This week’s world-famous news haiku competition™ is about how America added more jobs than expected in May, but ironically that sent the stock market down because it bolstered expectations for the fed to raise interest rates this year to cool the economy. Good luck getting anything about that into 17 syllables, let alone making it… emotional. Still, I believe in you! Send me your entry—to haiku at cheddar dot com—by noon ET today, for consideration by your Cheddar peers.

Now for God’s sake, man, can we hear about the news?

Matt Davis — Need2Know Chedditor

News You Need2Know

• Inflation eats paychecks as levels hit 3-yr highs

• Cracker Barrel surges as investors ask, ‘What rebr …

• Airlines draw up flight cuts for a grim winter

• Bill Gates testifies on Epstein ties in Congress

• Kalshi asks bettors to declare their employers

• Poll of the day: The Gates of Hell! Or not?

• Poll of the day: It’s a ‘no’ on the World Cup, the …

What’s the stock market up to, eh?

$SPX ( ▼ 1.62% )  $DJI ( ▼ 1.87% )  $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$CBRL ( ▲ 22.56% )  $MSFT ( ▼ 1.5% )  $DAL ( ▼ 5.79% )  $AAL ( ▼ 4.76% )  $IAG.L ( 0.0% )  $KALSHI ( ▼ 0.8% )  

Inflation eats paychecks as levels hit 3-yr highs

Hold onto your wallet because year-over-year inflation just hit a three-year high of 4.2% in May, and your paycheck is officially the main course. Thanks to the ongoing Iran conflict, gas prices have surged more than 40% since last year. While "core" inflation (which conveniently ignores that most of us need to eat and drive) rose a softer 0.2% on the month, inflation-adjusted hourly wages dropped 0.7%. That’s the first time they’ve dropped since the pandemic.

Are we slowing down our spending, though? Of course not. David Stacey, chief economist at America First Credit Union, summed up our collective denial: “They’re still spending, but they’re spending themselves kind of into a trouble situation,” he told the Wall Street Journal, noting that upcoming summer vacations "will just exacerbate" this financial mess. Sure, economists like RSM's Joe Brusuelas hope "we’re approaching the peak" of these price hikes. But if your credit card debt is rising along with that of most Americans, I’d imagine that’s cold comfort.

“The numbers were great,” Trump said of the data, yesterday.

Quote of the Day

Cracker Barrel surges as investors ask, ‘What rebrand?’

Grab your rocking chair and biscuits, because Cracker Barrel $CBRL ( ▲ 22.56% ) is coming back. After a disastrous, short-lived logo change last summer threw the family restaurant chain into the center of a culture-war controversy, shares just surged a massive 28%. It’ll be a while before the company reaches its 2021 highs, of course, since the stock has essentially been in the toilet since last year.

Still, what’s the secret to the turnaround? Frantically hitting the undo button. The company reinstated its classic logo and went back to its old-school cooking processes, and investors are eating it up.

Despite analysts bracing for a loss, Cracker Barrel served up a surprise $42.8 million profit in the fiscal third quarter. Let's be real, though: This wasn't just because of the food. The company largely pulled this off through aggressive corporate cost-cutting and a very convenient $47.4 million litigation settlement over Visa card swipe fees.

In reality, fewer people are actually eating there, with foot traffic dropping 6.7%. But Chief Financial Officer Craig Pommells is finding the silver lining, noting, “Although traffic remained negative, we’re encouraged by the gradual improvements in the underlying traffic trend.” Meanwhile, CEO Julie Masino is taking the wins where she can get them, boasting that their Google Star rating hit a high not seen since 2018, and insisting, “Our value remains strong.”

That’s some rebrand for falling foot traffic, I must say. Can I get a ‘C’? Can I get a ‘B’? Can I get an ‘RL’? No? It’s un-pronounceable? Well, okay then…

Airlines draw up flight cuts for a grim winter

America’s winter travel plans are on thin ice. Thanks to skyrocketing jet fuel prices, airlines are preparing to aggressively slash schedules, the Financial Times reports. As one industry adviser bluntly told the paper’s reporter, Peter Campbell, “You need to make sure you’re filling every seat. You can’t fly planes that are empty.”

Airlines are hitting the panic button. ITA Airways chief Joerg Eberhart warned, "Maybe there will have to be some help from governments," noting their fuel hedging only lasts two months: “The real problem starts then in January.” McKinsey's Steve Saxon agrees, predicting that if prices go up again, "the winter is fairly ugly."

For smaller carriers, the threat is existential. Latam's Roberto Alvo cautioned that "weaker carriers... are going to start to suffer." Aviation consultant Jeffrey Goh laid out the industry's grim dilemma: “Are you going to put your aircraft in the desert... Or are you going to fly [at] an operating loss?” Turkish Airlines chair Murat Şeker even threatened that they will "stop operating in certain cities" if elevated fuel levels continue.

Meanwhile, some executives are just busy cashing in on our travel desperation. Delta’s $DAL ( ▼ 5.79% ) Peter Carter cheered, “It’s all driven by demand. The economy is quite strong." IAG's $IAG.L ( 0.0% ) Luis Gallego bragged they "don’t see any weakness," and American Airlines' $AAL ( ▼ 4.76% ) Nat Pieper is simply plotting to take "full advantage of the revenue goodness as long as it lasts."

Song of the Day: Bedouine, ‘One Thing Right’

Here’s a sunlit, groove-heavy celebration of summer. Hoorah!

Bill Gates testifies on Epstein ties in Congress

Microsoft $MSFT ( ▼ 1.5% ) co-founder Bill Gates faced lawmakers on Capitol Hill on Wednesday, testifying in a closed-door hearing before the House Oversight Committee regarding his past ties to convicted sex offender Jeffrey Epstein. The biggest revelation from the hearing was that Epstein had attempted to extort the billionaire over his past infidelities to his then-wife, Melinda French Gates.

In his remarks, Gates confessed, “I learned Epstein had become aware of sensitive information about my personal life, including the fact that I had been unfaithful in my marriage.” He stressed that these affairs "had nothing to do with my interactions with Epstein," but revealed that Epstein used this information, alongside "many lies," to "pressure me to re-engage with him."

Why was he meeting with Epstein in the first place? Gates claimed his sole motivation was securing funding for his global health philanthropy. "I was introduced to Epstein in 2011 through people I trusted," he said, noting that Epstein promised he could raise billions. By 2014, Gates realized their discussions were a "dead-end," telling Congress, "I concluded Epstein would never deliver on his promises."

Looking back, Gates expressed deep regret. "I was so focused on the possibility of raising funds for global health that I allowed that goal to override my better judgment," he said, straining credulity, and calling their meetings a "grave error in judgement." Especially now he’s gotten caught.

While maintaining he "never witnessed nor had any indication that Epstein was engaged in ongoing criminal conduct," Gates ultimately conceded he "should never have met with Epstein.”

Now, of course, he’s paying the, er…Bill. He was excluded from Microsoft’s annual CEO summit, where he normally hosts a dinner at his home in Washington state. Weeks before the May event, his team received word it would be better not to do it this year. Or next year? Or the year after that? Let us know what you think of Bill’s rep in today’s poll. 👇🏻

Kalshi asks bettors to declare their employers

Prediction markets are emerging as the wild west of the internet, a place where you could bet your life savings on everything from the weather to whether George Santos will skip the State of the Union because he’s, you know…disgraced, no longer a congressman, and spent some time in prison.

But Kalshi $KALSHI ( ▼ 0.8% ) is putting an end to the unregulated fun, it seems.

The platform has announced it will soon require users to disclose their employers before placing bets on certain high-risk markets. Why? Because it turns out quite a few people have been using their day jobs to cheat. From an Army soldier pocketing $400,000 using classified information to politicians wagering on their own races, the "inside information" epidemic has officially crashed the party.

Kalshi will now give new markets an integrity risk score. High-risk markets, like corporate or national security events, will prompt an online form demanding your workplace. If you’re a "presumptive insider," you're banned before you can even click "bet."

"This lets us identify presumptive insiders – people who have material, nonpublic information about a market's outcome – and screen them out before a trade is ever placed," Kalshi has announced.

Robert DeNault, Kalshi's head of enforcement, defended the vibe shift, telling the New York Post, "Prediction markets need to be safe spaces to trade. Kalshi is committed to leading the industry on market integrity."

Riiiiight. Meantime if you’ve got hot, top-secret workplace gossip, tell your friends. Then have them place bets on your behalf?

Free yourself from advertising forever!

Should you check your 401(k) today?

👎️ 

Still a hard “no” from us, I’m afraid.

Poll of the day: The Gates of Hell! Or not?

Poll of the day: It’s a ‘no’ on the World Cup, then

We asked: Should I pay $7,500 to go to the World Cup Final in New York?

You answered:

⬜️⬜️⬜️⬜️⬜️⬜️ Yes. The memory of standing in a stadium packed with 80,000 screaming fans while witnessing peak human athletic achievement is worth it. (21)
🟨⬜️⬜️⬜️⬜️⬜️ Let’s look at the ROI here. For $7,500, you could buy an 85-inch 8K television, a couch that molds to your body, a commercial-grade beer tap, and hire a local high schooler to blow an airhorn in your ear every time someone scores. (77)
⬜️⬜️⬜️⬜️⬜️⬜️ Do it. Because honestly? In the grand, cosmic scale of the universe, we are just fleeting specks of dust riding a rock through a cold, indifferent void. Will that $7,500 matter when the sun expands and swallows the earth? No. (24)
⬜️⬜️⬜️⬜️⬜️⬜️ Bro, you're looking at this all wrong -- it's not an expense, it’s an investment. You network in those high-tier seats. You find one guy who drops a tip on a new meme coin or a tech startup, and boom, that $7,500 just paid for your next two mid-life crises. (14)
🟩🟩🟩🟩🟩🟩 Sit your couch-potato self down, turn on the TV, and I'll bring over a $15 12-pack. We can yell at the referee from the safety of fiscal responsibility. (414)
550 Votes

via @beehiiv polls

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