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Tuesday, August 20, 2024

Wall Street Breakfast: Goodbye DEI?

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Harley-Davidson (HOG) is the latest corporation to back away from DEI initiatives following a backlash kickstarted by activist and political commentator Robby Starbuck. An online campaign against the 120-year-old motorcycle company accused the firm and its CEO, Jochen Zeitz, of embracing a "woke agenda of the very far left" that does not align with the business's core customers. It follows similar campaigns against Deere (DE) and Tractor Supply (TSCO), which both shelved their DEI protocols earlier in the summer.

Quote: "We did it again. 3 for 3," Starbuck wrote on X. "People are sick of the lunacy in their workplace. They just want to go to work and have it be work again. I'm not asking you to become a conservative company. I'm asking you for it to be neutral and to make it a welcoming place for everybody." He also pledged to continue his anti-woke campaign against another major U.S. corporation but hasn't disclosed the name of the company.

Harley-Davidson will no longer have supplier diversity spending goals and is reviewing all sponsorships and affiliations to retain its "loyal riding community, first responders, activity military members and veterans." It will also not participate in Human Rights Campaign scoring and will evaluate its training program to be absent of socially motivated content. "We are saddened by the negativity on social media over the last few weeks, designed to divide the Harley-Davidson community, and it is our responsibility to respond with clarity, action and facts," HOG said in a press release.

From the SA comments section: "This really isn't all that hard. Don't take sides in the culture war. Why MBAs don't understand this is beyond me. In the past, companies stayed silent and it offended no one," writes Alfredo Martinez. The saying "go woke, go broke" is also under the microscope. "HOG went from above $70 to under $40 in the six years before the Floyd controversy," adds Herbert Kornfeld. "Since then it has hung around the same under $40 level as before Floyd. In other words: it went 'broke' before it went 'woke.'" (52 comments)
     
M&A

In a win for Alaska Air (ALK), the time period for the Department of Justice to complete its review of the carrier's proposed $1.9B acquisition of Hawaiian Airlines has expired. "This is a significant milestone in the process to join our airlines," said Alaska. "The proposed combination remains subject to other closing conditions, including approval from the Department of Transportation of an interim exemption application." The news sent Hawaiian Holdings (HA) soaring 10% premarket on Tuesday. Recall that the DOJ review period had already been extended three times from the original Aug. 5 deadline.

     
Outlook
Democratic presidential candidate Kamala Harris has proposed raising the corporate tax rate to 28% from the current 21% to fund her other plans, including expanding the child tax credit and forgiving medical debt. That compares to former President Donald Trump, who wants to preserve the tax cut to 21% he implemented in 2017. Note that any changes need to be approved by both houses of Congress. Separately, Trump said he would consider ending a $7,500 tax credit for electric vehicle buyers, and would be open to naming Tesla's (TSLA) Elon Musk to a cabinet or advisory role. (281 comments)
     
Commodities

A bar of gold is now worth $1M for the first time ever, with gold topping $2,500/oz on Monday and gold bars in the London market typically weighing about 400 oz. Gold futures have also been on the rise, driven by a weakening dollar and growing speculation about potential Federal Reserve rate cuts. Central bank purchases have supported gold's rally, with net purchases totaling 483.3 tons in the first half of the year (equivalent to nearly 40K gold bars), but some analysts expect consolidation ahead, with the odds of further easing already baked in unless the Fed signals deeper rate cuts. (10 comments)

     
Today's Markets
In Asia, Japan +1.8%. Hong Kong -0.3%. China -0.9%. India +0.5%.
In Europe, at midday, London -0.6%. Paris +0.1%. Frankfurt -0.1%.
Futures at 7:00, Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude +0.4% to $73.93. Gold +0.8% to $2,560.80. Bitcoin +4.6% to $60,760.
Ten-year Treasury Yield unchanged at 3.88%.
Today's Economic Calendar
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Seeking Alpha's Wall Street Breakfast Podcast
Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.
 
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