Leery buyers put screws to U.S. homebuilders 31 Jan 2023 Pulte, which constructs more upscale houses, lifted quarterly sale prices 17%, but D.R. Horton and Lennar sacrificed operating margin to offload homes. High interest rates are keeping 80% of Americans downcast about the market. Optimistic valuations tell an oddly different story.
Big oil can be lean and not mean 31 Jan 2023 Net debt at Exxon and Chevron declined nearly $50 bln last year, and both are on path to having no debt at all. Neither seem inclined to lever up given oil’s murky and volatile future. But excess cash must go somewhere. Shareholders are in line for big payouts.
Pfizer goes back to the pharma meat-grinder 31 Jan 2023 Its warning that revenue will fall by one-third this year is a return to pre-pandemic doldrums, where pharma companies wrestled with the meager, declining returns of developing new drugs. The best shot for Pfizer and peers is to focus new technology on hard-to-treat diseases.
Global supply chain scars will spark sea change 31 Jan 2023 The business of shifting goods around the world plunged into chaos during the pandemic. In this Exchange podcast Alan Murphy, boss of researcher Sea-Intelligence, explains China’s changing role in global trade and how that impacts the price of everything from iPhones to cars.
Capital Calls: TikTok’s Beltway visit 30 Jan 2023 Concise views on global finance: The social media app’s CEO Shou Zi Chew is going in front of a U.S. Congressional committee. But it’s leaders outside of Washington that Chew needs to convince.
China’s reopening generates mirage of normality 27 Jan 2023 Movie sales during the Lunar New Year holiday beat last year's to hit $900 mln as travel rebounds. The relief bounce is unsurprising, but retail growth has yet to recover to pre-pandemic levels. Scarred consumers have too many reasons to avoid splurging.
Meme stocks give bankruptcy new excitement 26 Jan 2023 When a company like Bed, Bath & Beyond lurches towards failure, investors try to reckon what it would be worth after a cleanup. That’s harder when retail traders push its stock to unexpected highs, as happened to car rental firm Hertz. What was once a science has become a game.
Microsoft’s revenue sniffles are tech’s flu 24 Jan 2023 The software developer's growth rarely falters, but its 2% top-line expansion was the slowest in 22 quarters. Customers who overinvested during the pandemic are now retrenching, even on Microsoft’s software staples. It’s a poor omen for firms built on more dispensable offerings.
Amazon creates bazaar for U.S. banking wannabes 24 Jan 2023 The e-commerce titan’s latest debt, an $8 bln loan, is curious, but not as much as the foreign institutions providing it. Australia’s ANZ, Spain’s BBVA, Singapore’s DBS and others rarely turn up in such deals. The likelihood of them leveraging this one into more business is slim.
Layoffs take Big Tech back to more modest future 20 Jan 2023 Alphabet has joined the ranks of U.S. technology firms cutting staff, with roughly 5% looking like the norm. Job openings are shrinking fast too. Proposed trims only partly cut back the 420,000 workers added since Covid-19 hit. The industry will still emerge bigger than it was.
Macau bounces into Year of the Rabbit 19 Jan 2023 Spring has sprung in the casino hub with the end of China’s zero-Covid. Operators will return to profit. Yet from Sands to SJM, balance sheets are stretched. How quickly they are repaired depends on if punters spend as much as before. Pandemic policies will leave other scars too.
Disney investors pay twice for half-leadership 18 Jan 2023 Between outgoing chief Bob Chapek and returning CEO Bob Iger, the media giant earmarked $60 mln in pay and severance for last year. By contrast, Apple boss Tim Cook is in line for a downsized $49 mln this year. Disney’s generosity is at odds with its poor succession planning.
Capital Calls: Activism, Bond spat, Airline M&A 18 Jan 2023 Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.
Goldman slams into unwelcome sort of volatility 17 Jan 2023 The investment bank’s push into consumer lending was meant to bring stable growth to balance out trading swings. Instead, it has done the opposite, losing $4 bln and counting. Belated, patchy disclosures don’t help, nor does archrival Morgan Stanley’s wealth management success.
Will Disney’s real activist please stand up? 13 Jan 2023 Dan Loeb started a campaign, but took an easy win. Nelson Peltz is using velvet gloves to persuade current boss Bob Iger to get the $180 bln media giant on the right track. But activists’ main job is forcing a regime change. At Disney, that’s going to take some muscle.
Banks dress up for a business-casual recession 13 Jan 2023 A downturn is coming, warn lenders like JPMorgan, Bank of America and Citi, but nothing too fancy. Even as bad-debt charges mount, they keep lending, especially through credit cards. After years of enforced discipline, banks are appropriately attired even if things get much worse.
Investors sit on a plastic waste ticking bomb 13 Jan 2023 Four years after vowing to curb packaging, giants like PepsiCo and Mars are far from meeting their goals. Just 9% of global plastic actually gets recycled. If governments decide to firmly turn against corporate polluters, these may face an annual $100 bln cleanup bill.
Capital Calls: BlackRock, Tim Cook’s pay 13 Jan 2023 Concise views on global finance: The asset manager edges closer to its Blackstone roots by expanding in private investments; compensation for Apple’s CEO re-enters Earth’s atmosphere.
CVS maintains unhealthy M&A lifestyle 12 Jan 2023 The drugstore chain owner may buy Oak Street, a fast-growing network of doctors treating older patients. A mooted $10 bln price sounds high given the cash burn and risk of a government crackdown. It would be another ill-advised deal for boss Karen Lynch’s growth strategy.
Capital Calls: Prices down, jobs saved? 12 Jan 2023 Concise views on global finance: New data shows U.S. prices falling 0.1% in December, marking the largest drop since early 2020. With inflation in retreat, the Fed can focus more on keeping Americans employed.