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A bit of corporate news you can use today and then we'll go flying. From American Public Media, this is Marketplace. In Los Angeles, I'm Kai Risdell. It is Wednesday today, the 22nd of May. Good as always to have you along, everybody. I ask, as a way to get going today and with, honestly, only a little bit of hyperbole,
What do you suppose you would get if you went looking for the corporate earnings equivalent of the monthly jobs report, the consumer price index, and gross domestic product all rolled into one?
My pick personally would be the first quarter profit report we got from the AI chip company NVIDIA after the bell this afternoon. $26 billion in revenue in the first three months of the year. $26 billion in revenue in three months. Last year in Q1, a mere $3.
Seven billion. NVIDIA shares have doubled in less than a year. It's worth more than $2 trillion and is estimated to control more than 90% of the market for high-end artificial intelligence computer chips. And with numbers like that, as Marketplace's Megan McCarty Carino reports, you can bet there are competitors eyeing a piece of that pie.
NVIDIA's path to superstardom in the AI economy started with a happy accident. The company designs graphics processing units, or GPUs, which were intended to process graphics. For a long time, these chips were mostly used in computer gaming. Chris Miller is author of Chip War, the fight for the world's most critical technology. He says GPUs can run multiple calculations at once instead of in a sequence.
And it turned out that that same set of calculations were useful in training and deploying AI systems. So NVIDIA leadership leaned into that first mover advantage, says Daniel Newman, a tech analyst with Futurum Group. See, NVIDIA doesn't just have a vision of saying, let's sell lots of GPUs. NVIDIA has a vision of owning an AI factory or a stack. The company has created a whole
whole ecosystem geared to AI, from networking technology to software. They've basically shortcut the whole process. That's why it's tough for competitors to catch up, says Dan Ives, an analyst at Wedbush Securities. It's LeBron James playing one-on-one against a bunch of kindergartners. Though
Though some rivals are also making impressive plays. AMD and Intel now have processors to rival the performance of NVIDIA's. Amazon, Microsoft, and Alphabet are making their own. Google's latest Gemini model was trained entirely on a proprietary AI processor.
Down the road, this is going to be a AI arms race, a game of thrones. But for now, Ives says those same big tech companies are still shelling out billions to buy up NVIDIA chips. I'm Megan McCarty Carino for Marketplace. Continuing on the corporate beat today, Target reported first quarter earnings today and they were, and I'm sorry in advance for this, I just couldn't not, they were off Target.
Same-store sales, that's a key category, down 3.7% from last year, more than analysts had been guessing, made all the more troubling by the fact that, A, consumer spending is still pretty strong, and B, some of Target's competitors, Walmart among them, are actually doing better than they were this time last year. Marketplace's Kaylee Wells has that one.
There are a couple factors at play here. One, says Columbia University economics professor Brett House, is that retailers are probably seeing the end of that extra spending that was supported by those pandemic-induced savings cushions.
Target is one of those retailers relying on middle and working class consumers whose savings accounts ballooned during the pandemic. And those extra saving cushions are largely gone. The other factor, now that the pandemic emergency ended, we've been spending our money differently. Perhaps everybody has the yoga pants they need.
Shiraz Mian is director of research at Zacks Investment Research. He says when we were stuck at home, we stocked up on clothes and electronics and toys, the discretionary items that we wanted rather than needed. Now...
a trend with consumers in the post-COVID period going more for services and experiential spending categories. And they're shifting more of their budgets to food and consumables. Arun Sundaram is a senior executive
equity research analyst at CFRA Research. He says when it comes to things we have to buy, Target is losing out to its main competitors, especially Walmart. Food and beverage only accounts for about 20% of Target's annual sales, whereas for Walmart, grocery accounts for 60% of Walmart's U.S. sales. Target expects sales to remain flat or increase slightly this quarter. Sundrum says the company should do even better next quarter because Target really shines during back-to-school season.
I'm Kaylee Wells for Marketplace. Wall Street for the midweek session today. Underwhelming. We'll have the details when we do the numbers. If you've paid any attention at all to the Federal Reserve of the past couple of years, you know Chair Powell and the gang are all about the data as they try to figure out where interest rates ought to be.
Right now, of course, the big focus is inflation data, personal consumption expenditures, CPI and PPI, too. But the Fed is not the only place that eagerly awaits those data drops every month. Companies do, too. And the run of higher than expected inflation data so far this year is playing a big role when companies decide to borrow money. Marketplace's Justin Ho has more on the corporate bond decision matrix.
Figuring out when exactly to issue a bond is a pretty big deal for companies. Drew Pascarella, who teaches finance at Cornell University, says a lot of big companies have entire teams dedicated to it. One of the areas that they're focused on is a calendar of these major news events that potentially would be market moving.
That's because after a big piece of economic data comes out, like really hot inflation numbers or a really weak jobs report, traders can panic and start buying or selling government bonds. And that causes yields on all types of bonds to jump around. That's risky. So rather than gamble, a more conservative company would choose the rate that's available to them before the news comes out.
Inflation reports this year have been pretty volatile and hard to predict. But Pasquarello says that hasn't always been the case. In times when the economy was boring and predictable, like before the pandemic. The focus on economic data would be less intense because the potential range of outcomes from that data would be, you know, less volatile. And the kind of economic data companies focus on changes depending on the economy.
Throughout my career, there have been various times when certain pieces of data mattered. That's Guy Lebas, chief fixed income strategist at Janie Montgomery Scott. He says in the early 2000s, for instance, bond markets focused a lot on manufacturing data. Then, in the early stages of the financial crisis, the monthly jobs reports got a lot of attention, especially after one particularly bad report in September 2007. Lebas says investors had thought things were improving.
And as it turned out, that was actually the early stages of a substantial downturn in economic activity. Surprises like that can also cause demand for bonds to fall. A company is not going to come to markets with a new bond deal unless they feel reasonably confident that that bond deal is going to go pretty well. That's Winnie Caesar, head of strategy at CreditSites. She says the stakes are high this year because companies are trying to issue a lot of debt. That
That's because they know investors want to pile money into bonds since they're offering pretty decent interest rates right now. People are thinking this might be my last chance to buy corporate bonds at five and a half percent. Maybe in a year from now, they'll only be at four and a half percent.
Caesar says companies will probably issue a lot of bonds this year, and they probably won't need to focus as much on inflation reports if prices continue to cool off more predictably. Then I think that that is reaffirming to the market that we don't have an economy that is reaccelerating or overheating, and that Fed policy of restrictiveness is actually working.
As that happens, Caesar says companies might go back to timing their bond sales around jobs reports and other government data, the way they did before the pandemic, when inflation wasn't an issue. I'm Justin Ho for Marketplace. We do talk a lot about data on this program, as you will know. Inflation data, like Justin was just talking about. The labor market and its data, on and on I could go.
But the corollary to all that data is the data ain't going to get you there if you want to know what's actually happening in this economy. The economy is people, one of whom we heard from last winter. He was working as a flight instructor and he sent us an update. Adam Kephartz in Paulsbo, Washington. I was recently hired by Horizon Air, a regional airline based in the Pacific Northwest. ♪
I started training for Horizon Air back in April and hope to be flying the jet as soon as July. I actually interviewed back in 2019 before the pandemic hit. So I've been in that pipeline going on four years, five years. So it's been a long process.
End of last year, November or December, I could see that I was getting really close. And so I had reached out to another airline just to make sure to cover my bases and see if I could get an interview.
And they processed my paperwork very quickly. They said, yep, we want to interview you. And then I heard nothing for four and a half months. But then thankfully, the airline that I work for now was able to say, hey, we have the class date for you, and we'd love to get you on board as soon as possible. ♪
Getting my foot in that door at this airline has meant a lot to both me and my wife because it's based in the Pacific Northwest. The bases are going to be cities that are
aren't that hard to reach from where I live. Right now, you know, being a junior pilot, I could be based wherever the company needs me. And so at least initially for the first couple months, I anticipate probably having to come up with some sort of a crash pad or, you know, Airbnb or something where I am paying a little bit out of pocket. But long term, it certainly looks like I'd be very likely to be based in Seattle within maybe six months. ♪
Through the support of my wife, financially, we were able to make things work in the last five years while I was undertaking all this flight training. But now as we start to have kind of a more normalized, I guess for lack of a better term, dual income, that'll allow us to start checking some boxes off the projects list that we've been accumulating, doing some things in our yard, around the house that weren't musts at the time, but certainly were
Financially, you know, I'm at a point now where it's really important to both me and my wife to get a financial advisor. We've been able to kind of figure things out on our own prior to this, but now I'm starting to think, okay, this is the career. I want to make sure to make wise decisions financially and really set ourselves up for success all the way through retirement.
Adam Kempart, coming this summer to Skies Near You. We cannot do this series without you, no matter where you are, no matter what you do. Tell us about your economy, would you? Marketplace.org slash my economy. Coming up. Being out in the community and helping people, it's really powerful. You've got to get out there, people. First, though, let's do the numbers. ♪
Dow Industrials off 201 points today. That is a half percent, 39,671. The NASDAQ off 31 points, two-tenths percent, 16,801. The S&P 500 dipped 14 points, about three-tenths percent, 53,7 there. Megan McCarty Carino was telling us about chipmaker NVIDIA and all the competitors who are scrambling to keep up. NVIDIA down about a half percent the day before that earnings announcement came out, five percent after the bell last time I checked to the upside.
Intel shed 1%. Advanced micro devices, better known as AMD, gained about a half percent. Qualcomm lifted 1% today. Bond prices down. Yield on the 10-year T-note rose to 4.42%. You're listening to Marketplace.
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This is Marketplace. I'm Kai Risdahl. BNPL is the marketplace initialism of the day today. Buy now, pay later. Companies offering that particular financial service have long marketed themselves as different than traditional credit cards, a more accessible and sometimes interest-free alternative.
Soon, though, BNPL is going to be regulated in some of the same ways as traditional plastic. The Consumer Financial Protection Bureau announced new rules today that will oblige pay later companies. Afterpay and Klarna are two you might have heard of. It'll oblige them to investigate when consumers dispute a charge and also to issue refunds for returned products, along with periodic billing statements. Marketplaces of Anamar has more now on what that means for the booming BNPL industry and its customers.
Many of Buy Now, Pay Later's repeat customers are financially vulnerable to begin with, says Nadine Chabrier with the Center for Responsible Lending. Users tend to be younger. They tend to be Black, Latino, consumers of color.
She says many have lower annual incomes and a high risk of becoming overextended. And the CFPB's rules are the first real attempt to protect those borrowers, says Cliff Robb, a professor of consumer science at the University of Wisconsin. It's adding a little bit more structure to what's been a pretty loosely regulated space. Where consumers sometimes get stuck paying off loans even after receiving a faulty product or returning one to the retailer.
But the new standards won't make waves in most of the buy-now-pay-later industry. Not at all. The big players already have these practices in place for the most part. Instead, analyst Claire Tassin with Morning Consult says they send companies like Affirm and Afterpay a message. That the CFPB is going to treat them the same as credit card providers going forward.
Probably including tighter regulations down the road, like requiring these platforms to vet borrowers more thoroughly to make sure they can pay back their loans. I actually think that benefits BNPL lenders. Chi-Chi Wu is with the National Consumer Law Center. She says strong buyer protections are part of what makes credit cards so appealing. And they could help Buy Now, Pay Later reach new customers. Yeah.
You know, older consumers such as myself, a Gen Xer, might feel more comfortable using them. And maybe even replace borrowers shut out by stricter rules. I'm Savannah Marr for Marketplace. The White House announced another tranche of student loan forgiveness this morning. That brings the total, the Department of Education says, to $1.5 billion.
to nearly 5 million borrowers not having to pay back $167 billion in outstanding loans. That kind of debt has ripple effects throughout the economy, as the borrowers obviously know, things they can't spend money on so that they can pay their loans. But increasingly, companies have come to realize it too. And in fact, some employers have been rolling out programs that let workers reduce their student debt burden today while saving for retirement tomorrow. Marketplace's Daniel Ackerman explains that one.
Back in 2018, the medical device maker Abbott found many of its younger employees were facing a financial quandary. Sometimes they have to make a choice, pay school debt or save for retirement. That's Diego Martinez, Abbott's VP of Benefits. He says student debt was preventing workers from paying into their 401k plans, which meant they were giving up on the company's matching contribution.
Abbott decided to make the contributions anyway, provided the employees were paying their loans. Back then, that meant getting a special letter of permission from the IRS.
But a new law taking effect this year allows any employer to offer retirement matching of student loan payments. There's certainly a lot of Americans with a lot of student loan debt who might be excited about this. Olivia Mitchell at the Wharton School co-authored new research on how this policy could play out for workers in the long run.
The short answer, pretty well. This policy would allow workers to consume more, actually to spend more out of their earnings by about 3% more prior to retirement. The new benefit comes with some costs for companies, like figuring out new tax rules and making sure participants are actually making their loan payments.
Still, a growing number of companies are starting to offer the match. We'd been looking at student loan debt for a long time now. Marco Diaz is global head of benefits for News Corp. The firm rolled out loan matching this year, and Diaz says it wasn't just fresh-from-college new employees who took advantage. We're also getting parents of children who have taken on student loan as a parent maybe for the second time in their life.
Diaz says the program has convinced candidates to accept News Corp's offers over competitors. I'm Daniel Ackerman for Marketplace. Two seemingly contradictory things can be at the same time true. Thing one, pandemic is over. Thing two, according to the Kaiser Family Foundation, 7% of all the adults in this economy, that is 17 million people, said in March of this year that they've got long COVID.
There are huge lifestyle challenges that go with that, of course. And there are huge workplace challenges, too, for employer and employee, as Marketplace's Samantha Fields reports.
Before Brenda Curry got COVID, work was a huge part of her identity. She had two jobs, one as a hotel concierge in Portland, Oregon, and another as a kid's ski coach. And that was my life and my livelihood. But in March of 2020, as the world was shutting down, she got sick, and she never fully recovered. Months later... I was having severe issues with my eyes and my cognition. You know, I was having a lot of trouble with my eyes.
You know, there was a disconnect between my brain and my eyes, and there still is. She would get dizzy when she stood up. She had intense fatigue. She couldn't read or watch movies. And she realized she couldn't work, at least not like she had before. I was having a hard time. And like I said, my career was so important to me. I was at a complete loss.
Curry's experience sounds familiar to Beth Pollack. She's a research scientist at MIT who's studying long COVID. What you hear often is a story of loss. And one of the losses that really impacts people, both personally in their lives and professionally and financially, is that too often they've had to lose their careers. For some people, she says, long COVID is so severe that they really can't work.
But for many others, what they really need is the right accommodations so that they are able to continue to work. Long COVID can be considered a disability under the ADA, the Americans with Disabilities Act, which means people who have it are legally protected from discrimination and have a right to request reasonable accommodations at work.
Katie Brennan at the Society for Human Resource Management says that might mean taking extra leave or... Things like telework, flex scheduling, extra rest breaks.
It really is dependent on the particular disability and an employee's limitations. Employers are required to make reasonable accommodations for people with qualifying medical conditions, as long as it doesn't pose an undue burden on them. In most cases, an employer is going to approve an accommodation. If a disability or illness isn't visibly obvious, which is often the case with long COVID, employers can request documentation from a doctor.
But many doctors don't know much about long COVID or take it seriously. And those that do are in high demand, like Dr. Monica Verdusco-Gutierrez. She directs the Long COVID Clinic at UT Health San Antonio. Some patients, I will see them maybe it's a year after they've been dealing with COVID. And then the waiting list to get into clinic can be several months. Many who find their way to her have struggled to find the right care or support. A
I think there's challenges because still there's not a lot of clarity in the diagnosis. There's no test or biomarker yet that shows long COVID, and Reduzco Gutierrez says partly because of that. Some clinicians may not be even comfortable writing for accommodations. Which can stand in the way of people getting the support they need at work.
Beth Pollack at MIT recently co-authored a piece for the Harvard Business Review called Long COVID at Work, A Manager's Guide. And she says in researching it, We heard many stories from people losing their careers to people being able to not only keep working, but also be promoted and really thrive in their careers. The difference, she says, was whether they were able to get the accommodations they needed.
For Brenda Curry in Portland, it took a while to find a job she could do. The first couple of jobs she tried in customer service ended up being too much. She quit without ever telling anyone she has long COVID. Because it's invisible, and I felt like it would work against me
Eventually, when she was ready to try working again, she applied for a part-time job at a new retail store opening in town. And it was very clear from the beginning that I was really struggling. And I had to sit down with my manager and say, I have...
long COVID and I've been very sick. Her manager has worked around her limitations, scheduling her for shorter shifts and telling her that anytime she needs to take a break, she can. Being back at work and being part of the economy and also being out in the community and helping people, it's really powerful. It still takes all of her energy to work just 15 hours a week, but Curry says she's grateful to be able to do it. I'm Samantha Fields for Marketplace.
This final note on the way out today, a little bit of politics of this economy and some economic trivia all in one. The White House said today it's going to release a million barrels of gasoline from the Northeast Gasoline Supply Reserve. In other news, we've got a Northeast Gasoline Supply Reserve. Congress apparently set it up in 2014 after Superstorm Sandy hit New York.
Congress also said it's got to be shut down by the end of this fiscal year, and this release will just about take care of that. The politics of this economy go like this. The Biden administration obviously now gets to say it's doing what it can to control pump prices. The economic trivia is that that million barrels comes to 42 million gallons. Oil and gas barrels are only 42 gallons apiece.
Our media production team includes Brian Allison, Jake Cherry, Jessen Duhler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Warren Carlos-Torado, and Becca Weinman. Jeff Peters is the manager of media production, and I'm Kyle Risdell. We will see you tomorrow, everybody. This is APM.