interest

Warner Bros. Discovery reported a $148 million loss in the third quarter, hitting a sour note as the company began fielding interest from would-be buyers as Hollywood braces for a transforming deal.

Earnings for the entertainment company that includes HBO, CNN and the Warner Bros. film and TV studios fell short of analyst expectations. A year ago, the company reported profit of $135 million for the third quarter.

Revenue of $9.05 billion declined 6% from the year-ago period. The company swung to a loss of 6 cents a share, compared to last year’s earnings of 5 cents a share.

Still, Chief Executive David Zaslav spent much of Thursday’s call with analysts touting his company’s underlying strengths — while avoided giving details about the company’s sale.

“It’s fair to say that we have an active process underway,” Zaslav said.

Warner Bros. Discovery on Thursday reiterated it is forging ahead with previously announced plans to split into two separate entities by next spring. However, the Warner board acknowledged last month that it was also entertaining offers for the entire company — or its parts — after David Ellison’s Paramount expressed its interest with formal bids.

Paramount has made three offers, including a $58 billion in cash and stock for all of Warner Bros. Discovery. That bid would pay Warner stockholders $23.50 a share.

The Ellison family appears determined to win one of Hollywood’s most storied entertainment companies to pair with Paramount, which the Ellisons and RedBird Capital Partners acquired in August.

But Warner Bros. Discovery’s board, including Zaslav, voted unanimously to reject Paramount’s offers and instead opened the auction to other bidders, which is expected to lead to the firm changing hands for the third time in a decade.

Board members are betting the company, which has shown flickers of a turnaround, is worth more than the offers on the table. Despite its rocky third-quarter results, Warner’s stock held its ground in early morning trading at around $22.60 a share.

“Overall we are very bullish,” Zaslav said of the company’s business prospects.

“When you look at our films like ‘Superman,’ ‘Weapons’ and ‘One Battle After Another,’ the global reach of HBO Max and the diversity of our network’s offerings, we’ve managed to bring the best, most treasured traditions of Warner Bros. forward into a new era of entertainment and [a] new media landscape,” he said.

But the company’s results underscored its business challenges.

The studio witnessed a major decline in advertising revenue in the third quarter, reporting $1.41 billion, down 16% from the previous year, which executives attributed to declines in the audience for its domestic linear channels, including CNN, TNT and TLC.

Distribution revenue also took a hit, as the company reported sales of $4.7 billion, a decrease of 4% compared to last year.

Studio revenue increased 24% to $3.3 billion, powered by the success of DC Studios’ “Superman,” horror flick “Weapons” and the latest installment of “The Conjuring.” But even those box office wins couldn’t totally offset shortfalls in other areas of its content business.

Last year, the company was able to sub-license its rights to broadcast the Olympics in Europe, which pushed content revenue to $2.72 billion. But this year, revenue was down 3% to $2.65 billion.

Burbank-based Warner Bros. has had a string of success in theaters, with nine films opening at the top spot globally at the box office. The studio recently surpassed $4 billion in worldwide box office revenue, making it the first studio to do so this year. Warner Bros. last achieved that milestone in 2019.

Zaslav would like to continue with Warner’s break-up plans, which were announced last June.

The move would allow him to stay on to manage a smaller Hollywood-focused entity made up of the Warner Bros. studios, HBO, streaming service HBO Max and the company’s vast library, which includes Harry Potter movies and award-winning television shows such as “The Pitt.”

The company’s large portfolio of cable channels, including HGTV, Food Network and Cartoon Network, would become Discovery Global and operate independently.

Beyond Paramount, Philadelphia-based Comcast, Netflix and Amazon have expressed interest in considering buying parts of the company.

The company said its third quarter loss of $148 million was the result of a $1.3 billion expense, including restructuring costs.

Getty Images

Uncertainty over pace of cuts

All eyes on Budget

INDIO, Calif. — A Riverside County criminal grand jury indicted the longtime mayor of Coachella on nine counts, including one felony charge of violating conflict of interest rules related to government contracts and four felony counts of perjury.

Steven Hernandez, 42, who has served on the Coachella City Council for nearly two decades, pleaded not guilty Thursday morning at the Larson Justice Center in Indio.

Hernandez was a rising politician in Riverside County and Coachella, an agricultural city of 42,500 people about 130 miles southeast of Los Angeles. If convicted as charged, Hernandez would be barred from public office for life and face more than seven years in state prison, according to Riverside County Dist. Atty. Mike Hestrin.

Hernandez was raised in Coachella by his grandparents, who were migrant farmworkers. He was first elected to the council in 2006, becoming an integral part of a powerful group of Latino politicians in the valley east of Palm Springs. Under his leadership, the city made major infrastructure investments in its downtown, including an expanded library, a new senior center and a new fire station.

But Hernandez allegedly benefited from some of the votes he cast from the dais, catching the attention of the Riverside County District Attorney’s office.

The indictment, unsealed Thursday, charges Hernandez with several misdemeanors for using his role as a public official to influence governmental decisions in which he had a financial interest. Among those were votes, cast between 2021 and 2023, to use pandemic-era American Rescue Plan Act funds to rehabilitate the downtown fire station, as well as votes on a commercial project known as Fountainhead Plaza, an affordable apartment community called the Tripoli Mixed-Use project, and a transit hub near downtown.

It also charges Hernandez with a felony for “willfully and unlawfully” approving a contract in which he had a financial interest when when he voted for an agreement between the city and the Coachella Valley Assn. of Governments’ Housing First program, which serves chronically homeless people.

An Assn. of Governments spokesperson said the organization has fully cooperated with the district attorney’s office and grand jury and “there has never been an implication from investigators that the investigation had anything to do with actions by elected officials serving in their CVAG capacity.”

The perjury charges relate to claims made by Hernandez on his Statement of Economic Interests public disclosure forms, also known as the Form 700, the district attorney said.

The indictment named 13 witnesses who testified before the criminal grand jury, including a city council member, the city’s economic development director, a former council member and a former city manager.

Hernandez will remain mayor of Coachella “until otherwise notified,” according to city spokesperson Risseth Lora.

Along with serving on the city council, Hernandez works as the chief of staff for Riverside County Supervisor V. Manuel Perez. He was placed on “indefinite administrative leave” from the county, Perez said in a statement Wednesday, adding: “Although we are still waiting on more details, it’s our understanding that the charges are unrelated to his role in our office.”

Hernandez surrendered to Riverside County Sheriff officials at the Robert Presley Detention Center in Riverside on Tuesday and posted $112,500 bail. He appeared before Riverside County Superior Court Judge John J. Ryan on Thursday morning. Wearing a navy suit, he clasped his hands behind his back as his attorney entered the plea.

He donned sunglasses as he left the courtroom.

This article is part of The Times’ equity reporting initiative, funded by the James Irvine Foundation, exploring the challenges facing low-income workers and the efforts being made to address California’s economic divide.

NBCUniversal owner Comcast is indeed interested in some of Warner Bros. Discovery’s assets.

On a Thursday call with analysts to discuss third-quarter earnings, Comcast President Mike Cavanagh suggested the Philadelphia giant might bid for certain Warner assets, primarily the Warner Bros. film and television studios and its streaming service HBO Max.

Sources had previously said Comcast was angling to join the Warner Bros. Discovery auction after that company’s board formally opened the process last week. The Warner board has unanimously rejected three unsolicited bids from David Ellison’s Paramount, which has offered $58 billion for all of Warner Bros. Discovery.

Comcast isn’t looking to acquire the entire company or Warner’s large portfolio of cable channels that include CNN, TBS and Food Network. Instead, Cavanagh suggested that Comcast’s interest would be more narrow.

He noted that NBCUniversal and Warner Bros. have compatible businesses. Comcast wants to grow its studios business and its struggling streaming service, Peacock, which lost $217 million during the quarter.

“You should expect us to look at things that are trading in our space … It’s our job to try to figure out if there are ways to add value,” Cavanagh told analysts.

But he added a note of caution, saying the company didn’t feel that a merger was “necessary.”

“The bar is very high for us to pursue any [merger] transactions,” he said.

The Warner Bros. Discovery auction comes amid deep turmoil in the industry. Traditional entertainment companies, including Warner and NBCUniversal, have long relied heavily on cable programming fees to boost profit but consumers have been scaling back on pay-TV subscriptions amid the move to streaming.

To address that challenge, Comcast is spinning off its cable channels, including CNBC, MSNBC, USA and Golf Channel, into a separately traded company called Versant. That process is expected to be complete this year.

As part of the transition, the liberal-leaning MSNBC is changing its name to MS Now and dropping the peacock from its network logo, reflecting its pending exit from NBC, which will remain part of Comcast.

Cavanagh suggested that Comcast would not double down in a declining cable channel business that it was already exiting.

But Warner has other compelling businesses, including HBO and its Warner Bros. film and television studio. The Warner Bros. studio has released a string of movie blockbusters this year, including “Superman” and “A Minecraft Movie.”

Warner and NBCUniversal are investing in their respective streaming services but both lag Netflix, YouTube and Walt Disney Co. in terms of subscribers and engagement. Peacock has 41 million subscribers; the service has lost billions of dollars since Comcast launched it five years ago.

To shore up Peacock and the NBC broadcast network, Comcast has doubled down on sports, including striking a $27-billion, 10-year deal for NBA basketball, a contract that kicked in this month with the new season. (Nielsen ratings for the inaugural NBA game on NBC last week were strong — nearly 5 million viewers).

Most analysts believe that Ellison’s Paramount is in the best position to win Warner Bros. Discovery. They point to the Ellison family’s determination, wealth and political connections. Tech titan Larry Ellison, who is backing his son’s bid, is the second-richest man in the world behind Elon Musk, and President Trump views the elder Ellison as a good friend.

In contrast, Trump has displayed a dim view of Comcast Chairman and Chief Executive Brian Roberts, in large part, because of Comcast’s ownership of MSNBC, which Trump has accused of being an arm of the Democratic National Committee.

The tension has led observers to conclude that Comcast would face a stormy regulatory review process with Trump overseeing the Department of Justice, which would likely perform an anti-trust review of any major transaction for Warner Bros. Discovery.

Concerns about Comcast’s ability to get deals through the Trump administration may be overblown, Cavanagh said.

“I think more things are viable than maybe some of the public commentary [suggests],” Cavanagh said.

The United States Federal Reserve has cut its benchmark interest rate by 25 basis points to 3.75 – 4.00 percent, amid signs of a slowing labour market and continued pressure on consumer prices.

The cut, announced on Wednesday, marks the US central bank’s second rate cut this year.

“Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the Fed said in a statement.

“Uncertainty about the economic outlook remains elevated.”

The cuts were largely in line with expectations. Earlier on Wednesday, CME Fed Watch — which tracks the likelihood of rate cuts — said there was a 97.8 percent probability of rate cuts.

After the September cut, economists had largely been expecting two additional rate cuts for the rest of this year. Goldman Sachs, Citigroup, HSBC, and Morgan Stanley, among others, forecast one more 25-basis-point reduction by year’s end following Wednesday’s cut. Bank of America Global Research is the only major firm that is not anticipating another 25-basis-point cut in 2025.

“The Fed has a challenging line to walk; lower interest rates to support labour markets and growth, or raise them to tamp down inflation. For now, they are taking a cautious approach tilted a bit towards the growth concerns,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University in Massachusetts, told Al Jazeera.

Despite forecasts, Federal reserve chairman Jerome Powell isn’t necessarily inevitable.

“We haven’t made a decision about December,” Powell told reporters in a press conference.

“We remain well-positioned to respond in a timely way to potential economic developments.”

Government shutdown implications

The cuts come as economic data becomes increasingly scarce amid the ongoing government shutdown, now in its 29th day as of Wednesday, making it the second-longest in US history, behind the 35-day shutdown during the first presidency of Donald Trump in late 2018 and early 2019.

Because of the shutdown, the Department of Labor did not release the September jobs report, which was scheduled for October 3. The only major government economic data released this month was the Consumer Price Index (CPI), which tracks the cost of goods and services and is a key measure of inflation. The CPI rose 0.3 percent in September on a month-over-month basis to an inflation rate of 3 percent.

That data was released because the Social Security Administration required it to calculate cost-of-living adjustments for 2026. As a result, Social Security beneficiaries will receive a 2.8 percent increase in payments compared to 2025.

The shutdown, however, could have a bigger impact on next month’s central bank decision as the Labor Department is currently unable to compile the data needed for its November reports.

However, amid the limited government data, private trackers are showing a slowdown.

“We are not going to be able to have the detailed feel of things, but I think if there were a significant or material change in the economy one way or another, I think we would pick that up,” Powell said.

Consumer confidence lags

Consumer confidence fell to a six-month low, according to The Conference Board’s report that was released on Tuesday.

The data showed that lower-income earners – those making less than $75,000 a year – are less confident about the economy as fears of job scarcity loom. This comes only days after several large corporations announced waves of layoffs.

On Wednesday, Paramount cut 2,000 people from its workforce. On Tuesday, Amazon cut 14,000 corporate jobs. Last week, big box retailer Target cut 1,800 jobs. This, as furloughs and layoffs weigh on government workers. The US government is the nation’s largest employer.

Those making more than $200,000 annually remain fairly confident and are leading consumer spending that is keeping the economy afloat, according to The Conference Board.

Pressures both on consumer spending and the labour market are largely driven by tariffs weighing on consumers and businesses.

US markets are ticking up on the rate cut. The Nasdaq is up 0.5, the S&P 500 is up 0.1, and the Dow Jones Industrial Average is up by 0.26 as of 2pm in New York (18:00 GMT).

Oct. 27 (UPI) — The Federal Reserve will meet Wednesday, as the U.S. government shutdown enters its fifth week, to decide whether to cut interest rates for a second time since September.

Last week, the Labor Department released its Consumer Price Index, showing inflation rose at a rate of 3% last month. While inflation remains above the Federal Reserve’s 2% target, many economists expect a rate cut this week.

“Concerns about tariffs driving prices higher are still not showing up in most categories,” Scott Helfstein, Global X’s head of investment strategy, told CBS News on Friday. “Nothing in the inflation print should stop the Fed from cutting rates next week. Yes, prices are higher, but not enough to keep them from helping the economy.”

While some economic data has not been released amid the government shutdown, forcing the Federal Reserve to make its decision without some key information, a quarter-point cut to benchmark federal funds this week would lower the target to somewhere between 3.75% and 4%.

“This time around, there are warning signs all around the economy, from rising unemployment to seven straight months of contraction in manufacturing due to tariffs,” Ryan Young, senior economist at the Competitive Enterprise Institute, told Fox Business. “That is what is pushing Fed officials towards cutting rates. But that stimulus comes with a tradeoff: it risks higher inflation. They’re taking a chance, and it might not pay off.”

Last month, Federal Reserve chairman Jerome Powell announced a 0.25% rate cut, the first of President Donald Trump‘s second term and the first since the United States imposed wide-ranging tariffs. The Federal Reserve works to control inflation, while maximizing job growth.

U.S. markets, which closed higher Monday, are also expecting another rate cut this week, along with a third in December.

The Dow Jones Industrial Average and the S&P 500 are currently sitting at record highs. On Friday, the Dow closed for the first time above 47,000, buoyed by the expectation of another rate cut this week, as well as big tech earnings reports and a possible China trade deal.

Warner Bros. Discovery has officially acknowledged the company is up for sale, marking the third time in a decade that its storied assets have been on the auction block.

The company’s board announced Tuesday that it has initiated “a review of strategic alternatives … in light of unsolicited interest the Company has received from multiple parties for both the entire company and Warner Bros.”

The Ellison family, which owns Paramount, started the bidding late last month. With financial backing from his father, Larry Ellison, David Ellison is looking to build an entertainment juggernaut. The family and RedBird Capital Partners finalized their takeover of Paramount in August, and has since made at least one offer for its rival. Paramount wants to buy the entire company, including its basic cable channels that include CNN, TNT, Food Network and HGTV.

Warner Bros. Discovery stock soared 11% Tuesday to more than $20 a share, valuing the company at $50 billion. That’s the highest level since Discovery swallowed the larger WarnerMedia in April 2022.

The company did not disclose the other entities that have expressed interest in buying the company as a whole, or its stable of assets, including premium cable channel HBO, the HBO Max streaming service and the legendary Warner Bros. film and television studio and its campus in Burbank.

“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,” Chief Executive David Zaslav said in a statement announcing the strategic review.

“After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets,” he said.

The company last summer unveiled its intention to split into two separate publicly traded entities — an arrangement that most observers saw as the unofficial kickoff of the company’s sale.

That separation process will continue, Warner Bros. Discovery said Tuesday.

The company intended to create two stand-alone entities. One would include the Warner Bros. studio and its expansive library of shows and movies, as well as the HBO Max streaming service. Zaslav was planning to run that enterprise.

The second company, Discovery Global, would comprise the basic cable channels and international operations. Chief Financial Officer Gunnar Wiedenfels would lead that operation.

“We view this as a move to initiate the entire bidding process now, for all bidders, even though not every bidder may be interested in all of WBD,” Raymond James analysts Ric Prentiss and Brent Penter wrote in a Tuesday note to investors.

“WBD is telling other bidders they can bid now instead of waiting for the split, or perhaps they even need to bid now since waiting may prove to be too late,” the analysts said.

Warner Bros. Discovery board intends to “evaluate a broad range of strategic options,” including “an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to our shareholders,” it said in a statement.

“Our decision to initiate this review underscores the Board’s commitment to considering all opportunities to determine the best value for our shareholders,” Warner Bros. Discovery Chair Samuel A. Di Piazza, Jr., said in the statement. “We continue to believe that our planned separation to create two distinct, leading media companies will create compelling value. That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”

The company did not set a deadline or timetable for the strategic alternatives review, although it had previously said the separation into two distinct companies — Warner Bros. and Discovery Global — would be complete by April.

TD Cowen media analyst Doug Creutz indicated Tuesday’s announcement was simply a formality because investors were well aware the company was in play.

“We continue to think a transaction with [Paramount] … is reasonably likely; we are more skeptical that other, more attractive bidders will emerge,” Creutz wrote.

The announcement hit as Warner Bros. Discovery employees already are nervous about the process and the proposed Ellison takeover, which observers believe would spark a massive consolidation and the elimination of hundreds more jobs.

Some already were suffering from deal fatigue as many are veterans of the company’s two previous sales.

In October 2016, the company, then known as Time Warner Inc., announced its sale to phone giant AT&T. President Trump, who was first elected the following month, strenuously objected to the merger. The government challenged the union, and it took nearly two years to win federal approval. The AT&T years were turbulent. The company restructured, then spent billions to build the HBO Max streaming service.

After three years, AT&T threw in the towel after lining up Zaslav, who had long managed the much smaller Discovery. The April 2022 sale to Discovery burdened the company with more than $50 billion in debt.

Since then, Zaslav and his team have tried to streamline the operations, leading to thousands of layoffs. The company’s debt now hovers around $35 billion.

Allen & Company, J.P. Morgan and Evercore have been retained as financial advisors to Warner Bros. Discovery. Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP are serving as legal counsel.

WASHINGTON — President Trump is showing little urgency to broker a compromise that would end the government shutdown, even as Democrats insist no breakthrough is possible without his direct involvement.

Three weeks in, Congress is at a standstill. The House hasn’t been in session for a month, and senators left Washington on Thursday frustrated by the lack of progress. Republican leaders are refusing to negotiate until a short-term funding bill to reopen the government is passed, while Democrats say they won’t agree without guarantees on extending health insurance subsidies.

For now, Trump appears content to stay on the sidelines.

He spent the week celebrating an Israel-Hamas ceasefire deal he led, hosted a remembrance event for conservative activist Charlie Kirk and refocused attention on the Russia-Ukraine war. Meanwhile, his administration has been managing the shutdown in unconventional ways, continuing to pay the troops while laying off other federal employees.

Asked Thursday whether he was willing to deploy his dealmaking background on the shutdown, Trump seemed uninterested.

“Well, look, I mean, all we want to do is just extend. We don’t want anything, we just want to extend, live with the deal they had,” he said in an exchange with reporters in the Oval Office. Later Thursday, he criticized Democratic health care demands as “crazy,” adding, “We’re just not going to do it.”

Spokesperson Karoline Leavitt told Fox News that Democrats must first vote to reopen the government, “then we can have serious conversations about health care.”

Senate Majority Leader John Thune echoed that approach before leaving for the weekend, saying Trump is “ready to weigh in and sit down with the Democrats or whomever, once the government opens up.”

Thune said he’d also be willing to talk, but only after the shutdown ends.

“I am willing to sit down with Democrats,” Thune posted on social media Friday.

“But there’s one condition: End the Schumer Shutdown. I will not negotiate under hostage conditions, nor will I pay a ransom,” he added.

Frustration is beginning to surface among rank-and-file Republicans, with bipartisan conversations breaking out on the Senate floor as members look for ways to move things forward. Still, even those Republicans admit little happens in Congress without Trump’s direction.

Leaving the Capitol on Thursday, GOP Sen. Lisa Murkowski said, “We’re not making much headway this week.” For things to progress, Murkowski acknowledged Trump may need to get more involved: “I think he’s an important part of it.”

“I think there are some folks in his administration that are kind of liking the fact that Congress really has no role right now,” she added. “I don’t like that. I don’t like that at all.”

Trump has not been slowed by the shutdown

While Congress has been paralyzed by the shutdown, Trump has moved rapidly to enact his vision of the federal government.

He has called budget chief Russ Vought the “grim reaper,” and Vought has taken the opportunity to withhold billions of dollars for infrastructure projects and lay off thousands of federal workers, signaling that workforce reductions could become even more drastic.

At the same time, the administration has acted unilaterally to fund Trump’s priorities, including paying the military this week, easing pressure on what could have been one of the main deadlines to end the shutdown.

Some of these moves, particularly the layoffs and funding shifts, have been criticized as illegal and are facing court challenges. A federal judge on Wednesday temporarily blocked the administration from firing workers during the shutdown, ruling that the cuts appeared politically motivated and were carried out without sufficient justification.

And with Congress focused on the funding fight, lawmakers have had little time to debate other issues.

In the House, Johnson has said the House won’t return until Democrats approve the funding bill and has refused to swear in Rep.-elect Adelita Grijalva. Democrats say the move is to prevent her from becoming the 218th signature on a discharge petition aimed at forcing a vote on releasing documents related to the sex trafficking investigation into Jeffrey Epstein.

So far, the shutdown has shown little impact on public opinion.

An AP-NORC poll released Thursday found that 3 in 10 U.S. adults have a “somewhat” or “very” favorable view of the Democratic Party, similar to an AP-NORC poll from September. Four in 10 have a “somewhat” or “very” favorable view of the Republican Party, largely unchanged from last month.

Democrats want Trump at the table. Republicans would rather he stay out

Senate Minority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries have said Republicans have shown little seriousness in negotiating an end to the shutdown.

“Leader Thune has not come to me with any proposal at this point,” Schumer said Thursday.

Frustrated with congressional leaders, Democrats are increasingly looking to Trump.

At a CNN town hall Wednesday night featuring Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders, both repeatedly called for the president’s involvement when asked why negotiations had stalled.

“President Trump is not talking. That is the problem,” Sanders said.

Ocasio-Cortez added that Trump should more regularly “be having congressional leaders in the White House.”

Democrats’ focus on Trump reflects both his leadership style — which allows little to happen in Congress without his approval — and the reality that any funding bill needs the president’s signature to become law.

This time, however, Republican leaders who control the House and Senate are resisting any push for Trump to intervene.

“You can’t negotiate when somebody’s got a hostage,” said South Dakota Sen. Mike Rounds, who added that Trump getting involved would allow Democrats to try the same tactic in future legislative fights.

Trump has largely followed that guidance. After previously saying he would be open to negotiating with Democrats on health insurance subsidies, he walked it back after Republican leaders suggested he misspoke.

And that’s unlikely to change for now. Trump has no plans to personally intervene to broker a deal with Democrats, according to a senior White House official granted anonymity to discuss private conversations. The official added that the only stopgap funding bill that Democrats can expect is the one already on the table.

“The President is happy to have a conversation about health care policy, but he will not do so while the Democrats are holding the American people hostage,” White House spokesperson Abigail Jackson said Thursday.

A product of the Congress Trump has molded

In his second term, Trump has taken a top-down approach, leaving little in Congress to move without his approval.

“What’s obvious to me is that Mike Johnson and John Thune don’t do much without Donald Trump telling them what to do,” said Democratic Sen. Mark Kelly of Arizona.

His hold is particularly strong in the GOP-led House, where Speaker Mike Johnson effectivelyowes his job to Trump, and relies on his influence to power through difficult legislative fights.

When Republicans have withheld votes on Trump’s priorities in Congress, he’s called them on the phone or summoned them to his office to directly sway them. When that doesn’t work, he has vowed to unseat them in the next election. It’s led many Democrats to believe the only path to an agreement runs through the White House and not through the speaker’s office.

Democrats also want assurances from the White House that they won’t backtrack on an agreement. The White House earlier this year cut out the legislative branch entirely with a $4.9 billion cut to foreign aid in August through a legally dubious process known as a “pocket rescission.” And before he even took office late last year, Trump and ally Elon Musk blew up a bipartisan funding agreement that both parties had negotiated.

“I think we need to see ink on paper. I think we need to see legislation. I think we need to see votes,” said Ocasio-Cortez. “I don’t accept pinky promises. That’s not the business that I’m in.”

Both parties also see little reason to fold under public pressure, believing they are winning the messaging battle.

“Everybody thinks they’re winning,” Murkowski said. “Nobody is winning when everybody’s losing. And that’s what’s happening right now. The American public is losing.”

Cappelletti and Kim write for the Associated Press. AP writer Mary Clare Jalonick contributed to this report.

The details: In 1946, when jackrabbits and homesteading World War II veterans dominated the dry, remote open spaces of the Morongo Basin, the Mesquite Motel went up along the main highway in Twentynine Palms. By 1962, it was called La Hacienda and had a tall, yellow, utterly utilitarian sign (and a little, rectangular pool). Later it became the Motel 29 Palms, the Sunset Motel and the Mojave Trails Inn. In 2019, owner Ashton Ramsey said, he bought it for $350,000 and dubbed it Ramsey 29.

The old yellow sign hangs out front. But Ramsey turned L.A.-based Kristen Schultz and her firm K/L DESIGN loose to take these 10 rooms in a desert-eclectic direction.

Furniture is hand-built, brick walls are whitewashed and coat hangers carry their own clever slogans. Headboards are upcycled from Italian military stretchers, canvas armchairs bear the words “soiled clothes large” and the new tiles on the bathroom floor say “29,” as do custom blankets and other items. The floors are concrete. Room 9, closest to the highway, now has triple-paned windows. Six rooms opened in 2020, the remaining four in 2024. Guests check themselves in digitally.

Ramsey plans changes around the pool next, including more palm trees. But he’s not shying away from the word “motel.”

“I’ve leaned into that,” Ramsey said. “You’ve got to be proud of what you are.” In fact, he said, “We didn’t just renovate a motel. We’re trying to renovate a town. If we don’t brag on 29, nobody else will.”

Spring rates typically start at $185 a night on weekends (plus taxes), $95 on weekdays. Free parking. Pets OK for a fee. (The hotel website routes bookings through Airbnb.)

Paramount, backed by billionaire Larry Ellison and his family, has officially opened the bidding for rival Warner Bros. Discovery — a potential massive merger that would dramatically change Hollywood.

Warner Bros. Discovery’s board rejected Paramount’s initial bid of about $20 a share, but talks are continuing, according to two people close to the companies who were not authorized to speak publicly.

One of the knowledgeable sources said Paramount was preparing a second bid.

Warner Bros. Discovery owns HBO, CNN, TBS, Food Network, HGTV and the prolific Warner Bros. movie and television studio in Burbank.

Ellison, one of the world’s richest men, is committed to helping his 42-year-old son, David, pull off the industry-reshaping acquisition and has agreed to help finance the bid, two people close to the situation said.

The younger Ellison, who entered the movie business 15 years ago by launching his Skydance Media production company, was catapulted into the major leagues this summer with the Ellison family’s purchase of Paramount’s controlling stake.

Since then, David Ellison and his team have made bold moves to help Paramount shake more than a decade of doldrums. Buying Warner Bros. Discovery would be their most audacious move yet. The merger would lead to the elimination of one of the original Hollywood film studios, and could see the consolidation of CNN with Paramount-owned CBS News.

Representatives for Paramount and Warner Bros. Discovery declined to comment.

CNBC reported Friday that two companies have been in discussions for weeks following last month’s news that Paramount was planning a bid. Bloomberg reported Saturday that Warner Bros. Discovery had rejected Paramount’s bid of about $20 a share.

Industry veterans were stunned by the speed of Paramount’s play for Warner Bros. Discovery, noting that top executives had begun working on the bid even as they were putting finishing touches on the Paramount takeover.

One of Paramount’s top executives is a former Goldman Sachs banker, Andy Gordon, who was a ranking member of RedBird Capital Partners, the private equity firm that has teamed up with the Ellisons and has a significant stake in Paramount.

Paramount’s interest prompted stocks of both companies to soar, driving up the market value for Warner Bros. Discovery.

Paramount’s offer of $20 a share for Warner Bros. Discovery was less than what some analysts and sources believe the company’s parts are worth, leading the Warner Bros. Discovery board to rebuff the offer, sources said.

But many believe that Paramount needs more content to better compete in a landscape that’s dominated by tech giants such as Netflix and Amazon.

Paramount has reason to move quickly.

Warner Bros. Discovery had previously announced that it was planning to divide its assets into two companies by next April. One company, Warner Bros., would be made up of HBO, the HBO Max streaming service and the Burbank-based movie and television studios. Current Chief Executive David Zaslav would run that enterprise.

The other arm would be called Discovery Global and consist of the linear cable television channels, which have seen their fortunes fall with consumers’ shift to streaming.

The Paramount bid was seen as an attempt to slip in under the wire because other large companies, including Amazon, Apple and Netflix, may have been interested in buying the studios, streaming service and leafy studio lot in Burbank.

However, Netflix’s co-chief executive Greg Peters appeared to downplay Netflix’s interest during an appearance last week at the Bloomberg Screentime media conference. “We come from a deep heritage of being builders rather than buyers,” Peters said.

Some analysts believe Paramount’s proposed takeover of Warner Bros. Discovery could ultimately prevail because Zaslav and his team have made huge cuts during the past three years to get the various businesses profitable after buying the company from AT&T, which left the company burdened with a heavy debt load. The company has paid down billions of dollars of debt, but still carries nearly $35 billion of debt on its books.

Others point to Warner Bros.’ recent successes at the box office as evidence that Paramount is offering too little.

Despite the tumult at the corporate level, Warner Bros.’ film studio has had a successful year. Its fortunes turned around in April with the release of “A Minecraft Movie,” which grossed nearly $958 million worldwide, followed by a string of hits including Ryan Coogler’s “Sinners,” James Gunn’s “Superman” and horror flick “Weapons.”

Meanwhile, Paramount has been on a buying spree.

Just in the last two months, Paramount made a $7.7 billion deal for UFC media rights and closed two deals that will pay the creators of “South Park” more than $1.25 billion over five years to secure streaming rights to the popular cartoon.

Last week at Bloomberg’s Screentime media conference, Ellison declined to comment on Paramount’s pursuit of Warner Bros. or even whether his company had already made a bid. But he did touch briefly on consolidation in Hollywood, saying, “Ironically, it was David Zaslav last year who said that consolidation in the media business is important.”

“There are a lot of options out there,” he added, but declined to elaborate.

After news of Paramount’s interest surfaced, Warner Bros. Discovery‘s stock jumped more than 30%. It climbed as much as $20 a share, but closed Friday at $17.10, down 3.2%.

Paramount also has seen its stock surge by about 12%. Shares finished Friday at $17, down 5.4%

Warner Bros. Discovery is now valued at $42 billion. Paramount is considerably smaller, worth about $18.5 billion.

Billionaire Larry Ellison ponied up the money for his family to acquire the controlling stake in Paramount two months ago, and the tech titan would need to write another huge check should Paramount buy Warner Bros. Discovery.

So, in Hollywood circles, the question has been: How involved is the elder Ellison in Paramount’s strategy and operations?

Paramount Chief Executive David Ellison said he speaks with his father every day, but he drew an important distinction:

“Look, I run the company day to day. Make no mistake about that,” David Ellison said Thursday at Bloomberg’s Screentime media conference in Hollywood, adding that his father had been a “phenomenal” mentor and “we couldn’t have a better relationship.”

“He is the largest shareholder in the business,” Ellison said. “What’s important for everybody to know is the way he approaches this is: How do we maximize value for our shareholders? … I think he’s best in the world for doing that.”

Since the Ellison family and RedBird Capital Partners acquired Paramount in August, its stock is up more than 50%. Much of the run-up came last month after news leaked that Paramount was interested in acquiring Warner Bros. Discovery, which owns CNN, TBS, Food Network and one of Hollywood’s most prolific film and television studios.

Ellison refused to comment on Paramount’s pursuit of Warner Bros. Discovery or whether his team had already made a bid.

But he did shed light on the business strategy behind any pursuit, while trying to tamp down fears that another big merger would result in more cost-cutting, more job losses and a reduction in content spending.

“The way we approach everything is, first and foremost: What’s good for the talent community, what’s good for our shareholders and value creation, and what’s good for basically storytelling at large?” Ellison said. “We’re looking at actually producing more movies [and] more television series … because you need that content.”

Paramount staffers are bracing for a massive workforce reduction next month, part of the company’s goal of finding more than $2 billion in spending cuts.

But, since the takeover, Paramount’s Ellison has made a priority of beefing up relationships with talent through a series of big bets, including agreeing to pay $7.7 billion for media rights to UFC’s mixed martial arts events in the U.S. in a seven-year deal with TKO Group Holdings.

The company also invested in the construction of a Texas-based production hub for prolific “Yellowstone” creator Taylor Sheridan and agreed to pay $1.5 billion over five years for streaming rights for “South Park,” the Comedy Central cartoon. And Paramount lured Matt and Ross Duffer, who created “Stranger Things,” away from Netflix with an exclusive four-year television, streaming and film deal.

Earlier this week, Paramount spent $150 million to acquire Bari Weiss’ the Free Press news site, while also naming Weiss editor in chief of CBS News.

Warner Bros. Discovery, led by Chief Executive David Zaslav, also has declined to discuss Paramount’s interest, although people close to the company have suggested Zaslav would like to see bidding war.

No other studios have publicly expressed interest and, on Wednesday, Netflix Co-Chief Executive Greg Peters downplayed such speculation.

“We come from a deep heritage of being builders rather than buyers,” Peters said during a separate appearance at the Screentime conference, adding the track record for big mergers was not great.

But Wall Street widely expects more consolidation among entertainment firms.

“Ironically, it was David Zaslav last year who said that consolidation in the media business is important,” Ellison said, adding “there are a lot of options out there.” But he declined to elaborate.

Analysts have speculated that, beyond Paramount, few other media companies have financial firepower to pull off a bid. And Paramount has an “in” that several other media companies, including Brian Roberts’ Comcast, lack: a good relationship with President Trump and his administration.

Trump has called Larry Ellison a good friend. After David Ellison spoke with Trump at a June UFC fight, the previous managers of Paramount got traction in their efforts to settle Trump’s lawsuit over a “60 Minutes” interview last fall with Kamala Harris. Paramount paid $16 million in July to settle the suit and weeks later the Federal Communications Commission approved the Ellison takeover of Paramount.

“We have a good relationship with the administration,” David Ellison said.

It’s set to be a heavy week in EastEnders next week, with one resident in hospital and another held captive as a number of storylines are set to take a dark turn

The aftermath of Joel Marshall’s attack on his stepmother Vicki Fowler is set to play out in next week’s EastEnders, as tensions begin to rise between Vicki and Joel.

At the end of this week, the BBC soap will take an extremely dark turn, when he Joel his stepmother following an argument.

The week starts off with Ross apologising to Joel for their earlier argument unaware of his actions, as Vicki heads to The Vic for help. Of course, he’s left absolutely horrified to learn of Vicki’s attack, and he shuts down rumours that Joel is the one responsible.

Elsewhere, Joel enlists the help of best mate Tommy while playing down the extent of his attack on Vicki. Helping his friend, Tommy agrees to hide Joel in the Slaters garage – although Zoe senses something is up…

READ MORE: BBC EastEnders sparks backlash as soap ‘quietly’ changes name of iconic characterREAD MORE: EastEnders fans spot ‘huge clue’ Stacey will return as Lacey Turner departs after 21 years

Things get so bad, that Vicki is taken to hospital, but Ross is relieved to find out that she will recover. But tensions continue to rise between the pair as they discuss Joel.

Later in the week, we’re set to see Vicki stunned as things develop, but what has happened and what will the consequences be?

Unfortunately, Vicki isn’t the only one in danger next week. There’s fears for Harry Mitchell as his father Teddy struggles to locate him.

Unbeknownst to Teddy and Gina, he’s held captive by Okie and refuse to release him until he reveals where the hidden camera is linked too. However, no one suspects any trouble, as Okie and Ravi force Harry to make a call to Teddy.

Despite Harry later giving them the information on the cameras, the pair refuse to let him go. Things get worse for Harry when Gina leaves him a scathing voicemail, and later gives Okie her number when he bumps into her on the way to retrieve Harry’s laptop.

He’s later instructed to let Harry go but he continues to keep him locked up, taunting him by going on dates with Gina. Later, a broken Harry takes drugs to escape his current reality as Okie continues to toy with his emotions…

There’s happy news for two other couples however, as Jasmine finally accepts a date with Oscar, and Julie is delighted when Nigel reveals that he’s taking her to India.

And in more lighter news, Elaine tells Yolande she wants to turn No.5 into a boutique hotel…

Elsewhere, Johnny panics when he realises, he drunkenly sent a business proposal to all of his clients, including his boss, and later tells Callum he’s been fired…

EastEnders airs Mondays to Thursdays at 7:30pm on BBC One and BBC iPlayer.

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ATLANTA — The head of a nonpartisan agency tasked with finding a prosecutor to take over the Georgia election interference case against President Trump and others is asking for more time after a judge set a two-week deadline for that appointment to be made.

Fulton County Superior Court Judge Scott McAfee, who’s overseeing the case, wrote in an order Friday that if the Prosecuting Attorneys’ Council doesn’t appoint a new prosecutor or request a “particularized extension” within 14 days, he would dismiss it. The fate of the case has been in limbo since Fulton County District Atty. Fani Willis was disqualified from continuing the prosecution over an “appearance of impropriety” caused by a romantic relationship she had with the lead prosecutor.

Pete Skandalakis, executive director of the Prosecuting Attorneys’ Council, said in a court filing Monday that his office has yet to receive the physical case file and does not expect to receive it for about four weeks. He asked McAfee to reconsider his order or to give him at least 90 days after he receives the case file to appoint a new prosecutor.

Without the case file, Skandalakis wrote that he “cannot intelligently answer questions of anyone requested to take the appointment or to do his own due diligence in finding a prosecutor who is not encumbered by a significant appearance of impropriety.”

He noted the case is one of 21 waiting to have a prosecutor assigned by his office. So far in 2025, he wrote, 448 criminal matters have been referred to his office because of a conflict of interest or a recusal by the relevant elected prosecutor.

“Each case requires individual review and assignment due to the unique nature of conflicts and the facts and circumstances of the particular case,” he wrote. Because of the complexity of the election case and the extensive resources required to handle it, “it will require time” to find someone to take it on, the filing says.

Even if a new prosecutor is named, it is unlikely that any prosecution against Trump could move forward while he is the sitting president. But there are 14 other people still facing charges in the case, including former White House chief of staff Mark Meadows and former New York mayor and Trump attorney Rudy Giuliani.

If a new prosecutor is named, that person could continue on the track that Willis had charted, decide to pursue only some charges or dismiss the case altogether.

Willis announced the indictment against Trump and 18 others in August 2023. She used the state’s anti-racketeering law to allege a wide-ranging conspiracy to try to illegally overturn Trump’s narrow loss to Democrat Joe Biden in the 2020 presidential election in Georgia.

Defense attorneys sought Willis’ removal after the revelation in January 2024 that she had engaged in a romantic relationship with Nathan Wade, the special prosecutor she had hired to lead the case. The defense attorneys said the relationship created a conflict of interest, alleging that Willis personally profited from the case when Wade used his earnings to pay for vacations the pair took.

McAfee rebuked Willis, saying in an order in March 2024 that her actions showed a “tremendous lapse in judgment.” But he said he did not find a conflict of interest that would disqualify Willis. He ultimately ruled that Willis could remain on the case if Wade resigned, which the special prosecutor did hours later.

Defense attorneys appealed that ruling, and the Georgia Court of Appeals removed Willis from the case in December, citing an “appearance of impropriety.” The high court last month declined to hear Willis’ appeal, putting the case in the lap of the Prosecuting Attorneys’ Council.

Brumback writes for the Associated Press.

Only about 1 in 5 Americans use a high-yield savings account (HYSA), according to a recent CNBC study. And that’s a shame, because that means the other 4 in 5 Americans are missing out on easy money.

I’ve been writing about personal finance for years, and here’s something I’ll never understand: Why leave free money on the table?! If you’re going to keep cash in the bank, you might as well earn something worthwhile on it.

Here’s exactly how much you could make with $10,000 sitting in a top HYSA today.

How much interest $10,000 earns at 4.00% APY

Some of the top HYSAs are paying around 4.00% annual percentage yield (APY) right now.

At 4.00% APY, here’s how much interest $10,000 would earn in interest:

• In one year: $400
• Per month: About $33
• Each day: About $1.10

Compare that to a traditional bank paying 0.01% APY, where $10,000 would make just $1 in an entire year. The gap is staggering.

I always tell people — If you were walking along and saw a $1 bill on the ground, would you pick it up? Of course you would. Because it’s “free money.”

Well, moving your cash pile into a high-yield savings account is kind of like picking up extra money every day (except there’s no bending down required — it just collects and grows in your account). It’s one of the easiest wins in personal finance.

Why online banks are better

Bigger interest checks are nice. But online banks have several other benefits that come with high-yield savings accounts:

• FDIC insurance: Just like the big banks, most online HYSAs insure your money up to $250,000.
• Easy transfers: You can usually link your checking account and move money back and forth in a day or two.
• No hidden fees: Many top HYSAs don’t charge monthly maintenance fees or have account minimums. Some even waive ATM fees and overdraft charges.
• Better apps and tech: Most online banks focus on a digital-first convenience which lets users manage everything from their phone.

In short, online banks give you all the safety of a traditional bank, but with more modern features and way better returns.

When Home Depot (HD -0.68%) talks, the stock market listens. The blue chip Dow Jones Industrial Average component is a bellwether for consumer spending and the housing market.

In recent years, Home Depot’s results have disappointed. Earnings have been falling, and fiscal 2025 same-store sales are expected to grow by just 1%. But that sluggish growth could quickly fade into the rearview mirror.

In an effort to maximize employment and reduce inflation to 2% over the long run, Jerome Powell and the Federal Reserve are cutting interest rates by 0.25% — citing a weak labor market and “somewhat elevated” inflation. More cuts could be in the cards to boost consumer spending and avoid a recession. Although artificial intelligence (AI) has been driving the stock market to record highs, U.S. gross domestic product growth is projected to be just 1.6% in 2025 and under 2% every year through 2028 — illustrating weakness in the broader economy.

Here’s why an interest rate cut is great news for Home Depot, and whether the dividend stock is a buy now.

Image source: Getty Images.

A much-needed jolt

Higher interest rates have a significant impact on consumer spending, particularly on discretionary goods, services, and travel. When money is more readily available for borrowing, consumers may opt for a car loan or a mortgage because the monthly payment is lower. Or they may finance a home improvement project. In this vein, lower interest rates can lead to an increase in renovation projects, which benefits Home Depot.

There’s a big difference between going to Home Depot for a few spare parts to fix an appliance and redoing an entire room or section of a house. And Home Depot’s poor results suggest that a lot of customers are putting off big projects until conditions improve.

On its August earnings call (second quarter 2025), Home Depot said that lower interest rates would help boost demand and provide relief for mortgages. Home Depot CEO Ted Decker said the following:

When we talk generally though to our customers, each of our sets of consumers and pros, the number one reason for deferring the large project is general economic uncertainty, that is larger than prices of projects, of labor availability, all the various things we’ve talked about in the past. By a wide margin, economic uncertainty is number one.

The prospect of good-paying jobs and lower interest rates could certainly give Home Depot’s residential business a lift. However, the company has also been investing heavily in its professional and commercial contractor business. In June 2024, Home Depot completed its $18.25 billion acquisition of SRS Distribution, expanding its home improvement and construction business. SRS specializes in selling roofing products to contractors — which provides cross-selling opportunities with Home Depot’s retail outlets.

Home Depot made the SRS acquisition in the middle of an industrywide downturn — a sign that it is investing for the long term. SRS essentially makes Home Depot even more of a coiled spring for the next cyclical expansion period, potentially amplifying the benefits the company will feel from lower interest rates.

Taking a home improvement rebound for granted

The market is forward-looking and cares more about where businesses are headed than where they have been. And unfortunately for investors considering Home Depot, the stock is already priced as if interest rates will continue to fall.

As you can see in the following chart, Home Depot’s earnings were on the rise leading up to the pandemic, then entered a new phase during the pandemic as consumers accelerated spending on do-it-yourself home improvement projects, driven by low interest rates.

HD data by YCharts

But Home Depot’s earnings have been ticking down in recent years even though its stock price is around an all-time high — suggesting that investors are looking past the company’s near-term struggles in anticipation of a recovery.

In February, Home Depot raised its dividend by the lowest amount in 15 years and issued a dire warning to investors about a prolonged downturn in the home improvement industry. So it could take several interest rate cuts to really move the needle on consumer spending at Home Depot.

In the meantime, the stock is on the expensive side, with a price-to-earnings ratio of 28.2 and a forward P/E of 27.7 compared to a 10-year median P/E of just 23. Meaning that Home Depot’s earnings would need to grow 20% faster than its stock price just for the valuation to come back down to historical averages over the last decade.

A quality company at a premium valuation

Home Depot is an excellent company, but it is already priced for a recovery. So the stock isn’t a screaming buy now.

The good news is that Home Depot could still be a good buy for long-term investors who believe in the company’s potential for store expansions, same-store sales growth, and that the SRS acquisition will pay off. If Home Depot enters a multiyear period of double-digit earnings growth, its valuation could quickly come down, making the stock more attractive.

Home Depot could also reaccelerate its dividend growth rate, building on its 16-year track record of consecutive annual dividend raises. Home Depot yields 2.2% — which is better than the 1.2% yield of the S&P 500.

All told, Home Depot isn’t a no-brainer buy now because the stock price has run up ahead of anticipated rate cuts. But it’s still a decent buy for long-term investors.

It wasn’t a big surprise that Federal Reserve Chairman Jerome Powell cut interest rates at the Fed’s September meeting on Wednesday. In July, he implied in no uncertain terms that a rate cut was coming, and the likelihood was that it was going be a quarter of a point. That’s what has happened. The governing body also signaled that two more cuts would come at its next two meetings, in October and December.

Powell noted that there are mixed signals in the economy, which made it a difficult decision. Normally, the Fed keeps rates high until inflation backs down, and right now, inflation is higher than the Fed wants it to be. Nonetheless, the once-strong job market is beginning to falter, and a reduction in interest rates should stimulate the economy and employment opportunities.

A more active economy with more jobs and money flowing is great news for most businesses, and some companies will feel the change more acutely. Visa (V 1.19%), SoFi Technologies (SOFI 4.96%), and Carnival (CCL -2.86%) (CUK -2.67%), are three stocks that should benefit in a big way.

Image source: Getty Images.

1. Visa: The best indicator of spending habits

Visa is the largest credit card company in the world, and its performance tells the story of the economy to some degree. Because it’s a credit card network, its processed volume is a strong indication of how people are spending. And because it targets a wide range of demographics, its message is fairly universal.

The purpose of cutting interest rates is to boost the economy, and Visa is a major beneficiary of higher spending. Visa’s core business is providing the network, or infrastructure, that moves money from a customer’s partnering bank to a merchant, taking a small cut of each transaction. Although it has branched out to other services, they mostly center around different ways of moving money. More money flowing means more money for Visa.

It has been performing well despite the higher interest rates. In the 2025 fiscal third quarter (ended June 30), revenue increased 14% year over year, and payments volume was up 8%. It’s highly profitable, since it has a simple, low-cost model, and net income increased 8% over last year in the quarter.

Lower interest rates should further boost Visa’s earnings, benefiting this Warren Buffett-backed stock. Visa is a solid long-term investment, offering value to most portfolios.

2. SoFi: A young bank disruptor

Banks have a two-sided relationship with interest rates. They make more money on net interest income when rates are higher, but they also suffer from higher default rates because consumers struggle to pay back loans. They also take out loans at lower rates for that reason, and altogether, banks usually do better with lower rates.

That goes for the industry as a whole, but I’m picking SoFi in particular partly because of its large lending segment, and partly because it’s growing much faster than almost any other bank, which means it stands to gain a lot from an improving economy.

SoFi is a neobank, a cadre of digital banks that have no physical branches and offer a modern take on financial management. In addition to student, personal, and home loans, it offers a broad array of standard banking services and typically beats out national averages on savings rates for deposits.

It also offers non-standard services like cryptocurrency trading on its app, and it recently said it would offer international money transfers on a Blockchain network. That could offer real value, since sending money internationally is often a complicated, expensive, and long process.

SoFi’s lending segment struggled last year when interest rates were at a high, and it has already benefited from lower rates with accelerated revenue growth and better credit metrics. Even lower rates should help all of its segments, which, aside from lending, include financial services, like bank accounts and investing, and tech platform, which is a business-to-business financial infrastructure.

As it becomes a larger and more formidable player in finance, it should be able to weather future uncertainty even better.

3. Carnival: Great performance, high debt

Carnival is sailing through smooth seas as customers continue to sign up for its cruises. Demand is at historical highs, operating income is at a record, and the company is ordering new ships and launching new destinations to meet all of this demand.

There’s only one kink in the business: it has massive debt. It’s been paying it off responsibly, but it’s still more than $27 billion. This year, it has refinanced $7 billion at better rates, saving millions on interest. It will now be able to refinance more of its debt at lower rates.

Outside of the debt, the investment thesis for Carnival is strong. It’s the largest global cruise operator, and demand has stayed healthy despite high inflation. That’s resiliency.

Carnival stock is still cheap today due to the concerns about the debt, but as it pays it down and becomes more profitable, expect the stock to keep climbing.

Stocks are at an all-time high, as there have been plenty of winners during the AI boom.

However, one sector has been left behind over the last couple of years. Housing stocks have generally been reeling with mortgage rates still elevated and existing home sales down roughly 30% since pre-pandemic levels. That has impacted everyone in the sector, from home builders to real estate agencies to home-furnishing companies, which depend on home sales to drive demand.

One company, RH (RH -3.60%), is still trading down 69% from its pandemic-era peak, as its business pulled back substantially in the post-pandemic era, even though it has since regrouped and is back to delivering solid growth.

The stock pulled back last week after the high-end home furnishings company formerly known as Restoration Hardware missed estimates and cut its full-year guidance. The stock fell 4.6% on the news, even though the numbers were solid considering the challenging macroeconomic environment.

Image source: RH.

Revenue rose 8.4% to $899.2 million, below estimates for $905.4 million. Demand, which is a measure of order growth, was up 13.7% in the period, even with the impact of tariff uncertainty and a weak housing market.

Despite the weaker-than-expected revenue growth, the company continued to deliver strong profit margins with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 20.6%, and a generally accepted accounting principles (GAAP) operating margin of 14.3%.

Adjusted earnings per share jumped from $1.69 to $2.93, showing its margins are rapidly expanding, though that missed the consensus at $3.22.

Why RH could soar

It will take a lot for RH to recover to its previous peak, which came at a time when the housing market was soaring and home-improvement stocks were delivering rapid growth.

However, considering it’s down 69% from its peak, RH doesn’t need to get all the way back there to be a winner. In fact, the Fed rate cut on Wednesday could be the trigger the company needs in the housing market.

CEO Gary Friedman hasn’t hesitated to blame what he’s called the weakest housing market in 30 years for the company’s woes, and lower mortgage rates are likely to bring more home buyers and sellers into the market. Lower rates will reduce monthly payments, and it will also encourage sellers to reenter the market as it will diminish the “lock-in effect” of the pandemic era.

As a high-end home furnishings seller, RH is well prepared to take advantage of the housing market recovery as home sales tend to trigger new furniture purchases.

The company has also expanded significantly in Europe and with new galleries in the U.S., in addition to new trial businesses like restaurants, guesthouses, and airplane and yacht charters.

While interest rate cuts in the U.S. won’t directly affect the business in Europe, its expansion across the pond shows there’s plenty of growth runway left for the company.

Is RH a buy?

Based on analyst estimates for fiscal 2027, which ends in January 2027, RH stock trades at a forward P/E of 18, which seems like a fair price for a stock that still has significant growth potential. Additionally, Friedman envisions expanding the brand beyond home furnishings, even flipping whole, fully furnished houses, effectively getting into the housing market, a program it calls RH Residences.

Even if mortgage rates decline, it could take time for the housing market to spring back to life, especially as the lock-in effect is likely to persist for at least some homeowners.

However, investing in RH looks like a good way to take advantage of the expected rate cuts. For risk-tolerant investors, getting some exposure to the stock right now looks like a smart idea.

BREAKINGBREAKING,

The central bank’s cut comes amid a cooling labour market, which has stalled economic growth.

The United States Federal Reserve will cut interest rates by a quarter of a percentage point, so they will now be between 4.00 percent and 4.25 percent, as a slowing labour market stalls economic growth.

The Fed, the US central bank, announced its decision on Wednesday afternoon.

Economists had widely expected a 25 basis point cut, with CME FedWatch — a group that tracks probability of monetary policy decisions — putting the odds at 96 percent. One basis point is one-hundredth of one percentage point.

Before Wednesday, the Fed had last cut rates in December by 25 basis points, the third cut last year, taking its benchmark rate to between 4.25 percent and 4.50 percent, where it had held steady since.

Federal Reserve Chairman Jerome Powell has emphasised that uncertainty in the economy has kept the Fed cautious, arguing that maintaining rates gave policymakers flexibility as conditions shifted.

The cut comes as a response to shifting economic conditions, following a slew of weak jobs reports showing a slowdown in growth in the labour market and a slight uptick in inflationary pressures.

“Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated,” the central bank said in a press release.

“Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen.”

Investors are also waiting for indications from the central bank on whether it will cut interest rates two or three times for the rest of the year as economic uncertainty weighs on the US labour market and the broader economy while the costs of goods and services increase under tariff-driven pressures.

Political pressure

The latest cut comes at a time of heightened scrutiny and pressure on the Fed, which has long emphasised its independence from political pressure. But for months, US President Donald Trump has publicly attacked the central bank, mocking Powell as “too late Powell” over his cautious approach to cutting rates.

At the same time, the Republican-led White House has sought to oust Fed Governor Lisa Cook, who was appointed by former US President Joe Biden, a Democrat, citing alleged mortgage fraud.

On Monday, a US appeals court blocked Trump from removing her. The administration has said it will challenge the ruling.

“The president lawfully removed Lisa Cook for cause. The administration will appeal this decision and looks forward to ultimate victory on the issue,” White House spokesman Kush Desai said on Tuesday.

That same day, Stephen Miran, chair of Trump’s Council of Economic Advisors, was sworn in to fill a temporary Fed seat left vacant by Adriana Kugler until January, while the White House searches for a permanent replacement.

Miran pledged to act independently, but his close ties to the Trump administration — and his work as a fellow at the conservative Manhattan Institute — have raised doubts. His Senate confirmation fell largely along party lines, 47–48, and Senator Lisa Murkowski of Alaska was the only Republican to oppose him.

On Monday, Senate Minority Leader Chuck Schumer called Miran “nothing more than Donald Trump’s mouthpiece at the Fed”.

Markets respond

As of 2pm in New York (18:00 GMT), US markets are trending upwards. The Nasdaq is about even with the market open, the S&P 500 is up 0.2, and the Dow Jones Industrial Average is up by 1 percent.

SEOUL, Sept. 17 (UPI) — To address its low fertility rate, the South Korean government has gone all out. Now, the country’s private corporations are joining the campaign by offering higher savings interest rates for families with multiple children.

The Korean Federation of Community Credit Cooperatives said Wednesday that its newly launched savings product attracted more than 30,000 customers. With more than 1,250 financial cooperatives, it is the nation’s largest apex organization.

The product provides 10% interest for customers with a newborn this year. If the child is their second, the rate increases to 11%, and for a third child, it rises to 12%. A monthly deposit limit applies, though.

“We will develop various programs to uphold our responsibility as a local financial institution, and to contribute to building a sustainable community,” cooperative Chairman Kim In said in a statement.

KB Kookmin Bank, Korea’s largest lender in terms of assets, also has a savings account that offers interest rates up to 10% to families with multiple children.

Last year, Seoul-based builder Booyoung started to award a $72,000 bonus to employees each time they had a baby. The company told UPI that it had spent $7.1 million for the initiative so far.

Cosmetics maker Kolmar Korea provides a childbirth grant of $7,200 for the first and second children, and $14,400 for the third. It has also made parental leave mandatory.

South Korea’s fertility rate has been plummeting, falling to 0.72 in 2023 before slightly going up to 0.75 last year. This means that for every 100 women, only 75 babies are expected to be born.

It is one of the lowest rates in the world. Only a handful of places recorded fertility rates below 1 in recent years, including Hong Kong, and Taiwan.

A federal manhunt is under way for anyone involved in the assassination of the conservative commentator and Trump ally.