DJ The 10-Point: The Wall Street Journal's Guide to the Day's Top News
2021 Dow Jones & Company, Inc.
By Matt Murray
Good Morning. In today's edition, Facebook's own research shows its Instagram app harms teenage girls, Apple's latest iPhone looks like its previous iPhone, California Gov. Gavin Newsom easily beats back a recall, and high inflation means the lowest-paid Americans' real wages are falling.
U.S. stock indexes continued their pullback Tuesday, even after fresh data showed that inflation climbed at a slower pace than economists expected in August. After starting higher, the S&P 500 ended down 0.6%, the Dow industrials 0.8% and the Nasdaq 0.4%. This month's broad pullback has come amid concerns that the Delta variant of Covid-19 could weigh on economic activity and that stocks have rallied for too long without a correction. In global trading Wednesday, Asia markets ended lower, Europe was down at midday and U.S. stock futures were higher.
-- Goldman Sachs finance chief Stephen Scherr, who led the Wall Street powerhouse's yearslong push into Main Street banking, is retiring.
-- Sportradar, backed by Michael Jordan and Mark Cuban, saw its shares fall 7.2% following its market debut.
-- Fintech startup Pagaya is close to an agreement to go public in a SPAC deal that would value it at about $9 billion.
-- Fast-rising metal costs are pushing manufacturers to take what steel they can get. And a hot uranium market is a boon for a handful of hedge funds.
Facebook knows its Instagram app is toxic for teen girls.
For the past three years, Facebook has been conducting studies into how its photo-sharing app Instagram affects its millions of young users. Repeatedly, the company's researchers found that Instagram is harmful for a sizable percentage of them, most notably teenage girls. In public, Facebook has consistently played down the app's negative effects on teens, and hasn't made its research public or available to academics or lawmakers.
In May, Instagram head Adam Mosseri told reporters that research he had seen suggests the app's effects on teen well-being is likely "quite small." In a recent interview, he said the research into the mental-health effects on teens is valuable: "In no way do I mean to diminish these issues...Some of the issues mentioned in this story aren't necessarily widespread, but their impact on people may be huge."
-- The Democratic chairman and ranking Republican on the Senate Consumer Protection, Product Safety, and Data Security Subcommittee said they would launch a probe into Facebook's research on how Instagram affects young users.
Apple showcased the iPhone 13 and a smartwatch with a new look at its annual September event, capping a year of record profit -- largely thanks to last fall's iPhone 12 -- and battles with opponents unhappy at its power over third-party software on its mobile devices. The iPhone 13 looks similar to the previous model, and a challenge for Apple is to avoid the kind of drop-off in sales that has greeted other off-year iPhones following big hits. Some investors are worried the company's stock is overvalued, that Apple faces greater costs and that the latest phones won't fuel the same level of growth as last year's highly anticipated crop.
In other tech news...
-- Amazon plans to add 125,000 U.S. employees as it prepares for the holiday shopping period in a tight labor market.
-- SpaceX plans to launch four civilians into orbit this week-360 miles up -- on a journey lasting at least three days.
For the lowest-paid Americans, real wages in August were down 0.5% from a year earlier, contrasting with 2.1% growth in the two years before the pandemic. It's a case of strong pay gains meeting high inflation -- reflecting the unusual nature of the economic recovery. Until recent weeks, reopenings, vaccinations and fiscal stimulus had fueled a powerful surge in demand, in particular for in-person services such as dining and travel-shunned for most of the pandemic -- that skew toward low-pay jobs. Companies couldn't hire fast enough and boosted pay. But at the same time, persistent pandemic-related shortages and bottlenecks were causing prices to soar.
-- U.S. median household income declined significantly last year for the first time in nearly a decade.
House Democrats' tax plan would bring significant cuts for low-income households, largely by extending the expanded child tax credit, while raising the average federal tax rate on households with income of at least $1 million to 37.3% from 30.2% in 2023. It would increase corporate taxes as well as capital-gains taxes and individual income taxes on high-income households-and make the estate tax harder to avoid. Democrats would use the additional tax revenue to pay for new spending programs as well as a series of tax cuts, including renewable-energy incentives.
California Gov. Gavin Newsom easily defeated a recall effort, the Associated Press projected. The recall campaign was fueled in large part by frustrations over the first-term Democrat's business and school shutdowns, along with mask and vaccine rules, intended to slow the spread of Covid-19. Mr. Newsom has said that the rules, among the nation's strictest, saved lives and staved off further economic disaster.
A Haitian prosecutor asked a judge to charge Prime Minister Ariel Henry in connection with the assassination of President Jovenel Moïse, saying there were enough elements to order the immediate indictment. He also requested that immigration authorities keep Mr. Henry from leaving the country. Mr. Moïse was killed early on July 7 after assailants stormed the presidential compound. Among the approximately 40 people Haitian police have implicated in the assassination plot are Colombian mercenaries, Haitian politicians, Miami businessmen and members of Mr. Moïse's security team.
In other world news...
-- Iranian security guards physically harassed female U.N. inspectors at a nuclear facility, diplomats say.
-- U.S. and EU officials are crafting a pledge to reduce global methane emissions by nearly a third by 2030.
-- China's recovery hit a bump in August, with retail sales and the all-important property market both signaling weakness.
(END) Dow Jones Newswires
September 15, 2021 07:29 ET (11:29 GMT)