Capital Calls: Disney’s Netflix problem 8 Nov 2022 Concise views on global finance: The Magic Kingdom’s shares tanked on Tuesday after it reported widening losses in its streaming service division, but it can overcome the challenges.
Europe’s diverging prices complicate ECB’s task 1 Nov 2022 Inflation is running at 7% a year in France and 22% in Estonia. These differences make the European Central Bank’s stance too aggressive for some states and too timid for others. The controversy about monetary policy will only intensify as the ECB pushes rates higher.
Europe’s pain will be ultimately worth it 31 Oct 2022 The European Union faces a tough period as the energy crisis bites and debt troubles return. But the bloc could have the world’s cheapest and cleanest energy by the mid-2030s and it will probably emerge stronger geopolitically, says Hugo Dixon.
European banks’ perfect moment will prove fleeting 26 Oct 2022 Rates are rising, traders are busy, and customers are paying their debts. That helpful backdrop helped Barclays, Deutsche and Santander average a punchy 11% return on tangible equity so far in 2022. But with recession looming, and bad-debt buffers looking low, it may not last.
ECB $2 trln bank-loan unwind is fraught with peril 25 Oct 2022 The European Central Bank may tweak a funding scheme to stop lenders minting money at its expense. Fiddling with the terms is legally dubious. Other options could undercut its fight against inflation. But the status quo, indirectly costing taxpayers billions, is unsustainable.
The urgent search for the perfect inflation hedge 20 Oct 2022 Nearly every major asset class has lost money this year, leaving investors scrambling to protect their wealth from rising prices. Traditional alternatives such as gold and property also have drawbacks, writes Edward Chancellor. The best shield may be the most obvious one.
French protesters have a point on wages 20 Oct 2022 Inflation running at 10.9% is eroding European workers’ salaries. Companies benefitting from a power crisis, like 139 bln euro TotalEnergies, can afford pay hikes. For others, one-time bonuses are a better way to keep workers happy and cushion the downside of looming recession.
P&G’s pricing power hangs by a floss 19 Oct 2022 The $300 bln maker of Pampers and Puffs charged more in the latest quarter without scaring off too many customers. It’s a good sign, but some of its brands are weaker and costs are rising at a faster pace. As a lens into the global consumer, the results are cause for concern.
Kroger clumsily bags up Albertsons grocery goodies 14 Oct 2022 The $25 bln acquisition of its smaller rival anticipates $1 bln of annual savings, but uniting the second- and third-largest U.S. supermarkets also raises regulatory concerns. Despite promised price cuts, wage hikes and store disposals, shareholders’ trolleys are the fullest.
Bank mortgage tweaks presage bigger political hit 14 Oct 2022 Spain’s CaixaBank proposed a rate freeze, while UK lenders favour ad hoc relief for struggling borrowers. As interest costs soar, these won’t be enough to avoid a mess. Since cash-strapped governments can’t help, they may hammer banks with Polish-style blanket payment holidays.
How West can mobilise trillions to help save Earth 10 Oct 2022 On top of stopping global warming, rich nations have geopolitical reasons to help the countries in the Global South transition from fossil fuels. America’s call for the World Bank to focus more on global needs like climate change is a step in the right direction, says Hugo Dixon.
Capital Calls: Peloton races tough economic cycle 6 Oct 2022 Concise views on global finance: The $2.9 bln fitness company is laying off staff for the fourth time this year in a turnaround bid for survival.
Capital Calls: Buffett’s Berkshire successor 4 Oct 2022 Concise views on global finance: The Omaha oracle owns $100 bln of stock in his conglomerate. His potential successor Greg Abel’s purchase of $68 mln of stock last week – after selling shares in a subsidiary for $870 mln in June – is too small a move toward Buffett’s standard.
Behind Britain’s self-inflicted financial crisis 28 Sep 2022 Sterling fell to a record low and gilt yields soared after finance minister Kwasi Kwarteng unveiled a raft of unfunded tax cuts. In this Viewsroom podcast, Breakingviews columnists explain the long-term damage to the UK’s credibility and what will rebuild investors’ confidence.
UK swaps one cost-of-living crisis for another 27 Sep 2022 The Bank of England may raise rates past 5% to stem the inflationary effect of Chancellor Kwasi Kwarteng’s tax cuts. Homeowners, saved by the government’s energy price cap, now face a surge in mortgage costs. That will sap growth and add to pressure for banks to help customers.
Capital Calls: Novartis 22 Sep 2022 Concise views on global finance: The Swiss drugmaker hopes to fix its growth problem by listing its generic drug business and focusing on the U.S. market.
Fed has won minds but will have to break hearts 13 Sep 2022 Investors and households still believe U.S. inflation, at 8.3% in August, will come down. Clear messaging from Chair Jay Powell and fellow rate-setters has worked. But expectations and reality are still far apart. Consumers and jobseekers may not realize the pain that’s coming.
Grocers’ crisis defences look shaky 13 Sep 2022 Morrisons lost its top-four UK position to Aldi, while Ocado’s online sales are under pressure. Competition from discounters means supermarkets have less scope to raise prices and protect margins than in past slowdowns. The bleak outlook has yet to reach stock valuations.
Capital Calls: T-Mobile US transmits clear signal 9 Sep 2022 Concise views on global finance: The telecom carrier is planning a $14 bln buyback program as it beats rivals in shareholder return.
Europe’s sturdy banks risk becoming punch bags 8 Sep 2022 Lenders like Lloyds and Deutsche are set for a rate-hike windfall even as the region faces recession. As in the pandemic, governments may prod them to offer borrowers loan repayment holidays and cheap credit to pay their bills. But this time, banks may not get as many sweeteners.