United States of America

Carmakers will blink first in union standoff

22 Sep 2023

The UAW is expanding strikes at GM and Stellantis, but not at Ford, where the union sees progress. Divide-and-conquer will stretch labor funds and selectively boost the financial impact – some $48 mln a week at the F-Series pickup manufacturer alone. Workers have the upper hand.

Uncle Sam risks recession by a thousand cuts

22 Sep 2023

A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.

Permira will have to work to exit classified hole

22 Sep 2023

The buyout firm has teamed up with Blackstone to take Norway’s Adevinta private. Its initial outlay in 2021 is under water after a tech downturn battered the $11 bln company’s valuation. Permira’s hopes of a decent return rest on turbocharging sales and tangibly hiking margins.

UFC’s Saudi challenge may be less than a body blow

22 Sep 2023

After its WWE merger, the mixed martial arts promoter’s $15 bln parent TKO faces a smack from Saudi-backed PFL. But the latter is targeted more at non-US fans, a lesser market for UFC. Saudi may also struggle to scale up enough to deliver the knockout blow it managed with golf.

Rupert Murdoch will redefine chair emeritus

21 Sep 2023

The 92-year-old media mogul is ceding his role co-running the Fox and News Corp boards, accepting the retirement honorific as his son Lachlan takes charge. By tiptoeing out, he at least cements succession. There can be no doubt, however, that his ongoing presence will be felt.

Cisco’s $28 bln spelunking yields dicey deal

21 Sep 2023

Buying data and security outfit Splunk could increase recurring revenue at the $215 bln networking giant. Cisco is also paying a low multiple. But the two don’t have much overlap, and Splunk’s cloud-based business needs work. Cisco bears execution risk, which hinges on growth.

Listing duo offers followers a cautious playbook

21 Sep 2023

Chip designer Arm and grocery delivery company Instacart have secured relatively successful stock launches, offering hope of a wider reopening of the IPO market. In this Viewsroom podcast, Breakingviews columnists explain how cornerstone investors and lowly valuations helped.

Oil spike offers only a brief boon for Fed and MbS

21 Sep 2023

Crude prices are up 25% since July, swelling the Saudi crown prince’s budget. Fed boss Jay Powell wins too: he can use it to justify inflation-busting high rates. Yet long-term, a surfeit of energy demand over supply will complicate life for both central bankers and oil tsars.

Fed clarity effectively sends a strong buy signal

20 Sep 2023

Benchmark US interest rates probably will hover around 5.5% for a while. A stable cost of capital gives companies, consumers and investors good reason to stop putting off decisions any longer. It should help resolve valuation ambiguities and restart M&A, IPO and housing activity.

Anti-obesity drugs can shrink more than patients

20 Sep 2023

Wegovy and other weight-loss treatments could transform public health. That may hurt medical, food and fitness companies, while potentially affecting activities from drinking to gambling. This shrinking revenue demands a new investment concept: total unaddressable markets.

Instacart under-promises in hope of overdelivering

19 Sep 2023

The grocery delivery service’s shares started trading at $42 apiece, 40% higher than where it priced last night. That may seem wacky, but at $14 bln, Instacart is still reasonably valued. In this market, it’s a wise strategy for boss Fidji Simo.

Bausch pushes debt escape plans to extremes

19 Sep 2023

BHC’s CFO just quit as the drugmaker mulls a dicey plan to spin off its $5.5 bln Bausch + Lomb stake. Such engineering increasingly pits creditors against shareholders, in this case Carl Icahn and John Paulson. Stronger covenants would help, but CEOs keep getting more creative.

New economic rules shatter US bonds’ crystal ball

19 Sep 2023

Government debt has been signaling a downturn for 440 days, but there’s been no recession. The famed predictive power of the yield gap between different vintages of Treasuries is waning. As the global economy evolves, warnings from the fixed-income markets can be safely ignored.

Big oil lawsuits are riskier than quitting tobacco

18 Sep 2023

California is suing fossil-fuel companies, alleging tens of billions in climate-related damages. Decades of litigation forced tobacco firms to pay up. The tension is that, while global warming’s ravages imply higher costs, US oil production is crucial amid tightening supply.

IPO candidates are trying to flip the FOMO script

18 Sep 2023

Arm’s IPO investors got a 25% return on the first day. Instacart began its roadshow with a low number, only to bump it up. Klaviyo just lifted its price range. Companies and their bankers are finally getting an open window. Creating envy over big debuts will help it stay open.

Less ethical US foreign policy requires new logic

18 Sep 2023

When Joe Biden took office he promised to put human rights at the heart of international affairs. The president is now cosying up to regimes like Vietnam to contain China and build new supply chains. That makes sense, but Biden should explain his approach better, says Hugo Dixon.

Deaths haunt Corporate America via labor strikes

15 Sep 2023

Auto workers, pilots, and truck drivers have had upper hands in labor strikes. That’s despite labor supply healing. One reason may be that men have left the workforce. Opioids and Covid are partly to blame. But it highlights the dangers of demographically concentrated jobs.

Detroit profit engine could screech to a halt

14 Sep 2023

Years-long employment contracts meant auto workers missed out on post-pandemic gains. New demands could halve Ford and GM profit. The companies may prefer one-off rewards. But unions have little incentive to accept. Instead, transition plans may be wounded, and both sides pay.

Lazard’s new CEO dares to evoke Bruce Wasserstein

14 Sep 2023

Peter Orszag aims to double revenue to about $5 bln by 2030 while delivering at least a 10% annual shareholder return. The firm’s recent history suggests the plan is bold. But it’s as good a time as any to heed the advice its former boss famously gave clients: “Dare to be great.”

BP CEO exit raises strategy and board questions

14 Sep 2023

Bernard Looney resigned after he failed to disclose past relationships with staff. In this Viewsroom podcast, Breakingviews columnists debate what that means for the oil giant’s commitment to net zero, and whether BP’s board did all it could have done.