Americas

German consumer is poor substitute for China trade

21 May 2024

Consumption is up but won’t be enough to lift the country out of its funk, with growth of just 0.2% this year. Exports to the People’s Republic are threatened by worsening relations between Brussels and Beijing. Meanwhile a split Berlin government looks unable to launch reforms.

China’s cars fine-tune their driving skills

21 May 2024

Automakers in the country are touting autonomous driving, and Tesla is preparing to join the fray. On this week’s Exchange podcast, Maxwell Zhou, CEO of Alibaba-backed DeepRoute.ai, explains why progress is accelerating and how that is already changing consumers’ expectations.

Snap’s AI push makes for a poor man’s Meta

20 May 2024

Boss Evan Spiegel is following the lead of his arch-rival, chasing the same advertisers that flock to Facebook and plowing money into machine learning. Meta stole Snap’s thunder on AI-powered glasses and more. Problem is, Spiegel doesn’t have the resources to turn the tables.

European defense dollars will flow to the US

20 May 2024

NATO members expect to hit the elusive defense spending target of 2% of GDP this year. Russia, not former President Donald Trump’s cajoling, is the impetus. Still, building out capacity in weapons-making takes time. With European industry lacking, US companies will benefit.

Pricey stocks overlook the world’s troubles

19 May 2024

Trade tension between the US and China will dampen growth, while rising defence spending means higher taxes and lower profits. Equity markets, now at record highs on both sides of the Atlantic, aren’t cheap. Add in these headwinds and investors have more downside than upside.

Warren Buffett’s legacy is at stake via Bill Gates

17 May 2024

The Omaha sage pledged much of his Berkshire stock to the Gates Foundation. He did so when both the Microsoft co-founder and his ex-wife Melinda ran the charity. Now, her departure could put Buffett’s gift, equal to a 10% stake, in Bill’s hands. It’s a new sort of key man risk.

Chevron has chance to save doubtful Hess deal

17 May 2024

If Hess shareholders are sensible they will vote down Chevron’s uncompelling $51 bln offer. The premium is small and closure is uncertain. Besides, Hess’s offshore crown jewel in Guyana may be gaining in value. Chevron has a brief opportunity to up its game.

Private credit wonder drug works in limited dose

17 May 2024

The quantity of loans channelled directly to companies by funds has exploded to more than $2 trln. The economic benefits of diversified lending just about make up for the risks. The challenge is making sure financial innovation does not starve banks to death.

Hotpot IPO looks too mild without China spice

17 May 2024

Singapore-based Super Hi has distanced itself from its Chinese roots ahead of a $50 mln US offering. That's prudent, given scrutiny on companies like Shein and ByteDance. Yet without support from former parent Haidilao, the firm may struggle to stand apart from larger peers.

Buyers will keep springing for fancy Walmart wares

16 May 2024

Price increases hurt companies from Starbucks to McDonalds. But the $510 bln superstore, with thinner margins, is doing just fine. Decisions to pass cost increases to consumers might be to blame. With inflation still uncomfortably high, conscientious companies will benefit.

Oscar Mayer offers peek at how M&A sausage is made

16 May 2024

Kraft Heinz may offload the hot-dog and bologna maker as it refocuses on faster-growing fare in its pantry. The 140-year-old brand, potentially worth some $5 bln, already has been processed and repackaged by multiple owners. It’s largely a tale of changing financial tastes.

The dollar and the yuan are polar opposites

16 May 2024

The strong greenback and questions over a Chinese devaluation reflect the contrasting outlooks for the two economies. In this Viewsroom podcast, Breakingviews columnists debate why Beijing is unlikely to push down its currency and why the dollar will remain elevated.

AMC is the worst, and best, of public markets

15 May 2024

The theater chain’s shares leapt 135% on the return of a key 'meme stock' cheerleader. It promptly swapped debt for bubbly equity. For aspiring CFOs, the idea that public markets can randomly spit out cheap capital is tempting. For everyone else, the trade is a loser.

Crypto’s virtuous cycle is more of a spiral

15 May 2024

Bitcoin ETF approvals have boosted the cryptocurrency, helping FTX customers recover funds and prompting firms like $44 bln Block to hoard more of the digital coins. But it also fuels a new type of speculation. With companies getting deeper into crypto, a new bubble is inflating.

AI will help treat Big Pharma’s looming illness

15 May 2024

Drug discovery is a long and costly process with success rates below 10%. Caps on prices and shorter patent periods in the US will also make life harder for the likes of Pfizer, AstraZeneca and rivals. Despite patchy results, betting on machines may be the best hope of a cure.

Bank treasurers hold keys to an investor mystery

15 May 2024

Executives who manage lenders’ exposure to interest-rate swings are more important than ever. But it’s tough for shareholders to pick their way through the complex hedging programmes of $570 bln JPMorgan and its peers, adding volatility to their share prices.

Biden’s China policy is backed into a corner

14 May 2024

The president quadrupled tariffs on electric cars from the People’s Republic as homegrown efforts stumble. China leads on tech, and the US depends on the undependable Tesla. Muddled policy on everything from steel to batteries will only up the pressure for more rearguard actions.

Memo to McKinsey: Avoiding Arthur Andersen’s fate

14 May 2024

After coughing up $1 bln for opioid-related settlements, the elite consultant may face criminal charges, too. There are notable differences from when a 2002 US indictment killed the auditing giant. But the looming existential threat increases the likelihood of costly concessions.

China tests EU resolve on export trade fight

14 May 2024

France’s Emmanuel Macron got little to show from President Xi Jinping’s European tour this month. In this Exchange podcast, MERICS expert Grzegorz Stec explains the difficulty of managing ties with Beijing and why balancing risk and business opportunity is so tricky.

Yuan devaluation isn’t worth the trouble

14 May 2024

A weaker currency would boost exports and prices, but speculation China could engineer a fall underestimates Beijing’s desire for a stable exchange rate. Aggressive US tariffs could change the calculus. For now, official signals point to a slow grind lower against the dollar.