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10-26-2023

TECH

• controls. The company’s advertising business saw strong growth, but its metaverse project continues to generate losses.

• The UK government plans to establish the world’s first AI safety institute to evaluate and understand the risks associated with AI. Prime Minister Rishi Sunak emphasizes the need for government evaluation and regulation of AI, addressing concerns such as job displacement, cyber-attacks, and the potential for AI to facilitate the development of weapons. The government will also host a global AI safety summit to discuss the risks and challenges of AI technology. China has accepted Britain’s invitation to attend the summit.

• Google has introduced new updates to Android, Search, and Play Store to help users identify and report deepfake images. The updates include an in-app reporting mechanism for offensive AI content and a tool called “About this image” that provides information on the image’s history, fact-checking references, and more. Google aims to combat the spread of disinformation and AI-generated fake images.

• ServiceNow reported strong Q3 results with subscription revenue of $2.2B, up 27% YoY, and raised its 2023 subscription revenue forecast. The company emphasizes the importance of generative AI for businesses.

• The White House is expected to announce an executive order on artificial intelligence (AI) that will require assessments of advanced AI models before use by federal workers, facilitate immigration for highly skilled workers, and address cybersecurity concerns.

• SK Hynix reported a 24% increase in Q3 revenue due to strong demand for DDR5 and HBM memory products. They also announced opposition to the proposed merger between Kioxia and Western Digital.

• KLA Corporation reported strong Q3 2023 earnings, with revenue of $2.4 billion and non-GAAP EPS of $5.74. Intel faces concerns about profit margins due to weak demand for data center server chips.

• Elon Musk’s X platform, formerly known as Twitter, is adding audio and video calling features. The platform aims to become an “everything app” like WeChat, but has lost 13% of its daily active users since Musk took over.

• Apple has released watchOS 10.1, which includes the Double Tap gesture and NameDrop feature. The update is not compatible with iPhone 8 and iPhone X.

• T-Mobile US Inc announced strong Q3 earnings, surpassing expectations with increased profits and subscriber gains. The company achieved its goal of covering 300 million people with mid-band 5G ahead of schedule, and remains a leader in the industry. T-Mobile also reported growth in its business and broadband segments.

• ASGN Inc. reported Q3 2023 revenues of $1.12 billion, with the Commercial segment seeing declines and the Federal Government segment experiencing growth. The company expects soft revenues in the Commercial segment for Q4 2023.

• Siltronic, a German chip equipment supplier, reported a decline in sales but beat expectations with a net profit of €35.1 million in Q3. German technology firms, including Suess MicroTec, are facing delays in exporting to China due to tightened controls, leading to reduced sales forecasts. Suess MicroTec has cut its sales forecasts and deliveries worth €23.5 million are stuck at customs.

• Cisco has unveiled a new AI strategy for its Webex platform, partnering with NVIDIA to enhance collaboration experiences. The strategy includes real-time intelligence, AI assistant features, and AI-powered audio and video capabilities. Cisco emphasizes privacy and aims to compete with Zoom, Microsoft Teams, and Google Meet.

• Chip stocks, including Texas Instruments, are declining due to weakening industrial demand and underwhelming forecasts. Texas Instruments reported a 35% YoY revenue decline and expects a 10% decline in Q4 revenue.

MEDIA

• President Biden expressed skepticism about the Palestinian death count in Gaza and emphasized Israel’s need to target those provoking the conflict. The Council on American-Islamic Relations criticized Biden’s remarks. Israel’s planned ground offensive in Gaza has been delayed due to talks to free hostages and American pressure. Turkish President Erdogan accused Israel of attacking civilians. Former Israeli military official Uzi Dayan sees the recent raid as preparation for future incursions into Gaza. Video footage shows Israel’s armored vehicles preparing for a ground invasion. Hamas called for increased protests against Israel’s campaign. The UN agency for Palestine refugees called for a ceasefire to protect civilians. EU leaders are divided on calling for humanitarian pauses in the conflict. The UK will hold an emergency meeting to discuss aid delivery and the release

• Apple has increased the prices of its subscription services, including Apple TV+ and Apple News+, with prices ranging from $9.99 to $12.99 per month.

• NETGEAR Inc reported Q3 2023 revenue of $197.8 million, up 14.1% sequentially but down 20.7% YoY. Comcast reported a net loss of $4.05 billion in Q3 but saw revenue increase to $30.12 billion. Comcast’s broadband business lost 18,000 customers, while its streaming service Peacock gained 4 million paid subscribers.

• Entertainment giant Endeavor is reviewing strategic options, excluding the sale of TKO Group Holdings. Private equity firm Silver Lake is considering taking Endeavor private.

• Al Jazeera’s Gaza bureau chief, Wael al-Dahdouh, lost his wife, teenage son, daughter, and grandson in an Israeli airstrike on a refugee camp.

• Scholastic Inc. has reversed its decision to separate books with diverse themes at school book fairs after facing backlash and accusations of censorship. The company acknowledged the confusion and feelings of exclusion caused by the policy and is now working on making its book fairs inclusive for all children.

• Barcelona defeated Shakhtar Donetsk 2-1 to lead Group H in the Champions League. Atletico Madrid drew 2-2 with Celtic, playing with 10 men. Feyenoord beat Lazio 3-1 to top Group E.

• Borussia Dortmund’s 1-0 win over Newcastle United in the Champions League Group F keeps their hopes alive, securing their first victory in the group stage.

• Democratic congressman Jamaal Bowman has been charged with pulling a false fire alarm in a House building during a crucial vote. He will plead guilty, pay a $1,000 fine, and provide a formal apology.

• Supreme Court Justice Clarence Thomas’s $267,000 loan for an RV appears to have been forgiven, raising tax and ethics questions. Senate inquiry reveals concerns about ethics, tax reporting, and potential consequences for Justice Thomas.

CONSUMER

• Unilever and Nestle experienced weak third-quarter sales volumes due to price increases, despite prices beginning to moderate. Unilever announced a plan to streamline business, focus on key brands, and improve gross margin. Unilever’s new CEO, Hein Schumacher, aims to boost performance, focus on main brands, and make leadership changes. Unilever’s Q3 results showed a 5.2% increase in underlying sales, but sales volumes fell in Europe. The company plans to focus on main brands, increase net productivity, and make leadership changes. Unilever reported solid Q3 results with a 5.2% underlying sales growth, but was impacted by currency effects.

• Whirlpool Corp lowers full-year profit forecast due to slowing demand, but Q3 profit exceeds expectations. Stock drops 5%.

• Ethan Allen Interiors Inc. reported a 23.6% decline in Q1 2024 sales due to a softening economy and a major flood at its Vermont manufacturing operations. The company maintained strong operating margins and a strong cash balance. They are implementing initiatives to position themselves as an Interior Design Destination.

• Silgan Holdings reported strong Q3 2023 performance despite challenges, with $1.80 billion in net sales and $110.6 million in net income. The company plans to return over $250 million to shareholders in 2023.

• Marine Products Corporation experienced a 22% decrease in net sales for Q3 2023 due to reduced boat deliveries and the normalization of retail boat demand. The company declared a quarterly cash dividend of $0.14 per share. Shares of Marine Products fell 13% in response.

• Amazon analysts anticipate that the expansion of same-day delivery services in at least 90 cities will boost the company’s profit margins in Q3. The convenience of fast delivery drives larger and more frequent orders, increasing customer engagement and advertising revenue.

• PROG Holdings Inc exceeded expectations with strong Q3 financial results, driven by customer payment behavior and portfolio performance. Q4 GMV expected to be similar, but revenue may face pressure in 2024. Company focuses on growth, enhancement, and expansion strategy.

• Casino, a French retailer, has lowered its 2023 profit outlook due to falling sales and the need for price cuts.

REAL ESTATE

• PulteGroup is offering lower mortgage rates to sell new houses in a challenging market. Sales of new homes have increased, but concerns about affordability and higher rates remain. Meanwhile, new home sales in the US reached a 19-month high in September, driven by price discounts and incentives from builders. However, the supply shortage, rising prices, and mortgage rates have diminished affordability. Despite this, new home sales in September increased by 12.3%.

• U.S. mortgage rates have reached their highest point in 23 years, leading to a decrease in mortgage applications. The Bank of England may hike interest rates due to unchanged inflation. U.S. home prices have remained resilient despite rising rates, but housing activity has declined.

• Regency Centers and Kimco Realty Corp. stocks fell on Wednesday, underperforming the market. DuPont de Nemours Inc. and Dow Inc. stocks also declined, underperforming compared to their competitors. Caterpillar Inc. stock fell, underperforming compared to Deere & Co.

• Vietnam’s real estate sector is facing difficulties, with missed interest payments, a credit crunch, and falling stock prices. Developers like No Va Land and Vinhomes are struggling, and non-listed companies have defaulted. Real estate bonds worth $6 billion are set to mature in the next two years. There are concerns about spillover risks into the banking sector, but analysts believe there is no risk of massive contagion. The turmoil is attributed to a long-running graft campaign and an economic slowdown. Despite the challenges, Vietnam’s long-term prospects are seen as positive. Additionally, shares of Vingroup and Vinhomes fell 6.9% due to foreign investors offloading shares.

• Wyndham Hotels reported a 1.2% decline in Q3 revenue, while PPHE Hotel Group expects at least £400 million in revenue for 2023. Hilton Worldwide Holdings had strong Q3 performance with increased revenue and operating income, but a slowdown in RevPAR growth. Hilton also raised its annual profit forecast.

• M/I Homes Inc had an outstanding third quarter with record revenue, income, and a 50% increase in new contracts. They expect strong results in 2023.

TRAVEL

• An Australian court has found Carnival and its subsidiary Princess Cruise Lines negligent in handling a Covid-19 outbreak on the Ruby Princess ship. The court awarded medical expenses to one plaintiff and is yet to decide on other claims. The cruise was linked to 900 cases and 28 deaths. Carnival is reviewing the judgment and could face more claims.

ECONOMIC

• Heidrick & Struggles International Inc reported Q3 2023 revenue of $263 million, a 3% increase from the previous year. The company achieved its 13th consecutive quarter of double-digit adjusted EBITDA margin. The On-Demand Talent and Heidrick Consulting businesses continue to show strong growth. Honeywell International Inc. reported a net income of $1.514 billion in the third quarter, with sales rising to $9.212 billion. The company’s full-year guidance was adjusted, with sales expected to range from $36.8 billion to $37.1 billion. Allison Transmission Holdings Inc reported a 4% increase in net sales to $736 million and a 21% increase in diluted EPS to

• Mike Johnson, a Republican congressman from Louisiana, has been elected as the new Speaker of the US House of Representatives. He is known for his conservative views on issues such as abortion and same-sex marriage, and his support for Donald Trump’s efforts to overturn the 2020 election. Johnson’s election is seen as a victory for the hard-right faction of the Republican Party.

• Ted Pick, a veteran at Morgan Stanley, has been chosen as the new CEO, replacing James Gorman. He will start his role on January 1, 2022. Gorman will remain as executive chair for an unspecified period.

• China Construction Bank (CCB) reported a 2.63% increase in Q3 net profit, reaching 88.11 billion yuan ($12.04 billion), and maintained a non-performing loan ratio of 1.37%. Sinopec, China’s largest refiner, reported a 38% increase in Q3 profit, driven by higher oil-product sales and reduced losses in its chemicals business. Air China reported a net profit of 4.24 billion yuan ($579.31 million) for the third quarter. Valero Energy reported a 7% decrease in Q3 earnings due to lower refining margins. Industrial & Commercial Bank of China (ICBC) is expected to report a 1.4% decline in Q3

• The Federal Reserve is proposing a 30% reduction in debit card interchange fees, lowering the cap from 21 cents to 14.4 cents per transaction. The proposal will undergo a 90-day public comment period. Banks and retailers have differing opinions on the impact of the fee reduction.

• Western Union reported a 3% increase in its branded digital revenue for Q3, driven by changes in Iraqi monetary policy. Wabash National Corp announced strong Q3 results with revenue of $633 million and raised its full-year EPS guidance.

• Corning Inc. stock fell 0.30% but outperformed competitors. APA Corp. stock rose 0.05% and broke a three-day losing streak. Packaging Corp. of America stock fell 0.03% but still outperformed the market. Paccar Inc. stock dropped 0.35%. MarketAxess Holdings Inc. reported Q3 2023 earnings of $172 million with lower volatility but sees increased volatility in October. MarketAxess stock fell 9.26% and had higher trading volume.

• The Biden administration has requested $56 billion in emergency spending from Congress for disaster relief, child care, and high-speed internet. This includes $23 billion for disaster relief and $16 billion for child care centers. The request also includes funding for international food aid, energy assistance, and pay for federal wildland fighters. The administration aims to support communities affected by extreme weather events.

• Dow generated $1.06 billion in free cash flow in Q3, Danaher reported better-than-expected earnings, Dover’s earnings were in line with expectations, General Dynamics had strong revenue growth, and Teledyne had record operating margin.

• Payment provider Worldline’s stock fell over 50% after the company cut its full-year guidance due to a slowdown in Germany. The decrease is seen as overblown, as the company is still profitable and expects stable margins. Other payment stocks also dropped amid concerns over valuations and a slowdown in consumer spending.

CRYPTO

• Sam Bankman-Fried, founder of FTX cryptocurrency exchange, plans to testify in his own defense at his fraud trial. He is facing charges of stealing billions of dollars from customers and could face decades in prison if convicted.

• Bitcoin’s price has surged to around $35,000, doubling this year, driven by optimism surrounding the potential approval of a spot Bitcoin ETF by US regulators.

HEALTH

• Boston Scientific has raised its profit forecast and exceeded Q3 profit estimates due to increased demand for heart devices following a rebound in elective surgeries. Bristol-Myers Squibb has delayed its sales target for new drugs due to competition and limited patient access. Merck reported higher Q3 sales and profit driven by strong demand for cancer treatments. West Pharmaceutical Services raised its 2023 profit forecast. UPS lowered its 2023 revenue forecast due to decreased e-commerce demand and labor negotiations.

• Healthcare Services Group Inc. reported Q3 2023 revenue of $411.4 million and a net loss of $5.5 million. Option Care Health Inc. reported Q3 2023 revenue of $1.093 billion and completed a $100 million share repurchase program. Life Time Group Holdings reported Q3 2023 revenue of $585 million and an increase in adjusted EBITDA by 101%. Travel + Leisure Co. reported Q3 2023 adjusted EBITDA of $248 million and announced the acquisition of the rights to the Vacation Ownership business of Sports Hospitality Ventures.

• Edwards Lifesciences reported strong Q3 2023 sales growth of 11-12%, driven by demand for its TAVR platform and artificial heart valves. The company expects full-year sales growth in the range of 10-13%.

SPORTS

• The Texas Rangers and Arizona Diamondbacks will face off in the 2023 World Series, with the Rangers favored and having home-field advantage. The series begins on October 27th. The Rangers have a higher payroll but have faced injuries, while the Diamondbacks are unexpected wild-card teams.

• South Africa’s forwards, known as the ‘Bomb Squad,’ will play a crucial role in the Rugby World Cup final against New Zealand, relying on their power to dominate upfront. The team has made a controversial 7-1 split between forwards and backs on the bench, risking having no cover for potential back injuries. The Springboks are focused on the upcoming match and are prepared for a physical battle.

• South African hooker Bongi Mbonambi has been cleared of making a racial slur against England’s Tom Curry due to insufficient evidence. Both players faced online abuse, which World Rugby condemned. England captain Owen Farrell spoke out against the abuse.