Chapter 1: What is the significance of stock market performance in relation to the economy?
We'll catch up with the week that was, of course. We'll talk stocks and retail and farming, too. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Friday today. This one is the 12th of December. Good as always to have you along, everybody. We are at three and counting.
That is the number of Federal Open Market Committee meetings one Jerome Powell has left before he is done as chair. And honestly, he's going to have his hands full in the homestretch. Not only is the economy not cooperating with what Powell has said he wants to be a smooth transition, but his colleagues are kind of betwixt and between, too.
So we, of course, are going to try to sort it all out right now. Sudip Reddy is at MSNOW. Kate Davidson's at Bloomberg. Hey, you two. Hey, Kai. Hey, Kai. Sudeep, we're going to start with you and we'll go to the nuts and bolts of the meeting. The headlines already everybody has seen. Anything that the chair said that was surprising to you in that meeting?
Well, he was very clear that this is a difficult path they're on right now. There's lots of dissent, three dissents. That's a pretty big deal, most since 2019. And there's a reason there are all these dissents, because it's really hard to tell what's going to happen with inflation. It has been stubbornly high. That's been quite clear. It's in everybody's minds these days.
And there's lots of concern that he was articulating about the job market. and you don't know whether those numbers are going to be on a downward path, whether we're going to see the job market continue to deteriorate, which, of course, would solve the inflation problem, but in the worst way imaginable.
And he's trying to navigate a committee that's scratching their heads over all of this stuff and figuring out where to go. So it's not a good place to be in the final months of your tenure.
Kate, my note prompting me on the next question I wanted to ask you is, and this is a quote from my notes, dissent make me care. Much talk, of course, about how there were three dissents in this meeting, two that preferred not to cut at all, one that wanted to cut even more. Is this – and Powell talked about it a little bit. He said we had a robust discussion and all of that jazz.
But it seems to me this is what we ought to be bracing ourselves for because the economy can't make up its mind. The board now is more fractured and we ought to just get used to this, no?
Yeah, I think there's some truth to that and I think your point about should we care, it's a really great question. I mean isn't dissent a sign of healthy debate? Is it inherently problematic? I think that some people would certainly ask that.
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Chapter 2: How does Jerome Powell's leadership impact the Federal Reserve's decisions?
obviously has the best available data and the best researchers and the best window into what's going on. And when they're shrugging and they're saying, well, I don't have a clue, where does that leave the rest of everybody else? And that is the concern here of how cloudy... the picture is right now.
It's very hard for everyone else to make decisions when you don't know, is inflation going to go up or is it going to come down? Is the job market going to stabilize and recover or is it going to fall apart? That's not a great environment to be in, whether you're a consumer or a business or anyone else in the economy.
Kate, I'm going to get on the leading edge of what is going to be a whole swarm of coverage about Powell's legacy. He was asked about it at this meeting. He said, I just want the economy to be in the best shape possible. You lead the Fed team at Bloomberg. You have, I'm sure, decades of wisdom behind you and you've got your own experiences.
What is your take on Powell's legacy as we sort of enter the homestretch here for him?
Yeah, I mean, important to note, right, that there's still about five months left and who knows what might happen early next year. But I think Ultimately, the simplest answer, I think, is Powell would be remembered for being the Fed chair who stood up to Donald Trump, right? I mean, there was a time where we maybe all thought, hey, he's the Fed chair that got the economy through the pandemic.
And then it was, oh, yikes, he's the Fed chair who has overseen the biggest burst in inflation in four decades. That was not great. He then was the Fed chair that managed to help bring inflation back down without triggering this deep recession. So there have clearly been ups and downs and I'm sure criticisms that if you were to examine closely his tenure that you could point to.
But I think over time, looking back, I mean, this is really what has marked his eight years in the job is just all of the pressure that he got that was so unusual and so intense from Donald Trump.
From the guy who appointed him, we do have to point out. Sadiq, I'm asking you this question in your capacity as the guy running things in Washington. Well, you get to decide who's running things, but for MSNOW. What are you worried about with this economy in the next six-ish months? And I want you to take the Congress of the United States into consideration as you answer this.
The number one thing I'm looking at is what is the impact of immigration and tariffs, tariffs being far higher than they once were, immigration being far lower. Ultimately, that will have a significant effect on the economy, and we have not been able to figure out exactly how significant, but those are the things that will define the overall trajectory in 2026. And
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Chapter 3: What are the implications of dissent within the Federal Reserve?
Marketplace's Mitchell Hartman is going to tell you why that matters in a minute. Here's a hint. Kate alluded to it. And then later, as always, we will have the details when we do the numbers. We'll get retail sales data for October next week. And again, this is an oldie but a goodie.
Since spending buyer on behalf of consumers drives 70% of this economy, it is going to be good to finally know what's what. The caveat is that October doesn't quite get us to the all-important holiday shopping season. Data so far, this is from Adobe Analytics and the National Retail Federation, suggests that despite all the economic agita, the rate of consumer spending hasn't really declined.
So while we wait for the government data, we're following some of our small business retail regulars through the holidays, and we've got some midseason updates for you. First, Kalina Bruce at Noir Lux Candle Bar in Seattle.
People have been very intentional about spending and shopping with small businesses. And so we have felt that and it has been demonstrated in our numbers. We're definitely up from where we were this time last year. I would say sales are up about 15% from where we were this time last year. The biggest challenge by far has been... supply chain.
We have just had so many delays in receiving our shipments and it has caused tremendous backup for us when it comes to being able to produce for our clients. For instance, wax Our typical brand that we use is not available, so we'd have to explore other options.
So that's what I'm doing today is driving around the city to figure out where I can get wax from so that we can keep our classes going, so we can get orders out and just make sure that we are doing our due diligence with meeting timelines and meeting customer expectations.
Colina Bruce driving around Seattle for Noir Lux Candle Bar. Two more retail regulars coming up in a bit. We don't do straight up stock market stories very often. First of all, because, say it with me now, the stock market is not the economy. But also, we don't usually do them because as soon as we assign one in our morning meeting, the three major indices either spike or take a tumble.
Today was a tumble day after the record highs yesterday. The thing the market can be useful for, though, is as a guide to what traders are anticipating, how they think the economy and those corporate earnings are going to do in the next six months or so. And when things do go up, that can juice economic growth, as Marketplace's Mitchell Hartman explains.
Today wasn't so pretty compared to yesterday's hat trick of all-time highs. Today is more of a digestion day. Sam Stovall is chief investment strategist at CFRA Research. So far, only consumer staples and health care are in the green. You know the old saying that when the going gets tough, the tough go eating, smoking, and drinking. And if they overdo it, they have to go to the doctor.
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Chapter 4: How do stock market trends affect consumer sentiment and spending?
Closed at 48,458. The Nasdaq leaked 398 points. That is 1.7%. Finished at 23,195, well off the lows. S&P 500 down 73 points, 1.1%, 68.27. For the week, the Dow up 1%. The Nasdaq went the other way, down 1.6%. S&P 500 dipped 0.6%. Mitchell was talking about some of the market ties this week. One of the top performers...
Carvana, the online used car company, has been rallying all week as it gets ready to join the S&P 500 on December 22nd. It is now worth more than GM and Ford. Go figure that one out. Carvana did pull back a bit today, though. Decelerated 3.6%. Lululemon performed well after a strong earnings call yesterday and an announcement that its CEO was stepping down in January.
The athleisure company has been underperforming. Perhaps the era of leggings and yoga pants is coming to a close? Don't know. Ticker symbol LULU stretched up 9.6%. Today you're listening to Marketplace.
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This is Marketplace. I'm Kai Risdahl. Here's the thing about running a small business, any kind of business really, but retail in particular. You can advertise and market yourself and hustle all you can, but customers gotta wanna buy what you've got. Philip Rollins runs the comic and record store Offbeat in Jackson, Mississippi.
Holiday business so far is okay. It's slower than normal, which I expected. We did some stuff to offset that, though. We participated in Record Store Day Black Friday. So we've been setting up at some markets to get more visibility, more promotion, and just meeting the people where they're at as well, too.
So even though it's a small cost for some of these events, it's been worth it in the long run. We have plenty of stock, so we're not trying to order a bunch of stuff. I'm hoping that people don't wait to the last minute to look for stuff. because, I mean, stuff is running out. It's certain records that have not restocked. Hayley Williams is one of them.
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Chapter 5: What challenges do retailers face during the holiday shopping season?
For decades, an essential agriculture service was provided by crop dusters, small, low-flying aircrafts that applied pesticide or fungicide over fields. Actually, they don't dust, they spray. They also fertilize, find seeds, even dry the crops for harvesting. But of course, this requires a pilot and a plane.
And a few years ago, both of those started to become hard to come by, says Taylor Moreland in central Missouri.
More and more farmers were demanding fungicide on corn than what pilots could apply.
So Moreland started his own business, Agrispray Drones. His company sells drones and trains farmers to use them to apply products, plant seeds, and check on crops, all with a remote control. It can be a lot easier than hiring a pilot in a crop duster. But Moreland says using drones does take practice.
You have to learn a whole new concept because it's the first piece of ag equipment that flies, is battery-powered, and is autonomous.
A group of students are learning how to fly ag drones on a Saturday morning at the fairgrounds in Montgomery City, Missouri. Instructor Caleb O'Neill is leading a review after lunch.
Anybody remember how to turn these things on, what the process is? Controller first. Controller first.
As a field specialist for the University of Missouri Extension, O'Neill travels the state demonstrating how to use two different types of agriculture drones. Who wants to fly this first? Small imaging drones can hover over fields and capture pictures and video. So if a field is too wet to get a tractor out, a farmer can still scout their crops.
Larger drones can carry tanks to apply herbicide, pesticide, or fertilizer. And they're precise. They douse only the plants that need it, unlike a crop duster's all-or-nothing approach.
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Chapter 6: How are drones transforming the agricultural industry?
Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fargali. Joanne Griffith is the chief content officer. Neil Scarborough is the vice president and general manager. And I'm Kai Risdell. Have yourselves a great weekend, everybody. We'll see you back here on Monday, all right? This is APM.