Fed’s next challenge: the unemployment boogeyman 26 Jul 2024 The central bank’s steady hand on rates has solidly given the economy a soft landing. Strong 2.8% second-quarter growth provides a cushion as inflation, at 2.5%, melts away. But joblessness can become a tipping point for wages, consumption, and GDP. Risks are creeping in.
Casino buyout puts new spin on public vs. private 26 Jul 2024 Hedge fund Standard General is offering Bally’s investors a $4.6 bln deal that looks less than generous, but with the option to take risky, semi-liquid over-the-counter stock instead of cash. Unappealing as that is in this case, it shows how the lines between worlds are blurring.
Rose-colored Ray-Bans shade brand rehab realities 26 Jul 2024 EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.
Hyundai’s extra gear is short on staying power 26 Jul 2024 Earnings at Korea’s largest carmaker jumped 23% last quarter, bucking a trend that had rivals from Tesla to GM to Nissan stalling. Yet investors have wiped almost 6% off the share price. Robust hybrid and SUV sales may not offer lasting protection as consumer confidence falters.
Donald Trump may dent but not dethrone King Dollar 26 Jul 2024 The US currency’s long-predicted demise has so far failed to materialise. The former president’s possible return to the White House is a reason to reconsider. While the greenback remains unassailable as the de facto global standard, its days of cyclical strength may be numbered.
Meta AI strategy: give something to get something 25 Jul 2024 As tech firms invest hand over fist in artificial intelligence, the Facebook owner’s plan to let developers tweak and freely use its models sounds like a giveaway. CEO Mark Zuckerberg hopes Meta will be long-term richer for it. Google’s Android success suggests he might be right.
Murdoch media galaxy would be better with one sun 25 Jul 2024 News mogul Rupert Murdoch reportedly wants to entrench his son Lachlan at Fox and News Corp, rather than spreading power among four siblings. For other shareholders, stability matters; Fox has beaten peers with Lachlan as CEO. Better an emperor than a squabbling committee.
Carmakers drive efficiency hopes into a ditch 25 Jul 2024 The shares of carmakers Nissan and Stellantis fell around 7% after weak results. The tough US market is hurting sales, erodes the European group’s high margins and hinders its Japanese peer’s turnaround. Unsold cars and cautious consumers mean any recovery will take time.
Ford and GM cushioned by economic safety features 24 Jul 2024 Detroit’s $100 bln automaking duo hit some bumps, but they’re mostly humming along. Even so, delinquent loans and growing inventories have spooked investors about vehicle prices. Bloated dealer profit, ageing cars and lower borrowing costs should smooth out the road ahead.
Euro-banks offer glimpse of possible bad-debt wave 24 Jul 2024 Deutsche upped its forecast loan-loss charge, contributing to a 7% share-price fall. BNP’s default provision spiked, and UniCredit’s has too in Germany. Most of the bad news relates to just a few specific corporate clients. But there will be more if rates stay higher for longer.
CrowdStrike in cursed grip of corporate klutz club 24 Jul 2024 The cybersecurity company’s 20%, or $17 bln, loss in value after a botched software update echoes those of bumblers from Chipotle to Citigroup. Many factors determine how long the stain lasts. Foremost among them is a CEO’s ability to persuade shareholders the slip was a one-off.
Google’s third-place cloud business is a winner 23 Jul 2024 Parent Alphabet tripled its quarterly operating income at its IT service division. It still lags in market share. Yet the $2 trln giant has an advantage learning from the mistakes of larger rival Microsoft while bigger peer Amazon illuminates the potential profit ahead.
Donald Trump might be bad for EVs, good for Tesla 23 Jul 2024 The electric-car giant’s US sales are down and rivals are rising. Yet boss Elon Musk has thrown in with Trump, whose vow to end government support could crimp EV sales by 27%. Thing is, that hurts others more. For Tesla, maintaining dominance as it pushes beyond cars matters.
Cold storage IPO merits a warm reception 23 Jul 2024 Lineage, a food warehouse REIT, is seeking a valuation as high as $19 bln in the biggest US public offering this year. The deal values it at a premium to smaller rival Americold. But that makes sense. Scale, which Lineage has, matters. A public currency will only make it bigger.
Bosch’s US deal blows cold air on EU growth 23 Jul 2024 The German industrial group is paying $8 bln to buy air-conditioning businesses from conglomerate Johnson Controls. The valuation looks good compared to where peers trade. For American castoffs to attract such a heavy capital outlay, however, is a bad omen for Europe’s prospects.
Mattel buyout would be fun but dangerous plaything 23 Jul 2024 Despite Barbie’s star power, the $7 bln toymaker’s sinking valuation has attracted suitor L Catterton. A deal can work but looks big enough to be a choking hazard for the LVMH-backed investment firm. Higher tariffs on Chinese suppliers also would make the financial game riskier.
KKR-Eni biofuels deal is rich bet on governments 23 Jul 2024 The US investor could pay up to $14 bln for 25% of the Italian group’s bioenergy arm. That’s a big premium to listed peers, at a time when greener fuels made from crops are less favoured. Long-term growth rates mean it makes sense, but only if states keep assisting the market.
Corporate America revels in Supreme Court windfall 23 Jul 2024 The most influential set of business-related rulings in decades augurs sweeping US deregulation. One case alone may save the medical testing industry some $30 bln, as companies race to challenge many longstanding rules. Receptive judges would help pay dividends for years.
Boeing and Airbus headwinds are hard to escape 23 Jul 2024 The troubled US jet maker and its European rival aren’t delivering as many planes as customers want. On this Exchange podcast, AirInsight co-founder Addison Schonland explains how some problems stretch back to Covid, whether a third player can break the duopoly, and much more.
Dollar-cost averaging is Democrat donor watchword 22 Jul 2024 US President Joe Biden’s backers were like owners of a sinking stock, stuck in a flailing investment aided little by more cash. His exit and nod to Vice President Kamala Harris drew $50 mln of new money. Spending now offers a reset and the lure of influence in a renewed campaign.