Axios Closer

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Friday ✅.

Today's newsletter is 699 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 0.7%.

  • Biggest gainer? CoStar Group (+8.3%), the commercial property services provider, reached its 52-week high.
  • Biggest decliner? Jabil (-16.5%), the manufacturing company, disappointed investors with second-quarter revenue and a reduced full-year forecast.

1 big thing: Housing market jolt

Illustration: Aïda Amer/Axios

The business of buying and selling homes in the U.S. just received a titanic jolt, Axios' Pete Gannon writes.

The big picture: The National Association of Realtors, as part of a wider settlement agreement to end a series of lawsuits from home sellers, agreed to end its rules that essentially guaranteed agents' 5%–6% commissions on home sales.

While a federal court still has to approve the deal, experts across the industry have not held back on predictions of its impact:

Case in point: Shares of online real estate companies plummeted on today's news, with Zillow, Redfin and Anywhere Real Estate closing down 13%, 5% and 12%, respectively.

  • Such companies rely in part on partnerships with real estate agents, whose marketing budgets could wind up being reduced with a drop in agent commissions.
  • Americans could end up spending $30 billion less in commissions, annually, due to the competition forces unleashed by the changes, analysts at Keefe, Bruyette & Woods predicted last year.

Changes to the industry are coming. "You'll see some new pricing models, and some new and creative ways to provide services to home buyers," Benjamin Brown, co-chair of Cohen Milstein's antitrust practice who worked on the settlement, told the New York Times.

  • "It'll be a really exciting time for the industry."

2. Charted: Adobe AI timeline disappoints

Data: Yahoo Finance; Chart: Axios Visuals

Adobe's stock fell 13.7% today after the company projected quarterly revenue that fell short of estimates, Hope writes.

The big picture: Investors are increasingly focused on results from new AI tools, over hype.

  • AI will be "slower to monetize than investors want," Jefferies analyst Brent Thill wrote, per MarketWatch.

3. What's happening

🤝 Apple reached a $490 million settlement in a class-action suit alleging it hid falling iPhone demand in China. (CNBC)

🤖 The FTC has launched an inquiry into Reddit's AI deals just days ahead of its expected IPO. (Axios)

4. Tech outage slams McDonald's

Photo: Robert Alexander/Getty Images

McDonald's said a "technology outage" disrupted operations at many of its stores around the world today, Axios' Jacob Knutson writes.

The big picture: The company said the issue was caused by a "third-party provider" and ruled out a cybersecurity attack.

  • "We thank customers for their patience and apologize for any inconvenience this may have caused," the company said in a statement.

Driving the news: McDonald's Japan said on social media that its restaurants suffered a "system failure" and asked customers to be patient.

  • It said in another post that many of its stores suspended operations and were not taking orders.
  • Similar alerts were made by the company's branches in Hong Kong and Taiwan, with disruptions also reported in Australia.

Go deeper

5. Amazon pushes further into sales periods

Illustration: Annelise Capossela/Axios

Amazon will hold a six-day sales event for U.S. customers on March 20–25, the company announced this week, Hope writes.

Why it matters: The retail giant has been increasing the frequency of its promotional periods as competition for online spending from the likes of Walmart and direct-to-consumer brands has grown.

  • In 2022, Amazon held two Prime Day-like sales events in the same year for the first time.
  • The company doubled up again last year — and its second event in October helped push year-over-year online stores sales growth to 9% in the fourth quarter, compared to a contraction in Q4 2022.

Zoom in: Unlike Prime Day sales, the upcoming Big Spring Sale is open to anyone, even customers who don't have a Prime membership.

  • The company says Prime members, who are some of Amazon's biggest spenders, will have "exclusive deals."

What we're watching: Amazon says prices for products across beauty, home, sports, outdoor and electronics may be discounted by up to 40%–50%.

💭 Our thought bubble: There's an expectation that consumer spending will slow down this year compared to last year, so companies like Amazon will likely ramp up incentivized shopping.

6. What they're saying

"A sentence of 40 to 50 years' imprisonment ... is necessary to reflect the seriousness of the defendant's crimes."
— U.S. Attorney Damian Williams in a filing to the court today about a sentence recommendation for Sam Bankman-Fried.

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

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