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Let’s jump into today’s storylines.

In today’s digest:

• Nasdaq falls, reaches correction territory

• Headline Hustle: Bank of Canada holds rates steady, UAW strikes a deal with Ford, House of Representatives select their speaker

• Scholastic’s controversial book collection

• Pulse Points: What’s Trending

FINANCE

A market correction or warning bell?

As the stock market takes a roller coaster ride, the tech sector seems to have lost its "seatbelt." The Nasdaq Composite, a tech-heavy index, nosedived into correction territory, dropping by a nerve-wracking 2.4%. Big tech names like Alphabet felt the ground shift beneath them, thanks to some cloudy days in their cloud business, while others in tech’s upper class, including Amazon and Nvidia, weren't spared from the turmoil.

This isn’t just about numbers tumbling down a screen

It's a domino effect shaking investor confidence that had been riding high on the tech wave. The current earnings season pulled back the curtain, revealing that the market's "crown jewels" aren't bulletproof. They're feeling the heat of market forces, triggering a sell-off frenzy…and it doesn't stop there. The bond market is throwing a tantrum, with yields on 10-year Treasury notes hitting a 16-year record, nudging investors to rethink their playbooks.

It's not just a tech headache. This is a market migraine, with pain points stretching into healthcare, small businesses, and beyond. Even non-tech folks like TransUnion are hitting speed bumps thanks to macroeconomic factors like climbing mortgage rates. Yet amidst the storm, there's a silver lining. Some players, like Microsoft’s cloud segment, are sailing smoothly, hinting that this isn't an industry apocalypse but a wake-up call for diversified strategies and eagle-eyed attention to economic undercurrents. Because in this high-stakes game, staying ahead means staying informed.

Headline Hustle

🏦 Bank of Canada hold rates at 5%. The Bank of Canada has opted to maintain its interest rate at 5%, citing concerns about inflation and the broader economic landscape. Governor Tiff Macklem emphasized the importance of data-driven decision-making, seeking a "clear downward momentum" in core inflation before any rate adjustments. Forecasts have been adjusted, with anticipated growth for this year revised from 1.8% to 1.2%. As for 2024, government spending is projected to be a significant growth driver. In summarizing the situation, Macklem stated that the economy is experiencing "low positive growth," a nuanced distinction from a recession.

🚗 UAW strikes a deal with Ford. The United Auto Workers (UAW) has reached a tentative labor agreement with Ford Motor, potentially concluding a six-week strike. This significant deal, pending member approval, features a 25% wage increase over four years, pushing top assembly worker wages to approximately $40/hr. Cost-of-living adjustments, suspended since 2009, are reinstated, and new hires will reach top wages in three years, down from eight. This development intensifies pressure on General Motors and Stellantis to finalize their deals, as historically, these companies have sought to match terms. Ford's offer is described as its most generous ever, but increased labor costs could challenge Ford's competitiveness against non-unionized rivals.

🗳️ House of Representatives finally elect a speaker. The U.S. House of Representatives has elected GOP Rep. Mike Johnson of Louisiana as its new speaker, concluding weeks of internal GOP discord. Johnson, a firm conservative who once supported efforts to overturn the 2020 election results in favor of former President Donald Trump, secured the role after the House GOP cycled through several leadership candidates. The appointment promises to rejuvenate legislative activity, with urgent matters like aid for Israel and an impending government-funding deadline on the horizon. Though critics label Johnson as excessively conservative, supporters view his election as a unifying move. Johnson's ascent marks a moment of relative unity in the GOP since their House majority win in 2022.

BUSINESS

Turning the page: Scholastic's struggle with inclusivity and censorship

Scholastic, a leading name in children's publishing, recently stirred the pot with its decision to categorize books discussing gender and race issues into a distinct collection for its school book fairs. Intended as a protective measure against new restrictive state laws, the move was quickly spotlighted as a form of censorship, sidelining diverse narratives.

The backdrop to this decision is a series of legislative measures in various U.S. states that limit the range of books available in schools, especially those touching on LGBT themes or racism. While Scholastic aimed to strike a balance by offering these books in a separate collection, the backlash was swift. Notable figures, including poet Amanda Gorman, voiced their concerns, leading Scholastic's president of Trade Publishing, Ellie Berger, to admit the error and extend an apology. This episode underscores the intricate challenges publishers grapple with, especially when the content in question is for young minds.

Big picture: The Scholastic incident sheds light on the broader societal debates around race, gender, and inclusivity. It emphasizes the pivotal role publishers play in shaping perceptions and the importance of public engagement in ensuring content remains diverse and uncensored. As the narrative unfolds, it's evident that the content children are exposed to in schools is intertwined with larger cultural discussions, underscoring the need for a holistic approach to education that champions diversity and inclusivity.

SNIPPETS

Pulse Points

• Meta Platforms reported its highest quarterly revenue since its public debut over a decade ago, driven by increased advertising demand and benefits from cost-cutting and new AI technology.

• Donald Trump stormed out of his New York fraud trial after being fined for violating a gag order. The judge also dismissed a defense request for a verdict in his favor.

• Eisai announced promising initial results for an injectable version of the Alzheimer's drug Leqembi in a clinical trial, suggesting a potentially more convenient method for the antibody treatment.

• X, formerly known as Twitter, is introducing audio and video calls.

• Airbnb turns to AI to help prevent house parties.

• Amazon is launching an AI tool for advertisers to create backgrounds from product descriptions and themes.

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