CI - Wall Street Breakfast Podcast: Students Loans Resume

2023-10-02 06:52:40 ET

Summary

• Student loan payments are resuming, putting a strain on borrowers' wallets and potentially impacting discretionary spending.
• Tesla has rolled out an updated version of its car in China, with improved features, but the starting price remains unchanged.
• Cigna has agreed to settle allegations of submitting inaccurate and misleading information about Medicare Advantage patients, requiring them to enter into a corporate integrity agreement.

Listen below or on the go on Apple Podcasts and Spotify

Student loan payments resume . What does it mean for the economy? (00:23) Tesla (TSLA) rolls out updated Model Y in China; starting price unchanged. (01:15) Cigna (CI) to pay $172M to resolve Medicare overpayment claims. (02:19)

This is an abridged transcript of the podcast.

Student loan payments are due again.

After years of not being required to pay which began due to the pandemic, borrowers have a new monthly bill .

With extra money going out on a monthly bill this could put a strain on wallets which means borrowers will have less money for discretionary spending.

BTIG analysts surveyed 1,000 borrowers and found that 82% of them will resume paying back loans this month. The average monthly payment will be $250 to $300 for the roughly 45 million student loan borrowers in the country — that represents 17% of the adult population.

Roughly 60% of those surveyed said that they would dine out less often or reduce their spending when eating out.

BTIG pointed to Starbucks (NASDAQ:SBUX), Chipotle (NYSE: CMG ) and Shake Shack (NYSE: SHAK ) as companies that may see a slide as a result of the return of debt payments.

Tesla (NASDAQ: TSLA ) has rolled out an updated Model Y version in China, with some improved features, although its starting price did not change.

The improved features include a new wheel design and a slightly faster 0-100 km/h acceleration time of 5.9 seconds, Tesla ( TSLA ) said in a WeChat post on Sunday.

The rollout comes amid intensifying competition in China from local automakers such as BYD, Nio and Xpeng, all of whom are expanding their lineup.

Tesla ( TSLA ) is slated to report its Q3 deliveries and production figures this week.

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The Cigna Group (NYSE: CI ) has agreed to pay $172M to settle allegations that it submitted inaccurate and misleading diagnosis information about its Medicare Advantage patients in order to increase its payments from Medicare.

The settlement also requires Cigna to enter into a five-year corporate integrity agreement with the agency that oversees the Medicare program.

Under the corporate integrity agreement, Cigna will be required to implement various accountability and auditing measures, in addition to conducting annual risk assessments. The Justice Department said Cigna’s management team and board of directors will also be required to certify Cigna’s compliance measures on an annual basis.

The Justice Department added that the claims were allegations only and that there had been no determination of liability.

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U.S. stocks on Friday staggered to a mixed finish, bringing the curtains down on the worst month for markets since December last year.

The Nasdaq ( COMP.IND ) ended 0.14% higher. The S&P (SP500) slipped 0.27%, while the Dow ( DJI ) declined 0.47%.

Of the 11 S&P sectors, seven ended in negative territory on Friday, led by Financials and Energy. Consumer Discretionary and Tech were the top gainers.

all three major Wall Street averages logged their first quarterly loss in 2023. For the month, the Nasdaq ( COMP.IND ) slid 5.81%, the S&P (SP500) fell 4.87% and the Dow ( DJI ) lost 3.50%. For the quarter, the indexes are down 4.12%, 3.65% and 2.62%, respectively.

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. The Dow is up 0.1%, the S&P 500 is up 0.1% and the Nasdaq is up 0.3%. Crude oil is up 0.7% at more than $91 a barrel. Bitcoin is up 4% and above $28,000.

In the world markets, the FTSE 100 is down 0.3% and the DAX is down 0.1%.

The biggest stock movers for the day premarket: Coinbase Global (NASDAQ: COIN ) is up more than 5% after the cryptocurrency exchange secured a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS).

On today’s economic calendar, at 945am the PMI manufacturing index and at 10am construction spending.

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