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American Airlines (AAL) is hit with the largest fine ever for breaking tarmac delay rules. (00:27) Toyota (TM) halts production at all factories in Japan. (01:17) Amazon (AMZN) hikes free shipping minimum to $35 to match Walmart’s (WMT) requirement. (02:36)
This is an abridged transcript of the podcast.
American Airlines has been fined $4.1M for violating federal statutes and a rule that prohibits tarmac delays of three hours or more on domestic flights without providing passengers an opportunity to deplane.
The fine was announced by the Department of Transportation on Monday.
An investigation by the agency covering 2018 to 2021 found that the carrier kept dozens of flights stuck on the tarmac for long periods of time without letting passengers off.
DOT said the fine levied against American (AAL) is the largest fine ever for tarmac delay violations.
Of the $4.1M assessed against AAL, $2.05M will be credited to the airline for compensation provided to passengers on the affected flights.
Japanese auto giant Toyota (NYSE:TM) (OTCPK:OTCPK:TOYOF) (OTCPK:OTCPK:TYIDF) faces a standstill at its factories in Japan due to a production malfunction.
The Japanese car manufacturer suspended operations at 12 of its 14 domestic plants on Tuesday morning and added the final two in the afternoon.
A company spokesperson told Reuters that the glitch left the company unable to order components. They said the amount of lost output remains unclear.
Last year, Toyota (TM) was forced to temporarily suspend operations at all 14 domestic plants due to a cyberattack. This time around, the system error is not believed to be a cyberattack.
These 14 plants together account for around a third of Toyota’s (TM) global production.
Toyota (TM) is known for its just-in-time inventory management, which reduces costs but makes production vulnerable to supply chain bottlenecks.
After a string of output reductions that it attributed to a scarcity of semiconductors, Toyota’s (TM) domestic manufacturing had been recovering. Output increased by 29% from January to June. The carmaker has set a production target of 10.6M vehicles for 2023.
The stock dropped marginally by 0.21% on the Japanese stock exchange on Tuesday.
Amazon (NASDAQ:AMZN) is increasing the free shipping minimum to $35 for non-Prime members in some markets from $25.
The $35 level for free shipping matches the minimum order amount required by Walmart (WMT) to avoid shipping fees for its Walmart+ subscription service.
An Amazon (AMZN) spokesperson in a statement provided to Seeking Alpha said, “We continually evaluate our offerings and make adjustments based on those assessments.”
Amazon (AMZN) announced this month that it will hold a major shopping event in October called Prime Big Deal Days. This is the same pattern as last year, when it held Prime sales events in July and October.
The exact timing of the major shopping event has not been disclosed.
Other headlines to look out for on Seeking Alpha:
Meta, Google, others said to meet with Sen. Schumer on AI next month
Summer of strikes: Why is labor rising across the U.S.?
3M board approves $6B settlement for combat earplugs
On our catalyst watch for the day,
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President Biden is expected to announce the first ten drugs that will be subject to Medicare price negotiations. Wall Street analysts came up with their own lists of potential inclusions.
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The two-day Jefferies Semiconductor, IT Hardware & Communications Infrastructure Summit will feature presentations by a long list of tech-related companies, including AEye (LIDR), Juniper Networks (JNPR), Ericsson (ERIC), and Amdocs (DOX).
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The three-day Google Next conference will include speakers from Google (GOOG), Wayfair (W), Accenture (ACN), and Wendy’s (WEN). Analysts will be laser-focused on the use case demonstrations of Google’s Generative AI products and services.
U.S. stocks on Monday rose at the start of the week.
The S&P (SP500) ended 0.63% higher. The Nasdaq (COMP.IND) added 0.84% and the Dow (DJI) advanced 0.62%.
All 11 S&P sectors finished in the green, with the exception of Utilities. Communication Services and Tech topped the gainers.
Treasury yields were lower on Monday. The longer-end 10-year yield (US10Y) was down 3 basis points to 4.21%, while the 2-year yield (US2Y) was down 1 basis point to 5.05%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.2%, the S&P 500 is up 0.2% and the Nasdaq is up 0.2%. Crude oil is up 0.5% at more than $80 a barrel. Bitcoin is up 0.1%.
In the world markets, the FTSE 100 is up 1.6% and the DAX is up 0.6%.
The biggest stock movers for the day premarket: Jackson Financial (NYSE:JXN) and Goosehead Insurance (NASDAQ:GSHD) are up around 7% and 11% as the companies prepare to enter the S&P SmallCap 600.
Despite exceeding the consensus mark in Q3, Heico (NYSE:HEI) is down more than 5% after the aerospace and defense part manufacturer reported a decline in its operating margin.
On today’s economic calendar, 10:00am Consumer Confidence. Also at 10:00am the Job Openings and Labor Turnover Survey.
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