Stocks were looking for a bounce this morning after a sell-off in the previous session. Yesterday, The Dow sank 0.75%, the Nasdaq dropped 0.72% percent, the S&P lost 0.86% while the small-caps led the way down with the Russel 2000 losing nearly 1%. After a trading flat overnight, futures turned green this morning and seem to be looking for strength as we begin the final trading day of the week.
Software developers have simply had enough with Google’s in-app payment policies. 36 states are taking a stand, and it could be a win for all of us.
Plus, the “Wage chasm” in America is taking shape. Companies in service-based industries are feeling the squeeze.
Additionally, Wells Fargo is making significant changes to its credit system which may send a ripple through the banking industry.
We’ve got the details on all of this and more in this morning’s Morning Briefing. Continue reading to find out more.
InvestorPlace & Charlie Shrem
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Wells Fargo has informed clients that all personal lines of credit will now be closed…
Wells Fargo & Co (WFC) is closing down its current personal lines of credit and no longer offers the consumer lending product. The lending program was marketed as a means to consolidate higher-interest credit-card debt, pay for home repairs, or avoid overdraft fees on connected bank accounts, and allowed customers anything from $3,000 to $100,000 in revolving credit lines. According to the article, customers have been issued a 60-day warning that their accounts would be closed.
Because of Federal Reserve restrictions, Wells Fargo CEO Charles Scharf was compelled to make difficult decisions during the coronavirus epidemic, unloading assets and deposits and pulling back from several products. Wells Fargo was banned from expanding its balance sheet by the Federal Reserve in 2018 unless it fixed compliance issues uncovered by its phony accounts scandal. According to experts, the asset cap has cost the bank billions of dollars in missed revenues over the last three years, based on the balance sheet expansion of rivals such as JPMorgan Chase and Bank of America.
According to a recorded phone call given to a UK court, a former senior Wells Fargo & Co. executive in London stated the institution had a faulty compliance culture, and executives operated like a mafia to crush internal critics. Alicia Reyes led Wells Fargo’s European investment bank as its CEO. In an April 2020 phone chat with a former Wells Fargo contract worker claiming wrongful dismissal after raising concerns internally about compliance issues in the United Kingdom, she blasted the institution.
Thirty-six states are suing Google over its Play Store management, citing harm to both customers and app creators…
On Wednesday, three dozen states and the District of Columbia filed an antitrust complaint against Alphabet Inc.’s Google, saying that the company’s Google Play app store constitutes a monopoly.
The company’s legal woes have grown as a result of the bipartisan antitrust action. It claims that the company has monopolized the distribution of apps on mobile devices that run the Google-owned Android operating system, blocking competition through contracts, technical barriers, and other means, according to a lawsuit filed by the state of Utah in the United States District Court for the Northern District of California.
The new complaint focuses on the Play Store, which is the most comparable element of Google’s operation to Apple’s. The Apple App Store has been embroiled in legal battles, with lawmakers questioning whether it unjustly taxes developers for consumer payments made through their apps and if it favors its programs over those of competitors. Plaintiffs in the new action, filed in the Northern District of California on Wednesday, are attorneys general from 36 states and the District of Columbia, representing both parties. California, Colorado, Iowa, Nebraska, New York, and North Carolina are among the states involved.
The plaintiffs allege that Google has used anticompetitive practices to obtain a 30% fee from customers who buy subscriptions and digital content on their Android phones. They claim that app creators have no choice but to utilize Google’s distribution infrastructure, in part because Google has “targeted potentially rival app shops.” Consumers, however, have little choice because Android is the only operating system accessible on many devices. Is this what we’re left to agree on? Perhaps, at least for now.
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Workers in restaurants are leaving in droves, which is unlikely to change anytime soon…
As we move from more than a year of COVID limitations to a return to normalcy, two industries are experiencing severe labor shortages: retail and dining. Why are some businesses having a hard time luring employees back? That is a difficult question to answer. Since stores and restaurants began reopening entirely across the country, and now in many states, including Michigan, with no mask or social distance regulations, the staffing issue has been a significant roadblock for companies. Approximately 649,000 retail workers departed the business in April, the most significant one-month exodus in the industry since the Labor Department began monitoring such statistics more than 20 years ago.
During the epidemic, several restaurants were forced to close their dining rooms, some of them permanently. Those that survived had to wait months before they could resume serving guests at total capacity, and many had to close regularly if workers became ill or were exposed to Covid-19. Many people were abruptly laid off, and some left the sector permanently.
According to Rebecca Givan, an associate professor of labor studies and employment relations at Rutgers’ School of Management and Labor Issues, restaurants must “think hard about doing these good jobs in various aspects” to retain employees.
According to Nick Bunker, head of economic research for North America at the Indeed Hiring Lab, restaurants that provide the most significant compensation and a better working environment may be able to rehire some workers who have left. He emphasized that quit rates don’t track where workers end up. As a result, people who left their restaurant employment may find themselves at places where they believe they will be treated better.
In May, there were 1.25 million job vacancies in the lodging and food services industry, up from 1.16 million in April. Restaurants have been boosting pay to persuade workers to remain — and to hire additional people. Darden Restaurants (DRI), the parent company of Olive Garden, announced a salary raise in March. In May, McDonald’s (MCD) announced salary increases for employees at corporate-owned locations. Others have followed suit. Higher wages, however, aren’t always enough to persuade individuals to stay, according to Givan. “Even a higher hourly income won’t allow you to pay your rent or put food on the table if you don’t have enough hours,” she explained.
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