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10-27-2023

TECH

• Google CEO Sundar Pichai will testify in the US antitrust trial, addressing Google’s dominance in search and search advertising. The trial alleges that Google paid billions to be the default search engine on smartphones. Google executive Prabhakar Raghavan testified, emphasizing the importance of innovation and highlighting competition from platforms like Expedia, TikTok, and Amazon. Raghavan expressed concern about losing users to Amazon and TikTok, particularly among younger generations. The trial accuses Google of illegally thwarting competitors and securing dominance in search through deals with companies like Apple.

• Elon Musk’s first year as the owner of Twitter, now known as X, has been marked by a decline in ad revenue, conflicts with the EU over false news, and a change in leadership. The platform has lost its role as a central hub for news and has faced concerns over paid subscriptions and algorithmic amplification of misinformation. X’s financial situation remains precarious, with a drop in advertising revenue and declining user base and web traffic. Despite this, Musk plans to launch two premium subscription tiers on X.

• Apple may face an import ban on certain models of its Apple Watch due to patent violations by Masimo. The US International Trade Commission ruled in favor of Masimo, potentially leading to the ban. Apple can appeal the decision, and President Biden has the power to intervene. The ruling is part of an ongoing intellectual-property dispute between Apple and Masimo.

• Merger talks between chipmakers Western Digital and Kioxia have been called off due to opposition from major investor SK Hynix and disagreement with shareholder Bain Capital. Western Digital’s stock price dropped as a result.

• Celestica shares dropped 14% after projecting lower Q4 revenue of $2 billion to $2.15 billion, below analysts’ expectations of around $2.1 billion.

• Taiwan’s chip industry urges government for renewable energy development, TSMC aims for net-zero emissions by 2050. Founder of TSMC warns of US-China tensions slowing chip industry and potential negative effects of decoupling. Former TSMC VP believes China will advance in chip technology.

• Huawei’s Q3 revenue increased by 1% YoY to $19.9 billion, while revenue for Q1 to Q3 2023 rose by 2.4% YoY to $62.3 billion. The company reported a 16% profit margin in Q1 to Q3, up from 15% in H1 2023. The growth was driven by strong sales of the Mate 60 series 5G smartphones, expansion in the cloud computing field, and success in the smartphone market despite US sanctions.

• Apple’s iOS 17.2 beta introduces the new Journal app, fixing security vulnerabilities and adding new features like collaborative playlists.

• VeriSign Inc reported a 5.4% increase in Q3 2023 revenue, reaching $376.3 million, due to steady demand for domain name registrations.

• Juniper Networks surpassed revenue estimates for Q3 2023, reporting preliminary revenue of $1.40 billion. The company experienced strong growth in its Enterprise business and Mist AI-driven enterprise revenue. However, net revenues decreased by 1% due to challenges in the Cloud and Service Provider segments. Juniper Networks expects fourth-quarter revenue to be between $1.35 billion and $1.45 billion.

• OpenAI has created a team called Preparedness, led by Aleksander Madry, to analyze and mitigate the risks associated with advanced AI models, including cybersecurity and nuclear threats. They will also develop policies to reduce these risks.

• ServiceNow reported impressive Q3 earnings with higher revenues and earnings per share, strong subscription revenue growth, and raised their outlook for 2023. The stock outperformed competitors and beat estimates. However, high valuation and uncertain macro environment pose risks.

• Meta’s social media app, Threads, has gained nearly 100 million monthly active users and CEO Mark Zuckerberg predicts it could reach 1 billion users. Advertisers see Meta as a safe bet due to its large user base and stability. Threads has added support for polls and GIFs to boost user engagement.

MEDIA

• Comcast reported strong Q3 earnings with increased EBITDA and EPS, adding 4 million Peacock subscribers. However, there was a decline in broadband and video customers, causing a drop in stock prices. Charter Communications also beat earnings estimates but fell short on revenue due to a decline in video customers.

• Taylor Swift’s album releases, including “Speak Now (Taylor’s Version),” helped drive revenue for Universal Music Group in the third quarter. Despite some disappointing growth in streaming revenue, the company reported higher overall revenue and adjusted earnings. Physical sales, subscriptions, and streaming contributed to the positive results.

• Both Mattel and Hasbro have experienced significant drops in their stock prices and weak quarterly results. Hasbro reported a 10% decline in Q3 revenue and lowered its sales outlook for the holiday season. Mattel’s stock dropped 8% after concerns about holiday sales were raised.

• A new Beatles song titled ”Now and Then” will be released on November 2, featuring vocals from the late John Lennon separated using AI technology. The track includes contributions from Paul McCartney, Ringo Starr, and George Harrison.

• A federal judge has ordered Georgia to redraw its congressional and state legislative districts due to racial discrimination against minority voters. The ruling could lead to more Black representatives in Congress. Similar battles over redistricting are also occurring in other Southern states.

• Conservative MP Crispin Blunt has been arrested on suspicion of rape and drug possession, leading to his suspension from the party. Blunt believes the investigation will end without charges. This adds to the ongoing allegations of sleaze within the Conservative Party.

• Hollywood actors submit counter-offer ahead of negotiations with AMPTP, strike involves 160,000 actors and media professionals.

• Taylor Swift has become a billionaire, with a net worth of $1.1 billion, mainly from her music, performances, and successful Eras Tour.

• Spark New Zealand’s CEO may receive a raise due to strong performance, while Experience Co Limited’s CEO faces caution over lack of share price growth. 4DMedical Limited’s struggling share price makes shareholders hesitant to increase CEO compensation, and Atomo Diagnostics Limited’s CEO is unlikely to see a pay rise due to concerns about performance.

• The underdog teams, the Arizona Diamondbacks and the Texas Rangers, will compete in the World Series despite their low win records.

• Shares of Ubisoft Entertainment rose 8.5% after reporting higher-than-expected net bookings in Q2, driven by the success of “Rainbow Six Siege” and “Assassin’s Creed Mirage.”

CONSUMER

• Bank of America has lowered its price target on Whirlpool stock due to concerns about the company’s free cash flow. Whirlpool’s shares dropped 16.8% after reporting Q3 results. The company beat earnings estimates but the profit was driven by cost-saving actions rather than increased demand. Whirlpool also cut its full-year earnings guidance and revised its free cash flow outlook. Newell Brands’ stock has fallen to a 14-year low after reporting a revenue miss and a negative outlook for the current quarter. The company reported a net loss for Q3 and lowered its full-year sales and earnings outlook.

• Shares in Moncler dropped 5.2% as the Italian fashion group reported slower Q3 sales growth due to a tough comparison and declining online performance. Despite this, total sales reached €670 million ($705 million), with growth in Asia offsetting a decline in the Americas.

• Best Buy is recalling 930,000 Insignia pressure cookers due to incorrect volume markings, causing burn injuries from spewing hot food and liquids.

• Electrolux reported weak demand and pricing pressure in Q3 2022, leading to a 13% drop in shares. The company plans to cut 3,000 jobs and implement cost reduction measures to address the challenges.

• Life Time Group Holdings and Insteel Industries have seen declines in their stock prices but have shown potential for long-term growth based on their financial indicators. Both companies have lower return on equity (ROE) compared to industry averages but have experienced decent net income growth over the past five years. They also prioritize reinvesting profits for future earnings growth. iFabric Corp. has also seen a drop in stock price but has shown net income growth and reinvests all profits, although its ROE is lower than the industry average. Investors should carefully assess the company’s risk before making any decisions.

• Graco Inc. reported a 1% decrease in third-quarter sales to $540 million, but saw a 15% increase in net earnings to $133 million. The company’s gross margin rate increased by 490 basis points, and it expects its operating margin rates to remain sustainable for the rest of the year.

• Shein and Temu, two low-cost e-commerce rivals, have decided to end their legal battles in the US, but no details about the resolution have been disclosed.

REAL ESTATE

• Apartment REIT UDR lowers full-year FFO forecast due to softer demand caused by higher housing costs and mortgage rates.

• Weyerhaeuser reported a decline in Q3 profit due to lower sales of wood products, while West Fraser Timber saw improvement in EBITDA but expects challenges in the wood building products industry.

• Pending home sales in the US unexpectedly rose by 1.1% in September, despite high mortgage rates and a decline compared to last year.

• Royal Caribbean Group reports strong Q3 2023 earnings, with record yields driven by new hardware and increased onboard revenue rates. Increased guidance for the year and positive outlook for 2024.

• Medical Properties Trust Inc (MPW) reported Q3 earnings, planning to execute $2 billion worth of liquidity transactions and considering asset sales. The company’s portfolio remains strong and diversified.

• AppFolio Inc reported a 32% YoY increase in Q3 2023 revenue to $165 million, with 7.8 million units served. The company launched Realm-X and expanded its customer education program, increasing its full-year revenue guidance.

TRAVEL

• The Grand Resort Bad Ragaz in Switzerland is a renowned health resort with a spa, clinic, thermal springs, luxury accommodations, and Michelin-starred restaurants.

ECONOMIC

• Mike Johnson, a conservative Republican, has been elected as the new speaker of the House GOP. He is known for his support of Donald Trump, election denialism, and opposition to LGBTQ+ rights.

• China’s former premier, Li Keqiang, has died at the age of 68 from a heart attack. He was known for advocating for private businesses and economic reforms but had little authority under President Xi Jinping’s centralized control.

• NatWest faced criticism for its handling of Nigel Farage’s accounts, with an independent review identifying “serious failings.” The bank’s CEO resigned, and potential regulatory breaches were noted. Additionally, NatWest’s shares fell due to a lower profit outlook and decreased net interest margin. The bank’s closure of Farage’s accounts was deemed lawful but raised concerns about decision-making and communication. NatWest acknowledged the failings and pledged to implement recommendations.

• Western Union reported Q3 2023 adjusted earnings per share of 43 cents, beating estimates by 13.2%, with revenues rising 1% YoY. Willis Towers Watson reported Q3 2023 earnings with 9% organic revenue growth and adjusted diluted EPS of $2.24. WW Grainger Inc reported Q3 2023 sales growth of 6.7% and a total company operating margin of 15.9%.

• Danske Bank reported higher-than-expected Q3 net profit of DKK5.32 billion, leading to an increase in full-year earnings guidance. CaixaBank reported a 19% increase in Q3 net profit, driven by higher lending income. Swedbank reported a stable profit of SEK 9.1 billion in Q3 2023. Popular Inc. reported a strong Q3 with net income of $137 million. Deutsche Bank reported solid Q3 earnings with net revenues of €7.13 billion. BNP Paribas reported solid Q3 results with distributable earnings per share up 15%.

• JPMorgan CEO Jamie Dimon and his family will sell 1 million shares of the bank in 2024 for financial diversification and tax-planning purposes.

• EU member states are clashing over budget allocations, particularly regarding funding for Ukraine. Some leaders have reservations, but there is broad support for providing aid. Hungary’s Prime Minister has criticized the EU’s strategy and opposes sending taxpayer money to Ukraine.

• Byron Wien, a well-known Wall Street strategist and author of the annual “10 Surprises” list, has died at the age of 90. He had a successful career at Morgan Stanley and Blackstone, and his predictions had a significant impact on financial markets.

CRYPTO

• FTX founder Sam Bankman-Fried testified in his fraud trial, blaming lawyers for key decisions and denying accusations of looting billions of dollars from customers.

• U.S. Deputy Treasury Secretary Wally Adeyemo will warn crypto firms about financing terrorist organizations like Hamas, Palestinian Islamic Jihad, and Hezbollah. These groups have raised over $130M in crypto since May 2021. The U.S. has imposed sanctions on individuals and organizations linked to Hamas to prevent them from accessing resources.

• BlackRock’s Bitcoin ETF listing and Grayscale’s court victory boost confidence in the crypto market. Ethereum, Ripple, and Dogecoin show bullish trends. Bitcoin slips but remains near yearly highs with hopes of SEC approval for Bitcoin ETFs. Dogecoin sees the largest increase, while Solana leads the decreases. Various cryptocurrencies and companies experience fluctuations in prices.

HEALTH

• The Gaza Ministry of Health reports conflicting death tolls from an explosion at al-Ahli Hospital, with accusations of responsibility from Hamas, Israel, and intelligence services. The US deploys troops to the Middle East for air defense against Iran-backed militia groups. US airstrikes in Syria respond to attacks by an Iran-backed militia, while the new US House speaker suggests separating funding for Ukraine and Israel. Israeli troops conduct a second raid into Gaza, aid workers prepare to send supplies, and the EU calls for humanitarian corridors and pauses in the bombing. The US launches airstrikes in eastern Syria targeting Iran’s Revolutionary Guard Corps, signaling engagement in the Middle East crisis. The death toll in Gaza surpasses 7,000, and protests erupt across the region. The US

• Sanofi’s stock dropped 16% after announcing plans to spin off its consumer healthcare unit and increase R&D investment. The company reported a decrease in sales for Q3 2021 but plans to separate its consumer healthcare business by Q4 2024. Sanofi also expects a decline in business earnings per share in 2024 due to increased tax rates and investment.

• Encompass Health Corp reported strong Q3 2023 earnings, Community Health Systems had solid same-store volume gains, Universal Health Services saw increased revenues, and EMCOR Group achieved record quarterly achievements.

SPORTS

• New Zealand and South Africa are preparing for a highly anticipated Rugby World Cup final. New Zealand aims to win their fifth title after a string of recent defeats, while South Africa hopes to secure a record fourth World Cup victory. Both teams are focusing on key aspects such as physicality, kicking game, scrummaging power, lineout defense, and counter-attacks. The match is seen as a significant measure of New Zealand’s performance, and retiring veterans will be playing their last game. South Africa’s coach and captain feel the pressure but believe in their selected team’s ability to win.

• Liverpool had a dominant 5-1 victory over Toulouse in the Europa League, maintaining a perfect record in the group stage. Brighton & Hove Albion also secured their first European win, beating Ajax 2-0.

• England’s hopes of retaining their World Cup crown are over after a defeat by Sri Lanka. Their batting lineup collapsed, resulting in a dismal loss. England captain Jos Buttler expressed shock and disappointment.