Franklin Finance Fridays: 07/11/2025
Let God Sort Em Out...
All,
It's important to let go of the need to control the outcome and instead focus on being open to different perspectives. By doing so, we create space for more diverse ideas, deeper collaboration, and solutions that reflect a broader understanding. This mindset shift encourages innovation and trust within our teams and allows us to grow beyond our own assumptions.
Reminder for the weekend is brought to you by the new Clipse album out today. So be it. Sometimes acceptance is the most powerful choice we can make. Letting things unfold without resistance can bring clarity, peace, and unexpected growth.
The White House is increasing pressure on Federal Reserve Chair Jerome Powell over cost overruns in the Fed’s $2.5 billion renovation of its headquarters. Trump officials suggest Powell may have misled Congress or violated planning rules, potentially giving legal grounds to remove him. Trump has criticized Powell for keeping interest rates high and argues it is harming the economy. However, Powell insists he was truthful in his congressional testimony and followed procedures. Trump allies have recently taken control of a key planning commission that oversees federal projects in Washington, signaling they may dig deeper into the Fed’s renovation details. Scholars warn that removing Powell for political reasons would destabilize global financial markets and damage confidence in the dollar. Some members of Trump’s team have long sought ways to challenge the Fed’s independence, which is protected by law unless “cause” is proven.
The Fed’s project was approved in 2017 and involves restoring historic buildings near the National Mall. Cost increases are partly due to complex requirements like building underground rather than adding floors. While the Fed is unlikely to cut rates immediately, Powell has suggested it may happen later in the year. The controversy is unfolding as Trump pushes for lower interest rates to ease federal debt payments, raising concerns about political interference in monetary policy.
Kraft Heinz is planning to split its business into two companies. One company would focus on traditional Kraft grocery products, while the other would concentrate on faster-growing items like Heinz ketchup and Grey Poupon mustard. The split aims to boost the total value of the businesses, which together are currently worth about $31 billion. The Kraft side of the business may be spun off as a separate company worth up to $20 billion.
This decision follows years of weak performance since the 2015 merger of Kraft and Heinz, which was led by Warren Buffett and 3G Capital. Many of the company’s legacy products, like processed cheese and macaroni and cheese, have lost popularity with consumers. Kraft Heinz has tried to modernize by removing artificial dyes and offering healthier products. It also recently sold its infant food division in Italy and is working to restructure its portfolio. Buffett’s Berkshire Hathaway remains a major shareholder but no longer holds board seats. 3G Capital has fully exited. If the split moves forward, it will mark a major turning point for the packaged food giant as it tries to adapt to changing tastes and market pressures.
Apple has offered up to $150 million annually for the U.S. rights to air Formula One races, significantly higher than ESPN’s current $90 million deal. The deal would begin after ESPN’s contract expires this fall. Formula One is seeking a more profitable media partner as its popularity grows in the U.S., although the interest from networks has been limited. Apple is currently seen as the top contender and has already seen success with its F1-themed movie starring Brad Pitt, which grossed $309 million globally. ESPN is not expected to make a counteroffer, citing budget concerns. Shifting to Apple TV+ could boost Formula One’s media revenue but might reduce its reach compared to ESPN’s wide cable audience, which averaged 1.1 million live viewers last year. Liberty Media, which owns Formula One, has been pushing for a larger U.S. presence and media payout. The Financial Times also reported on Apple’s bid. If finalized, this would mark a major move by Apple in expanding its sports media portfolio.
The State Department is laying off over 1,300 employees as part of a major restructuring aimed at reducing bureaucracy and streamlining operations. Led by Secretary of State Marco Rubio, the plan affects more than 1,100 civil servants and about 250 foreign-service officers, with a goal of cutting 15% of its domestic workforce. The move has drawn sharp criticism from diplomats and lawmakers, who argue it weakens U.S. global influence, especially as China expands its diplomatic presence. While no embassy or consulate positions abroad will be cut, some offices were hit hard, including the full staff of the Global Women’s Issues bureau. Many affected employees received conflicting messages about their job status, deepening confusion and morale issues. Critics warn the layoffs jeopardize institutional knowledge and the U.S.’s ability to compete diplomatically. This effort follows a Supreme Court ruling that cleared the way for broader federal workforce reductions and is part of a broader Trump administration agenda to shrink the federal government.
U.S. airline stocks rose sharply after Delta Airlines reported stronger-than-expected second-quarter earnings. Delta’s results showed stabilized bookings and growth in premium and loyalty revenues, even as basic economy fares declined. This performance led United and American Airlines to gain over 12%, with Southwest and Alaska Airlines also seeing strong increases. Delta posted $15.5 billion in adjusted revenue and $2.10 earnings per share, slightly beating Wall Street expectations. Fuel costs were down 11% for Delta, helping boost profits. Analysts are now optimistic that other airlines reporting in the coming weeks could also exceed expectations. Tariff-related uncertainty had earlier caused airlines to pull back on forecasts, but Delta’s performance has revived market confidence. Falling oil prices are expected to further support airline earnings moving forward.
The U.S. Department of Defense is becoming the largest shareholder in MP Materials by investing $400 million in preferred stock. MP Materials operates the only rare earth mine in the United States, located in California, and will use the funds to expand processing and magnet production. Shares of MP Materials surged 50% following the announcement. Rare earths are critical for military equipment, and the U.S. has previously relied heavily on imports from China. The Pentagon will also support MP’s second magnet manufacturing facility, expected to begin production in 2028. The Defense Department has agreed to buy all magnets produced at the new facility for ten years and to guarantee a minimum price for certain rare earth compounds. This public-private partnership is seen as a move to reduce dependence on China and strengthen the U.S. supply chain. MP’s CEO emphasized that the company remains independent and shareholder-driven, while noting the Pentagon deal could serve as a model for future industrial partnerships.
Nvidia has become the first company to reach a $4 trillion market valuation, briefly surpassing the previous record set by Apple. Its stock closed slightly lower at $3.97 trillion but still marked a major milestone. Nvidia’s growth has been driven by soaring demand for its AI chips, which are widely used by major tech firms like Microsoft, Amazon, and OpenAI. The company’s revenue jumped 70% year over year to over $44 billion in Q1 2025, with expectations of $45 billion in the current quarter. Nvidia shares are up nearly 20% this year and 1,500% over the past five years. Despite a recent $4.5 billion hit from U.S. export restrictions to China, Nvidia has continued to dominate the AI chip market. CEO Jensen Huang has played a visible role in shaping global AI conversations, meeting with leaders around the world. Nvidia now leads the tech sector ahead of Microsoft, Apple, and other major firms.
Kirk Tanner is stepping down as CEO of Wendy’s to become the new CEO of Hershey, effective August 18. He will replace Michele Buck, who is retiring and will support the transition in an advisory role. Tanner had been Wendy’s CEO for 18 months and previously spent over 30 years at PepsiCo. During his time at Wendy’s, he introduced innovative promotions like Takis-topped sandwiches, Girl Scouts Thin Mints Frosty, and SpongeBob-themed meals, as well as AI technology for drive-thru ordering. Wendy’s shares have dropped 30% this year due to declining sales and customer traffic. Ken Cook, the current CFO, will serve as interim CEO. Hershey’s stock fell 3% following the news. Tanner’s shift marks a notable move from fast food to the packaged snack industry.
TechCrunch Mobility highlights key developments in transportation and technology. Elon Musk's AI model Grok, known for its controversial behavior, will be integrated into Tesla vehicles. Users will be able to choose Grok’s personality settings, but premium connectivity is required. Meanwhile, Tesla is pushing to expand robotaxi operations in Arizona and eventually in California, though it has not yet applied for the necessary driverless permits. Waymo is broadening its service in Phoenix to teens aged 14–17 through parent-verified accounts, and it's beginning data-collection road trips in New York City and Philadelphia. Separately, the electric vehicle market continues to grow with new models from Mercedes-Benz, Subaru, and Volvo. Rivian’s second-generation EVs were also test-driven, showcasing premium upgrades. On the venture side, micromobility company Also raised $200 million before even releasing a product, while INSHUR secured $35 million to expand gig economy insurance services. The newsletter also notes major AI and mobility investment trends, like Slate Auto’s rise and new deals in the e-motor and mapping space.
The Trump administration has announced a new plan to restrict Chinese and other foreign ownership of American farmland, citing national security concerns. The USDA’s seven-point strategy includes increasing transparency of foreign land ownership, enforcing stricter penalties for false filings, and working with Congress and states to ban purchases by foreign adversaries. The plan follows rising concern over Chinese investment, particularly after a 2023 attempt by a Chinese company to buy land near a military base. While 26 states already limit foreign farmland ownership, there is no federal ban. Foreign entities currently own around 45 million acres, with Canada holding the most and China holding over 270,000 acres. The administration is also exploring ways to reclaim existing foreign-owned land and aims to secure critical agricultural inputs, protect food systems from cyber threats, and re-evaluate aid to foreign nations. The plan reflects growing efforts to safeguard U.S. food supply chains and rural land from geopolitical risks.
Have a great weekend.
Best,
Franklin
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.