TikTok ban
  • Interest rates may not need to be raised as much as previously thought
  • and more!


Debt ceiling negotiations hit a brick wall

Debt-ceiling negotiators broke off a second round of talks late Friday without yielding a breakthrough. The White House and House Republicans struggled to reach a deal to raise the limit and avert a government default as soon as next month.

The resumption and abrupt end of the talks Friday night followed a breakdown in the negotiations earlier in the day, highlighting the divisions that remain as time for reaching a deal draws short.

Rep. Patrick McHenry, one of the negotiators, said that he wasn’t confident it would be possible to reach an agreement this weekend, the deadline that President Biden said needed to be met to clear legislation by June 1st, when the U.S. could default.


Powell says rates may not have to rise as much as expected

Federal Reserve Chair Jerome Powell said Friday that interest rates may not have to rise as much as previously thought in part due to stresses seen in the banking sector.

“The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” he said as part of a panel on monetary policy.

“So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals,” he added. “Of course, the extent of that is highly uncertain.”


Queen Elizabeth II burial cost $200 million

The state funeral of Queen Elizabeth II cost the U.K. government around £162 million ($201.4 million). The U.K.’s longest-serving monarch died on Sept. 8, 2022, aged 96, at Balmoral Castle in Scotland.

A 10-day period of national mourning, during which most businesses and workplaces remained open but many events were canceled, was held ahead of her funeral in Westminster Abbey on Sept. 18.

An estimated 250,000 members of the public saw the British queen lying in state in London during the mourning period, with many queuing in the streets of London for more than 24 hours.


US small businesses hit the brakes on hiring

The portion of small-business owners who expect to expand their workforce over the next year was below 50% for the second month in a row in May. This is hitting the lowest level since June 2020, during the early months of the Covid-19 pandemic, according to a recent survey conducted for The Wall Street Journal.

Small businesses struggled to hire staff during the pandemic, as competition for workers increased and large companies with deeper pockets scooped up many of the available job candidates. 

Pools of applicants have increased, making filling openings easier for some small businesses. But pay expectations remain high, making it tough for others to make hires.

As the economy softens in response to interest-rate increases, some entrepreneurs are paring hiring plans in response to cutbacks by their customers. Fears of an economic slowdown have also made small-business owners more cautious—and less willing to pay up for talent.


Gorman steps down as Morgan Stanley CEO

James Gorman said he is stepping down as chief executive at Morgan Stanley in the next year, marking an end to a 13-year run in which he overhauled the Wall Street bank and on some measures overtook rivals like Goldman Sachs.

Gorman said at an annual shareholders meeting Friday that he expects a new CEO to be chosen within the next 12 months.

He said that the board has identified three strong senior candidates to be the next chief. Gorman said he would become executive chairman for a period after the new CEO takes over.


BlackRock orders employees back to office

BlackRock will require employees to go to the office for at least four days a week, the latest company to curtail liberal work-from-home policies enacted in the Covid-19 pandemic.

The New York-based asset manager with about 20,000 employees in more than 30 countries said that from September 11, staff would be able to work from home just one day a week, according to an internal memo.

“We encourage you to transition into this model by increasing your in-office days, as your schedule permits, over the next few months,” said the memo signed by Rob Goldstein, Chief Operating Officer, and Caroline Heller, Head of Human Resources.

BlackRock, the world’s largest asset manager with more than $9 trillion under management, joins a growing corporate push to have employees spend more time in the office. JPMorgan Chase announced in April that it would require managing directors to return to the office five days a week.


Elon Musk compares George Soros to Magneto 

Elon Musk lashed out at George Soros after the billionaire liquidated his stake in Tesla, smearing the 92-year-old in a personal attack, comparing the legendary investor to Magneto, the nemesis of Marvel’s popular band of mutant protagonists.

 “Soros reminds me of Magneto,” he wrote on Monday, claiming the philanthropist uses his considerable wealth to the detriment of mankind. 

The world’s second-wealthiest businessman did not explain what prompted his attack on Soros, but a quarterly SEC filing last week revealed that the investor dumped his entire $16 million stake in Musk’s company last week, along with most of his shares in EV rival Rivian.


Adidas resumes sales of Yeezy sneakers

Adidas said it would start selling its stockpile of millions of unsold Yeezy sneakers later this month, with antiracism organizations set to benefit from the proceeds.

The sportswear brand said Friday that the Anti-Defamation League, which combats antisemitism and other forms of prejudice, and the Philonise & Keeta Floyd Institute for Social Change, founded by George Floyd’s brother Philonise, would be among those receiving donations from the sale of Yeezy products.

Demand from sneaker fans for what will be the last generation of Yeezy products is expected to be intense, with Yeezy shoes still selling strongly on secondhand sales platforms, despite Kanye West’s comments. The shoes will be available through Adidas’ own website and app, the company said.


TikTok creators sue Montana over state's ban of social media app

A group of TikTok creators is suing Montana’s state attorney general over the state’s new ban of the social-media platform, echoing steps some of the app’s fans took to battle Trump-era efforts to restrict the app.

The creators filed the lawsuit Wednesday in the U.S. District Court of Montana. Samantha Alario, Heather DiRocco, Alice Held, Carly Ann Goddard and Dale Scout are suing the state attorney general, Austin Knudsen, who they say is in charge of enforcing the legislation.

They allege the ban is unconstitutional and violates the First Amendment, among other laws.

Photo by Zahra Amiri on Unsplash


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