Important News Items for Investors

1. Bonds Surge

The three major averages on Wall Street, namely the S&P 500 and the Nasdaq Composite, are heading for a losing week after the Federal Reserve hinted at a potential rate hike. This week, both indexes have experienced a decline of 2.7% and 3.5% respectively, making it their worst weekly performance since March. The Dow, however, has seen a more modest drop of 1.6%. The news has led to a surge in bond yields, with the benchmark 10-year Treasury yield reaching its highest level since 2007 at 4.498%. The 2-year rate has also hit its highest level since 2006, topping 5.2%. Stay updated with live market updates.

2. Rupert’s Reign

Rupert Murdoch, the international media mogul, has announced his resignation as chairman of Fox Corp. and News Corp. However, he will continue to be actively engaged with news and ideas in the capacity of chairman emeritus for both companies. His son, Lachlan Murdoch, will take over as the sole chairman of News Corp. while also serving as the executive chair and CEO of Fox Corp. This move comes after a challenging year for Fox’s TV network, which recently settled a defamation lawsuit from Dominion Voting Systems for $787.5 million and saw the departure of Tucker Carlson.

3. Microsoft’s New Tech

Microsoft has unveiled new Surface computers and provided details about Windows 11 at an event in New York. In addition, the company announced a supplemental artificial intelligence tool for core apps like Word and Excel. The upcoming operating system will feature smarter snipping tools that allow users to extract text from screenshots and redact sensitive information. The Surface Laptop Studio 2, a higher-end model, offers a new chip, a 14.4-inch screen, and can be used as a tablet, with prices starting at $1,999. The entry-level Surface Laptop Go 3, starting at $799, comes with a 12.4-inch touch screen and is lighter than previous models.

4. Cisco and Cybersecurity

Cisco, the world’s largest maker of computer networking equipment, has made its largest acquisition ever by purchasing cybersecurity software company Splunk for $28 billion. This cash deal represents about 13% of Cisco’s market cap and is expected to close in the third quarter of 2024. Splunk specializes in technology that helps businesses monitor and analyze their data, reducing the risk of hacks and resolving technical issues faster. Following the announcement, Splunk shares surged 21% while Cisco shares declined by 4%.

5. More McMoney

For the first time in nearly 30 years, McDonald’s is raising royalty fees for franchisees. Starting January 1, franchisees who add new restaurants will have to pay 5% in fees, up from the previous 4%. However, this increase does not apply to those maintaining their current restaurant footprint. Around 95% of McDonald’s approximately 13,400 U.S. restaurants are run by franchisees who pay rent, monthly royalty fees, and other charges. Despite its rocky relationship with U.S. franchisees in recent years, the company’s domestic business is experiencing significant growth this year.

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