Chapter 1: What recent political decisions are impacting the retail landscape?
The GOP-led House rejects President Trump's Canada tariffs, but backs him up on his voter ID push. Plus, Elon Musk announces a shakeup at XAI as it merges with SpaceX. And we'll look at how cautious consumers are reshaping retail.
Even though this consumer continues to be very aware. of how expensive items are becoming, it's not necessarily meaning they'll pull all the way back. It's just meaning that as a retailer, you have to fight harder for them. You have to bring your A game.
It's Thursday, February 12th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.
Chapter 2: How is Elon Musk's XAI changing after merging with SpaceX?
Six House Republicans have joined Democrats in rejecting President Trump's tariffs on Canada. Immediately after the vote, Trump said that Republicans who broke rank would suffer the consequences come election time. Oh, at least one of them, Colorado's Jeff Hurd, said he was comfortable with his decision. Here he was speaking to CNN.
I say this is something that supports the president's agenda of onshoring, reshoring manufacturing.
Chapter 3: What trends are emerging from cautious consumer behavior?
He's absolutely right. There's a lot that we need to be doing. There are a lot of trade imbalances and trade abuses that are happening. But we need to do it the right way, consistent with the Constitution. And I worry about the precedent that we might be setting if there's a Democratic president.
The move is largely symbolic. Even if the resolution clears the Senate, President Trump would almost certainly veto it. Nevertheless, Democrats are planning more anti-terror votes, targeting U.S. levies on Brazil and other countries.
Meanwhile, House Republicans were able to advance a key GOP priority yesterday, passing legislation that would significantly tighten federal voter registration requirements. The Save America Act requires that voters show proof of citizenship and would establish a nationwide voter identification requirement for casting ballots.
While Republicans have framed the bill as common-sense legislation, Democrats warn it could impose barriers for eligible voters. Here's Journal reporter Anvi Bhutani.
Now that the legislation has passed the House, it will come to the Senate, where it faces an uphill battle. Currently, with the rules around the filibuster, the Senate would require a 60-vote threshold to be met in order for the legislation to pass.
Currently, Republicans have a 53-vote majority in the Senate, which means they need to convince seven Democrats to side with them, but it doesn't look like that support exists currently.
There are fresh signs that international pressure on Russia's oil industry is having an effect, as dozens of tankers filled with Russian oil float at sea without buyers. Joining me with more is Journal Finance Editor Alex Frangos.
Alex, what's going on here, both with these ships kind of loitering around at sea, but also this real pricing squeeze, Russian oil being discounted heavily on global markets?
There's been a lot of pressure on Russia from European countries and the U.S. in terms of new sanctions on individual boats in their so-called shadow fleet that they've been using to move oil around the last few years.
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Chapter 4: How are rising prices affecting consumer spending habits?
And then Trump struck this deal with India to lower tariffs there in exchange for India saying they would cut back on buying Russian oil. So all this has meant that there's all this Russian oil that gets produced, but they have fewer buyers. And a lot of the oil is being stored on ships floating at sea waiting for a buyer to say, well, if the price gets low enough, we'll buy it.
I mean, everyone wants lower prices, Alex, but they're already quite cheap. And I want you to zoom in on that for us. This really kind of amazing gap that's opening up between what Russian crude oil is fetching on world markets and where international Brent crude prices are.
Yeah. So normal oil that is sold from non-sanctioned countries sells for something in the $60 to $65 a barrel range.
Chapter 5: What challenges are retailers facing with cost-conscious consumers?
Russia, in order to sell its oil, has to offer a discount that's as much as $27 per barrel. So they lose a lot of money compared to back when they were a legitimate member of the global economy.
I guess I'm just curious why this discount isn't making it more tempting than for countries to go in and buy this oil and get a great deal on it.
Yeah, it's a steep discount, but there are fewer buyers because India is saying they're not going to buy as much. And so then you're left with China. And there are certain buyers in China who are willing to take it, but not everyone, because the other dynamic here is there's a lot of oil in the world right now. The oil price in general isn't that high.
So refiners, these so-called teapot refineries in China, the kind of independent, more nimble refiners who buy a lot of illicit oil from places like Russia and Iran and until recently Venezuela, they can afford to say, we'll keep waiting till the price goes down more. That was Journal Finance Editor Alex Frangos. Alex, thanks as always. Thank you.
Elon Musk has announced a reorganization of his AI startup, XAI, just days after it merged with his rocket and satellite company, SpaceX. The changes include parting ways with two of XAI's co-founders and comes amid what tech reporter Georgia Wells says is a rapid expansion at the company.
In the all-hands meeting, Musk laid out a new structure for XAI that divides the company into four main teams, one working on its Scrock chatbot, another devoted to a coding-specific AI model, another working on image generation, and a fourth pursuing a project called MacroHard, which Musk described as intended to do digital emulation of entire companies.
Musk added that he plans to take SpaceX public by July. And let's quickly spin through some earnings updates we're getting this morning. Zero alcohol beers are helping to drive sales for Budweiser maker AB InBev.
The world's largest brewer is contending with a broad decline in drinking, especially amongst younger people, but recorded 34% growth in its teetotal portfolio last year, led by Corona Zero. Hermès is signaling confidence about its 2026 sales growth after logging a strong Christmas shopping season, and Japan's SoftBank has posted a quarterly profit thanks to gains in its Visions Funds business.
Its shares are up more than 9% so far this year, driven by hopes that stronger AI demand will boost its investments in companies like Arm Holdings and OpenAI. Coming up, we'll unpack what this week's earnings from retail giants tell us about the state of the American consumer. That's after the break.
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