Wall Street Breakfast Podcast: Gulf, East Coast Port Strike Looms As Talks Stall
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East, Gulf coast port strike looks inevitable as talks stall; Biden unlikely to intervene. (00:24) BlackRock (BLK), Microsoft (MSFT), Nvidia (NVDA) team up to launch $30B AI infrastructure fund. (02:10) Coca-Cola (KO) makes a new alcohol move with a test run of Bacardi rum and coke drinks. (03:08)
This is an abridged transcript of the podcast.
Around 45,000 dockworkers are threatening to go on strike next month at East Coast and Gulf of Mexico ports. Negotiations for a new labor contract have stalled, raising supply chain concerns ahead of the busy holiday season.
The International Longshoremen’s Association warned that, “A strike on October 1 seems more likely as time is running out to get a new contract with USMX.” The group is demanding better wages, automation protections and benefits. Their current contract expires on September 30.
United States Maritime Alliance (USMX) represents port employers including ZIM (NYSE:ZIM) and Maersk (OTCPK:AMKBY).
ILA’s leadership said earlier this month that, “Inflation has completely eaten into any raises and wages. USMX’s corporate greed has made them delusional.”
USMX said it is “disappointing” that the ILA is unwilling to reopen dialogue unless all demands are met, adding that employers are willing to resume talks “at any time.” It also called on the Biden administration to “be ready to step in if a strike occurs.”
However, an administration official told Reuters that Biden is not considering stepping in.
A strike could affect more than 50% of U.S. imports, while diverted shipments will likely strain West Coast ports. Shipments from Europe and Latin America to the East and Gulf coasts would likely be stranded, given few options to reroute.
The National Retail Federation says retailers have already been preparing for a potential strike, by bringing in products earlier and frontloading the peak shipping season or by shifting products back to the West Coast.
BlackRock (NYSE:BLK) is planning a more than $30B artificial intelligence investment fund with Microsoft (NASDAQ:MSFT) to build data centers and energy projects to fill the growing demand for AI.
The Global AI Infrastructure Investment Partnership will be one of the biggest investment vehicles ever raised on Wall Street through Global Infrastructure Partners. The fund marks GIP’s first big fund since the group agreed to be acquired by BlackRock (BLK) earlier this year. That deal is expected to close in October.
Abu Dhabi-backed investment company MGX and Microsoft (MSFT) are general partners in the fund, and Nvidia (NASDAQ:NVDA) is providing expertise, they said.
The partnership will initially seek $30B of private equity capital over time from investors, asset owners, and corporates, which will mobilize up to $100B in total investment potential when including debt financing, BlackRock (BLK) said.
What about a rum and coke without the bottle and the can?
Coca-Cola (NYSE:KO) announced on Tuesday that it is partnering with Bacardi Limited to debut a ready-to-drink pre-mixed cocktail.
The BACARDÍ Mixed with Coca-Cola RTD product will be available in several markets around the world, with the initial launch planned for select European markets and Mexico in 2025.
Of course, Coca-Cola (KO) is traditionally known for its non-alcoholic beverages, but has strategically been expanding into the alcohol market in recent years. The Atlanta-based company also introduced Topo Chico Hard Seltzer, and partnered with Jack Daniel’s to create a pre-mixed Jack & Coke cocktail.
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Catalyst watch:
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Notable investor events include HubSpot’s (HUBS) Analyst Day and T-Mobile’s (TMUS) Capital Markets Day.
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The KeyBanc Capital Markets Energy Transition Symposium will include participation from Ballard Power Systems (BLDP), FuelCell Energy (FCEL), Plug Power (PLUG), First Solar (FSLR), and SolarEdge Technologies (SEDG).
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Crowdstrike (CRWD) will hold an investor briefing at 2pm at its Fal.com security event.
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. Crude oil is down nearly 2% at $69/barrel. Bitcoin is up 1.3% at $59,000.
In the world markets, the FTSE 100 is down 0.5% and the DAX is flat. The market in Hong Kong is closed for a holiday.
The biggest movers for the day premarket: Shares of space exploration company Intuitive Machines (NASDAQ:LUNR) are up 43% after the company secured a Near Space Network contract from NASA.
On today’s economic calendar:
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08:30 AM Housing Starts and Permits
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10:00 AM Atlanta Fed’s Business Inflation Expectations
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02:00 PM FOMC Announcement
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02:30 PM Fed Chair Press Conference
Due to the rate announcement, Wall Street Lunch with Kim Khan will be published after the chairman’s press conference to accommodate the big announcement as well as commentary from Chairman Powell.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.