July 26, 2023

📰 News Organizations

• iRobot Stock Drops as Amazon Lowers Merger Price. Amazon.com will pay less to purchase iRobot than originally agreed upon. The deal price change will be largely offset by the planned increase in iRobot's net debt after it entered a $200 million financing facility to fund its operations.

• Unilever Shares Gain on Strong Sales and Optimism Amid Inflation Slowdown. Unilever's shares advanced as the company reported a 7.9% sales increase in the second quarter, moderating price increases on personal care products, and forecasted a slowdown in cost inflation, boosting investor confidence in its profitability.

• GE Earnings Benefit from Jet Engine Rebound. GE raised its cash flow and sales targets for the year after reporting strong orders and improved results across most of its operations in the second quarter. The manufacturer cited rising demand for its jet engines and improved demand for its wind-energy turbines, exceeding Wall Street's expectations.
  

• Adidas Shares Rise 6% as Yeezy Inventory Sales Exceed Expectations. Adidas’s second-quarter results showed a drop in operating profit to €176 million from €392 million. Adidas trimmed its 2023 loss forecast after experiencing better-than-expected sales of its Yeezy stock, resulting in a significantly smaller operating loss for the year.
  

• Tesla Surpasses German Automakers in Global EV Sales Race. The Musk-led company is selling more EVs than the Germans combined. Volkswagen, BMW, Mercedes struggle with waning sales China. Tesla delivered almost 890,000 cars in the first half of this year, more electric vehicles than Volkswagen AG, BMW AG, Mercedes-Benz Group AG and Porsche AG combined.
  

• Goldman Sachs Expects Record Oil Demand to Drive Price Increases. Goldman Sachs predicts "all-time high" oil demand in the second half of the year, leading to significant deficits and boosting prices, with Brent crude expected to rise from over $80 per barrel now to $86 per barrel by year-end.

🐦 Twitter

• 86.1 million owner-occupied housing units in the US and only 1 million available for sale (close to lowest ratio ever). Analysis back to 1983 starts 20 seconds in on video and was eye-opening, namely disconnect around 2012-2013. Big part of why home prices are rising again. Source.
  

• Investor appetite for risk assets hasn't cooled as large-/mid-cap equity funds have accounted for 62% of past month's inflows; still interest in investment grade corporates, munis, and U.S. government bonds, but share of inflows has compressed. Source.
  

• Approaching Prior Highs. The S&P 500 came within 2% of a new all-time high last week while the Nasdaq 100 pulled within 3%. Meanwhile, the small-cap Russell 2000 Index is 17% below its prior high (note: total returns including dividends). Source.
  

• $1 Trillion worth of commercial estate loans mature by the end of 2024 with an additional $1.5 Trillion worth coming due by 2027. Something to keep an eye on. Source.
  

• Q2 earnings season is underway, with 87 companies reporting so far. The good news: 78% percent of them beat estimates, by an average 6.2%. We have to wait another week to see if we get a similar bounce as in Q1. Source.
  

• If we're unable to retest the U.S. house price bottom in the second half of 2023, this cycle's peak-to-trough decline would be -5.1%. Among the 20 largest markets tracked by Case-Shiller, it ranged from -2.39% (NYC) to -17.2% (San Fran). Source.

📓 Online Publications

• US Home Prices Rise for Fourth Consecutive Month. Home prices in the US climbed for a fourth month as demand coupled with tight inventory pushed values higher. A national gauge of prices rose 0.7% in May from April, according to seasonally adjusted data from S&P CoreLogic Case-Shiller.
  

• Spotify User Growth Beat Expectations With 551 Monthly Active Users. But the music streaming platform tumbled 14% following weaker-than-expected revenue and guidance. Spotify reported revenue of €3.18 billion, below the consensus estimate of €3.21 billion from analysts polled by Refinitiv. Full-year revenue guidance was also softer than analysts forecasted.
  

• Rents Continue To Fall—But Not Enough To Provide Relief. In June, rents dropped 1% year over year, to a median of $1,745 a month nationally in the 50 largest housing markets, according to a recent report from Realtor.com®. This is the second month in a row that rents are down. But rents fell just $31 from the peak last July. And their monthly bills are roughly 24%, or $339, still higher than they were before anyone had ever heard of COVID-19 in June 2019.
  

• Americans Are Moving Into Flood-Prone Cities At an Alarming Rate. Migration into flood- and wildfire-prone counties has more than doubled since the COVID-19 pandemic began, according to a Redfin analysis of domestic migration data released Monday. That may change soon, however, with natural disasters intensifying and insurers pulling out of disaster-prone areas including Florida and California.

🎧 Podcasts

• Credit Suisse Fined $388 Million Over Archegos Collapse. UBS was fined a total of $387 million by the Fed and the Bank of England over Credit Suisse’s failure “to adequately manage” the risk posed by the US family investment fund Archegos, despite repeated warnings, the Fed announced in a statement. The action against UBS is being taken in conjunction with the Swiss Financial Market Supervisory Authority, the Fed said. Source(0:52)
  

• OpenAI's Sam Altman Launches Worldcoin Crypto Project. Officially launched Monday, the project's core offering is its World ID, which the company describes as a "digital passport" to prove that its holder is a real human, not an AI bot. To get a World ID, a customer signs up to do an in-person iris scan using Worldcoin's 'orb', a silver ball approximately the size of a bowling ball. Source(1:30)
  

• China's Reopening Has Not Fueled Global Growth So Far. The Chinese economy is facing substantial challenges due to geopolitical confrontations with the West, resulting in reduced borrowing by Chinese companies. Additionally, there is a middle-income trap issue, and concerns are growing about the possibility of an economic bubble burst, fueled by demographic factors such as a shrinking population. Source(20:45)
  

• Twitter's Rebranding Will Be Costly. Scott Galloway says changing Twitter to X will go down as one of the worst brand decisions in history. The majority of the world's population knows what Twitter is and they also recognize the blue bird logo. He said that the majority of all money spent every day is on brands we've heard of before. Branding is an expensive asset to build and this rebranding destroyed all that. Source(25:22)