Axios Closer

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Wednesday βœ….

Today's newsletter is __ words, a __-minute read.

πŸ”” The dashboard: The S&P 500 closed up 0.5%.

  • Biggest gainer? Dexcom Inc. (+9.8%), the maker of glucose monitoring systems, announced its new over-the-counter product Stelo has been cleared for use by the FDA.
  • Biggest decliner? Brown-Forman (-7.3%), the parent company of Jack Daniel's, reported third-quarter sales that fell short of expectations.

1 big thing: SEC adopts climate disclosures

SEC chair Gary Gensler. Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

The Securities and Exchange Commission today adopted final rules that will force larger public companies to disclose certain emissions and climate-related risks to their business, Axios' Ben Geman and Kia Kokalitcheva write.

Why it matters: The heavily lobbied rule β€” if it survives litigation β€” will give investors and the public a much closer look at companies' contributions to, and impact on, climate change.

How it works: It will require that so-called "large accelerated filers" and "accelerated filers" file securities disclosures of emissions from their direct operations (Scope 1), and the energy that powers them (Scope 2).

  • Registrants must also offer analysis of physical risks to their businesses from climate change, like extreme weather, and "transition risks" like climate policies and changing consumer preferences.

Yes, but: The SEC dropped plans to force tallying and reporting of emissions from firms' supply chains and end-uses of their products.

  • These Scope 3 emissions are often the largest category β€” think, for instance, of vehicles burning gasoline that oil companies produce.
  • The final rules also exempt smaller reporting companies (SRGs), and emerging growth companies (EGCs) are exempt from some of the disclosure requirements like greenhouse gas emissions.

The big picture: The rules are at the center of intense political and lobbying battles over financial regulators' foray into climate.

What's next: It's certain to end up in court.

2. Charted: FICO scores drop

Data: Fair Isaac Corporation; Chart: Axios Visuals

The national average FICO score has ticked lower, Axios' Pete Gannon writes.

Why it matters: Though just a 1-point drop from the last reading in July, it's the first time the score has decreased in a decade.

Between the lines: The downtick, the company says, was driven by an increase in missed payments and rising debt levels for consumers.

  • In October 2023, just over 18% of the population had a 30-day or worse past-due payment in the last year, up 4% compared to April 2023.
  • Average credit utilization β€” the amount of available credit a borrower used β€” was 35% in October, up a percentage point from pre-pandemic 2019.

What we're watching: The coming months will show whether the drop is an anomaly or an early warning about consumer repayment behavior, FICO notes.

3. What's happening

πŸ‘Ύ Change Healthcare is facing threats of litigation from patients after a cyber attack left them scrambling. (Axios)

πŸ‘Ÿ Foot Locker reported a holiday-quarter loss amid turnaround strategy, sending its shares plunging 30%. (CNBC)

4. New York Community Bancorp rescue

Steven Mnuchin holding enough money to buy multiple shares of New York Community Bancorp. Photo: Andrew Harrer/Bloomberg via Getty Images

Steven Mnuchin, the former Treasury Secretary, has led a $1 billion cash injection into New York Community Bancorp at $2 per share, Axios' Felix Salmon writes.

  • Why it matters: The investment is designed to ensure "a strong balance sheet and liquidity position" for the bank, per Sandro DiNello, who has been CEO for less than a week and who is now handing over the leadership reins to former OCC head Joseph Otting.

Between the lines: Mnuchin and Otting know each other well β€” they were chair and CEO, respectively, of OneWest Bank, which bought most of the assets of mortgage lender IndyMac during the 2008 financial crisis.

Follow the money: NYCB rallied to close at $3.46 today, roughly where it traded Tuesday prior to news that the bank was looking for outside investors.

The bottom line: This is very expensive capital for NYCB, but does put it on a much firmer regulatory footing.

Go deeper

5. πŸͺ President Biden nods to Cookie Monster

Photos: Jim Lo Scalzo/EPA/Bloomberg, Roy Rochlin/Getty Images for DoubleTree by Hilton

My favorite Sesame Street character and the White House are in agreement about shrinkflation, Hope writes.

What they're saying: "C is for consumers getting ripped off. President Biden is calling on companies to put a stop to shrinkflation," the White House posted while quoting Cookie Monster, who said β€”

  • "Me hate shrinkflation! Me cookies are getting smaller. πŸ˜”"

The intrigue: Not everyone's happy about the blue monster's commentary.

  • "I'm shocked," Frank Oz, who worked with creatorΒ Jim Henson, wrote on X. "Muppets need to live in their own pure world."

6. What they're saying

"We're sad that it's come to this with someone whom we've deeply admired β€” someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI's mission without him."
β€” OpenAI's response to Elon Musk's lawsuit against the company

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

Our item about New York Community Bancorp was corrected to state that OneWest Bank acquired IndyMac assets during the financial crisis of 2008 (not 2018).