Monday Recap: Fed’s Rate Cut Boosts Markets, Airlines Eye Card Deals, Intel Surges

Last week, the Federal Reserve delivered a significant 0.5 percentage point interest rate cut, causing cheers across Wall Street.

The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all climbed over 1% by week's end, with the Dow even closing at a record high on Friday. The markets rallied strongly, driven by optimism surrounding the Fed's move.

American Airlines Eyes Citigroup for Exclusive Credit Card Deal

American Airlines (NASDAQ:AAL) is in discussions with Citigroup (NYSE:C) to become its exclusive credit card partner. According to insiders familiar with the matter, this move could see the airline parting ways with its current partner, Barclays (NYSE:BCS).

Although the deal is still under negotiation and would require regulatory approval, it highlights a shifting landscape for co-branded credit card deals.

Airline credit card partnerships have long been a lucrative venture for banks, but recent changes in the industry have made these deals less attractive. Financial institutions have become more cautious as airlines demand a bigger share of revenue, and the regulatory environment has tightened. Nevertheless, co-branded cards remain a significant source of profit for both airlines and banks. For airlines like American, these deals provide a steady revenue stream that helps them stay competitive and profitable, especially in times of economic uncertainty.

Intel Gains Momentum with Potential Investment and Takeover Interest

Intel (NASDAQ: INTC), the chipmaking giant, saw its stock price rise 4% last week following reports that Apollo Global Management was interested in making an equity-like investment of up to $5 billion in the company.

According to Bloomberg, this potential investment would provide Intel with a much-needed boost, as the company has struggled with a significant drop in its value this year. Intel's shares have fallen by over 50% in 2023, a sharp decline for a company that once dominated the tech landscape.

Last Friday, CNBC confirmed that Qualcomm had approached Intel regarding a possible acquisition. Though nothing concrete has materialized, such interest highlights the challenges Intel is currently facing in staying competitive in the semiconductor space. Intel’s last major success was in the early 2000s, and the company has been looking for ways to revitalize its operations ever since.

Intel is not only grappling with financial losses but also fierce competition from rivals like AMD and NVIDIA, who have gained considerable ground in the chip industry. These pressures have made it necessary for Intel to seek outside investment to maintain its position as a leading player in the tech world. Whether Intel can bounce back from its current troubles remains to be seen, but the interest from companies like Apollo and Qualcomm shows that many still see potential in the firm’s future.

What’s Next for the Economy and Markets?

The weeks ahead will provide crucial insights into how markets react to the Federal Reserve’s ongoing policy changes. As the November meeting approaches, investors will closely monitor incoming economic data, inflation trends, and signals from Fed officials. Another rate cut seems likely, but the size and timing will depend heavily on how the U.S. economy performs in the coming months.

What to Watch This Week: