--:-- Alex Osalev: This podcast is brought to you by Twilio, the ultimate toolbox for customer engagement.
--:-- Alex Osalev: Got one of those rewards credit cards? Well, merchants could stop accepting them. We're definitely entering a new era of credit card rules that could impact most, the vast majority of credit cards with rewards programs out there. Plus, there's a possible end to the government shutdown that has Democrats furious at defectors within their own party. And Hollywood may be struggling to bounce back after the pandemic, but IMAX is booming. It's Monday, November 10th. I'm Alex Osalev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.
--:-- Alex Osalev: Do you have one of those premium rewards cards like the JPMorgan Chase Sapphire Reserve? Well, stores could soon be rejecting them. That's because of a settlement between merchants and Visa and MasterCard in a legal fight over credit card swipe fees that dates back two decades. Anna Maria Andriotis, who covers the banking sector for the journal, is here to talk about what this deal means for merchants, banks, and the rest of us.
--:-- Anna Maria Andriotis: So, Alex, should consumers be worried that these popular credit cards won't be accepted in a lot of places? Possibly. And I say that because it's a complicated question. We're definitely entering a new era of credit card rules that could impact most, the vast majority of credit cards with rewards programs out there.
--:-- Alex Osalev: So, let's back up for a second. What was this case about?
--:-- Anna Maria Andriotis: Much of this comes down to interchange fees. So every time that consumers pay with a credit card, the merchant pays the bank that issued your credit card what's called an interchange fee. These fees vary, but they're often between 2% to 2.5% of the purchase price. Merchants pay tens of billions of dollars in these fees every year.
--:-- Anna Maria Andriotis: These costs have been rising so much for merchants because more and more consumers have switched from cash and debit cards to credit cards. Two, it's because more and more people are shopping with rewards cards. And it's because credit cards with rewards have higher interchange fees than credit cards that don't have rewards programs.
--:-- Anna Maria Andriotis: So this legal settlement has enabled merchants to reject some of these cards if they want to. But have they said that they won't take rewards cards? For decades, Visa and MasterCard have had what they call an honor all cards rule. What this rule has said is, merchant, if you accept one Visa credit card, you have to accept all Visa credit cards.
--:-- Anna Maria Andriotis: What this settlement has done if it approved by the court is it essentially says to merchants okay, we're creating three buckets of acceptance for credit cards. But the moment that you choose to accept one rewards credit card that falls into that rewards bucket, you have to accept all of those credit cards.
--:-- Anna Maria Andriotis: So here's what consumers can expect. There is a possibility that merchants, when you pull out to pay with a rewards credit card, they'll say no. The chances of merchants doing that are, with big merchants, not very high, because what it could result in would be merchants seeing their sales fall potentially in a pretty substantial way.
--:-- Anna Maria Andriotis: It will be likely that consumers will see this with smaller merchants, small businesses. Think of like, you know, the bagel store, the hair salon, the stuff that's just in your neighborhood. But another thing that consumers could be seeing, rather than rejecting the credit card outright, the merchants, in particular the smaller merchants, might say, well, I'm going to charge you extra for that.
--:-- Anna Maria Andriotis: You mentioned banks. How have they responded to this move?
--:-- Anna Maria Andriotis: It does not benefit banks when something like this happens. This honor roll cards rule basically said to the banks, guys, don't worry about it. You don't have to compete against each other. You don't have to have your own card products competing against each other. Because the moment a merchant accepts one of a Visa's credit cards, they have to accept all of them, right? That's not the case anymore.
--:-- Anna Maria Andriotis: So it's going to make it a little bit tougher right now. It potentially starts to create a little bit more of a real competitive environment for banks when it comes to merchant acceptance.
--:-- Alex Osalev: That was WSJ reporter Anna Maria Andriotis. Thanks, Anna Maria.
--:-- Alex Osalev: Thank you. As we mentioned in this morning's show, there's an end in sight to the government shutdown. That's due to eight senators who have broken with Democratic leadership to help Republicans advance a measure that funds the government.
--:-- Alex Osalev: The Senate could have its final vote on the measure later today, followed by a vote in the GOP-run House later this week. The crack in party unity drew condemnation from many Democrats, with some left-leaning critics saying Senate Minority Leader Chuck Schumer can't keep his troops in line.
--:-- Alex Osalev: In the meantime, the shutdown drags on. Aviation analytics company Serium says more than 1,600 flights have been canceled today as of this afternoon, or around 6.3 percent of the schedule. Bad weather is worsening the pain caused by the FAA flight restrictions and the number of disrupted flights is expected to grow.
--:-- Alex Osalev: Meanwhile, President Trump is threatening to dock the pay of air traffic controllers who don't return to work. If flight restrictions have disrupted your travel plans in the past few days, let us know. Send a voice memo to WNPOD at WSJ.com.
--:-- Alex Osalev: Hopes of an end to the government shutdown helped lift stocks today. The Nasdaq-led gains, closing up 2.3 percent, its biggest one-day rally since May, after a steep slide last week. Chip stocks and the magnificent seven tech companies rose. The S&P climbed one and a half percent and the Dow rose less than one percent.
--:-- Alex Osalev: Once the government reopens, a slew of delayed government economic data will likely be released. In the meantime, we've been looking at alternative data to get a sense of how the economy is doing. We dropped the first special episode in a four series on alternative economic indicators today looking at what Nevada employment picture can tell us about the broader U economy. That in the What News feed now.
--:-- Alex Osalev: Coming up why IMAX big screens are bringing in big money. That's after the break.
--:-- Alex Osalev: At Constellation, we bring the energy, powering America's growing economy every minute, every day. As the nation's largest producer of clean and reliable America-made energy, Constellation is wherever you are. From families to corner stores to manufacturers to the biggest data centers, we meet the nation's energy needs by generating emissions-free electricity today and for our future.
--:-- Alex Osalev: President Trump pardoned a list of top allies in connection with efforts to overturn the results of the 2020 election. The list of pardons includes high-profile figures such as Trump's former chief of staff, Mark Meadows, lawyers Rudy Giuliani and Sidney Powell, as well as dozens of others.
--:-- Alex Osalev: None of the people identified on the list have been charged with federal crimes, making the pardons a largely symbolic move. The federal pardon would not affect charges brought by state prosecutors.
--:-- Alex Osalev: The U.S. Supreme Court has rejected a long-shot bid to overturn the landmark 2015 decision that gave same-sex couples the constitutional right to marry. In a brief written order, the court turned away an appeal by Kim Davis, a Kentucky County clerk who had denied a marriage license to a gay couple.
--:-- Alex Osalev: And the Food and Drug Administration said manufacturers should remove black box warnings on hormone replacement therapy drugs that alleviate menopause symptoms. In an opinion piece published today in The Wall Street Journal, FDA Commissioner Marty McCary says clinical trials that appeared to show increased breast cancer risk were not in fact statistically significant.
--:-- Alex Osalev: He says those warnings may have kept many women away from what could be life-changing treatment.
--:-- Alex Osalev: The big United Nations climate conference known as COP30 starts this week in Brazil. just as political support is faltering for the landmark Paris Climate Accord adopted at the UN Climate Conference a decade ago.
--:-- Alex Osalev: The U.S. has pulled out of the agreement, and Europe and Canada are wary of the cost and political unpopularity of climate measures. It's China that has emerged as a clean technology superpower.
--:-- Alex Osalev: Paris correspondent Matthew Dalton joins us now. Matthew, what have China's investments in green tech looked like?
--:-- Matthew Dalton: Well, they are making enormous manufacturing investments in all of the big clean energy technologies. They are installing huge numbers of solar panels, wind turbines, batteries domestically in their own electricity grid.
--:-- Matthew Dalton: A lot of people think that those installations are so large that they're able to cover China's electricity demand growth on their own. So that's what's happening inside China. And it's just been this titanic shift that few people saw coming, actually, when the Paris Accord was signed in 2015.
--:-- Matthew Dalton: Overseas, China has been flooding global markets with these products as well. So developing countries all around the world have really been turning to solar and batteries in particular as in some cases the least costly choice for installing power generation.
--:-- Matthew Dalton: It's sort of a double-edged sword for the West because they haven't been able to compete in many of these technologies. And so the entire world is relying on China for a lot of this stuff.
--:-- Matthew Dalton: So the Paris Agreement called for world governments to try to limit global warming to the rise of 1.5 degrees Celsius since the industrial age. Where do those goals stand now?
--:-- Matthew Dalton: Global emissions are still rising. China's emissions are plateauing, maybe, maybe starting to fall. It's unclear, but emissions in some other countries are still rising. So most people think 1.5 degrees is out of reach without some insane economic catastrophe striking the globe.
--:-- Matthew Dalton: Under two degrees, even that is going to be tough. But the emergence of China, the new market dynamics of clean energy does make this at least under two degrees possible.
--:-- Alex Osalev: That was WSJ reporter Matthew Dalton. Thank you, Matthew.
--:-- Matthew Dalton: Thanks a lot, Alex.
--:-- Alex Osalev: And finally, in the movie business, the hot ticket is IMAX. The box office overall has struggled to recover from the pandemic. but everyone wants IMAX. Its share of domestic and global tickets are at record highs, and its worldwide box office is on track to exceed $1.2 billion this year for the first time.
--:-- Alex Osalev: Take Mission Impossible, The Final Reckoning. When it hit theaters earlier this year, the movie made 20% of its first weekend domestic box office from IMAX screens.
--:-- Alex Osalev: The movie star Tom Cruise and its director Christopher McQuarrie touted the jumbo screen experience in IMAX's own promotional video.
--:-- Alex Osalev: Look, we want it on the big screen. IMAX is a beautiful format, and we want an IMAX. There are several sequences in The Final Reckoning that are created specifically for IMAX, and seeing them in IMAX on the big screen is the only time you're ever going to see them like that.
--:-- Alex Osalev: It's a spectacular way to watch the film. Hollywood power players are pitching the CEO of IMAX to take their movies, hoping the big screen gets viewers off the couch and into theaters.
--:-- Alex Osalev: And if studios land this prize, they splash the IMAX name on movie ads, sometimes in even bigger print than the title of the movie itself.
--:-- Alex Osalev: And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bien-Aimé and Zoe Kolkin with supervising producer Tali Arbel. I'm Alex Osalev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. We'll be right back.
--:-- Alex Osalev: LLC. Member NYSE SIPC.
