Raphael Stevens

As fears of an American recession spread, stockmarkets around the world have been jittery. The moves have been the wildest of all in Japan. On August 5th the Topix plunged by 12% in its worst performance since 1987; the yen had climbed from its weakest point in 37 years. The next day, stocks swung back, rising by 9%, as investors snapped up stocks that had plunged in value. The sharp moves carry implications not just for Japanese investors and firms. The country’s financial heft means that they could become a source of further volatility in nervous global markets. More

San Francisco Federal Reserve President Mary Daly on Monday said she expects that interest rates will be cut later this year.
“How much that needs to be done and when it needs to take place, I think that’s going to depend a lot on the incoming information,” she said during a forum in Hawaii.

Mary Daly, president of the Federal Reserve Bank of San Francisco, during the National Association of Business Economics (NABE) economic policy conference in Washington, DC, US, on Friday, Feb. 16, 2024. 
Graeme Sloan | Bloomberg | Getty Images

San Francisco Federal Reserve President Mary Daly on Monday said she expects that interest rates will be cut later this year but declined to provide a timetable or the extent to which the central bank will ease.
With markets expecting aggressive reductions starting in September, Daly said progress on inflation and a clear slowdown in hiring likely will drive the Fed to some extent of policy easing.

“Policy adjustments will be necessary in the coming quarter. How much that needs to be done and when it needs to take place, I think that’s going to depend a lot on the incoming information,” she said during a forum in Hawaii. “But from my mind, we’ve now confirmed that the labor market is slowing and it’s extremely important that we not let it slow so much that it turns itself into a downturn.”
The remarks come the same day Wall Street suffered its worst drawdown in nearly two years as investors wrestled with fears over slowing growth and the Fed’s response. At their meeting last week, Fed officials provided some hints that lower rates are coming but were short on specifics.
In the following two days, consecutive weak reports on layoffs, manufacturing and job creation generated a scare that the Fed is moving too slowly.
A voter this year on the rate-setting Federal Open Market Committee, Daly vowed that policymakers will do what is necessary to achieve their economic objectives.
“We will do what it takes to ensure what we achieve both of our goals, price stability and full employment,” she said. “We will make policy adjustments as the economy delivers the data and we know what is required.”
Earlier in the day, Chicago Fed President Austan Goolsbee told CNBC that the central bank’s “restrictive” rates policy doesn’t make sense if the economy isn’t overheating, which he said it is not. If there are trouble signs with the economy, Goolsbee said the Fed will “fix it.” More

Summer is generally peak season for flight disruption.
Bad weather is the chief cause of flight delays, according to Federal Aviation Administration data.
U.S. airlines make different obligations to travelers. A Transportation Department dashboard lays out the policies of major carriers: Alaska, Allegiant, American, Delta, Frontier, Hawaiian, JetBlue, Southwest, Spirit and United.

Ironheart | Moment | Getty Images

The summer travel season is in full swing, often bringing more flight delays and cancellations.
But travelers may be out of luck when it comes to reimbursement for such disruptions, depending on the root cause and specific airline policy, experts said.

“In general, in the U.S., airlines aren’t really obligated to pay you anything, anytime,” said Eric Napoli, chief legal officer at AirHelp, which helps fliers claim compensation for delayed or canceled flights.

‘High’ season for flight delays and cancellations

Mid-June to the end of August typically marks “high season” for flight disruptions, Napoli said.
“This summer will see more planes in the skies, frequent bad weather and increased use of the nation’s airspace,” according to a Federal Aviation Administration webpage on summer travel.
Bad weather has accounted for 66% of total flight-delay minutes year to date, according to FAA data through July 21. In 2023, the share in that time frame was about 72%.
Such data presumably includes the global IT outage on July 19 that grounded thousands of flights.

“Volume” caused another 15% of delays this year, FAA said.
Summer generally brings a “higher volume of passengers and flights” with school out and “millions of Americans” on vacation, Hayley Berg, lead economist at Hopper, wrote in a recent analysis of travel disruptions.
Indeed, 8 of the 10 busiest travel days of 2024 were in June, July and August, according to FAA data as of Sunday.

What you can expect from airlines

There’s generally one overarching duty for airlines relative to compensation for passengers: Carriers owe a refund of the ticket price and fees if they cancel a flight or make a “significant change” in the flight — regardless of the reason, according to the U.S. Department of Transportation.
Consumers are entitled to a refund only if they choose not to accept an alternative option from the airline, like rebooking on a different flight, the DOT said.
This obligation holds even for those who bought nonrefundable tickets.
One key caveat, though: The DOT doesn’t currently define what constitutes a “significant” change. That determination is based on factors like length of delay and flight and particular circumstances, the agency said.
Starting Oct. 28, airlines will have to “promptly” and automatically pay refunds to customers, due to a recently issued Biden administration rule, which also defines a “significant” change as a delay of three hours for domestic flights and six hours for international flights.
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More broadly, airline compensation policies vary for delays and cancellations.
A Transportation Department dashboard outlines major carriers’ promises to customers in the event of cancellations or delays longer than three hours. (Those carriers include: Alaska, Allegiant, American, Delta, Frontier, Hawaiian, JetBlue, Southwest, Spirit and United.)
Airlines are “required to adhere” to these promises, the agency said.
For example, all airlines do commit to rebooking passengers on the same airline for free and to providing a free meal if cancellation leads to waiting at least three hours for a new flight. Most of them offer a hotel stay for overnight delays. But none offers cash compensation for a delay of three or more hours.

Importantly, these compensation policies only apply to “controllable” delays and cancellations, meaning those attributable to airline operations. The same obligations may not apply to situations outside their control, like bad weather.
For example, the spate of delays and cancellations related to the global IT outage last month was deemed a “controllable” event. A failed tech update by cybersecurity firm CrowdStrike impacted Microsoft services used by several airlines.
Passengers flying abroad may have more rights depending on international rules, experts said.
For example, passengers flying to and from Europe generally have more rights to compensation due to European Union law, according to AirHelp.

Tips for passengers

Experts recommend a few ways to minimize the odds of a flight disruption, and to better cope with delays or cancellations if they occur:

Book the first flight of the day. Flights departing after 9 a.m. are two times more likely to be delayed than those scheduled between 5 a.m. and 8 a.m., according to Berg.
Avoid connecting flights to reduce odds of a disruption. This won’t always be possible, depending on factors like ticket cost, airport and destination. If you do have a connection, leave ample time for a layover, Napoli said. At minimum, travelers should leave a layover buffer of at least 45 minutes for domestic flights and 90 minutes for international trips, Berg said.
Build in a buffer day. Leave “wiggle room” at your destination so you don’t miss “big” events or plans in the event of a delay or cancellation, Berg said.
Fly on days that are less busy. Traveling during weekdays like Tuesday or Wednesday tends to bring less flight traffic, Napoli said. Travelers may be less likely to see certain kinds of delays, and have more open seats if they need to rebook. Tickets tend to be cheaper on these days, too.
Pack smartly. Those with a carry-on bag or personal item should pack strategically in the event of a delay or cancellation, Napoli said. For example, it may make sense to have a change of clothes, snacks, electronics, valuables, and a toothbrush on hand if your checked bag isn’t available, he said.
Multitask while waiting. In the event of a delay or cancellation, use your time wisely, experts said. “Get in line to speak with an airline representative at the same time you call the customer support center,” Berg said. This way, you maximize your odds of talking to a representative more quickly if multiple passengers are trying to get through simultaneously.

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JPMorgan Chase is expanding, with the aim of reaching more Americans in smaller cities and towns. 
Chairman and CEO Jamie Dimon is embarking on his 14th annual bus tour on Monday, with his first stop in Iowa, where the bank plans to open 25 more branches by 2030. 
The firm is in a unique position to spend on brick-and-mortar, while others are opting to be more prudent. 

A JPMorgan Chase Bank location in Blaine, Minnesota.
Michael Siluk | Universal Images Group | Getty Images

Three years ago, JPMorgan Chase became the first bank with a branch in all 48 contiguous states. Now, the firm is expanding, with the aim of reaching more Americans in smaller cities and towns. 
JPMorgan recently announced a new goal within its multibillion-dollar branch expansion plan that ensures coverage is within an “accessible drive time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for Chairman and CEO Jamie Dimon as he embarks on his 14th annual bus tour Monday. 

Dimon’s first stop is in Iowa, where the bank plans to open 25 more branches by 2030. 
“From promoting community development to helping small businesses and teaching financial management skills and tools, we strive to extend the full force of the firm to all of the communities we serve,” Dimon said in a statement. 
He will also travel to Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. Across those six states, the bank has plans to open more than 125 new branches, according to Jennifer Roberts, CEO of Chase Consumer Banking. 
“We’re still at very low single-digit branch share, and we know that in order for us to really optimize our investment in these communities, we need to be at a higher branch share,” Roberts said in an interview with CNBC. Roberts is traveling alongside Dimon across the Midwest for the bus tour.
Roberts said the goal is to reach “optimal branch share,” which in some newer markets amounts to “more than double” current levels.

At the bank’s investor day in May, Roberts said that the firm was targeting 15% deposit share and that extending the reach of bank branches is a key part of that strategy. She said 80 of the firm’s 220 basis points of deposit-share gain between 2019 and 2023 were from branches less than a decade old. In other words, almost 40% of those deposit share gains can be linked to investments in new physical branches. 
In expanding its brick-and-mortar footprint, JPMorgan is bucking the broader banking industry trend of shuttering branches. Higher-for-longer interest rates have created industrywide headwinds due to funding costs, and banks have opted to reduce their branch footprint to offset some of the macro pressures. 
In the first quarter, the U.S. banking industry recorded 229 net branch closings, compared with just 59 in the previous quarter, according to S&P Global Market Intelligence data. Wells Fargo and Bank of America closed the highest net number of branches, while JPMorgan was the most active net opener. 
According to FDIC research collated by KBW, growth in bank branches peaked right before the financial crisis, in 2007. KBW said this was due, in part, to banks assessing their own efficiencies and shuttering underperforming locations, as well as technological advances that allowed for online banking and remote deposit capture. This secular reckoning was exacerbated during the pandemic, when banks reported little change to operating capacity even when physical branches were closed temporarily, the report said. 
But JPMorgan, the nation’s largest lender, raked in a record $50 billion in profit in 2023 – the most ever for a U.S. bank. As a result, the firm is in a unique position to spend on brick-and-mortar, while others are opting to be more prudent. 
When it comes to prioritizing locations for new branches, Roberts said it’s a “balance of art and science.” She said the bank looks at factors such as population growth, the number of small businesses in the community, whether there is a new corporate headquarters, a new suburb being built, or new roadways.
And even in smaller cities, foot traffic is a critical ingredient. 
“I always joke and say, if there’s a Chick-fil-A there, we want to be there, too,” Roberts said. “Because Chick-fil-A’s, no matter where they go, are always successful and busy.”  More

Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 3, 2024.
David A. Grogen | CNBC

Warren Buffett sent shockwaves through the investing world over the weekend by slashing his big Apple stake by half, causing the tech stock to crater on Monday amid the intensifying global sell-off.
Berkshire Hathaway disclosed in its earnings filing that its Apple holding was valued at $84.2 billion at the end of the second quarter, indicating that the Oracle of Omaha dumped a little more than 49% of the tech stake.

Shares of Apple dropped more than 7% in premarket trading Monday. Global stock markets are on the brink of a major correction, triggered by concerns of an economic slowdown.
The 93-year-old legendary investor has been on a massive selling spree, offloading more than $75 billion in equities in the second quarter and raising Berkshire’s cash pile to a whopping $277 billion, an all-time high for the conglomerate. Buffett also started selling his second-biggest holding Bank of America in July.

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Buffett had already sold 13% of his Apple stake in the first quarter and he indicated previously that it was a tax-saving move as he expected the U.S. government to raise the rate to fund a burgeoning fiscal deficit. However, the magnitude of the second-quarter sale could mean tax was not the only motivating factor.
Berkshire began buying the stock in 2016 under the influence of Buffett’s investing lieutenants Ted Weschler and Todd Combs. Over the years, Buffett grew so fond of Apple that he increased the stake drastically to make it Berkshire’s biggest and called the tech giant the second-most important business after his cluster of insurers.
Berkshire’s Apple holding grew so big that it once took up half its equity portfolio, so the selling could also be out of portfolio management concerns.
Shares of Apple climbed 23% to a record high in the second quarter amid renewed optimism surrounding its artificial intelligence capabilities.

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