Hello Capitalists,

Here is everything we are following today:

• Scott Bessent warns NYC not to elect a socialist mayor or else…

• Starbucks announces job cuts and closures nationwide

• Unemployment claims move in a good direction following Fed rate cuts

• White House tells federal agencies to prepare for mass firings amid gov’t shutdown potentiality

Today’s markets:

• DOW: 46180.06 (⬇️0.21%) - 🔴

• S&P: 6634.15 (⬇️0.46%) - 🔴

• NASDAQ: 22465.02 (⬇️0.45%) - 🔴

• CBOE VIX Volatility Index: 17.07 (⬆️2.1%) - ⚠️⬆️

Scott Bessent warns NYC what will happen if they elect a socialist: “Drop Dead”

Treasury Secretary Scott Bessent warned that if socialist Zohran Mamdani becomes NYC mayor and implements his socialist economic plans, the city will inevitably need a federal bailout, which Bessent vowed to deny, referencing Gerald Ford’s famous “drop dead” response to New York’s 1970s financial crisis.

“I guarantee you, and there’re not a lot of things in life that are sure, but New York City will be coming to the federal government for a bailout if Mamdani’s plans are implemented,” Bessent told FOX Business’ Maria Bartiromo. “It will be the same thing that Gerald Ford said. Drop dead.”

• Economic exodus prediction: Bessent cautioned that Mamdani’s policies would drive away high earners and businesses from New York, noting that the past five years have already seen “the greatest transfer of wealth in U.S. history from Manhattan County to Palm Beach County.”

• Controversial socialist agenda: The 33-year-old democratic socialist’s campaign platform includes proposals that have alarmed Wall Street executives, such as free buses, city-owned grocery stores, and rent freezes for rent-stabilized tenants, all centered around affordability themes.

• Wall Street opposition: Following Mamdani’s surprise Democratic primary victory, billionaire hedge fund manager Bill Ackman pledged to finance a rival candidate and warned that the socialist agenda would “destroy jobs and cause businesses and wealthy taxpayers” to flee, declaring “Socialism has no place in the economic capital of our country.”

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Starbucks announces closures and job cuts amid turnaround plan

Starbucks CEO Brian Niccol announced Thursday that the company will close underperforming U.S. stores, eliminate 900 non-retail positions, and freeze hiring as part of its turnaround strategy.

“These steps are to reinforce what we see is working and prioritize our resources against them,” Niccol said.

• The closures will target locations unable to meet customer and employee expectations or achieve financial performance goals. Affected store employees will be notified this week, while corporate staff facing job cuts will learn Friday. Niccol, a year into his role, said the company is “ahead of schedule” in its turnaround but acknowledged significant work remains.

• A good start: Despite the cuts, early results show improved customer engagement at upgraded locations, with visitors staying longer and providing positive feedback.

The right direction: Unemployment claims beat expectations

Initial jobless claims for the week ending September 20 fell to 218,000, down 14,000 from the previous week and well below the expected 235,000, suggesting the labor market remains more resilient than feared despite Federal Reserve concerns about employment risks.

• Strong economic data across multiple sectors: GDP growth was revised upward to 3.8% for Q2 (from earlier estimates), consumer spending increased 2.5%, and durable goods orders rose 2.9% in August, all indicating underlying economic strength despite earlier recession concerns.

• Federal Reserve policy implications: The positive data comes just after the Fed cut rates by 0.25% to 4%-4.25% in September, citing employment concerns, though Chair Jerome Powell noted the economy is showing “resilience” amid various policy changes while keeping the door open for additional cuts.

• Market expectations remain unchanged: Despite the encouraging economic indicators, markets still anticipate two more Fed rate cuts this year at the October and December meetings, as policymakers continue monitoring data for signs of where to take monetary policy next.

White House tells federal agencies to prepare for mass firings if gov’t shuts down

The White House Office of Management and Budget directed federal agencies to prepare plans for permanently eliminating jobs during a potential government shutdown, departing from typical protocols where furloughed workers are eventually brought back with back pay, Bloomberg reports.

• Targeting unnecessary programs: Agencies must identify programs where discretionary funding lapses on October 1st with no alternative funding sources, then draft plans to permanently cut jobs in areas deemed unessential and “not consistent with the President’s priorities” if Congress fails to continue funding.

• Lapse of protocol: The move is a lapse of normal shutdown procedures and has ruffled feathers in congress, with Senate Minority Leader Chuck Schumer calling it “an attempt at intimidation” and predicting court challenges or eventual rehiring.

• Funding impasse context: The directive comes amid congressional deadlock over government funding.

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