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10-28-2023

TECH

• Amazon reported strong third-quarter earnings, with operating income increasing over 300% YoY. The company’s revenue growth was driven by its core e-commerce business as well as strong performance from its cloud computing division, Amazon Web Services (AWS). AWS sales were up 12% YoY, and operating income increased by 29% compared to last year. The company’s operating margins have been rising, indicating the success of its post-pandemic efficiency efforts.

• Elon Musk’s X.com plans to challenge YouTube and LinkedIn, launch a news wire service, and expand into the payments sector. The platform has 500 million active users but has faced advertiser exodus and criticism for misinformation. Musk has made significant changes to the platform, including firing staff and introducing paid subscriptions. X is also facing financial concerns and declining user engagement.

• Google paid $26.3 billion in 2021 to secure default search engine positions on various platforms, with a significant portion going to Apple. These payments are part of an ongoing antitrust case against Google.

• Google has committed to investing up to $2 billion in artificial intelligence (AI) startup Anthropic, joining Amazon in securing relationships with AI companies. The deal includes a convertible note and a major cloud agreement. The investments highlight the importance of large language models (LLMs) and Google’s efforts to compete with Microsoft and other Big Tech companies.

• Huawei Technologies reported a 2.4% revenue growth in the first nine months of 2023, reaching 456.6 billion yuan ($62.4 billion). The growth was driven by strong sales of the Mate 60 series smartphones and gains from the sale of businesses. Despite US sanctions, Huawei’s smartphone sales made a comeback in the third quarter.

• Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, reported strong earnings for Q3, beating estimates. However, challenges and uncertainties remain, including legal troubles, ad revenue loss, and metaverse investments resulting in losses. Mark Zuckerberg’s net worth has increased despite the losses.

• Apple is hosting an online event called “Scary Fast” on October 30/31 to announce new Macs with M3 processors and potentially a new iPad Pro.

• Venture capital firm Sequoia Capital is increasing its investments in AI startups, with 60% of new investments in the AI space. Wall Street analysts predict AI could have an economic impact of $15.7 trillion by 2030. The global AI market is projected to grow by $125.3 billion by 2027.

• Tata Group acquires Wistron’s Indian manufacturing unit for $125 million to become India’s first iPhone maker, challenging China’s dominance.

• Investment firm Merlyn Advisors proposes a merger between Telecom Italia and Open Fiber, excluding smaller rival’s areas. Italian government supports Telecom Italia’s sale to KKR despite rival strategy.

• The UK government is hosting an AI safety summit with attendees including European Commission president Ursula von der Leyen and US vice-president Kamala Harris. The summit aims to address the risks and challenges of AI and establish international regulation.

• President Joe Biden is expected to issue an executive order on October 30 to regulate AI, requiring firms to disclose protection plans and federal workers to assess advanced AI models. Congress is also urged to take legislative action on AI.

• The Thailand, France, and South Africa data center markets are all expected to grow due to factors such as increasing demand for cloud computing, government initiatives, and investments in renewable energy.

• Juniper Networks exceeded analyst expectations in Q3 2023, reporting adjusted earnings of $0.60 per share and total revenue of $1.398 billion. Shares rose 7% as a result.

• Adobe’s stock has seen a strong run and integration of generative AI has driven double-digit revenue growth. Concerns arise about excessive valuation and the impact of generative AI on profitability. However, strong financials and reinvestment of profits suggest potential long-term value and growth.

MEDIA

• South Africa will rely on their deep player pool and strong bench to pressure New Zealand in the Rugby World Cup final. Both teams have three World Cup titles.

• Shares of Charter Communications dropped 9% despite beating Q3 earnings due to slower growth in new broadband subscribers and a dispute with Disney.

• The recent mass shooting in Lewiston, Maine has prompted Congressman Jared Golden to reverse his opposition to an assault weapons ban. Gun stores in Maine are experiencing a surge in sales following the shooting.

• Taylor Swift’s Eras Tour has been a massive success, grossing over $178 million worldwide and contributing $700 million in ticket sales. This has propelled her net worth to $1.1 billion, making her a billionaire. The tour has also generated millions for the US economy and created jobs.

• Universal Music Group (UMG) has reported an increase in revenue from paid subscription platforms, while revenue from free, ad-supported streaming services dropped. UMG attributes the increase to the growth in subscribers and recent price increases by Apple and Amazon.

• Corus Entertainment Inc. reported Q4 2023 earnings with consolidated revenues of $1.5 billion and a profit of $50.4 million. The company suspended its dividend due to declining advertising demand and ongoing labor disruptions in the entertainment industry. Shares dropped 19% as a result.

• Disney has delayed the release of its live-action Snow White film and Pixar’s Elio due to an ongoing labor strike. Snow White will now release on March 21, 2025, and Elio on June 13, 2025. Other films, like Dune and Mission: Impossible, have also been affected. Additionally, Disney removed Magazine Dreams from its release calendar due to assault charges against actor Jonathan Majors.

• Mexican media company Grupo Televisa plans to prioritize profitability and cash flow over expansion, focusing on improving its existing subscriber base and generating free cash flow. The company is considering market consolidation in Mexico’s cable industry. Televisa reported a 2% decline in cable segment revenue in Q3 2023. The company aims to improve profits by cutting staff and enhancing its video streaming offerings.

• Boris Johnson, former UK prime minister, will join GB News as a presenter, covering topics such as international affairs and upcoming elections.

• FIFA has yet to ratify a 10-month ban for Newcastle United’s Sandro Tonali, giving a “high chance” of him playing this weekend.

• Taylor Swift’s re-recorded album “1989 (Taylor’s Version)” receives praise for its songs and Swift’s ability to maintain her underdog image. The album also includes bonus tracks called “From The Vault.”

• Disney’s share price drops to lowest level in nearly nine years as investors worry about its ability to adapt to the age of streaming.

CONSUMER

• Stanley Black & Decker reported Q3 2023 earnings with revenue of $4 billion, down from the previous year due to lower Outdoor and DIY volume. The company’s adjusted gross margin improved to 27.6%. They expect additional gross margin gains in 2024 and raised their full-year adjusted diluted EPS guidance.

• Abercrombie & Fitch and its former CEO, Michael Jeffries, are facing a lawsuit alleging that the company benefited from a sex trafficking operation led by Jeffries. The lawsuit claims that Jeffries forced models to engage in sexual acts with him and others in order to be featured in Abercrombie’s catalogs. The lawsuit also alleges that Abercrombie knew about the conduct and paid settlements to people who accused Jeffries of sexual abuse or harassment. The company has not commented on the pending litigation.

• Electrolux reported lower-than-expected profits in Q3, leading to a 13% drop in shares. The company plans to cut 3,000 jobs and increase cost reduction efforts.

• Inditex, the owner of Zara, has announced that its suppliers will purchase 2,000 metric tons of Circulose, a raw material made from recycled cotton waste, from Renewcell in Sweden. This is part of Inditex’s goal to source 25% of its fibers from “next generation” materials by 2030.

• Dollar General stock underperforms compared to Amazon, Walmart, and Costco. CVS Health stock falls for eighth consecutive day, underperforms compared to Amazon and UnitedHealth Group. Costco stock falls for seventh consecutive day, underperforms compared to Amazon and Walmart. Institutional owners of CVS Health may consider selling shares due to recent drop in stock price.

• Best Buy is recalling around 930,000 Insignia pressure cookers due to a defect in volume markings that can cause hot food to spew out, resulting in burn hazards. 17 people have been burned by the cookers.

• Vp shareholders have seen a 51% decline in stock value over 5 years, with a 29% drop in the last year. SFS Group investors lost 1% over 5 years, but EPS increased by 6.7% per year. USU Software investors experienced a 22% loss over 3 years, with EPS declining at a similar rate.

• Deckers Outdoor Corporation, the parent company of UGG and HOKA ONE ONE, reported strong Q2 2024 earnings with revenue increasing 25% to over $1 billion. The company saw high consumer demand for UGG and HOKA products, with direct-to-consumer sales growing nearly 40%. The wholesale business also saw a 19% increase in revenue. Deckers plans to divest its Sanuk brand.

• Carter’s Inc. had strong demand in its U.S. Wholesale segment, but lower sales in U.S. Retail and International segments due to weather. The company plans to open new stores and close low-margin ones. They reported Q3 results and expect improved performance for the full fiscal year.

REAL ESTATE

• Cousins Properties, AvalonBay Communities, UDR Inc, Digital Realty Trust, and AvalonBay Communities all reported strong Q3 earnings, with various growth rates in core FFO and revenue. Each company highlighted positive trends in their respective portfolios. UDR Inc lowered guidance for the year due to increased concessionary activity. Digital Realty Trust saw strong leasing activity and raised its full-year guidance. AvalonBay Communities expects elevated expenses in 2024.

• Medical Properties Trust (NYSE: MPW) reported strong Q3 earnings, leading to a rebound in stock prices. The company aims to address debt through asset sales and increase liquidity.

• The Biden administration is launching an initiative to convert empty office buildings into affordable housing near transit hubs. They will provide over $35 billion in grants and loans, as well as technical guidance, to developers. The aim is to address the housing crisis and revitalize main streets.

• Tri Pointe Homes (TPH) reported better-than-expected earnings and revenue for Q3 2023, with 1,223 home deliveries and an average sales price of $675,000. The company has a strong order backlog and plans to expand into Utah.

• Arbor Realty Trust Inc had a strong quarter with distributable earnings of $0.55 per share, exceeding expectations and resulting in a stock price increase.

• STAG Industrial, a monthly dividend-paying industrial REIT, reported strong Q3 2023 earnings with high lease retention and rent spreads. The company’s strategic property locations and acquisition activity contribute to its growth prospects.

TRAVEL

• Hiring a travel guide offers benefits like local knowledge, translation services, and cost and time savings. Tips for finding and vetting guides are provided.

ECONOMIC

• JPMorgan Chase CEO Jamie Dimon intends to sell 1 million shares of the company’s stock, valued at $141 million, in 2024 for financial diversification and tax planning. This is Dimon’s first stock sale since becoming CEO in 2005, and it represents less than 12% of his holdings. Dimon believes in the company’s prospects and will retain a significant stake. The sale is not related to leadership succession.

• NatWest’s Q3 results were disappointing, with misses on key metrics and a potential regulatory issue. Shares fell as much as 18%.

• Newly elected House Speaker Mike Johnson expressed condolences for a mass shooting, defended the Second Amendment, and opposed including Ukraine aid in a spending bill. He faces challenges in fundraising and concerns about his conservative views.

• The US and China are working towards a potential meeting between President Biden and President Xi Jinping at the Apec summit. The meetings between US and Chinese officials focused on stabilizing and improving bilateral relations and addressing global challenges. The US urged China to use its influence to prevent further escalation of the Israel-Hamas conflict. China emphasized the importance of mutual respect and peaceful coexistence.

• Morgan Stanley, Quanta Services, Nasdaq Inc., Masco Corp., Globe Life Inc., Chubb Ltd., Charles Schwab Corp., Mosaic Co., and Netflix stocks all underperformed on Friday, with some experiencing consecutive losses and trading below their 52-week highs.

• Investors added $17.5 billion to funds, with money market funds receiving $22.2 billion and equity funds experiencing outflows. Tech-focused ETFs saw significant inflows, while US and global equity funds saw outflows.

• Li Keqiang, former Premier of China, has passed away at the age of 68 from a heart attack. He served as premier from 2013 to March 2023 and was known as a reformist economist. Despite being overshadowed by President Xi Jinping, Li was regarded as a popular figure domestically and internationally.

• Schaeffler India’s Q2 profit rose 8% due to strong demand, Cipla’s quarterly profit exceeded estimates, Reliance Industries’ profit missed estimates, Reliance Jio’s profit rose 12%, and Dr Reddy’s Laboratories saw a 9% YoY growth in revenues.

• Republican Congressman George Santos from New York has pleaded not guilty to federal charges, including fraudulent loans and unauthorized credit card charges. There are efforts to remove him from Congress, and his trial is set for September 9, 2024.

CRYPTO

• Sam Bankman-Fried, founder of FTX cryptocurrency exchange, testified in his criminal trial denying fraud charges and blaming his inner circle for the collapse of FTX. He admitted to making mistakes but denied defrauding customers or taking their funds. The trial is nearing its end.

• Senator Elizabeth Warren and other lawmakers are calling for increased regulation of bitcoin and crypto markets, citing concerns that terrorists raised $130 million in crypto to finance attacks in Israel. However, a retired Army Officer disputes these figures, stating that only $450,000 of Hamas’ $300 million annual budget was raised through crypto channels. The US Treasury has imposed new sanctions on Hamas and individuals involved in financing the group, aiming to disrupt Hamas’ activity through financial sanctions and engagement with stakeholders. The US is pressuring European allies to expand and strengthen their sanctions on Hamas.

• BlackRock’s potential approval of a cash bitcoin ETF has sparked excitement in the crypto market, but some see it as a betrayal of bitcoin’s principles. Bitcoin rallied to $35,000, its highest level since May 2022, driven by hopes of ETF approval and its correlation with gold prices. However, the industry still faces hurdles like legal troubles and lawsuits that could dampen the market. Traders remain optimistic about Bitcoin’s advancement past $40,000 with hopes of SEC approval for ETFs.

• Bitcoin surpasses its previous high at $31,800, leading to speculation of a potential move towards $100K. Technical indicators suggest a short-term bullish trend.

HEALTH

• The Israeli military claims that Hamas is using Gaza’s largest hospital, Al Shifa, as a command center. The military presented satellite imagery showing buildings within the hospital complex marked as underground Hamas complexes. The claims have not been independently verified, and it is unclear what intelligence was used to make these determinations. The hospital is currently overwhelmed with patients injured by Israeli airstrikes and is sheltering thousands seeking refuge.

Hamas has reportedly been stockpiling supplies, including**fuel,**, food, and medicine, in tunnels under Gaza, while the population suffers from shortages.

The head of the UN agency aiding Palestinians in Gaza warns of dire consequences due to lack of basic services, medicine, food, and water.

Israelii ground troops remain in Gaza as heavy airstrikes continue, with

• Sanofi plans to separate its consumer healthcare business by creating a publicly listed entity in Q4 2024. The company’s shares dropped significantly after issuing a 2024 forecast that fell below expectations and removing a 2025 profit target. Sanofi also plans to increase R&D investment and reported strong performance in its specialty care and vaccines segments.

• The Ensign Group, Inc. had a successful Q3 with higher occupancy and managed care revenues. They raised their 2023 earnings and revenue guidance.

SPORTS

• Barcelona and Real Madrid face off in the Clásico, with Barcelona aiming to close the gap in their historical head-to-head record. The match is marked by tension between the clubs’ boards and the absence of Real president Florentino Pérez. Young players like Jude Bellingham have a chance to shine.

• The 2023 World Series will feature the Texas Rangers and Arizona Diamondbacks, two underdog teams with different playing styles. The postseason has been unpredictable, with surprising outcomes and increased viewership.

• Manchester United manager Erik ten Hag supports Marcus Rashford despite his slow start, acknowledges the team’s need for better attacking play, and praises their defensive organization. Aaron Wan-Bissaka returns to training, but Casemiro’s availability for the match against Manchester City is uncertain.