4:00

only making one rate cut

4:02

versus three. Basically, says

4:04

Karen Petru at Federal Financial Analytics,

4:06

the bond market is saying to

4:08

the Fed, we can hear you,

4:10

we're just not listening. Even

4:13

though J-PAL said we're going to keep

4:15

rates about where they are for a

4:17

while, we don't think we've beaten inflation

4:19

yet, the market is essentially saying we

4:21

think you have and you're going to

4:24

be cutting rates as soon as September.

4:27

And based on that belief, investors bid

4:29

up bond prices, sending the interest rate

4:31

on the benchmark 10-year Treasury bond lower.

4:35

Traders think the Fed is over cautious

4:37

and the Fed will be able to

4:39

cut rates. Indeed, it may have to

4:41

cut rates because the economy will be

4:43

softening. But Petru points out

4:46

that so far, the Fed has

4:48

confounded market expectations, keeping rates higher

4:50

for longer again and again. I'm

4:53

Mitchell Hartman for Marketplace. Wall

4:55

Street on this Monday in

4:57

mid-June. Equities, stocks did quite

4:59

fine. Thanks. Bond yields actually

5:01

moved up a hair. We

5:04

will have the details when we do the numbers. Here

5:30

is the imitation, is this in serious form

5:32

of flattery and maybe a good way and

5:34

make a buck two story of the week.

5:38

This week, in case you'd missed it,

5:40

is the second annual Walmart Plus week

5:42

with member discounts at the mega retailer

5:44

on gas and travel bookings, a free

5:46

trial of express delivery should you so

5:48

desire, early access to new products as

5:50

well. It is,

5:52

of course, a not-so-thinly veiled attempt

5:54

to beat Amazon to the Prime

5:57

Day punch. That mega retailer's discount

5:59

bonanza will as always. be held

6:01

in July exact dates TBD. But

6:04

it has spawned a whole slew of

6:06

imitators, alternatives, and wannabes that have turned

6:08

summer into something of a months-long mini

6:10

Black Friday. Marketplace Megan McCarty Carino

6:13

has that one. Traditionally, summer

6:15

was a slow time in retail,

6:17

says Katherine Black, a partner at

6:19

Carney Consulting Firm. Summer sales

6:21

used to be sort of around key

6:23

holidays, so it's Memorial Day, Fourth of

6:26

July. You'd see discounted

6:28

barbecues or camping equipment. But

6:30

when Amazon, which is a

6:32

marketplace underwriter, created its own

6:34

all-purpose summer shopping holiday back

6:36

in 2015, the

6:38

retail world took notice. We now

6:40

see corresponding promotions from Walmart, Target,

6:42

Best Buy, Macy's, and more. If

6:45

Amazon's doing it, we should also think about

6:48

it. But also, you know, the summer is

6:50

to back to school a little bit like

6:52

fall shopping is for Black Friday. That is

6:55

a chance to get people hooked before

6:57

a major spending season. And increasingly, customers

7:00

are hooked with paid annual memberships, says

7:02

analyst Arun Sundaram at CFRA Research. You

7:04

know, they're not necessarily making a lot

7:06

of money off of these because, you

7:09

know, it tends to be really heavy

7:11

discounts and promotions going on. But

7:14

if you drive memberships, then you'd have

7:16

more loyal customers. Not just loyal customers,

7:18

but usually bigger spending ones, too. He

7:20

says these programs tend to appeal to

7:23

consumers who prize convenience. They're willing to

7:25

pay more to get it. The

7:27

Walmart Plus membership tends to bring in

7:29

more higher income households, which Walmart has

7:32

historically had trouble bringing in and retaining.

7:35

Memberships don't just provide retailers with

7:37

a loyal customer base, but data,

7:39

says Kuhn Powell, a marketing professor

7:41

at Northeastern University. And

7:43

that's basically exchange that you make as

7:46

a consumer. You get some discounts and

7:48

some other things, but the retailer now

7:50

has just way better data on you.

7:52

How you respond to sales promotions, your

7:54

age, gender, and address. And so lots

7:57

of retailers have become very good at

7:59

giving personal. He

8:01

says that drives sales and advertising

8:04

revenue, which is usually a lot

8:06

more lucrative for retailers than just

8:08

selling stuff. I'm Megan

8:10

McCarty-Carino for Marketplace. The

8:34

Biden administration has pinned its sizable

8:37

renewable energy ambitions on

8:39

offshore wind. Back

8:42

in 2021, the White House said that by

8:44

the end of this decade, it wants 700

8:46

times more

8:48

offshore wind capacity online than existed

8:51

in 2020. With

8:53

government incentives priming the pump, companies from around

8:55

the world would have invested billions of dollars

8:58

in building an offshore wind industry here pretty

9:00

much from scratch. But the

9:02

economic one-two punch of inflation and high

9:04

interest rates has hit the wind

9:07

sector just as hard, if not harder, than it

9:09

has hit the rest of the economy. Marketplace's

9:12

Daniel Ackerman visited the port city of

9:14

New Bedford, Massachusetts to see for himself

9:16

how the offshore wind industry is adjusting

9:18

to these economic headwinds. Walking

9:21

around the port, Klaus Moller is like a kid

9:23

in a toy store. In this

9:25

case, the toys are bigger than a football

9:27

field. Here you're seeing the

9:29

blades, which is my favorite

9:31

part of a turbine. They're huge. They're

9:33

107 meters long. Moller is

9:36

CEO of Vineyard Wind. We're standing beneath

9:38

a giant metal rack holding three blades.

9:40

They'll be ferried out to sea and

9:42

bolted onto turbines twice the height of

9:44

the Statue of Liberty. Each turn

9:46

of the blades gives power for a house for one

9:48

day. It's incredible technology.

9:51

And a mature technology, he says. Growing

9:54

up in Denmark... When I looked at the

9:56

ocean as a kid, I saw wind farms.

9:59

About 20... 12,000 turbines are already

10:01

spinning in the waters off Europe and Asia.

10:04

Here in the US, it's only a couple dozen.

10:07

Developers are having a hard time borrowing the

10:10

billions needed for offshore wind projects thanks to

10:12

higher interest rates. And inflation

10:14

hit the cost of materials, like the hundreds

10:16

of tons of steel in each turbine. Mueller

10:19

admits part of the reason his project

10:21

is actually under construction now is

10:24

luck. When you look at the macro

10:26

and what has happened, to some degree

10:28

we were a little bit ahead of

10:30

the wave, right? Vineyard Wind had

10:32

its funding lined up before interest rates jumped.

10:35

Other projects haven't been so lucky on

10:37

timing. Certainly 2022, 2023 have been challenging

10:39

years. Michael

10:44

Brown is CEO of OceanWinds North

10:46

America. Back in 2021, it

10:48

struck a deal to sell power into the

10:50

Massachusetts grid at $75 per megawatt hour

10:53

for the next 20 years. Then

10:56

the Federal Reserve began cranking up

10:58

interest rates. And? The

11:00

underlying financing cost doubled. And

11:03

there was that inflation on materials.

11:06

So with potential revenues locked in

11:08

but costs skyrocketing? That

11:10

project would have made it not just loss making,

11:12

but significantly loss making

11:16

hundreds of millions of dollars of losses. The

11:18

company scrapped its agreement with the state and

11:21

it wasn't alone. In the last two

11:23

years, more proposed offshore wind farms have

11:25

been tabled than have started construction. The

11:28

term the industry uses is economically

11:30

unviable. It's extremely tough environment

11:33

for these projects and they're extremely

11:35

expensive. Brown says these days

11:37

everyone in the offshore wind industry

11:39

is changing course to cover those

11:41

expenses and revive its prospects. For

11:44

instance, states and power utilities have stopped

11:46

setting electricity prices in stone for 20

11:48

years. Brown says

11:50

that flexibility? It's huge because

11:53

it allows us to take the uncertainty factor

11:55

out of our bed. The

11:57

federal government is also streamlining permitting and

11:59

offering. offering tax credits. That'll get more

12:01

projects built and make them cost-competitive with

12:03

other power sources by the end of

12:06

the decade, says Chris Olath, who

12:08

heads the think tank's special initiative on offshore

12:10

wind. Overall, we'll be on track. We

12:12

have a pathway. Olath is confident

12:14

the industry is on the upswing for now.

12:17

But she says that could change come

12:19

November. The Trump

12:21

administration, if they get a second

12:23

term, will come in swinging

12:26

on renewable energy and

12:28

particularly offshore wind. Trump

12:30

has said he'd put a halt to offshore

12:32

wind via executive order on day one. That

12:34

means companies are watching the election

12:36

closely. One offshore wind executive

12:39

said, if need be, his company

12:41

will sit on the sidelines and wait out

12:43

a second Trump administration. In

12:45

New Bedford, Massachusetts, I'm Daniel Ackerman

12:47

for Marketplace. Coming

12:58

up. I

13:11

feel like I've been working about 22 to 24 hours a day, it seems like.

13:15

Seems like that's not sustainable, no?

13:18

First though, let's do the numbers. The

13:21

Dow Industrials gained 188 points today,

13:23

about a half percent on the blue chips, 38,778. The

13:26

Nasdaq up 168 points, that is one percent on that index, 17,857. The S&P 500

13:28

found 41 points

13:35

in the couch cushions, 8 tenths percent, 54 and 73.

13:38

We heard from Dan Ackerman about how

13:40

the offshore wind industry is faring in

13:42

wind power stocks then. Next era energy

13:44

partners down 2.1 percent, Hannon

13:47

Armstrong. We can 1.8 percent. Megan

13:49

McCarty Carino is telling us about it.

13:51

This is the season for membership program

13:53

deals from some companies like Walmart, up

13:56

6 tenths percent today. Best Buy increased four

13:58

and six tenths percent. Amazon Prime

14:00

Day, as I said, coming up in July,

14:02

Amazon, by the way, grew two tenths of

14:05

one percent. Bond prices fell. The yield on

14:07

the 10-year T-note nudged up 4.28 percent. You're

14:09

listening to Marketplace. Here's

14:15

the deal, gang. Marketplace is for the public

14:17

good, not for profit. We count on you,

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our listeners, to help us cover the cost

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of the reporting that you rely on. We

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That's part of our mission. But if

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you're in a position to donate, we

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are counting on you. Please give what

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you can right now at marketplace.org/donate or

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our news team to dive into the

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stories that matter most. Thank you

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But support is still needed to end

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our listeners, to help us cover the

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15:07

on. We are going to remain

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the link in our show notes.

15:44

This is Marketplace. I'm Kai Rizdahl. We

15:47

are not officially even in summer yet,

15:49

but already big parts of the country

15:51

have had or are bracing for major

15:54

heat waves. More than 70

15:56

million Americans are under extreme heat alerts and temperatures in

15:58

parts of the West. have

16:00

already been above a hundred degrees the

16:02

Midwest and the Northeast are up next.

16:06

Most often we hear about weather in the

16:08

wintertime cold and ice and snow playing havoc

16:10

with retail sales and what have you but

16:12

there is growing evidence that summer heat waves

16:15

take a big economic toll as well a

16:17

toll that is going up as the planet

16:19

gets hotter. Marketplaces Henriette reports. Some

16:21

workers were recently fixing masonry on a

16:23

mere genus building on the roof on

16:26

a really hot day. And the head

16:28

contractor said during the hotter parts

16:30

of the day I'm just not going to send people like

16:32

to work. Gina who's an assistant

16:34

professor of public policy at the University of

16:36

Chicago says the contractor was worried about the

16:38

health effects on the workers and the potential

16:41

for costly errors in the heat so they

16:43

took a bit longer to finish the job.

16:45

Probably would have taken two days ended up

16:47

taking three or four days just because they

16:49

needed to stop. This happens in a lot

16:52

of sectors of the economy when temperatures become

16:54

unbearable and it gets unsafe to work outdoors.

16:57

All aspects of the economy slow down.

16:59

Solomon Shung is a professor at UC

17:02

Berkeley. He says heat can lead to

17:04

more accidents on the job. It can

17:06

also increase health care costs, put strain

17:08

on the electricity grid, reduce crop yields

17:11

and overall depress economic output. The real

17:13

challenge with this kind of slowdown is

17:15

that we don't usually see that we

17:17

ever catch up again. Shung

17:19

says after a heat wave the economy can

17:22

get back to its normal baseline of productivity

17:24

but we often don't make up for what

17:26

we lost while it was hot and with

17:28

more intense and frequent heat waves as

17:31

the climate warms that could start to

17:33

have a lasting impact on the economy.

17:35

Like a lot of little heat waves can add

17:37

up to having this very large effect on overall

17:40

economic performance in the long run. We're

17:42

already seeing that. According to research out

17:44

of Dartmouth increased heat waves due to

17:46

climate change erased at least 16 trillion

17:49

dollars from global GDP between 1992 and 2013. Justin

17:51

Mankin, a Dartmouth professor

17:55

who co-authored that paper, says governments

17:58

and businesses are adapting. by installing

18:00

air conditioning in more warehouses and

18:02

schools, putting out warnings ahead of

18:04

heat waves, and reducing work hours

18:06

when needed. And so

18:08

you need to weigh that

18:10

cost of lost economic productivity

18:13

against the costs of adaptation

18:15

investments. In general, he

18:17

says, those investments are usually cheaper

18:19

than economic losses from heat. I'm

18:22

Henry Abb for Marketplace. Port

18:30

of Baltimore is all the way

18:32

open again after

18:47

the last piece of the collapsed Francis

18:49

Scott Key bridge was removed last week

18:51

and 50,000 tons of bridge wreckage in

18:53

all, says the Army Corps of Engineers.

18:56

Container and cargo ships are coming and going,

18:58

which is good news for the businesses that

19:00

depend on that port, the cargo companies, the

19:03

customs brokers, and the nearly 3,000 longshoremen

19:06

who work there, the people who tie

19:08

ships to piers, load and unload containers

19:10

and vehicles, and keep track of

19:12

everything that is coming off and going on those ships.

19:15

Marketplace's Stephanie Hughes spent some time with

19:17

them. Deep in the belly of

19:19

the cargo ship Victoria Highway, longshoreman Jim Pumphrey

19:21

picks up a length of heavy chain from

19:24

a storage box. He

19:27

says each chain can hold 10 tons. They

19:29

lash down into here, and then

19:31

they go up into a piece of equipment.

19:34

That's construction equipment in cars, goods

19:36

known as roe roe, because

19:38

they roll on and off the ship. The

19:41

chains hold the vehicles in place until they're ready

19:43

to be driven off. Pumphrey points

19:46

to a giant bulldozer going past. They

19:48

call them high heavies, too. That's what that

19:50

was, because you see how big it was. It was high heavy. Pumphrey

19:53

is 66 and says this is

19:55

pretty physical work. There are lots

19:57

of moving parts around here, so he and everyone else are going to

19:59

be there. here

26:00

have seen our dream and been able to give us some

26:02

money. We're making progress. I'll be

26:04

honest, it really has in the last month.

26:06

We've now that we've kind of survived the

26:08

first three month period, we're

26:10

able to start payoffs on the, some of the debt. And

26:12

then eventually, hopefully I'll be able to start getting my own

26:14

paycheck, but I don't know when that's going to be pretty

26:17

soon. Hopefully soon. We'll see

26:20

though. My

26:27

biggest challenge right now is finding a work and

26:29

personal life balance because I've been doing, I feel

26:31

like I've been working about 22 to

26:33

24 hours a day, it seems like. Yeah. And

26:35

with ranching, you know, ranching is already 24 seven,

26:38

365. There's no vacations from

26:41

ranching. So people are always like, so you decided

26:44

you're going to ranching at a restaurant, which is like

26:46

the two busiest things. But

26:48

I always tell people when you have

26:50

a passion for it and you love it, like it's not, it

26:53

is work, but it's really not to

26:55

be able to walk into a restaurant and see

26:57

just your dreams come to fruition or like the

26:59

dreams you didn't even know you had come to

27:01

fruition is it's amazing and the

27:04

coolest thing ever. And I think every ranch

27:06

should have a steakhouse attached to it. Jess

27:13

and Terrell Trask running a ranch

27:15

and a restaurant in Ely, Nevada,

27:18

wherever you are, whatever you do, we

27:21

need your help with this series. So

27:23

take a minute if you could let us know how

27:26

things are going. marketplace.org slash my account.

27:46

This final note on the way out

27:48

today, saw this on CNN, a great

27:50

example of whence trade wars come. Remember

27:52

the other day, the European Union announced

27:54

big new tariffs on Chinese made electric

27:56

vehicles. Well, now comes word

27:58

from the Ministry of