This Week in Finance: September 7th, 2023 | Money News Bites

By Chika


Last Updated: September 7, 2023


Summer hiring slowed down in the month of August. But the economy has been boosted by resilient consumer spending as Wall Street prepares for the biggest IPO of the year. Here's a rundown of some of the financial news that made headlines this week. 



Unemployment increased in August  

This summer, hiring slowed down, and unemployment went up in August. These are signs that the job market is cooling because of high-interest rates. The unemployment number rose from 3.5% in July to 3.8% in August, which shows that more people are looking for work.

The numbers from Friday's jobs report make it likely that the Federal Reserve will keep rates the same at its meeting this month. However, they won't settle the question of whether rates should go up again in November or December. 

Still, the job market is still tight enough that most companies don't lay off workers and instead pay them more to stay.



Summer spending boosts US economy

In the midst of rising interest rates, July saw a significant increase in consumer spending, while inflationary pressures remained subdued, indicating sustained economic strength in the United States.

Americans increased their spending on groceries, recreational products, and automobiles, as well as services such as housing, dining out, and insurance. In July, adjusted for inflation, consumer expenditure increased 0.6%.

The most recent data indicates that the Federal Reserve will hold rates constant next month as officials seek to reduce inflation without triggering an unnecessarily severe recession.



ARM eyes $50bn IPO

Arm Ltd. is targeting a valuation between $50 billion and $55 billion for what is shaping up to be the largest initial public offering of the year.

According to sources familiar with the matter, Arm intends to begin meeting with potential investors as early as Tuesday in preparation for its Nasdaq stock market debut the following week.

Arm is a key participant in the global semiconductor industry, with Apple, Qualcomm, and Advanced Micro Devices, among others, relying on its chips. It takes pride in being a neutral entity in the chip industry, selling its designs to all manufacturers without favoring any one.



Grayscale wins landmark crypto case against SEC

Grayscale won a landmark case against the Securities and Exchange Commission when a federal appeals court in Washington DC ruled that the SEC was wrong to reject the crypto investment firm's application to convert its flagship vehicle, Grayscale Bitcoin Trust, into an exchange-traded fund. 

The decision places significant pressure on SEC chairman Gary Gensler, who has issued a flurry of enforcement actions against crypto industry participants this year. The regulator has pending cases against Coinbase, a Nasdaq-listed cryptocurrency exchange, and Binance, the largest cryptocurrency exchange.

The SEC stated that it was examining the court's ruling. It is unclear whether the regulatory agency will file an appeal with the complete federal appeals court or the Supreme Court.



Hollywood strike robs California's economy of $5 billion

The impact of the Hollywood strikes on California's economy has reached nearly $5 billion four months after screenwriters took to the picket lines. This is a figure anticipated to increase following the breakdown of the most recent round of negotiations between union representatives and studios.

Most Hollywood productions have been halted as a result of the first strike by actors and writers in 60 years, affecting caterers, dry cleaners, drivers, and other minor businesses that support the industry. 

This week, Fiona Ma, the state treasurer of California, sent a "urgent appeal" to the major studio heads in which she criticized their inability to reach an agreement with the unions and exhorted them to return to the negotiating table. Approximately 700,000 Californians are employed in the entertainment sector.



Former Goldman Sachs executive sues bank for £1 million, citing dysfunctional workplace culture 

Former global director of recruiting at Goldman Sachs International, Ian Dodd, is suing the London office of the bank for £1 million. Dodd asserts that his position provoked mental health issues and that the bank's workplace was "dysfunctional" with meetings marked by "high emotions and frequent tears."

Dodd began working at the London office of the Wall Street firm in November 2018 but became ill in 2019 and departed in 2021.

The bank refutes his claim and is representing itself in court. In its court defense document, the bank disputes allegations that its employees exhibited "general agitation" and denies the existence of a "culture of bullying" at the defendant.

The lawsuit follows increased scrutiny of Goldman's working environment, which prompted the bank to implement changes. Last year, Goldman told its most senior employees they could take as much vacation time as they need to "rest and recharge." 


Leave a Reply

Your email address will not be published. Required fields are marked *