Robinhood is cutting about 23% of jobs. Robinhood CEO Vlad Tenev said Tuesday in a press release that the company will reduce its headcount by approximately 23%. The company also dropped its earnings report for the second quarter, which showed a decline in monthly active users and assets under custody. The layoffs will be primarily in operations, marketing, and program management.
Household debt tops $16 trillion for the first time. The rise is fueled by higher inflation and interest rates that pushed up housing and auto balances. Mortgage balances rose 1.9% for the quarter, or $207 billion, to about $11.4 trillion. Credit card balances surged 13% over the past year, the largest gain in more than 20 years. Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices.
US job openings fall to 10.7 million. The lowest since September. The number of available positions decreased to 10.7 million in the month from an upwardly revised 11.3 million in May, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. The 605,000 decline was the biggest since April. This suggests that tightness in the labor market is easing somewhat amid growing economic pressures. Read more here.
Ferrari races to a record profit. The rich haven’t stopped buying luxury cars. The Italian car maker reported a record 446 million euros ($455.23 million) in Ebitda, in the second quarter, ahead of the €418.9 million consensus. Revenue also hit a record of €1.3 billion, more than the €1.22 analysts expected. Wealthy buyers continued to spend despite gloomy macroeconomic conditions.
Uber reports another big loss but beats on revenue. Uber reported a net loss of $2.6 billion for the second quarter, $1.7 billion of which was attributed to investments and a revaluation of stakes in Aurora, Grab, and Zomato. Uber beat analyst estimates on revenue. CEO Dara Khosrowshahi said Uber continues to benefit from an increase in on-demand transportation and a shift in spending from retail to services.
PayPal jumps as Elliott Management says it has a $2 billion holding in the company. In its earnings materials, PayPal said it had entered into an information-sharing agreement on value creation with Elliott Management. Elliott Managing Partner Jesse Cohn said that PayPal has an unmatched and industry-leading footprint across its payments businesses and a right to win over the near- and long term. Read more here.
Rental renewals in the US are increasing. Divvy CEO Adena Hefets says renewals are increasing by roughly 10% and an increase of 15-20% for new leases. The main driver is that home prices have also increased by 20% which led to the landlord's cost of capital also increasing. In effect, landlords had to raise prices in order to cover these higher costs now. Source(1:09:14)
WHAT TO WATCH
Elon Musk says Twitter may become an accurate and relevant news source. A Twitter thread Sunday night raised speculation that Musk was preparing to take over the firm. The billionaire tech mogul “It sure is hard to find a news source that’s accurate, relevant & not totally depressing!” Musk wrote on July 31. “Old-school version of The Economist & Jon Stewart Daily Show/Colbert Report was great.” “Maybe Twitter can become that,” he added. Read more here.
Home prices grew by 18.3% from June 2021 but is steadily dropping. This marks the 125th consecutive month of year-over-year increases. Though annual appreciation was still strong, it slowed from the previous month for the second consecutive month, reflecting reduced buyer demand in part due to higher mortgage rates and worries about a slowing economy. CoreLogic projects that year-over-year appreciation will drop to 4.3% by June 2023. Read more here.
Biden to sign bill boosting China competition and U.S. chip production. The President is set to sign into law a bipartisan bill to invest billions of dollars in domestic semiconductor manufacturing and science research. Biden had urged Congress to pass the legislation, dubbed the Chips and Science Act, as a matter of necessity for America’s economy and national security.