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12-06-2023

TECH

• Investors are turning to AI technologies amidst a funding decline, with Elon Musk’s AI startup xAI seeking to raise $1 billion in equity.

• Shares of MongoDB fell despite strong Q3 earnings of $432.9 million, up 30% YoY, while SentinelOne raised its revenue forecast.

• IBM and Meta have formed the AI Alliance, a coalition of over 50 organizations, to promote open innovation and open science in AI. The alliance aims to address safety concerns, develop benchmarks and standards, support AI skills development, and promote education and public discourse on AI. Founding members include Oracle, Dell Technologies, Harvard, Yale, NASA, CERN, and the Linux Foundation.

• Nvidia and Microsoft CEOs believe AI will have long-term benefits for industrial companies, while Nvidia stock rises amid chip export concerns.

• Apple’s stock value crosses $3 trillion, Nvidia working on export regulation compliance, and Plug Power’s stock falls.

• Nintendo’s stock remained unchanged with below-average trading volume. Nokia’s stock fell 5.06% for the second consecutive day, underperforming the market. Ericsson benefited from being chosen by AT&T for a network deployment, while Nokia faced a revenue drop. AT&T’s $14 billion deal with Ericsson dealt a blow to Nokia, causing its stock to drop.

• Beeper Mini, a universal chat app, reverse-engineers iMessage for Android, allowing users to send iMessages without compromising privacy.

• Asana reports solid Q3 financials with revenue of $166.5 million, but stock falls due to macroeconomic challenges and net loss.

• Microsoft is facing a legal challenge from the FTC over its $69 billion purchase of Activision Blizzard. The FTC argues the acquisition would harm consumers and give Microsoft too much power in the gaming industry. The FTC is appealing a court decision that did not block the acquisition.

• Apple confirms that foreign governments are engaging in push notification spying, prompting calls for transparency from Senator Ron Wyden.

• Amazon has criticized Microsoft’s licensing agreements in the UK’s cloud computing market, claiming they restrict competition and customer flexibility. Google has also made similar claims.

• ByteDance, the parent company of TikTok, is offering to buy back $5 billion worth of shares from investors, valuing the company at $268 billion.

• Apple’s iMessage may be exempt from EU interoperability regulation due to its low popularity among business users.

• Bing is testing AI Deep Search with OpenAI’s GPT-4, enhancing search queries with detailed prompts and comprehensive answers. Microsoft’s Copilot will also integrate GPT-4 for productivity and complex tasks.

• Apple’s iOS 17.2 update will fix wireless charging issues for certain vehicles and enable Qi2 wireless charging support for iPhone models.

• Five9, a call center software firm, has received takeover interest, including from Zoom, two years after a failed acquisition attempt.

• OpenAI’s president did not expect much attention for ChatGPT, but it became a success, making OpenAI a leading tech company. ChatGPT surpassed Taylor Swift and Elon Musk in popularity on Wikipedia in 2023.

MEDIA

• Israel continues its ground offensive in southern Gaza, particularly in Khan Younis, causing significant harm to civilians and overwhelming hospitals.

• Rockstar Games released the trailer for Grand Theft Auto VI, set for a 2025 release, breaking YouTube records. Take-Two Interactive’s stock dropped.

• Hollywood actors from the SAG-AFTRA union have ratified a three-year contract with major studios, ending a six-month strike. The deal includes pay raises, streaming bonuses, and AI protections.

• NCAA President Charlie Baker proposes a new tier in Division I sports where schools pay athletes at least $30,000 per year through a trust fund, allowing name, image, and likeness deals.

• U.S. House Republicans questioned Harvard, MIT, and Penn presidents on combating antisemitism and Islamophobia on their campuses.

• Accounts of sexual violence committed by Hamas during the Oct. 7 attack in Israel are emerging, but justice remains uncertain. Israeli police are investigating, the UN will investigate, and the ICC may step in. Israel refuses to cooperate. President Biden strongly condemns Hamas for their treatment of Israeli women hostages. Former Meta COO Sheryl Sandberg calls for a global response to the sexual violence.

• Daktronics reported strong Q2 2024 earnings, beating expectations with $0.27 per share, and a 6.4% increase in sales.

• Twitch, Amazon’s streaming unit, will shut down operations in South Korea on February 27, 2024, due to high operating costs and network fees.

• TV legend Norman Lear, known for creating iconic sitcoms like “All in the Family” and “The Jeffersons,” has died at 101 in Los Angeles.

• Charter Communications’ stock fell 8-9% as the CFO warned of a potential decline in broadband subscribers in Q4, affecting cable company stocks.

• Ancora Holdings Group supports Nelson Peltz’s bid for a seat on Disney’s board, citing the need for restructuring and shareholder-driven change.

• The cast and creators of Netflix’s ”The Crown” gather in London to celebrate the final season and series finale, with stars from all seasons present.

• Jonathan Majors’ ex-girlfriend testified at his assault trial, detailing instances of alleged abuse and manipulation, including screaming and throwing items.

CONSUMER

• Designer Brands Inc., the parent company of DSW, reported disappointing Q3 earnings, with a decline in net sales and revenue. The company attributed this to weak sales in the footwear market and lower retail traffic. However, the casual portion of the business performed well. The CEO emphasized the need for increased speed, innovation, and fashion in assortments. The company plans to focus on improving performance through increased marketing investment and strengthening brand equity.

• Procter & Gamble to take up to $2.5 billion in charges due to restructuring and writedown of Gillette business.

• Amazon plans to lower seller fees on clothing items priced under $20 to compete with Shein, starting in January 2024.

• Ferguson plc reports Q1 2024 earnings in line with expectations, with a modest revenue decline of 2.8% and solid gross margins.

• Culp, Inc. sees improved sales and operating performance in Q2 2024 despite industry challenges, focusing on financial management.

• Rent the Runway’s Q3 sales decreased by 6.3%, with revenues at $72.5 million and a net loss of $31.5 million. Shares have declined 79.7% this year. The company announced modifications to debt terms to improve cash flow and expects growth through inventory and customer experience improvements. Active subscribers dropped to 131,725.

• The National Retail Federation (NRF) retracted its claim of ”organized retail crime” causing half of inventory losses in 2021 due to incorrect data.

• Stitch Fix’s Q1 revenue at high end of guidance, active clients down 15%, losses narrowed, exceeded adjusted EBITDA expectations.

• Hong Kong researchers have developed a color-changing fabric embedded with a tiny camera and AI technology to reduce clothing waste. The fabric is made with polymeric optical fibers and can change colors through gestures or an app.

• Ermenegildo Zegna plans to double the number of Tom Ford stores and increase revenue by over 10% annually after acquiring the brand.

REAL ESTATE

• Luxury homebuilder Toll Brothers reports mixed FY 2023 results, with decreased net income but increased contract value and gross margin. Stock rises after beating expectations and citing strong demand and lower mortgage rates.

• Refinance rates for 30-year, 20-year, and 15-year fixed mortgages have decreased, leading to increased demand for refinancing.

• The Bank of England warns of potential mortgage bill increases, while also highlighting risks in commercial property and financial markets. Bank Rate remains at 5.25%.

• Median home list prices in Alachua County, Florida rose 0.5% to $349,075, while in Bay County, it dropped 1.5% to $449,963. Lake County saw a 0.7% increase to $414,950, Marion County had a 0.6% decrease to $309,450, and Okaloosa County experienced a 0.9% decrease to $436,450.

• Hovnanian Enterprises Inc reports strong Q4 2023 results with total revenues of $2.76 billion, plans for top-line growth, and increased pre-tax profit.

• Barbara Corcoran, a self-made millionaire and real estate investor, advises putting down 20% on an investment property and having tenants pay the mortgage.

ECONOMIC

• BlackRock expects positive sentiment and stable markets in 2024, with opportunities in fixed income, active ETFs, private markets, and technology services. The US labor market is rebalancing, with job vacancies at a 28-month low. European stocks rise as investors anticipate rate cuts by major central banks. US stock futures rise as investors look for a Fed interest rate cut and Bitcoin surges past $44,000. The yield on the 10-year Treasury drops to 4.204% as traders await US labor market updates.

• Canadian stocks, particularly in energy and materials sectors, decline as signs of weaker economy and falling commodity prices weigh on investor sentiment. Moody’s downgrades outlook for eight Chinese banks to negative after lowering China’s sovereign bond rating due to debt concerns. Chinese state media criticizes Moody’s for negative rating outlook on China’s economy, while government response remains restrained. Uncertain global economic recovery and concerns over China’s property market weigh on copper prices. China’s blue-chip stocks hit a five-year low and the yuan weakens after Moody’s downgraded China’s credit outlook due to economic concerns. China’s major state-owned banks sell US dollars to support the yuan currency after Moody’s cut its outlook on China’s government credit ratings. Moody’s warning of a credit downgrade for China sparks concerns about economic outlook and leads to market fallout. Speculation about Moody’s downgrade of China’s sovereign credit ratings circulated on Chinese social media before the official announcement. Moody’s has downgraded China’s credit outlook to negative, citing stagnant growth and a property crisis. Canada’s main stock index falls as materials stocks decline due to falling metal prices and Moody’s downgrade of China’s credit ratings. Canada’s services sector experiences deepening downturn in November, with S&P Global Canada services PMI hitting a three-year low.

• Salesforce.com (CRM) has seen a +20.9% return over the past month and positive earnings estimate revisions. GitLab Inc. (GTLB) has been upgraded to a hold rating following strong Q3 2023 results, but may face competition. Signet Jewelers (SIG) beat earnings expectations in Q3 2024, while G-III Apparel Group (GIII) exceeded expectations and raised full-year guidance. Signet Jewelers is undervalued and expected to rise, while GitLab’s stock surged after strong Q3 results and guidance. Signet Jewelers notes a shift in shopping habits this holiday season, while GitLab plans to launch an AI-powered product.

• CEOs of major US banks will testify before Congress, warning that proposed regulations could harm the economy and credit markets.

• Brazil’s economy defied expectations and grew by 0.1% in Q3, while Australia’s economy slowed with GDP growth at 0.2%.

• The Supreme Court is hearing a case that could impact tax policy, potentially changing when income is taxable and affecting tax revenue. It may also block Democratic tax proposals and impact billionaires’ wealth.

• Ukrainian President Zelenskiy cancels US Senate address as talks stall on aid package, while pleading for further US support.

• Russian President Vladimir Putin is visiting the United Arab Emirates and Saudi Arabia to discuss oil cooperation, conflicts in Gaza and Ukraine. He aims to strengthen ties, gain support from major oil producers, and showcase Russia’s role in global politics.

• The US is imposing visa restrictions on Israeli settlers involved in extremist violence in the West Bank to curb violence and promote peace.

• President Biden expressed uncertainty about running for re-election in 2024 if he wasn’t facing the possibility of Donald Trump winning.

CRYPTO

• Republican Rep. Patrick McHenry of North Carolina has announced he will not seek re-election, potentially impacting cryptocurrency regulation efforts.

• US regulators have fined Binance $4.3 billion for noncompliance, potentially marking the peak of enforcement action against crypto firms.

• Wang Yicheng, a Chinese businessman accused of involvement in crypto scams, has been removed as a board member by the Thai-Asia Economic Exchange Trade Association.

• Coinbase Wallet enables users to send cryptocurrency globally through social media apps and messaging platforms, expanding accessibility in over 170 countries. Users can send money instantly and without fees by sharing a link.