Good Morning!
Happy Friday! - here's what's making waves in the market today:
👉 Jerome Powell uncertain about rates 💸
👉 IRS raises income taxes 🧾
👉 ICBC hit with ransomware attack 🎭
Off we go!
FED: Uncharted Waters
Jerome Powell, the Chairman of the Federal Reserve, expressed optimism on Thursday about the slowing of inflation rates. Powell's address at the International Monetary Fund in Washington, D.C., took place against a backdrop of high inflation levels, which, although still above the Federal Reserve's long-term target, have significantly reduced from their peaks in early 2022. The Federal Reserve's response to this situation has been a series of 11 rate hikes, the most aggressive policy tightening since the early 1980s, raising its benchmark rate from near zero to a target range of 5.25%-5.5%.
These rate increases have coincided with a decrease in the Federal Reserve's preferred inflation measure, the core personal consumption expenditures price index, which fell to an annual rate of 3.7%, down from 5.3% in February 2022. Moreover, the more widely followed consumer price index peaked above 9% in June of the previous year
Source: Yahoo
Despite these developments, Powell remains uncertain whether the actions taken so far are adequate to maintain this trend and hinted that additional measures might be necessary to continue combating high inflation levels. His remarks came just after the Federal Reserve maintained its benchmark interest rates.
🎯 GRIT TAKE: Since becoming the Federal Reserve Chair, Jerome Powell faces… upgrade to VIP to read the full GRIT take. Click below!
IRS: Uptick in Fed Taxes
The Internal Revenue Service (IRS) made an announcement on Thursday regarding an increase in the federal income tax brackets and standard deductions for the year 2024. These changes, which will be applicable for the tax year 2024 and for returns that will be filed in 2025, include an adjustment in the income thresholds for each tax bracket.
In addition, the standard deduction for the year 2024 will see a rise. For married couples filing jointly, the standard deduction will increase to $29,200, up from the previous $27,700 in 2023. For single filers, the standard deduction will be $14,600, a rise from the $13,850 in 2023. This adjustment aims to accommodate changes in the economy and help taxpayers effectively manage their tax liabilities.
Single Individuals:
Married Filed Jointly:
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ICBC: Ransomware Shake-Up
The financial services sector of the U.S. arm of ICBC, a Chinese banking giant, recently faced a ransomware cyberattack, causing disruptions in its Treasury trading operations. The Industrial and Commercial Bank of China, recognized as the world's largest bank in terms of assets, acknowledged on Thursday that its financial services branch suffered a significant cyber breach. This breach compromised certain systems due to ransomware, malicious software that blocks access to a system until a ransom is paid. Following the detection of the breach, ICBC promptly segregated the affected systems to control the damage.
Source: World Finance
While the perpetrator of the attack remains unidentified, ICBC is actively investigating the incident and working on recovery with the assistance of its specialized cybersecurity team. This type of ransomware attack is becoming increasingly common among cybercriminals.
Headlines You Need To Know: 🎙
Biden to meet Xi on Wednesday in San Francisco
Trade Desk shares plunge
Virgin Galatic is pausing flights next year
Vince McMahon plans to sell a big chunk of his WWE shares
Nvidia plans to sell new chips to China that meet USA rules
How power companies profited from Italy’s covid lockdowns
The UK has avoided a recession yet again.
India’s factory output slows in September
Portnoy’s Power Move
Let’s walk through how Dave Portnoy sold his company for $550 million and then bought it back for $1. Dave Portnoy founded Barstool Sports in 2003 in Milton because he realized that there was a gap in the market related to sports betting. The internet was not big at the time, so he launched a sports betting newspaper for the local Boston Market where he would hand deliver the papers each morning. Portnoy would use fake names to write articles in his paper because he believed it made the small company look much bigger.
By 2007, the local newspaper had immense growth, and they decided to move to the online space where they focused on writing blogs about their life, sports, sports gambling, and trending news stories. Fast forward a few years, and the company has exploded in growth and is one of the biggest sports content companies in the world.
Source: YouTube
In 2016, Barstool did its first-ever fundraising round, which valued the company at $100 million, and the Chernin Group invested $25 million into the company. By 2020, Penn National Gaming had the chance to purchase a 36% stake in Barstool for $163 million, giving the company a valuation of $450 million. In partnership with Penn, they launched the Barstool Sportsbook, which was a sports gambling app that would compete with DraftKings, FanDuel, Hardrock, and many other gambling apps. In February 2023, Penn bought the entire company for $551 million.
However, in August, they announced a massive partnership with ESPN that would end the Barstool Sportsbook and replace it with the ESPN Bet App. On top of that, they announced that they would be selling Barstool back to Dave Portnoy for $1, along with certain non-compete rights and 50% of a future sale price.
Chart of the Day
📊 Real Estate Commission Rate
Average real estate commission has soared back to levels seen prior to 2015.
Source: Axios
GRIT Meme of the Day 😂
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇
Source: @wallstreetoasis
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