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This is MarketPlats. In Los Angeles, I'm Kyle Risdell. It is Thursday. Today, this one is the 21st of November. Good as always, to have you along, everybody. Let us stipulate here, right at the outset, that the vibes of this economy are real. Because, as we know, how people feel about their economic lives does matter.
That said, a good dose of data every now and then can be really useful. Something a little more objective that might tell us where the economy is at present and sometimes a bit about where it's going.
It's convenient then that we got just such a dose of data today. The conference board's leading economic index, sometimes called in the vernacular, the index of leading economic indicators. It crunches together 10 different forward looking indicators to suss out what economic growth is going to look like in the short term future.
Last month, it turns out the LEI was down by 4-10% after being down in September and August and all the way back to earlier this year. What might that portend do you suppose? Marketplaces Mitchell Hartman is on the economic crystal ball gazing desk for us today.
The leading economic index is designed to predict future growth. It uses data on manufacturing, home building, unemployment, interest rates, stock prices, and consumer sentiment. Economist Stephanie Gishard at the conference board says LEI was down last month. And it has also been declining for almost three years now. So it's bad, but the declines are also slowing down.
So this is a positive development. It means that there are still headwinds to economic growth, but less than a few months ago. And the LEI is no longer flashing warning signs of recession to come, which makes sense, says analyst Sam Stovall at CFRA Research. Looking at real gross domestic product, expected to be up 2.9% in 2024,
2.3% in 2025. Stovall says you can also look at the stock market, which I know isn't the economy, but is often a harbinger. The stock market is a good predictor of economic growth trends. Historically, the market has anticipated the economy by six to seven months. And the S&P 500 has been hitting record highs. Objectively speaking, the economy is doing very well, exceptionally well.
Economist Mark Zandy at Moody's Analytics says the Conference Board's leading economic index may still be in the doldrums, but most everything else looks good, starting with the job market. Creating a lot of jobs across lots of industries, unemployment is very low. Economists not long ago were thinking recession, right? I mean, not this go around. For any warning signs of recession, Zandy looks to unemployment claims.
As long as they remain low, layoffs are low, consumers are going to continue to do their thing. So you look at the L.E.I., you think the world's going to fall into pieces. You look at the U.I. claims to go, eh, no, that's not happening. Last week, jobless claims fell again to the lowest level in more than six months. I'm Mitchell Hartman for Marketplace. Got 11 economists that says, eh, Wall Street as the week heads into the home stretch, traders do seem to have gotten their mojo back just a bit. We'll have the details when we do the numbers.
It's been brewing for days, but now it's official. The Department of Justice has given a federal judge its plan for breaking up Google. The DOJ wants to force the company to sell off its Chrome web browser. It wants limits on the Android mobile operating system and the government's got thoughts on Google and artificial intelligence too. Quoting here, justice wants the court to stop Google from manipulating the development and deployment
of AI solutions and other technologies that provide the most likely long-term path for a new generation of search competitors. That is a mouthful. I know. Which is why we ask marketplaces Kelly Wells to unpack it for us.
The DOJ's complaint about Google and AI is kind of all about the Chrome web browser too. It is the most popular and it directs every search through Google's search engine. So does the second most popular web browser, Apple's Safari? That's a pretty tried and true monopoly strategy.
Adam Epstein is CEO of the search advertising firm Ad Marketplace. He says Google enjoys roughly 90% of search engine market share. The reason it's an AI problem is every time you look up the name of that one actor in that TV show or how to tie a double Windsor, you're making Google's AI program Gemini smarter. They can continue to improve their own search AI agent and keep searches away from their competitors.
That's why the DOJ wants to limit Google's ability to manipulate AI development. Shurag Shah is a professor at University of Washington's Information School. Getting that kind of diffuse a little bit will at least give some competitors fighting chance. Google called the DOJ's proposal a quote, radical interventionist agenda in a statement. The company says it would chill its investment in AI and endanger user privacy. Shah is not convinced.
In fact, there are a number of reasons to believe that it would be actually better for customers if Chrome were to be divested. Google has promised an alternative solution and information management professor Thomas Davenport of Babson College thinks the company might have a point. And so it's unfair to Google really impossible to expect them to do search without being able to use AI freely.
And he says Google controls so much market share in part because people like it. There are a variety of other search engines, but people just don't really want to use them. Adam Epstein of Ad Marketplace says he expects the DOJ effort will change the search market. And today's single search engine reality will feel quaint in a few years. I'm Kayleigh Wells for Marketplace.
There's been no small number of crises across the world these past few years. There are, of course, the wars in Gaza and Ukraine. And there are things like hurricanes and earthquakes and wildfires. All of them disrupt the global economy to one degree or another. Supply chains, or what I'm thinking of in particular here. First and foremost, though, of course, they are humanitarian crises. Organizations like Save the Children are on the front lines of those crises. And at the end of the day,
Running that kind of nonprofit is also kind of like running a business. Youti Sorepto is the president and CEO of Save the Children US. Thank you so much for coming into the studio. Thank you for having me. I want to start with you, actually. You come from corporate America decades in corporate America. You're an econ finance person by education. How did you wind up in this field?
Yes, I get asked that a lot. When I came out of grad school in Europe, actually, I joined Unilever, a large multinational company because I was very keen to actually get working abroad. And I figured if I joined a large multinational, that would get me abroad. And indeed, it did. Within five years, I was in Asia. But I did think, is there another way to use some of my skills to actually
have more direct impact on people. If you are working for large consumer packaged goods companies, you do try to make everyday products for everyday people all the time.
That also makes you very aware of their scores of people who actually could not afford our products. So I'm like, OK, how do I make that? My impact more direct. And then I got sort of lucky. I bumped into Save the Children. They said, oh, here's this. This is 12 years ago. We have this role. Would you like to join? Let's give it a try.
to give people a sense of scale. So you've been involved with Save the Children International for a long time. It's now you're running Save the Children in the US. Give us a sense of what it is that you do. What does your organization do? So Save the Children was founded over 100 years ago by this amazing woman, Eglentine Jeb, in the United Kingdom. And she was particularly aggravated about the fact that children in Germany and Austria were dying of starvation after World War I. We're talking 1919.
We are now an organization that has over 25,000 colleagues across 115 countries. We have an annual spend budget of almost $3 billion. And it's, you know, we do emergency responses, whether they are earthquakes or conflict affected settings. But we also do long-term education or livelihoods work across all kinds of countries, including here in the United States.
The other thing that struck me as I was thinking about this interview, there's this great video of something it was that you all did, and I apologize for not remembering the specifics, but the number of times supply chain imagery came up in that video.
Big cargo airplanes, trucks, passing goods hand to hand. The idea that so much of what you do depends on logistics and supply chains actually just sort of surprised me in a way that really shouldn't have been surprising, I suppose.
Yeah, people always say to me, oh, is it very different from what you did before in a private sector? And I'm like, well, more things are the same. Getting stuff from A to B on time in full with good quality at optimal cost is exactly what is required in this sector.
I think over the years, we've really professionalized that area of our work, right? When I joined now, you know, over 12 years ago, I would say we were definitely less organized and less structured and we had fewer systems than a large multinational consumer package goods company would have. And it's hard, right? When you're an NGO, you always have to make trade-offs. Where do we spend our money?
Does it go to children now? Oh, no, we do need a supply chain system. But now I'm very proud, I think, of our supply chain infrastructure. We have over 300 warehouses. We procure half a billion dollars every year from blankets and backpacks and food to medicine and whatever else is needed to help children in emergencies. And it occurs to me you're doing it under the most horrible of conditions, not just hurricanes here in the United States, but Gaza, Ukraine.
I always say to my old private sector people to do the supply chain under art that you ain't seen nothing yet. Exactly. That takes a level of determination and creativity that is quite something else. I think you said somewhere or it was said about the work that your organization does. There are more children now in need who are in war zones or disaster areas than there have been in generations. Yeah, probably certainly since World War II. Absolutely.
Yeah. What do you do with that? This is your job. What do you do with that? You, first of all, you accept that you cannot help every child everywhere all the time. Oh, man. You have to accept it. Otherwise, you can't- That's quite the leap to have to make. You have to make that leap. And sometimes we also have to extract ourselves out of areas because there's not sustainable funding, for instance. And if you can't do it well, it's better not to do it.
Right? Which is a hard thing to do in this sector because people think, well, do something and well, yeah, but something if you can't sustain it, you're sometimes doing worse to go in and give false hope. Yes. False hope and also do it badly. Yeah. Because if you do it and you start to make shortcuts on the safety with which you do it, the safety and security for your staff and colleagues, but also for the children that you serve, then you're better off not doing it. But but still it's sometimes hard to say we would like to do this, but we can only do half of it.
How do you know that what you do is working? This is the metrics problem, right? How do you measure your success? And again, there it is sometimes different from the private sector where I knew every day what we sold, what consumers thought. If they don't like your product, they walk away.
And sadly, sometimes I wish the people that we help could walk away if we weren't good enough. But they sadly don't have that choice, right? So we have to internally be much better at wanting to do to deliver the best possible products or service at the best possible cost. But it does kind of ring hollow to have the metric debris be we delivered 14,000 meals today to Rafa, right?
Yes, it's important. Yeah, you can count it, but it's not necessarily what counts. Exactly. And we have to live with that. So sometimes we say, okay, what can we count that does matter? Right? And there are always things that you can do to understand that, how many kids benefited from this education program? And in a certain case, you can absolutely test them, right? We test baselines. What are they like going in? What are they like going out? And is there significant difference? But sometimes it's harder, right? If you stop early child marriage,
in a country which impacts 12 million girls every year, they get married off before the age of, well often the age of 15, because their parents see no other options because of poverty, because of safety, because of cultural norms, et cetera. If you find a way to stop it, that we can measure then how many girls are not married off early. It does have a huge knock on effect, but you have to sort of use some proxies in order to get there.
You are, sadly, in a business, the need for which we'll never go away. No, and sadly, it's actually a growth market as we speak, which I wish I wouldn't have to say, but that is certainly the case. Not this reptile. Let's save the children you ask. Thank you for coming in. Thank you for having me.
coming up. You had new properties. You had a lot of new roofs, which withstand winds a lot better than older roofs. Bad news becomes good news sometimes. First though, let's do the numbers.
Down industrial is up 461 points today. One and a tenth percent on the blue chips closed at 43,870 they did. The Nasdaq gained six points less than a tenth percent, 18,972 the S&P 500 jumped 31 points, about a half percent.
59 and 48 big banks were a big part of the rally today JP Morgan Chase ascended 1.6 percent US bank Corp grew one and three tenths percent city group added one percent Wells Fargo increased about 1.7 percent today Bitcoin BTC traded around 98 thousand dollars per today
That is, nonetheless, or never the last rather, another record high. The value of Bitcoin has been on the rise since election days. You might have seen on hopes for a cryptocurrency-friendly approach from the incoming administration. Mortgage levels have climbed back to level seen last in July. The average rate for 30-year fixed is now 6.84%. That's up from 6.78%. Last week seems like a lot of decimal points, but every decimal point counts in a mortgage. Bonds down, yield on the 10-year keynote rose 4.42%. You're listening to Marketplace.
This is Marketplace. I'm Kyle Risdahl. Ford said this week it's going to cut 4,000 jobs from its European workforce, most of them in Germany and the UK. In Europe, the company said it's been losing money on passenger cars. Increased competition as well as the shift to electric vehicles, which Ford called highly disruptive are the approximate cause. Marketplace's Stephanie Hughes has more on the growing pains in the EV market.
One big problem for EV makers who sell cars in Europe started about a year ago when the German government, in a surprise move, ended an electric vehicle subsidy program. This is Tom Narayan, an auto analyst at RBC Capital Markets.
Since then, in Germany, EV sales have been quite sluggish. There's since been a big push by automakers, including Ford, to bring an incentive back. Meanwhile, automakers in Europe are motivated to sell EVs to meet a new continental emission standard, or else they could face big fines. Also, since Talis Blalak and electrified roadways consultant, car makers have more competition.
with the much cheaper Chinese imports, especially in the United Kingdom, where they don't have large automakers themselves. They don't have any tariffs. Here in the US, the challenges are a bit different. Blailex says there's been a lot of focus on the high-end electric car market. But now, pretty much everyone who wants a fancy EV has one.
So we need to have lower cost vehicles so that the average person that wants a new car looks at an EV and says it makes economic sense for me to buy that vehicle. Another challenge states side says RBC is Tom Narayan. We like big cars like SUV's and pickups.
very expensive because you need an enormous battery. These are heavier cars. American consumers also don't always know when and where they'll charge an EV. Elisa Freeman lives in a suburb of Baltimore. She affectionately calls her current car a spunky old Hyundai hatchback. It's been loved and she's thinking about moving on to an EV, but she doesn't know exactly where she'd plug it in. I live in a town home.
And I would have to put a cord across the sidewalk, which I don't even know if it's legal or not, so I'm looking to that. Freeman says she's also just used to gas-powered cars. She's been driving them for 30 years. She knows how much the repairs will cost. And an EV is a whole spunky new beast to learn all about. I'm Stephanie Hughes from Marketplace.
Hurricane Helene made landfall on Florida's Gulf Coast just shy of two months ago. Milton followed not even two weeks later. The storm killed nearly 250 people across six states. Damage runs into the very high tens of billions of dollars and not more. Some, as yet undetermined percentage of which was insured, some not. In Florida, where the insurance market is already kind of fragile, those storms are going to pose a real test as marketplaces Amy Scott reports.
Back in the summer of 2022, here's how insurance industry spokesman Mark Friedlander described the Florida market for our podcast, How We Survive. It's hanging on a shoestring right now. Friedlander is with the Insurance Information Institute, an industry-funded research group.
That year, several Florida insurers had gone bust. Others were pulling out of the state. And that was before Hurricane Ian caused about $60 billion in insured losses. So it was a little surprising when I checked in with Freelander again recently after back-to-back hurricanes Helene and Milton hit the state.
According to our analysis here at the Institute, the Florida market is in its best financial position in nearly a decade. What now? It is incredible. Absolutely incredible. What's happened?
So what did happen? Freelander credits tort reform. New state laws that made it harder to sue insurance companies for denied claims. Insurers have blamed excessive litigation for driving up costs. Meanwhile, the inflation that added to rebuilding costs has cooled. And after years of raising premiums, Freelander says insurance companies are in better financial shape to absorb claims.
This year, he says companies have filed for an average rate increase of less than 1%. That is a clear sign of a market that is stabilizing. And then on top of all this, we have nine new companies that have come to Florida this year.
As devastating as Hurricane Helene was elsewhere, catastrophe modeler Karen Clark estimates insured losses were around $2 billion in Florida, and she now expects claims from Milton will be lower than her company's initial estimate of $36 billion, partly because Milton hit areas that had recently rebuilt after Hurricane Ian.
You have new properties. You had a lot of new roofs, which withstand winds a lot better than older roofs. She says homeowners weary from rising insurance costs may also be hesitant to file small claims because they don't want the premiums to go up. So the insured loss is going to be well manageable for Florida insurers.
But better shape doesn't mean good shape. Chuck Nice is a professor of risk management and insurance at Florida State University. I don't think people realize how close we were to a collapse of the private market in Florida. We are a much stronger footing today. However, it's still not where I believe it needs to be.
as large private companies like farmers insurance and all state have either left Florida or reduced their coverage. Nice says citizens, the state backed insurer of last resort has taken on more risk.
Martin Weiss grades the financial health of insurance companies at Weiss' ratings. Of the hundred or so companies operating in Florida, more than half have ratings of C or lower. And Weiss is concerned about how often insurers are rejecting insurance claims. Last year, citizens denied just over half of claims. State Farm denied 47%.
Insurance companies have been denying homeowners claims with no payment whatsoever at very high levels. Insurers say they're often turning down flood damage, which isn't covered by traditional homeowners policies. But Weiss says those tort reforms the industry pushed for have made it harder for homeowners to dispute those denials. I'm Amy Scott for Marketplace.
This final note on the way out today in which AAA joins the EV bandwagon. You know how every now and then I do gas prices in this spot on the program? Useful ANIC data, I think, just to give you a sense. That all comes from AAA, their website, which until today was labeled gas prices.
Well, as EV penetration keeps gathering steam in this economy, there has been a rebrand. Triple A now calls it fuel prices, and you will be able to find statewide average per kilowatt hour costs to charge your EV. 34.7 cents, as a nationwide average, should you be curious, per kilowatt hour. Gas, because I know more of you are curious about gas than EV charging, $3.06 a gallon, the national average.
John Buckley, John Gordon, Noya Carr, Diane Parker, Amanda Peacher, and Stephanie Seek are the Marketplace editing staff. Amir Bibawi is the managing editor and I'm Kai Rizdall, we will see you tomorrow everybody. This is APM.
