Today in the Market (12/21/2023)

Good Evening! On Thursday, U.S. equities bounced after a significant decline in the main indexes yesterday, marking their most severe daily sell-off in months.

The three markets rebounded from yesterday, with the Dow Jones increasing by 0.87% while the S&P 500 barely got above the 1% mark by rising 1.03%. The Nasdaq finished the day strong, with the highest gain of 1.27%.

BLACKBERRY GETS HIT HARD

The stock price of BlackBerry Limited (BB) declined after the company’s projected financial performance fell short of expectations due to the six-week labor strike at the major automobile manufacturers earlier this year.

So how does the auto strike hurt Blackberry? According to CEO John Giamatteo, the United Auto Workers union strike reduced production levels for some of BlackBerry’s major clients. He emphasized that this impact is anticipated to be seen during the company’s fiscal Q4. On top of that, he said that while there is no change in the planned course towards software-defined vehicles, some milestones have been delayed.

Are any positive things going for Blackberry? The firm had substantial growth in its cybersecurity division, generating $144 million in sales. This is a significant increase of 44% compared to the previous quarter and an 8% rise compared to last year. Giamatteo reported that the unit successfully obtained significant contracts with prominent government entities, resulting in notable consecutive revenue growth and increased profit margins.

NO MORE AI FACIAL RECONGITION

This week, federal regulators accused Rite Aid (RADCQ) of failing to inform customers about the use of facial recognition software during their purchases of batteries and alka-seltzers. Additionally, the regulators claim the AI system inaccurately identified individuals as wrongdoers (more on that shortly).

So what did Rite Aid agree to do now? Rite Aid agreed to stop using this technology for five years after the Federal Trade Commission (FTC) accused the company of causing “emotional and reputational harm” to customers at some stores between 2012 and 2020.

But how bad was it? According to the FTC, Rite Aid’s face recognition technology inaccurately flagged several innocent people as shoplifters on multiple occasions. For example, the system triggered a search of an 11-year-old girl. It doesn’t stop there; during five days, a total of 900 or more alerts were generated for a single individual’s photo in the database across 130 different retailers. Even with these examples, Rite Aid expressed its disagreement with the claims made by the FTC and stated that the company stopped using the technology over three years ago.

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