Good morning readers. Jon Stewart, the iconic former host of "The Daily Show," is making a triumphant return to the comedy scene. Starting on February 12th, he'll be back in the anchor chair, but only on Mondays, injecting some much-needed humor into our week. With Trevor Noah's departure in 2022, the show has been a revolving door of guest hosts, but now Stewart is back to guide us through the 2024 election cycle. Don't miss this return of the voice of our generation.

Let’s jump into today’s storylines.

In today’s digest:

• Credit card spending hits record highs

• Headline Hustle: Apple sets new rules and restrictions on downloads outside app store, elite universities settle ‘price fixing’ lawsuit, FAA gives the green light to grounded Boeing jets

• Retailers ditch doomsday for ‘Just-in-Time’

• Pulse Points: What’s Trending

FINANCE

Banks grin as wallets thin

If your credit card's been getting a workout lately, you're not alone. In a twist that's more lemon than lemonade, Americans are swiping their plastic more than ever – from filling up the gas tank to booking those much-needed vacay flights. The problem? Those bills aren't vanishing as fast as they're racking up.

2023's been a banner year for credit cards

The four largest U.S. banks have reported a significant uptick in credit card spending in 2023 compared to the previous year, following a consistent upward trajectory in credit card usage since 2020 (with the exception of Citigroup, which reached its peak in 2021).

JPMorgan Chase, the nation's largest bank, reported a staggering 9% increase in credit card spending in 2023, reaching a whopping $1.2 trillion. Not to be outdone, Wells Fargo also saw its credit card spending balloon by 15%. But as credit card usage skyrockets, delinquency rates have been steadily rising since 2021, indicating that consumers are taking their sweet time paying off those card balances.

Adding to the concern, credit card loans – which represent unpaid balances on accounts – have seen a significant uptick as well.

• JPMorgan reported a 14% increase in credit card loans compared to the previous year, while Bank of America observed a 9% increase.

• Citigroup and Wells Fargo also noted increases in credit card loans.

It doesn’t stop there. The aggregate data reveals that credit card loans at these four banks grew faster than spending in 2023, surpassing 2019 levels for the first time, suggesting that consumers are accumulating more debt on their credit cards and taking longer to settle their bills compared to pre-pandemic times.

Banks are laughing their way to the…bank. From a banking perspective, this trend is profitable as banks generate revenue from interest charges on consumers who carry credit card balances. However, it could be a red flag for both consumers and the broader economy.

Big picture: consumers are living beyond their means. As pandemic cushions like stimulus checks and student loan pauses fade away, 2024 might just be a little bumpier than usual. While banks may be toasting to higher profits now, the rest of us might need to brace for an uncomfortable economic ride.

Headline Hustle

📱 Apple sets new rules and restrictions for apps downloaded outside app store. Apple is set to introduce new fees and restrictions for downloading apps outside of its closed iPhone ecosystem in response to a European law aiming to challenge Apple's app dominance. While users in Europe will soon have the option to download software onto their iPhones from sources other than the App Store, Apple's move ensures it retains control. This approach may lead to potential tensions with app developers and marks a battleground in Apple's ongoing battle to maintain control over third-party software and its substantial profits. Other tech giants like Meta Platforms and Spotify are preparing new download options to comply with the upcoming rules.

🏫 Elite universities settle ‘price fixing’ lawsuit. Five prestigious universities, including Brown, Columbia, Duke, Emory, and Yale, have agreed to settle a lawsuit alleging collusion to restrict students' financial-aid packages, collectively contributing $104.5 million to a fund for affected students. While the universities deny wrongdoing, they see settlement as a way to avoid protracted legal battles. Eight out of 17 schools have now settled, with the University of Chicago, Rice University, and Vanderbilt University having already reached agreements. The remaining nine institutions, including MIT and Georgetown, continue to contest the allegations in a case dating back to January 2022. The settlements await approval by the Illinois federal judge overseeing the matter.

✈️ FAA puts production limit on Boeing 737’s, clears path for grounded jets to fly. U.S. air-safety authorities have imposed production limits on the 737 MAX aircraft while giving the green light for grounded jets to take flight once again, pending inspections. The move comes after a harrowing incident involving Alaska Airlines, where a door plug tore away from a MAX 9 jet during takeoff. The FAA's stance is clear: no production expansion until quality control concerns are resolved. This setback disrupts operations for airlines like Alaska and United, but Boeing's future prospects hang in the balance, with safety investigations looming large.

LOGISTICS

Shelf control: Retail's 'Just-in-Time' revival

Remember the days when retailers stacked their shelves like doomsday preppers? Well, it looks like they're shelving that strategy. In a throwback to simpler times, major retailers are switching gears from a "just-in-case" to a "just-in-time" inventory management style, adapting to the ever-evolving whims of consumer behavior and a more predictable supply chain.

In a nod to pre-pandemic times, major players are steering the ship back to just-in-time inventory management. They're ditching the safety stock, thanks to better visibility into overseas production and nifty demand-based adjustments. The goal? Keep shelves stocked just right – not too much, not too little.

This shift isn't just about decluttering stockrooms. Experts say retailers have upped their game in supply chain trust, logistics know-how, and, crucially, in predicting what consumers will actually buy. After a year of spending shifts, companies are aligning their inventories with sales realities.

Data from the Census Bureau backs this up, showing general-merchandise retailers' inventory-to-sales ratios shrinking back to near 2019 levels since their peak in August 2022.

But let's not break out the champagne just yet. The retail world isn't immune to supply chain shocks – recent events like attacks on ships in the Red Sea and Panama Canal hiccups are stark reminders of the fragility of global supply chains. Yet, with smarter tech and sharper forecasting, retailers are now playing a more calculated game, balancing just-right inventories against unpredictable supply chains. This move isn't just a return to the past; it's a step towards a more resilient future in retail.

SNIPPETS

Pulse Points

• Jim Harbaugh, after revitalizing the University of Michigan's football program, is returning to the National Football League as coach for the LA Chargers.

• The United Auto Workers union has endorsed President Joe Biden for reelection over Donald Trump, as announced by UAW President Shawn Fain at a Washington, D.C. conference.

• Skydance Media, led by David Ellison and its investors, are considering a deal to privatize Paramount Global, according to sources familiar with the matter as reported by CNBC.

• Tesla aims to begin production of a new mass-market electric vehicle, codenamed "Redwood," envisioned as a compact crossover, by mid-2025.

• Hedge fund billionaire Bill Ackman and his wife Neri Oxman are purchasing a stake in Tel Aviv's stock market, signaling a "strong vote of confidence" in Israel's economy, according to the exchange's statement on Wednesday.

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