Finance Evening | MGM Shares Sink 11% as Takeover Bid Collapses; Starbucks to Close 250 Stores

📊 North American Markets Today

🇺🇸 US Stocks

MGM Shares Sink 11% After Takeover Bid Withdrawn

Source: CNBC

Barry Diller's People Inc. has rescinded its proposal to buy MGM Resorts International, sending shares of the casino giant down about 11% on Thursday. The move comes nearly four months after People Inc. offered to buy MGM at $48.30 per share. People Inc. already owns roughly 26.1% of MGM.

Diller, chairman of People Inc. (formerly IAC), blamed the complexity of the deal. "There are lots of ingredients that go into a proposal of this kind on its way to completion," he said in a press release. "We didn't feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time." CNBC's David Faber reported Thursday that Diller partly backed off because of the significant debt load the deal would have created.

Still, Diller said he remains open to a future deal and is interested in "the possibility of a strategic transaction with MGM Resorts." Earlier this week, Caesars Entertainment shareholders approved billionaire Tilman Fertitta's $17.6 billion offer to acquire the company, with Caesars shareholders set to receive $31 per share in cash.

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Starbucks to Close 250 Stores Across US and Canada This Week

Source: Yahoo Finance

Starbucks plans to close more unprofitable locations as CEO Brian Niccol's turnaround continues. In a letter posted to the company's blog and sent to employees on Thursday, COO Mike Grams said the chain will close 250 stores in the US and Canada this week, cutting its store count by roughly 1%. Grams wrote that the company had "carefully reviewed our North America coffeehouse portfolio" to find locations where it cannot consistently deliver the experience it wants or see a path to acceptable financial performance.

It mirrors a similar move almost exactly a year ago, when Starbucks also reduced its footprint by about 1%. Starbucks had 18,371 North America locations last quarter, down from 18,734 a year earlier. While closing stores, it is also remodeling others: on Wednesday it said it will accelerate coffeehouse redesigns that bring back chairs and a cozier vibe, aiming to complete at least 1,500 such "uplifts" by the end of fiscal 2026, and it plans to open a technology hub in India next year.

The news followed a strong third quarter, in which same-store sales rose 7.9% — above the 5.7% Wall Street expected and the 6.2% seen in Q2, versus a 2% decline a year earlier. William Blair analyst Sharon Zackfia said the closures could be "modestly beneficial" to same-store sales growth. Starbucks stock is up 10% over the past year, underperforming the S&P 500's 15% gain.

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Darden Stock Falls as Olive Garden Growth Slows

Source: CNBC

Darden Restaurants on Thursday reported quarterly earnings and revenue that narrowly missed analysts' expectations as same-store sales growth at Olive Garden slowed. Shares fell as much as 5% in premarket trading but pared losses after executives reassured investors on the earnings call, and were down about 2% in morning trading.

Executives said short-term challenges including consumers' cyclospora concerns and the World Cup weighed on same-store sales. CEO Rick Cardenas said the chains are performing better in September and that costs of key commodities such as beef are projected to improve later in the fiscal year. For the quarter ended Aug. 30, net income was $233.4 million, or $2.04 per share, down from $257.8 million, or $2.19 per share, a year earlier. Net sales rose 5.1% to $3.20 billion, and same-store sales rose 3.1%.

By brand, LongHorn Steakhouse was once again the top performer with same-store sales up 6.2%, overtaking Olive Garden as Darden's best-performing chain; Olive Garden's same-store sales inched up just 1.1%. CFO Raj Vennam said the World Cup dragged same-store sales down by 80 basis points early in the quarter. Darden reiterated its fiscal 2027 outlook of $13.60 billion to $13.75 billion in total sales and $11.10 to $11.35 in earnings per share from continuing operations.

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🌎 Canada / North America Economy

EU Warns Trump's Diesel Export Ban Would Hurt Both Sides

Source: The Guardian

The EU has warned US President Donald Trump against banning US diesel exports to the global market, saying the move would negatively affect both Europe and the US. The European Commission reacted with "concern" to reports this week that Trump could block diesel from reaching the global market.

Trump is reportedly considering a 90-day export ban to give US households temporary relief from high pump prices before the midterm elections, after US diesel hit a record average of $6.52 a gallon. "I've said let's not send out the diesel. We make a lot of diesel… I've called for it. I've called for it within my people," he said. EU executive spokesman Olof Gill said Thursday that "any disruption would risk negatively impacting both sides," and that the EU expects "close partners to consult each other before taking measures that affect shared markets."

Experts said a potential ban could be "devastating" for Europe. US diesel has made up a third of Europe's imports this year, and by August the US supplied about half of Europe's diesel imports. Britain's RAC said the average cost of diesel was 197.75p a litre on Thursday, up from 142.38p before the start of the Iran war. US energy secretary Chris Wright warned that banning exports was a "blunt tool" that could harm US fuel supplies in the long term.

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Student Loan Borrowers Sue Over Forgiven Debts Still on Credit Reports

Source: CNBC

A group of student loan borrowers sued the Trump administration on Thursday, alleging they suffered unexpected financial damages even though their debts were forgiven years ago. The suit, Woods v. U.S. Department of Education, was filed in the U.S. District Court for the District of Columbia.

The borrowers say the Education Department continues to report their canceled federal student loans to credit reporting companies as active. Counsel for the plaintiffs, The Project on Predatory Student Lending (PPSL), says the inaccurate reports can affect borrowers' ability to obtain mortgages, rental housing, auto loans and employment. "These borrowers have done everything asked of them, but this false debt is still shaping where they can live, what they can borrow, and what their futures look like," said PPSL president and executive director Eileen Connor.

The proposed class action involves borrowers whose federal student loan debts were cleared during the Biden administration between April 2022 and January 2025 because they attended a fraudulent or misleading college. One plaintiff, Jorge Cortes, a Marine veteran whose loans from ITT Technical Institute were forgiven in August 2022, still had a $21,586 loan balance on his credit report as of this summer. The Education Department is still reporting the debts of more than 300,000 borrowers, PPSL estimates.

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McDonald's to Spend $8.5 Billion Modernizing Restaurants, Betting on Protein

Source: NBC 5 Chicago

McDonald's said Wednesday it will spend $8.5 billion over the next decade to modernize its restaurants globally. With fast-food traffic flat in many markets including the US, Chairman and CEO Chris Kempczinski told investors at the company's Chicago headquarters that McDonald's must take share from rivals and improve restaurant productivity to keep growing. Shares fell nearly 5% Wednesday, their largest single-day drop since April 2025.

On products, McDonald's said hand-breaded chicken — now at 10,000 restaurants in Asia and a handful near Chicago — has boosted sales and quality ratings, and it plans to expand testing in more US and Irish markets next year. The company also plans grilled chicken sandwiches and wraps in the US and other markets, and will experiment with items like egg bites and bowls for customers seeking more protein and varied portions. Skye Anderson, president of McDonald's USA, said about 30 million Americans now use GLP-1 weight-loss drugs and seek smaller, protein-packed meals, while company research shows 60 million Americans are actively seeking more protein.

The modernizations include lockers for delivery orders, more visible coffee preparation areas, bigger play areas and improved kitchen layouts. McDonald's is deploying its ArchIQ system, developed with Google, to improve order accuracy and automate tasks like inventory and scheduling; its AI drive-thru, Archy, can take orders in Spanish and English with 90% accuracy. CFO Ian Borden said Archy could eventually cut at least 50 labor hours a week in a typical restaurant, though the intent is not to reduce staffing.

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🏦 Macro & Central Banks

New York Fed's Williams: Another Rate Hike by Year-End Is 'Reasonable'

Source: CNBC

It would be "reasonable" to expect another interest rate hike from the Federal Reserve by the end of the year, New York Fed President John Williams said Thursday. Speaking at the London Macro Policy Forum, Williams said investor sentiment suggests "it's likely that another rate hike may be appropriate by the end of the year." "That seems to me a reasonable way of thinking about it. But we have to see. We're going to collect the data and do what we did between July and September," he said.

Williams also said the time for explicit forward guidance was "over," echoing Fed Chairman Kevin Warsh, who has said the central bank will refrain from directly signalling its intentions for coming meetings. The Fed raised its benchmark rate by a quarter percentage point earlier this month, to a target range of 3.75%-4%.

Commentary from Warsh and other officials has fueled expectations of another hike. CME Group's FedWatch tool put the probability of an October raise at 77.5% on Thursday, up from around 53% on Wednesday. Recent data suggests the US economy remains strong while inflation stays above 3%. Boston Fed President Susan Collins warned Wednesday there was an "increased likelihood" that inflation will stay "notably" above the Fed's 2% target, and Fed Governor Michael Barr said "further policy adjustments are likely to be needed."

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Global Debt Tops $365 Trillion as Economists Warn of a 'Vicious Cycle'

Source: CNBC

Economists have warned that ever-higher costs to service mounting debt loads pose a major risk to governments around the world. Global debt rose by $10 trillion in the first half of the year to top $365 trillion, according to research published by the Institute of International Finance (IIF) on Wednesday. State debts are rising as yields on medium- and long-term government bonds from the world's biggest economies — including the US, Japan, France and the UK — hit their highest levels in more than a decade.

The IIF highlighted those four economies in particular as facing "persistently large deficits and rising interest expenses — challenges long associated with debt-distressed emerging market sovereigns." The Washington-based group found that advanced economies paid over $3.3 trillion in interest on internationally traded government bonds last year — more than global spending on AI ($2.6 trillion), defense ($3.1 trillion) or clean energy ($2.3 trillion).

The IIF warned that debt has become a political issue, creating a "vicious cycle between elections and short-term quick fixes, and a long-term vulnerability as the marginal utility of higher debt diminishes." IMF chief Kristalina Georgieva told the BBC this week that shocks to the global economy were "pushing debt levels up like a staircase not to heaven," criticizing a lack of government action.

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🛢️ Commodities & Currencies

Oil Prices Rebound as Iran War Escalates

Source: CBS News

French President Emmanuel Macron said Thursday that France would send "military means" to help shield the key Saudi oil terminal of Yanbu from attacks by Yemen's Iran-backed Houthis. "We are going to send military assets, meaning soldiers, radars, and defence systems to protect this site," he said in an interview with TF1 and France 2. The recent Houthi takeover of Yemen's Red Sea coast has cemented the hold of Iran and its allies over two key Middle East waterways — the straits of Bab al-Mandab and Hormuz — both major arteries for global energy flows.

Saudi Arabia, the world's biggest crude exporter, has been relying on the Red Sea port of Yanbu to export its oil after Iran blockaded the Strait of Hormuz at the start of the war. The Houthis have attacked facilities belonging to Saudi oil giant Aramco in Yanbu. Sen. John Kennedy, a Louisiana Republican, said the US has "got to make a decision with respect to staying and escalating or getting out" of Iran, and called on Chinese President Xi Jinping to assist the US.

On Thursday, the US Senate rejected a resolution aimed at limiting President Trump's war powers in Iran in a 49-50 vote. With higher yields raising costs for mortgages and auto loans, Iran's parliament speaker Mohammad Bagher Ghalibaf mocked the 10-year Treasury yield hitting 5.1% in a post on X. A coalition of 80 countries at the UN called for the full restoration of maritime navigation in the Gulf. Chinese President Xi Jinping, meeting Trump on Thursday, urged the US to end the Iran war through talks as soon as possible.

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💰 Personal Finance & Consumers

Most Americans Plan to Claim Social Security Early, Experts Worry

Source: USA Today

Retirement planners routinely urge Americans to wait until age 70 to claim Social Security, but most have other plans. A new retirement survey from Schroders finds that 45% of not-yet-retired Americans plan to file before age 67, which the federal agency considers full retirement age, while only 10% plan to wait until 70 to collect the maximum monthly benefit. The most popular claiming age is 62, according to the Center for Retirement Research at Boston College.

Claiming early has an obvious appeal: it's money, and many retirees feel too financially stretched to go without it. "Individuals are making those decisions based on current cashflow needs in retirement and uncertainty, rather than maximizing their lifetime benefits," said Deb Boyden, head of U.S. defined contribution at Schroders. She said inflation — with prices up roughly 30% since the start of the decade — and unease about Social Security's future are likely two factors.

The federal program faces a funding shortfall by 2032, and if Congress fails to act, retirees could see benefit cuts. Fear about its future is already driving early claiming: the Urban Institute found new Social Security claims rose dramatically in the first half of fiscal year 2025. AARP estimates that, even if the reserve runs out and Congress does not intervene, the agency would still have funds to pay about 83% of full retirement benefits. One scholarly paper found the typical retiree who claims before 70 loses $182,370 in potential Social Security income.

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