How could we recap this week without mentioning one of the most talked about corporate legal cases in years?
Last Friday, US District Judge Yvonne Gonzales Rogers issued a mixed ruling in Epic Games’ lawsuit against Apple (AAPL).
The gist of the ruling is that Apple must allow app developers to use third party payment providers when a customer wants to purchase an item from Apple’s App Store. Currently, Apple takes up to a 30% commission on App Store sales. The judge also upheld Apple’s right to curate what apps appear on the App Store, so that means that you won’t be able to download Fortnite from the Apple App Store any time soon.
Epic also must pay $6 million to Apple. Epic has stated that the case will be appealed and Apple is expected to ask for a stay in the injunction until the appeal is heard. Apple’s general counsel was quoted as stating that they were pleased with the ruling and considered it a win.
The CEO of Epic Games, Tim Sweeney, issued a statement on Twitter: “Today’s ruling isn’t a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers.”
Oil Prices Jump as U.S. Crude Stockpiles Tighten
On Wednesday, crude prices increased on a U.S. Energy Information Administration report that showed a 6.4 million barrel draw in crude inventories for the week ending on September 10th, 2021. U.S. crude stockpiles are at the lowest levels since September 2019. The previous week the EIA reported a draw in gasoline inventories of 7.2 million barrels. There was other news around global crude stocks this week as news broke that China will sell 7.38 million barrels of crude oil from the National Petroleum Reserve for the first time since it began stockpiling crude 15 years ago.
Last week, the U.S. Energy Department made a second loan from the U.S. Strategic Petroleum Reserve to Exxon Mobil (XOM) of 1.5 million barrels in an attempt to keep the gasoline supply stable since there were significant production outages in the Gulf of Mexico from several recent hurricanes. This week, Bank of America issued a report that stated if winter temperatures in the northern hemisphere are below normal, oil demand could spike and send crude up to $100/barrel this winter.
The Pace of U.S. Inflation Cools Down
On Monday, U.S. inflation data came in better than expected. Consumer prices in August rose 5.3% from a year ago and 0.3% from July, the Labor Department reported Tuesday. Stripping out food and energy, the consumer price index was up just 0.1% for the month. Economists surveyed by Dow Jones had expected the year over year number to come in at 5.% and the month over month number to come in at 0.4%.
Some other highlights include:
- Used car and truck prices fell 1.5% month over month, but are still up 31.9% year over year.
- Energy up 25% from previous year levels
- Food prices up .4% for the month
Wells Fargo Hit With $250M Fine
Wells Fargo & Co. (WFC) will pay a fine of $250 million after the Office of the Comptroller of the Currency stated it had decencies related to a 2018 consent order.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller of the Currency Michael J. Hsu.
Back in 2018, Wells Fargo paid a $1 billion fine when it consented to the order after failing to make promised adjustments to customer’s interest rates on auto and mortgage loans.
Amazon Plans to Hire 125,000 Employees
Amazon announced this week it will hire 125,000 employees, paying $18/hour on average. Since the start of the pandemic, Amazon has hired over 450,000 workers. Amazon has opened over 250 fulfillment centers, airport hubs, and facilities in the U.S this year. In addition, they announced that Amazon would cover the full cost of tuition books and fees for its 750,000 hourly employees.
Chinese Shares Hit Again
Chinese regulators previously ordered that Ant Financial had to separate two lending units from its main business. Huabei and Jiebei were ordered to be put into a new entity and bring in outside shareholders. It seems regulators in China have upped the ante and now want these two lending businesses to have their own independent apps as well.
In the gambling space, there is news of reforms. Government officials in China will begin to tighten regulations on operations, including appointing Government representatives to supervise companies’ operations in Macau, the only place in China where gambling is allowed.
This week, Wynn Resorts Ltd. (WYNN) saw its largest two day decline since March of 2020. Many US-listed Chinese companies sold off on the news on Tuesday and Wednesday. As of the US market close on Wednesday, the CSI 300 is down 7.95% Year to date and the Hang Seng Index is down 9.94% year to date.
The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. The Hang Seng Index represents the largest companies that trade on the Hong Kong Stock Exchange.
About the Writer
My name is Allen Spence and I have been working in the retail brokerage industry for over 16 years. I joined Alpaca in March of 2021 as a Brokerage Operations Consultant. Before joining Alpaca I have worked in a retail branch environment, call center for active traders, and spent over seven and a half years as the team lead on an equity trading desk for a large regional broker dealer. I’m excited to be at Alpaca helping bring the markets to investors worldwide. I live in Florida and enjoy traveling and spending time with my family.
Alpaca is a globally distributed financial technology company that is democratizing global access to financial markets starting with our API-first stock brokerage. Alpaca offers commission-free stock trading via API, a suite of developer APIs for brokerages, advisors, and startups, as well as a market data API.
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