FTC seeks to block Kate Spade, Michael Kors merger
The Michael Kors Store on Rodeo Drive on Feb. 23, 2017 in Beverly Hills, Calif. (Fg/bauer-griffin/GC Images via Getty Images, FILE)
(NEW YORK) — The Federal Trade Commission is asking a federal judge in New York to block the $8.5 billion merger of Tapestry, the company behind Coach, Kate Spade, and Capri, which controls Michael Kors.
In April, the FTC sued to block the sale, arguing that these brands dominate what’s known as the “accessible luxury” market and that if they combined, consumers would suffer by paying higher prices.
“This has to be the first time the focus of a federal court hearing turned to a $279 Kate Spade tote described as ‘colorful, joyful, feminine, green and white seen on Emily in Paris,” ABC News senior investigative reporter and correspondent Aaron Katersky said on Good Morning America Tuesday.
Tapestry argues the FTC is ignoring the reality of a marketplace, in which consumers have a lot of choices, suggesting it takes a mere stroll through Bloomingdale’s or Macy’s to see Gucci, Kors and Calvin Klein bags fighting for attention.
Michael Kors himself testified last month during a hearing, telling the judge there’s already plenty of competition for handbags, noting that he learned about one brand when he saw a photo of pop superstar Taylor Swift wearing an Aupen bag similar to those made by Kate Spade.
Kors also testified his handbags have “reached a point of brand fatigue” and a lawyer arguing in favor of the merger said it would revitalize the Michael Kors brand, so consumers have yet another choice. The goal, he said, is to sell more handbags to consumers.
The judge took these arguments under advisement and could rule at any time.
(NEW YORK) — Scammers don’t need a special occasion to try to steal your money or your identity. Whether it be holidays or big events, they are always on the prowl — the back-to-school shopping season is no different. Students and parents are particularly vulnerable right now as they shop for everything from textbooks to clothes and even jobs.
The rush to find the best deals has some consumers visiting unfamiliar websites and sometimes hastily clicking on links. All of the excitement can make for a less vigilant consumer — the perfect opportunity for bad actors to pounce. People aged 18 to 24 were more likely to report being targeted by text message or internet messaging than any other age group, according to the Better Business Bureau.
Shoppers need to be careful of fake websites appearing to sell popular supplies and textbooks at deeply discounted prices, as noted by Wells Fargo fraud and claims executive Dan Cusick. They may send fraudulent emails pretending to be a school asking you to update your personal information. The scammers also create fake social media ads that link to the fake websites. Consumers enter their payment information, giving scammers the chance to collect their credit card and bank details.
Fraudsters also set up fake rental sites offering discounted textbooks; they collect the rental fee but never send the books. You should always type the store’s website into your browser and shop from the store’s legitimate site, Cusick suggested. Log into a school’s online portal or app directly to update any student information, ignoring unsolicited or online offers and emails.
Fake scholarship and job offers
The FCC recently issued a warning to college students and their parents about a rise in fraudulent scholarships and fake job offers.Scammers post fake job postings that promise good pay and flexible hours on popular job sites and social media. They may even send emails that look like they’re coming from a business or college promising “guaranteed” scholarships that require you to pay a fee to be eligible.
After you apply, the FCC noted that one common tactic is for them to send you a check to deposit at your bank. They then ask you to send some of the money to another account. However, the check is fake and by the time it bounces, the scammer will have walked away with the money you sent them.
Bottom line is that your boss should be paying you, not the other way around. If they tell you to deposit a check and use some of the money for any reason, experts say it’s a scam.
Federal authorities recommend looking up the name of the company or the person who’s hiring you, plus the words “scam,” “review,” or “complaint” to see what others are saying about them.
If the email looks like it came from a professor or an office at your college, call them directly to confirm they’re really looking to fill a position. Beware of email addresses coming from non-company email addresses including Gmail, Yahoo and Hotmail. Ask the employer to send you details of the job duties, the pay and the hours. If they refuse, that could be another red flag.
Student Rental Scams
As the cost of college rises to record highs, experts say scammers are finding creative ways to dupe vulnerable and unsuspecting students. That’s especially true when it comes to fake apartment rentals.
The fraudsters rip off legitimate rental listings, including photos and descriptions, from reputable organizations. They then post the fake listing on their site at a deep discount. Once you show interest, they ask for your personal information like your bank account. They also create urgency, telling you to “act immediately” or “send money right away” and suggest you will lose the listing otherwise.
When it comes to rental scams, experts say beware of these major red flags: you can’t meet the person or see the rental property before you pay or they ask for payment upfront via wire transfer, gift card or directly into an account. Experts remind us to never send money or share personal information with unverified people or companies and to be guided by the old adage: if it seems too good to be true, it probably is.
(NEW YORK) — Consumer prices rose 2.5% in August compared to a year ago, slowing more than expected and delivering welcome news for the Federal Reserve, days before a widely expected interest rate cut.
Inflation cooled significantly from a year-over-year rate of 2.9% recorded in the previous month.
Price increases have fallen from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%.
The chances of an interest rate cut at the Fed’s meeting next week are all but certain, according to the CME FedWatch Tool, a measure of market sentiment. Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut.
So far this year, the job market has slowed alongside cooling inflation. That trend was underscored last week by a weaker-than-expected jobs report, though employers added a solid 142,000 jobs. The unemployment rate has ticked up this year from 3.7% to 4.2%.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment, while high interest rates slow economic performance and ease inflation.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy job market.
Speaking at an annual gathering in Jackson Hole, Wyoming last month, Fed Chair Jerome Powell said the “time has come” for the Fed to adjust its interest rate policy.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. Last month, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.
Last month, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%. However, economists disagree about whether current economic conditions warrant serious concern.
(NEW YORK) — Bitcoin vaulted to a record high on Thursday, surging more than 3% in early trading and hurtling toward investors’ long-sought milestone of $100,000.
The price of bitcoin briefly exceeded $98,000 for the first time on Thursday morning, before retreating to about $97,600.
The value of the world’s most popular cryptocurrency has soared 31% since the reelection of former President Donald Trump, who is widely viewed as friendly toward digital currency.
By comparison, the S&P 500 has climbed 2.4% since Election Day, while the tech-heavy Nasdaq has increased 2.6%.
The run-up of bitcoin extended to other parts of the crypto industry. Ether, the second-largest cryptocurrency, jumped 8% in early trading on Thursday. Lesser-known litecoin rose nearly 6%, and dogecoin ticked up more than 2%.
On the campaign trail, Trump vowed to bolster the cryptocurrency sector and ease regulations enforced by the Biden administration. Trump also promised to establish the federal government’s first National Strategic Bitcoin Reserve.
Trump said he would replace Securities and Exchange Commission Chair Gary Gensler, whom many crypto proponents dislike for what they perceive as a robust approach to crypto regulation.
In July, Trump told the audience at a cryptocurrency conference in Nashville, Tennessee, that he wanted to turn the U.S. into the “crypto capital of the planet.”
“I’m calling it the ‘election dividend,'” James Butterfill, head of research at digital asset management firm CoinShares, told ABC News. “We went from being worried about a Democrat getting elected to what we’ve got: a Republican clean sweep.”
The recent rise follows a period of stellar returns that stretches back to last year. The price of bitcoin has soared more than 150% since November 2023. Over that period, the S&P 500 has climbed about 30%.
Those gains have been propelled, in part, by U.S. approval in January of bitcoin ETFs, or exchange-traded funds. Bitcoin ETFs allow investors to buy into an asset that tracks the price movement of bitcoin, while avoiding the inconvenience and risk of purchasing the crypto coin itself.
Options trading for bitcoin ETFs
On Tuesday, options on BlackRock’s popular iShares Bitcoin Trust ETF (IBIT) were made available for trading on the Nasdaq. The options, which provide a new avenue for bitcoin investors, allow individuals to commit to buy or sell the ETF at a given price by a specific date. While such investments typically come with additional risk, they can also make large payouts.
The price of IBIT jumped 3.1% on Thursday.
The newly available options may account for some of the rise in the price of bitcoin over recent days, Bryan Armour, the director of passive strategies research at financial firm Morningstar, told ABC News.
“The options add volatility on top of volatility, which has interested some of the crypto investors,” Armour said.
The crypto industry entered this year bruised after a series of high-profile collapses and company scandals.
FTX, a multibillion-dollar cryptocurrency exchange co-founded by Sam Bankman-Fried, collapsed in November 2022. The implosion set off a 17-month legal saga that resulted in the conviction of Bankman-Fried for fraud. In April, Bankman-Fried was sentenced to 25 years in prison.
The surge of bitcoin since Election Day may continue for the foreseeable future, since past periods of momentum have been shown to propel the cryptocurrency, Armour said. But crypto investments remain highly volatile, he added, recommending that the asset make up no more than 5% of a person’s portfolio.
“It’s notoriously difficult to provide a value for bitcoin’s price,” Armour said. “It can go up; it can go down.”
“I would continue to keep any allocation small,” Armour added.
