Recent successful contract negotiations by major unions like the Teamsters demonstrate organised labour's continued leverage to secure improved compensation and benefits. For example, there is a 50% spike in UPS driver job searches following the Teamsters' negotiation of $30 billion in new compensation over 5 years, increasing average driver pay to $170,000 annually. Unions warn that stronger laws are needed to protect negotiated benefits, as current bankruptcy laws don't safeguard worker benefits. Teamsters say 22,000 members may lose bargained benefits despite providing wage and pension concessions after Yellow Corp.'s bankruptcy filings. Powerful unions pushing reforms to prioritise worker claims, benefits, and protection are healthy economic indicators but a worry to investors as rising costs would hurt corporate profits.
U.S. stocks were mixed, opened lower, and ended up stagnating as regional bank stocks fell after Moody's downgraded small to midsize lenders. Stocks recovered from their lows after dovish comments from a Fed official and better-than-expected U.S. trade deficit data. China reported weak July trade data, and European stocks slumped after a new Italian bank profit tax was introduced. Eli Lilly jumped almost 15% on positive earnings, while Walt Disney's earnings are expected tomorrow.
Gold prices bounced back Wednesday after sinking to one-month lows as the dollar and bond yields retreated ahead of big US inflation numbers that could sway future rate hikes. Bank stocks took a hit from credit downgrades and surprise taxes, though some Fed honchos hinted rates may stay flat without a sudden economic shift.
Oil prices gained slightly as China's tumbling imports stirred up demand worries, though Saudi and Russian output cuts offset the pressure and recovered the price. Meanwhile, American crude production is forecast to gush to record highs in 2023 after six straight weeks of rising oil futures. Still, bloated US stockpiles and China's shaky economy could dampen oil's rally.
The pound slipped against the dollar Tuesday as risk aversion buoyed the safe-haven greenback, while bets on aggressive Bank of England tightening were seen as excessive amid evidence of slowing UK growth. The Chinese yuan rose following weaker-than-expected inflation data.