Starting today, U.S. freight railroads are poised to cut back on some service with a new union rail contract up for negotiation. The reduced service would come ahead of a potential rail strike date of Sept. 17 if talks fail to progress. While ten of the twelve railroad worker union have struck deals, the holdouts - Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal Air, Rail and Transportation Workers - account for more than 90K rail employees. A rail strike could disrupt the retail industry and giants like Walmart, Target, and Home Depot if domestic trucking rates accelerated again. FedEx and UPS could also be impacted.
Activist investor Daniel Loeb is backing away from plans to push Disney to spin off ESPN, which he hoped could result in new business areas like sports betting and reduce the entertainment giant's debt load. While ESPN gives Disney a steady cash flow, the model has been put under the spotlight given the rising costs of sports broadcast rights. Loeb's Third Point even took another $1B stake in Disney last month to push for the changes.
The dollar kicked off the week on a downbeat note as traders priced in a narrowing of policy divergence between the US Federal Reserve and other big central banks. The euro has fallen by more than a tenth this year, while the US currency is up roughly 13 per cent — with the latter propelled higher by aggressive interest rate rises and hawkish messaging from the Fed about the future path of monetary policy.