Caroline Woods brings the latest business headlines from the floor of the New York Stock Exchange as markets open for trading Thursday, April 11.
Full Video Transcript Below:
CAROLINE WOODS: I’m Caroline Woods reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
Stocks looking to rebound after all the major indexes finished Wednesday in the red. Wall Street is reacting to yet another inflation report. The Producer Price Index, which measures the change in wholesale prices, came in lower than expected. Producer prices increased just 0.2 percent in March, lower than Wall Street’s estimate of 0.3 percent.
In other news, big box retailers are about to face a challenge that may affect their bottom lines. In early March, the Biden administration approved legislation that will cap credit card late fees at $8. That rule also applies to department stores that have their own store-branded credit card.
The new rule, which lowers the average late fee by about 75 percent, goes into effect on May 14. And while it will certainly benefit customers, it may take a big chunk out of company revenues. For its 2023 fiscal year, Macy’s reported $619 million in revenue from credit card purchases. Nordstrom brought in $475 million. Neither company revealed how much it made from late fees, but the new cap is sure to have an impact.
As retailers prepare for this change, they’re also preparing for a decline in credit card spending altogether. The $619 million in Macy’s credit card revenue was a 28 percent drop from 2022, and it expects that number to drop even further during its current fiscal year.
Of those hundreds of millions of dollars spent with credit cards, the bulk wasn’t purchased with store-branded cards. Both Macy’s and Nordstrom reported that only about 3 percent of their net sales came from their own cards.
That’ll do it for your daily briefing. From the New York Stock Exchange, I’m Caroline Woods with TheStreet.
