TheStreet’s Caroline Woods brings you the biggest business news of the day, including what investors are watching and why retailers may be on the losing end of new credit card rules.
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00:00I'm Caroline Woods reporting from the New York Stock Exchange, here's what we're watching
00:03on the street today.
00:05Stocks are looking to rebound after all the major indexes finished Wednesday in the red.
00:10Wall Street is reacting to yet another inflation report, the Producer Price Index, which measures
00:15the change in wholesale prices.
00:17That came in lower than expected.
00:19Producer prices increased just 0.2 percent in March, lower than Wall Street's estimate
00:23of 0.3 percent.
00:26In other news, big box retailers are about to face a challenge that may affect their
00:30top lines.
00:31In early March, the Biden administration approved legislation that will cap credit card late
00:36fees at $8.
00:37That rule also applies to department stores that have their own store-branded credit card.
00:42The new rule, which lowers the average late fee by about 75 percent, goes into effect
00:47on May 14th.
00:49And while it will certainly benefit customers, it may take a big chunk out of company revenues.
00:54For its 2023 fiscal year, Macy's reported $619 million in revenue from credit card purchases.
01:00Nordstrom brought in $475 million.
01:04Neither company revealed how much it made from late fees, but the new cap could surely
01:08have an impact.
01:09As retailers prepare for this change, they're also preparing for a decline in credit card
01:13spending altogether.
01:14The $619 million in Macy's credit card revenue was a 28 percent drop from 2022, and it expects
01:22that number to drop even further during its current fiscal year.
01:26Of those hundreds of millions of dollars spent with credit cards, the bulk wasn't purchased
01:29with store-branded cards.
01:31Both Macy's and Nordstrom reported that only about 3 percent of their net sales came from
01:35their own cards.
01:37That'll do it for your daily briefing from the New York Stock Exchange.
01:40I'm Caroline Woods with The Street.