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Grimace

McDonald’s $5 meal deal is an admission of self-inflicted wounds

5/10/24 4:06PM

The golden arches of history are long, but they bend back towards offering Americans cheap food.

Shares of McDonald’s rose 2.6%, their best session since January 2023, after Bloomberg reported that the fast food chain plans to offer a $5 meal deal in the US. Shares of competitors in the quick service restaurant industry broadly fell in response.

This news comes on the heels of McDonald’s April 30 earnings call, where CEO Chris Kempczinski bemoaned the state of the consumer, saying “it is clear that broad-based consumer pressures persist around the world.”

“The macro headwinds have been more significant than I think we even anticipated coming into the year,” added CFO Ian Borden.

But most economic data we’ve received this year, particularly in the US, doesn’t suggest the consumer is in dire straits. And industry peers weren’t sounding as dour as McDonald’s during their earnings calls. So what’s the deal?

“McDonald’s raised prices significantly, and consumers are finding other places to spend,” writes Samuel Rines, macro strategist at WisdomTree, in a May 9 note.

This was at a rest stop, but these McDonald's prices are nuts right??? pic.twitter.com/0qq8Ima3ZA
— Sam Learner (@sam_learner) July 18, 2023

Chris Turner, CFO at Yum! Brands Inc, talked up same store sales growth at Taco Bell that was above the industry average in the first quarter of 2024, and flagged a pick-up in same store sales growth so far in the second quarter. Part of the success, in his eyes? The Cravings Value Menu introduced in January to better appeal to price-centric consumers.

“We think Taco Bell is incredibly well-positioned for what I would describe as a more normal consumer environment today,” he said. “Consumers care more about value in the US.”

Over at Domino’s, CFO Sandeep Reddy discussed the conscious decision to avoid pushing too many price increases through in 2023, and how this contributed to same store sales growth of 5.6% in the US during the first quarter.

A key focus was on “making sure customer value was maintained,” he said.

McDonald’s is trying to recapture and articulate its value niche (which may or may not be successful with customers and franchisees), while its competitors already have evidence that their tactics are working.

“Domino’s and Taco Bell talked about maintaining their value-oriented propositions,” added Rines. “Meanwhile, that is only now entering the formula for McDonald’s.”

Which raises the question… how did we get to a place where McDonald’s wasn’t offering a clear and obvious value proposition to their customers? Where competitors metaphorically ate McDonald’s lunch as consumers ate a cheaper option?

This may be a part of why those companies — particularly Domino’s — are handily outperforming McDonald’s in the stock market so far this year.

Luke Kawa56m

Nebius soars on new report that details the importance of its near $20-billion deal with Microsoft

Nebius is jumping in premarket trading after a Bloomberg report that sheds more light on its near $20-billion deal to supply computing power to Microsoft.

Citing people familiar with the matter, the report says that Nebius will utilize more than 100,000 of Nvidia’s flagship Blackwell chips in order to “provide computing power to internal teams creating large language models and a consumer AI assistant” for Microsoft.

The so-called “neocloud” cohort, of which Nebius and CoreWeave are the most prominent in the publicly-traded space, effectively serve as overflow capacity for the AI boom. The pair have been on fire amid an all-out frenzy from hyperscalers to accumulate more computing power.

Nebius’ arrangement with Microsoft will allow the tech giant to use its own compute to focus on fulfilling demand from customers.

Remember that the stock market’s intermediate peak in February was accelerated by a breakdown in AI-geared momentum stocks amid concerns that Microsoft might have already had too much data center capacity, which came on the heels of the DeepSeek-induced freak out for the industry. Such worries have since been washed away by a steady wave of spending commitments from leading private and public tech giants that total in the hundreds of billions of dollars.

Hyunsoo Rim3h

Stellantis rises after reporting 6.4% jump in US sales

Stellantis is up more than 3% in early trading after the Jeep maker posted upbeat Q3 US sales, ending a string of quarterly declines in the region.

Total US deliveries came in at 324,825 vehicles, up 6.4% from the year prior, driven by strong performances from Fiat (+2%), Jeep (+11%), and Chrysler (+45%).

Jeep, which makes up nearly half of Stellantis' US volume, saw sharp gains across some key models, including Wrangler (+18%), Gladiator (+43%) and Wagoneer (+122%), with the latter hitting record monthly sales in August and September. The company also said Jeep held two of the five best-selling plug-in hybrids in the US in the first seven months of 2025.

The results come on the heels of Monday's unexpected resignation of CFO Doug Ostermann after just a year, with tariffs and dented demand hurting the company. Shares are down around 21% in 2025, despite today’s early jump.

Claire Yubin Oh3h

Credit bureaus sink as FICO launches a direct program for FICO scores, eliminating reliance on credit bureaus

Nationwide credit bureaus Equifax and TransUnion are down 11% and 5% in pre-market trading on Thursday respectively after Fair Isaac Corp. announced a new program to enable tri-merge resellers to directly distribute FICO scores to customers.

Dublin-based Experian PLC also dropped as much as 5% on the news.

Per FICO’s press release: “with the launch of the FICO® Mortgage Direct License Program, tri-merge resellers have the option to calculate and distribute FICO Scores directly to their customers, eliminating reliance on the three nationwide credit bureaus. This shift will drive price transparency and immediate cost savings to mortgage lenders, mortgage brokers, and other industry participants.”

Through this streamlining effort, resellers that buy and merge reports from Equifax, TransUnion, and Experian into one would rely less on these intermediaries in the chain to directly distribute their FICO scores. In effect, FICO hopes to eliminate “unnecessary mark-ups on the FICO Score” and put “pricing model choice in the hands of those who use FICO Scores to drive mortgage decisions,” according to Will Lansing, Chief Executive Officer of FICO.

FICO calculates this shift will reduce the average fee per score by some 50%, with the royalty fee for the score under the new model set at $4.95 per score, compared to the $10 per score fee in the previous system. Once a FICO-scored loan is closed under the new Mortgage Direct License Program, a funded loan fee of $33 per borrower per score will be applied additionally.

Despite the new program, firms can continue to still work through the credit bureaus if preferred.

Tasha Matsumoto

17h

The S&P 500 and Nasdaq 100 notch new closing highs as investors shake off the government shutdown

The S&P 500 closed 0.3% higher, the Nasdaq 100 was up 0.5%, and the Russell 2000 gained 0.2%.

Matt Phillips19h

Intel jumps on report of customer talks with AMD for foundry division

Intel shares popped in afternoon trading Wednesday after Semafor reported that it’s in preliminary talks for AMD to come aboard as a customer for Intel’s troubled contract chip manufacturing division, known as a foundry.

Shares were recently up 5.7%.

Semafor stressed that sources said, “It’s unclear how much of their manufacturing would shift to Intel if the two companies reach a deal, or whether it would come with a direct investment by AMD, similar to the deals cut by other companies. It is possible that no agreement will be reached, the people said.”

The addition of AMD — which competes with Intel in the CPU space — as a customer would be another big win for the US chipmaker following its partnership with Nvidia announced in mid-September.

TSMC, the primary manufacturer of AMD chips, was only briefly rattled by the news, and remains well in the green on the day.

Intel in early talks to add AMD as foundry customer