If you look at the headlines this week, you might think it’s all good. Markets aren’t in full panic mode, unemployment isn’t spiked, and earnings season is still producing plenty of bite-sized charts for investor floors. Underneath that is a very different story about what it takes to keep growth going when people are tired of paying less.
Within the economy, companies are forced to be creative. Some are looking at how valuable products are built, others are quietly reducing their physical footprint and trying to buy a few short-term stock market loves for longer-term stock market stocks. Tech, even the hottest corners of tech, are starting to see the narrative shift from infinite gold to gold to what’s happening as “how much is too much”
At the same time, politics and policy, embedded in places like flight schedules and housing costs, bleed into everyday life. Put it all together and you get a picture of an economy that hasn’t crashed, but has been quietly rethought in real time. Here’s a look at the stories that captured that tension this week.
Housing affordability is so tight that developers are selling mortgage rates
Dr. Horton relies on mortgage rate trading to navigate a market where mortgage rate trading is not extreme. In the most recent quarter, nearly three-thirds of buyers received a discount mortgage rate, often starting at around 3.99 percent, to make monthly payments. That generosity is not free. The stimulus cut the company’s home sales from 20 percent to 20 percent, even as net new orders rose 5 percent for the year to below 20 percent. The builder is also slowing new starts and tightening inventory, especially in softer markets like parts of Florida and California.
TD Bank is cutting branches as it moves to customers’ phones
TD Bank is closing 51 branches and one drive-thru location in 13 states and Washington as it rebuilds its physical footprint for a more digital world. The cuts are part of a plan to downsize or relocate about 10 percent of its stores while pouring more money into technology and referral-based services. Executives still plan to open new locations in some of the affected communities, but with a sharper focus on places where customers can actually be seen in person. TD now relies on more than 1,000 US branches and online tools to manage queues.
Outback Steakhouse Quietly Closes Doors in Eight States
It’s not your dream if the nearest Bloomin’ onion suddenly disappears. Outback Steakhouse’s parent company, Bloomin’ Brands, has closed 10 locations in eight states as part of a broader turnaround plan. The casual dining chain has been grappling with higher costs and more conservative dining, while its shares have fallen more than 40 percent this year. The company is looking at which restaurants it chooses to close based on sales, traffic and investment needs, and moving affected employees to nearby locations. It’s another sign that full-service chains are feeling the pinch because consumers are at the mall or at home.
Big short investor is betting against AI Darlings
Some gloss came out of the AI trade this week in shares of Nvidia and Palantir after Michael Burrin reported that he was shorting both names. The investor who called the housing crash ahead of the 2008 housing crash announced that his fund has reported options on two high-profile AI plays. His move has hit a nerve in a market that many investors may even think AI stocks are in bubble territory. Again, the boot comes after a monster escapes. NVIDIA is up more than 50 percent this year, and Palantir has gained more than 100 percent over the same period.
McDonald’s is losing its lowest-income customers
McDonald’s latest earnings call confirmed what many families are already feeling. Fast food is no longer cheap enough to be an option for the lowest income diner. The company said lower-income customers nearly doubled their numbers in the third quarter, a trend that has dragged on for nearly two years, as higher-income traffic rose. Same-store sales were modest in the U.S. and globally, but still missed some Wall Street expectations. In response, McDonald’s has bent back with limited-time digital promotions like $5 breakfast combos and $8 nugget meals, plus those tied to the Monopoly game.
YouTube TV hides a $60 credit that only power users will find
After YouTube TV dropped more than 20 Disney-owned channels when the wagon talks dropped, subscribers expected a meaningful breach. Instead, which many discover, the next $10 per month for six months, for those who can find it in the account settings and return it. The credit is not automatic and is only available to some users who have disappointed customers who feel out of reach with the loss of ESPN, ABC and other major networks. The move follows an earlier suggestion from YouTube that a larger $20 monthly credit could be on the table if the draft drags on.
Electric aircraft maker beta technologies is headed to the NYSE
Beta Technologies, a Vermont-based electric aviation startup, made its public market debut under the ticker beta. The company previously issued a one-share IPO at $34, above the market, giving it a total of over $1 billion and a valuation of about $7.4 billion. BETA builds electric aircraft and charging systems, including a conventional airliner and a vertical takeoff and landing model called Alia, which flies tens of thousands of nautical miles. With contracts that include the U.S. Department of Defense, Beta joins a growing club of electric aviation companies looking to spark a real slice of the future of air travel with cleaner, quieter planes.
Duolingo’s earnings are strong, but its stock still fell off a cliff
On paper, Duolingo’s third quarter looked great. Daily active users rose by 36 percent, revenue by 41 percent, and paid subscribers by more than a third. The company said investors should expect slower growth in overall resonics in future quarters, a key metric that cooks up future subscription and test revenue. CEO Luis von Ahn, Duolingo deliberately prioritizes product quality and user growth, especially because it relies on AI-powered learning tools. The market’s reaction shows how little patience some investors have for long-term thinking on a long-term tech bandwagon.
Airlines offer rare refunds on snarls air travel
United, American and Delta all said they will offer refunds during the government shutdown to customers who decide not to book, even if their flights aren’t technically canceled. The move has resulted in a 10 percent reduction in flights at the FAA’s 40 major airports as thousands of unpaid air traffic controllers become unavailable. Long Haul international routes are expected to remain mostly busy, but domestic schedules affecting 4,000 flights per day will be cut. The big three are framed as a client-friendly gesture in a tough situation, asking Washington to move quickly to end a system they have stopped trusting.