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  • Massive CrowdStrike Outage Grounds 46,000 Flights in One Day

    A global outage of cybersecurity software CrowdStrike on Friday wreaked havoc across multiple sectors, notably disrupting air travel and leaving thousands of passengers stranded. The outage resulted in the cancellation of approximately 46,000 flights worldwide, according to a report by The Washington Post.

    Delta Airlines was hit particularly hard, canceling about 1,200 flights on Friday. Other major airlines also felt the impact, with United canceling 649 flights, American 408, and Southwest 234. The chaos extended into the weekend, with Delta canceling an additional 1,300 flights on Sunday and another 600 on Monday.

    In a blog post on Delta’s website, CEO Ed Bastian revealed that the outage forced the airline to cancel over 3,500 flights through Saturday, bringing the total number of canceled flights to more than 5,000. Bastian noted that the incident occurred during one of the busiest travel weekends of the year, with passenger loads exceeding 90%, severely limiting the airline’s ability to rebook passengers. He added:

    “Specifically, the issue impacted the Microsoft Windows operating system. Delta has a significant number of applications that use that system, and in particular, one of our crew tracking-related tools was affected and unable to effectively process the unprecedented number of changes triggered by the system shutdown. Our teams have been working around the clock to recover and restore full functionality.”

    While most airlines struggled over the weekend, Southwest Airlines emerged relatively unscathed. A spokesperson for the budget carrier told Forbes, “The outage did not directly affect our operations, but we encourage customers to check their flight status throughout the day while the overall aviation system continues to recover.”

  • McDonald’s Extends $5 Value Meal as Diners Return to Restaurants

    McDonald’s is extending its $5 value meal beyond the initial four-week period in most U.S. markets, citing a boost in customer traffic. The fast-food giant announced this decision in a memo obtained by CNBC, revealing that 93% of its restaurants voted to prolong the promotion past its original end date later this month. Most locations will extend the offer through August or will soon vote on whether to do so.

    The $5 value meal, introduced on June 25, includes a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink, significantly cheaper than buying these items separately.

    “Our message is resonating with our millions of customers,” wrote Myra Doria, National Field President, and Tariq Hassan, U.S. Chief Marketing and Customer Experience Officer, in the memo. “When our customers are ordering the $5 Meal Deal, they aren’t visiting the competition, and early performance shows this deal is meeting the objective of driving guests back to our restaurants.”

    This move comes as restaurants offer deals to attract diners who are wary of higher prices due to inflation. McDonald’s $5 value meal faces competition from similar deals offered by Burger King, Wendy’s, Taco Bell, and Starbucks, which aim to appeal to value-conscious consumers.

    The memo emphasized, “Driving guest counts ultimately propels our business and is the key to sustained growth.”

    Coca-Cola contributed marketing funds to support the initial promotion, making it more attractive for franchisees. Some franchisee advocates are pushing for future contributions from the company to sustain the discounted offer.

    McDonald’s is set to report its earnings on July 29. The company declined to comment on the extension of the value meal deal.

  • Elon Musk’s Trump Endorsement Alienates Democratic Tesla Buyers

    Elon Musk’s endorsement of former President Donald Trump negatively impacts Tesla’s popularity among Democrats. According to new data from analytics firm CivicScience, Tesla’s favorability among Democrats has plummeted to 16% as of July 16, a 20-point drop since January. Even among Republicans, favorability has declined, falling 13 points to 23%.

    CivicScience CEO John Dick told Yahoo Finance, “Democrats, more closely than Republicans, associate Elon Musk and his actions with the brand.” This trend poses a significant challenge for Tesla’s future.

    California, known for its commitment to clean energy and electric vehicles (EVs), highlights the issue. Despite the Tesla Model Y being the best-selling car in the state, registrations dropped 17% year-over-year last quarter. The California New Car Dealers Association noted that Tesla sales “may have peaked,” marking the third consecutive quarter of registration declines in the state.

    Musk has also frequently criticized California. Last week, he threatened to move the headquarters of X (formerly Twitter) and SpaceX out of California, following Tesla’s earlier move to Texas.

    The association stated in April, “Californians’ love affair with electric vehicle giant Tesla may have peaked,” pointing to increased competition from other EV manufacturers. These competitors offer alternatives without the controversies surrounding Musk, who has become a polarizing figure.

    Since acquiring Twitter, Musk has delved deeper into politics, voicing opinions on diversity initiatives, election fraud, vaccinations, and immigration policies. His political stances and public comments, often shared via tweet, could harm Tesla’s reputation, which is closely tied to its CEO.

    “He completely alienated most of his buying base. … It will kill the business,” Tesla short-seller Mark Spiegel told Yahoo Finance. “I can’t imagine a single Democrat, or, let’s say, very few of them, willing to buy a Tesla at this point.”

    Musk’s endorsement of Trump and Ohio Senator J.D. Vance, both opponents of pro-EV policies, further complicates matters. Trump and Vance advocate for increased oil and gas production and are critical of EVs. Trump has claimed that electric cars will “kill” the U.S. auto industry and has criticized automakers’ shift toward EVs as a “transition to hell.” He has also suggested eliminating pro-EV regulations in exchange for support from the oil lobby.

    A potential Trump administration could repeal the $7,500 federal EV tax credit, implemented by Biden through the Inflation Reduction Act of 2022. Vance has proposed a similar credit for gas-powered vehicles. Despite these threats, Musk remains unfazed. “Take away the subsidies,” he wrote in a post on X. “It will only help Tesla.”

  • FAA Investigates Near-Miss Incident Involving Tampa-Bound Southwest Flight

    The Federal Aviation Administration (FAA) is investigating a troubling incident involving a Southwest Airlines flight bound for Tampa International Airport. On July 14, the Boeing 737 MAX experienced a rapid descent, plunging more than 1,500 feet in just over a minute and coming within 150 feet of the surface of Tampa Bay.

    According to public flight tracking data, the incident occurred shortly after 7 p.m., while the plane was still miles from its destination. The aircraft, which had taken off from Columbus, Ohio, should have been more than 1,000 feet above the surface at that point. Instead, it was flying dangerously low, at about the height of a 15-story building.

    The plane encountered stormy weather conditions, with light rain and gusts of up to 20 mph, as reported by a weather station at Tampa International Airport. Due to the poor conditions, the flight was rerouted to Fort Lauderdale.

    A recording of air traffic control communications, uploaded to YouTube, reveals that an operator alerted the pilots to their perilously low altitude. The aircraft then quickly ascended about 1,000 feet.

    Veteran commercial pilot Robert Katz, a certified flight instructor in Texas, expressed concern over the pilots’ apparent lack of awareness. “Wind shear could have swatted the airplane like a fly into Tampa Bay,” Katz said, emphasizing that the pilots should have been monitoring the plane’s descent without needing a controller’s alert.

    Katz further criticized the decision-making process, stating that the rerouting decision should have been made earlier if conditions were deemed poor enough to warrant it. “These pilots are going to have a lot of explaining to do,” he added.

    In response to the incident, the FAA issued a statement confirming the ongoing investigation. A spokesperson for Tampa International Airport declined to comment, referring inquiries to Southwest Airlines.

    “Southwest is following its robust Safety Management System and is in contact with the Federal Aviation Administration to understand and address any irregularities,” Southwest said in a statement. “Nothing is more important to Southwest than the safety of our customers and employees.”

    The incident was highlighted by Ben Schlappig on his flight blog, One Mile at a Time, where he described it as a “near catastrophe.” Schlappig speculated that the pilots might have misidentified the Courtney Campbell Causeway as a runway.

    Katz acknowledged this possibility but noted it would indicate extreme pilot fatigue. He stressed that incidents like this typically occur when pilots are inattentive due to stress or fatigue, exacerbated by poor weather conditions. “There are plenty of indications inside the cockpit that the airplane is getting too low,” Katz said. “Lots of checks and balances in place to get somebody’s attention to say, you know, wake up, do something.”

    This event follows a similar incident last month in Oklahoma City, where a Southwest jet flew at an unusually low altitude miles from the airport. In April, another Southwest flight came within 400 feet of the ocean off the coast of Hawaii before climbing again. The National Transportation Safety Board is also investigating a Southwest jet that experienced a “Dutch roll” and was found to have tail damage after a flight from Phoenix to Oakland, California, during severe storm conditions.

  • Tesla Sales Drop for Second Consecutive Quarter Despite Price Cuts, Surpassing Analyst Expectations

     Tesla’s global sales fell for the second consecutive quarter despite price cuts and low-interest financing offers, indicating weakening demand for the company’s products and electric vehicles overall.

    The Austin, Texas-based company announced Tuesday that it sold 436,956 vehicles from April through June, a 4.8% decrease from the 466,140 vehicles sold during the same period last year. However, the sales figure exceeded analysts’ expectations of 436,000.

    While demand for EVs is slowing worldwide, it continues to grow for most automakers. Tesla, with its aging model lineup and relatively high average selling prices, has faced more challenges than other manufacturers. Despite this, Tesla is still likely to remain the EV leader in the U.S. and globally.

    Tesla’s sales decline occurs amid increasing competition from both legacy and startup automakers, who are vying to capture Tesla’s market share. Most other automakers will report their U.S. sales figures later on Tuesday.

  • Independence Day Closures and Openings: What to Know for July 4

    As we celebrate Independence Day on Thursday, July 4, here’s a rundown of what’s open and closed to help you plan your day.

    Banks and Post Offices

    Closed: All banks and post offices will be closed for the holiday. This includes major banks such as Capital One, Bank of America, PNC, Truist, CitiBank, and JPMorgan Chase. However, Capital One Cafes will remain open.

    Stock Market

    Closed: The stock market will be closed on Thursday.

    Major Retailers

    Open: Walmart (6 a.m. to 11 p.m.), Target (hours vary by location), Home Depot (check local hours), Lowe’s (open until 8 p.m.), and Ace Hardware (hours vary by location).

    Costco

    Closed: All Costco warehouses will be closed.

    Pharmacies

    Open: Walgreens and most Rite Aid locations will be open. Check the Rite Aid website for specific hours.

    Restaurants

    Open: Many popular restaurants will be open, including Starbucks, McDonald’s, Dunkin’, Chick-fil-A (some locations may have limited hours), Wendy’s, Taco Bell, Subway, KFC, Cracker Barrel, Olive Garden (11 a.m. to 10 p.m.), Buffalo Wild Wings, Waffle House, IHOP, Golden Corral, Hooters, Longhorn Steakhouse (11 a.m. to 10 p.m.), Red Lobster, and First Watch (7 a.m. to 2:30 p.m.).

    Grocery Stores

    Open: Walmart (6 a.m. to 11 p.m.), most stores in the Kroger family (e.g., Baker’s, City Market, Dillons), Winn-Dixie, Trader Joe’s (all stores close at 5 p.m.), Sam’s Club (8 a.m. to 6 p.m. for Plus members, 10 a.m. to 6 p.m. for Club members), Meijer (6 a.m. to midnight), Publix, Aldi, Whole Foods, Food Lion, Harris Teeter, Giant Eagle, and Wegman’s.

    Retail Stores

    Open: Target, TJ Maxx (stores close at 8 p.m.), Marshall’s (stores close at 8 p.m.), HomeGoods (stores close at 8 p.m.), Macy’s (stores close at 7 p.m.), Nordstrom, Gap, Old Navy, Bass Pro Shops and Cabela’s (9 a.m. to 7 p.m.), IKEA (10 a.m. to 6 p.m.), Dick’s Sporting Goods (stores close at 7 p.m.), REI (10 a.m. to 6 p.m.), Burlington, Staples (10 a.m. to 5 p.m.), Office Depot and Office Max (9 a.m. to 6 p.m.), PetSmart (9 a.m. to 6 p.m.), PetCo, and Tractor Supply Co. (8 a.m. to 6 p.m.).

    Delivery Services

    Closed: UPS and FedEx will not provide pickup and delivery services on July 4. UPS Store locations and FedEx Office hours will vary, so check with your local store for specific hours.

    Historical Context

    The tradition of celebrating the Fourth of July dates back to a spontaneous celebration in Philadelphia marking the first anniversary of American independence. This event is documented in a letter by John Adams to his daughter, Abigail, as recorded by the Library of Congress. The annual celebration became more consistent after the War of 1812, with significant events like the groundbreaking ceremonies for the Erie Canal and the Baltimore and Ohio Railroad being scheduled to coincide with the holiday. Congress passed a law officially making Independence Day a federal holiday on June 28, 1870.

    Enjoy your Fourth of July, and plan accordingly with this guide to what’s open and closed!

  • Federal Judge Temporarily Blocks FTC Rule Banning Noncompete Agreements

    In a significant legal development, a federal judge in Texas has temporarily halted a new Federal Trade Commission (FTC) rule that would ban noncompete agreements. The ruling came on Wednesday after business groups vigorously opposed the regulation.

    Judge Ada Brown issued a 33-page opinion stating that the FTC lacked the authority to enforce the rule, which would make it illegal for employers to include noncompete agreements in workers’ contracts. Her order delays the rule’s effective date from September 4 to date pending a final decision on the case’s merits, expected by August 30. The plaintiffs in the case include a Dallas-based tax consultancy and the U.S. Chamber of Commerce.

    The FTC rule, if implemented, could impact millions of workers beyond the lawsuit’s scope. Studies suggest that up to one in five employees are bound by noncompete agreements, which prevent workers from joining competitors within their industry for a set period.

    Noncompete agreements are prevalent across various sectors, from technology and medicine to hairstyling and dance instruction, affecting both low- and high-wage earners. In April, the FTC voted 3-2 to ban these agreements, citing research indicating they suppress wages, hinder entrepreneurship, and disrupt labor markets. 

    However, business groups, including the U.S. Chamber of Commerce, contend that noncompete agreements are vital for protecting proprietary information and investments in employee training. These groups sued to block the rule immediately after its issuance, arguing that the FTC overstepped its authority with such a broad regulation.

    The U.S. Chamber of Commerce joined the case initiated by Ryan LLC, a global tax-consulting firm based in Dallas, on April 23, the day the FTC issued its rule. The Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce also joined the lawsuit.

    “This ruling is a big win in the Chamber’s fight against government micromanagement of business decisions,” said Daryl Joseffer, chief counsel at the Chamber, in a statement. “The FTC’s blanket ban on noncompetes is an unlawful power grab that defies the agency’s constitutional and statutory authority and sets a dangerous precedent where the government knows better than the markets.”

    The FTC responded by saying it is reviewing the decision and considering its next steps. “The FTC stands by our clear authority, supported by statute and precedent, to issue this rule,” said FTC spokesman Douglas Farrar. “We will keep fighting to free hard-working Americans from unlawful noncompetes, which reduce innovation, inhibit economic growth, trap workers, and undermine Americans’ economic liberty.”

    Judge Brown found that the plaintiffs were likely to succeed on the merits of their case, arguing that the FTC exceeded its statutory authority. She also deemed the FTC’s issuance of the rule as unreasonable. “The Commission’s lack of evidence as to why they chose to impose such a sweeping prohibition — that prohibits entering or enforcing virtually all noncompetes — instead of targeting specific, harmful noncompetes, renders the [rule] arbitrary and capricious,” Brown wrote.

  • S&P 500 Surpasses 5,600 Mark, Achieving Longest Win Streak of the Year: Market Wrap

    A surge in major technology stocks propelled the S&P 500 to new heights, with Federal Reserve Chair Jerome Powell’s congressional testimony failing to dissuade traders from expecting interest rate cuts this year.

    For the first time ever, the S&P 500 surpassed the 5,600 mark. Renewed interest in mega-cap stocks led the U.S. equity benchmark to its longest winning streak since November. Nvidia Corp. rose over 2.5%, and Apple Inc. gained on news of plans to increase iPhone shipments by 10% following a challenging 2023. Treasuries remained stable after a successful $39 billion sale of 10-year bonds, with swaps pricing in two Fed cuts in 2024 and increased odds of the first cut occurring in September.

    As Wall Street anticipated the consumer price index report, Powell indicated the Fed does not need inflation to drop below 2% before reducing rates but noted that more work remains. He mentioned that the labor market has cooled “pretty significantly” and stated that commercial real estate does not pose a threat to financial stability.

    “The key takeaway from his testimony is the Fed’s assessment of the balance of risks is shifting in ways that—if supported and sustained by incoming data—will deliver a rate cut in September,” said Krishna Guha at Evercore.

    The S&P 500 rose 1%, marking a seventh consecutive day of gains and its 37th record of the year. Gold and silver mining stocks rallied on expectations of Fed easing, while banks underperformed. Alphabet Inc., Google’s parent company, has reportedly abandoned its efforts to acquire HubSpot Inc., according to sources.

    U.S. 10-year yields fell two basis points to 4.28%. Bank of England Chief Economist Huw Pill suggested that the timing of a rate cut remains uncertain, leading traders to reduce bets on an August cut. Oil prices increased as a U.S. holiday boosted demand for gasoline and jet fuel.

    “Markets remain remarkably calm despite the flood of data this week, including Fed Chair Powell’s testimony, CPI/PPI reports, and the beginning of earnings season,” said Mark Hackett at Nationwide.

    The core CPI, excluding food and energy costs and considered a better measure of underlying inflation, is expected to rise 0.2% in June for the second month in a row. This would represent the smallest consecutive gains since August—a pace more acceptable to Fed officials.

    “June’s CPI report looks to be another ‘very good’ report that should boost the FOMC’s confidence about the inflation trajectory,” said Anna Wong at Bloomberg Economics. “That should set the stage for the Fed to start cutting rates in September.”

    A survey by 22V Research shows 55% of investors expect a “risk-on” market reaction to Thursday’s CPI report, 16% predict a “risk-off” reaction, and 29% expect a “mixed/negligible” response.

    “There is optimism about inflation generally,” said Dennis DeBusschere at 22V, adding that the survey also indicated investors believe “CPI is on a Fed-friendly glide path.”

    Meanwhile, some trading desks suggest investors should prepare for potential market volatility.

    The options market indicates the S&P 500 could move 0.8% in either direction following Thursday’s consumer price report, based on the price of at-the-money straddles, according to Stuart Kaiser, Citigroup’s head of U.S. equity trading strategy. This would be the biggest move for the index since June 12, the day of the last CPI print and interest-rate decision.

    Market volatility may increase in the coming days and weeks due to U.S. political uncertainty, comments from the Fed chair, and the start of the second-quarter earnings season, according to Mark Haefele at UBS Global Wealth Management.

    For the first time since 2022, S&P 500 earnings might not solely focus on technology, with the quarter’s success depending on sectors outside of the mega-cap tech heavyweights that have driven stocks to all-time highs, according to Bloomberg Intelligence strategists led by Gina Martin Adams.

    “While forecasts for the ‘Magnificent Seven’ remain robust, their earnings are expected to slow in the second quarter—just as the rest of the S&P 500 may finally post their first year-on-year growth in at least five quarters,” they noted.

    The Magnificent Seven may have already peaked, while the remaining S&P 500 stocks could see their first earnings expansion in at least six quarters, the strategists concluded.

  • Musk Triumphs Over Ex-Twitter Staff in $500M Severance Lawsuit

    A U.S. judge has dismissed a lawsuit filed by former Twitter employees, who accused billionaire Elon Musk of unlawfully withholding approximately $500 million in severance payments following his acquisition of the company.

    Judge Trina Thompson ruled that the employees failed to demonstrate that their claims were protected under federal law. This decision marks a significant victory for Musk, who purchased Twitter in 2022 and quickly initiated major changes, including terminating thousands of employees.

    The mass layoffs triggered lawsuits from former staff and vendors, alleging the company had reneged on promised payments. The dismissed complaint, filed in 2023 in a San Francisco federal court by Courtney McMillian, former “head of total rewards” at the social media platform—now renamed X—claimed that the company provided only one month’s severance pay instead of the more generous package of at least two months’ salary and health insurance contributions that had been promised.

    Musk’s legal team argued for the complaint’s dismissal, stating that the Employee Retirement Income Security Act (ERISA) did not apply as the plaintiffs contended. ERISA sets standards for private health and pension plans.

    “We are disappointed in the ruling and considering our options for moving forward,” a spokesperson for McMillian’s team said.

    Other lawsuits, including one from former company executives, are still progressing through the courts. In her decision, Judge Thompson acknowledged these ongoing disputes, indicating that the plaintiffs might find opportunities to pursue their claims in other legal avenues.

    “The Court lacks jurisdiction. However, plaintiffs are not without recourse. Indeed, there are other cases brought against Twitter for the failure to pay wages or provide employee severance benefits during the same or overlapping period,” she wrote.

  • AMD to Acquire Finnish AI Startup Silo AI for $665M in Bid to Challenge Nvidia’s Dominance

    AMD has announced plans to acquire Finnish artificial intelligence startup Silo AI for $665 million, marking one of Europe’s largest AI takeovers. This move is part of AMD’s strategy to expand its AI services and compete with market leader Nvidia.

    The California-based chipmaker stated that Silo AI’s 300-member team will leverage its software tools to create custom large language models (LLMs), the technology behind AI chatbots like OpenAI’s ChatGPT and Google’s Gemini. The all-cash deal is expected to close in the second half of this year, pending regulatory approval.

    “This agreement helps us both accelerate our customer engagements and deployments while also helping us accelerate our own AI tech stack,” Vamsi Boppana, senior vice president of AMD’s artificial intelligence group, told the Financial Times.

    This acquisition is the largest of a privately held AI startup in Europe since Google’s purchase of UK-based DeepMind for around £400 million in 2014, according to Dealroom data.

    The deal occurs amid increased regulatory scrutiny of Silicon Valley buyouts in Brussels and the UK. European AI startups like Mistral, DeepL, and Helsing have raised significant funds this year as investors seek a local rival to US-based OpenAI and Anthropic.

    Helsinki-based Silo AI, one of Europe’s largest private AI labs, provides tailored AI models and platforms to enterprise customers. Last year, Silo AI launched an initiative to develop LLMs in European languages, including Swedish, Icelandic, and Danish.

    AMD’s AI technology competes with Nvidia’s, which dominates the high-performance chip market. Nvidia’s market success has propelled its valuation past $3 trillion this year, driven by the demand for computing infrastructure to support large AI models. AMD began rolling out its MI300 chips last year, directly challenging Nvidia’s “Hopper” line of chips.

    Peter Sarlin, Silo AI co-founder and chief executive, called the acquisition the “logical next step” as the Finnish company aims to become a flagship AI entity.

    Silo AI is committed to open-source AI models, which are freely available and customizable. This approach contrasts with companies like OpenAI and Google, which favor proprietary models.

    Silo AI’s family of open models, known as “Poro,” aims to strengthen European digital sovereignty and democratize access to LLMs. The concentration of powerful LLMs in a few US-based Big Tech companies has drawn antitrust scrutiny in Washington and Brussels.

    AMD’s acquisition of Silo AI signals its intent to rapidly scale its business and enhance customer engagement with its AI offerings. AMD sees Silo AI, which builds custom models for clients, as a bridge between its foundational AI software and real-world applications.

    Software has become a crucial battleground for semiconductor companies, which seek to lock in customers to their hardware and generate more predictable revenues, outside the cyclical nature of chip sales.

    Nvidia’s success in the AI market is largely attributed to its investment in Cuda, its proprietary software platform that allows chips originally designed for graphics processing to run a wide range of applications. Nvidia has expanded Cuda to include numerous apps and services, primarily targeting corporate customers without the in-house resources to build on its technology.

    Nvidia now offers over 600 pre-trained models, simplifying deployment for customers. Recently, Nvidia launched a microservices platform called NIM, enabling developers to quickly build chatbots and AI “co-pilot” services. Historically, Nvidia offered its software free to chip buyers but announced plans to charge for products like NIM this year.

    AMD is among several companies, including Meta, Microsoft, and Intel, contributing to the development of Triton, an OpenAI-led rival to Cuda, aimed at allowing AI developers to switch more easily between chip providers.

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