Americas

Kamalanomics contains too much of some good things

16 Aug 2024

Ahead of the Democratic convention next week, Kamala Harris is unveiling plans to unstick the housing market, curb food prices and lower taxes. Cutting red tape and other steps to encourage more homebuilding is sensible, but excessive goodies for buyers risks stoking inflation.

Starbucks piles whipped cream atop CEO pay problem

15 Aug 2024

With a potential $145 mln package, new boss Brian Niccol would earn over 10,000 times the average barista. Based solely on the $20 bln of market cap he added, he’s in theory worth far more. Because vibes factor into valuing executives, it’s no wonder compensation keeps rising.

Attention retail shoppers: Walmart is different

15 Aug 2024

The $600 bln company’s sunny financial results and outlook shined brightly, lifting stock prices across an industry darkened by spending and recession fears. Its size and breadth make it a highly imperfect bellwether, however. There are better guides for consumption trends.

Dueling US tax ideas miss $4 trln elephant in room

15 Aug 2024

Both leading presidential campaigns have floated exemptions for tip income and higher credits for parents. Donald Trump also wants to move Social Security checks out of Uncle Sam’s reach. Such populist pitches pale next to expiring 2017 cuts, which will anchor the policy debate.

Apple begins delicate dance with Tencent in China

15 Aug 2024

The iPhone-maker wants a share of revenue from games played on the $450 bln tech giant's WeChat platform. For Apple boss Tim Cook, it's a lucrative opportunity as handset sales cool. Yet if the US company pushes too hard, it may jeopardise its hard-earned appeal in China.

Southwest shareholders needn’t act like passengers

14 Aug 2024

Rabble-rouser Elliott escalated its battle with the $15 bln airline by unveiling a dissident board slate. The timing is odd: sitting directors just won overwhelming support. It’s a question of persuading investors they deserve a smoother ride than sheep-like flyers tolerate.

Pringles’ $36 bln deal comes with a pinch of salt

14 Aug 2024

Candy maker Mars is acquiring snack rival Kellanova for $83.50 per share in an all-cash deal. Strategically it’s a fit: adding potato chips to M&M’s rounds out the buyer’s offerings. But a whopping $29 bln financing and a hostile regulatory environment add a dose of uncertainty.

Starbucks CEO starts with venti expectations

13 Aug 2024

The coffee chain added over $20 bln in market value as it named former Chipotle chief Brian Niccol as its new boss. Niccol has useful skills, from digital marketing to steering founder-led companies. Starbucks is bigger, though, as are the personalities he will have to navigate.

Elon Musk’s bully pulpit is coming into focus

13 Aug 2024

The Tesla boss’ two-hour online chat with Republican candidate Donald Trump was a mess. Yet it shows how his web of infrastructure-like businesses, from rockets to energy storage, hold growing sway in the political arena. The result may be a less-than-virtuous cycle.

Stocks are still strapped into a rollercoaster

13 Aug 2024

The VIX, an index that tries to gauge investors’ fears, soared 180% last Monday as stocks tumbled. Better US economic data and soothing words from the Bank of Japan have brought it down since. But history, and the shape of today’s markets, suggest that volatility is here to stay.

Iran danger marks return of oil’s risk premium

13 Aug 2024

Conflict in Gaza and tit-for-tat attacks in the Middle East have desensitised markets to possible supply shocks. A US warning of imminent retaliation against Israel changes that. Despite weaker demand, oil prices reflect the dangers of infrastructure and tankers becoming targets.

Starbucks has too many baristas in the boardroom

12 Aug 2024

The $90 bln coffee chain’s US sales are down as growth in China flags. Add a newish CEO and it seems a tasty brew for rabble-rousers like Elliott. But the complex interplay between former boss Howard Schultz, angsty labor reps and even more activists threatens a bitter finish.

Cross-border bank deal takes leap of faith

12 Aug 2024

A $2.8 bln investment by Scotiabank helps Ohio-based KeyCorp get out of a capital rut, and at a generous valuation, to boot. For the Canadian lender, the direct benefit of a minority holding in a US peer is less clear. Stake sales of this sort are rare for a reason.

Apple loses China price battle, but will win war

12 Aug 2024

Big discounts by Huawei and other local rivals have eaten into the iPhone maker’s market share. Boss Tim Cook is fighting back, to preserve nearly a fifth of revenue. In a region that often beguiles tech outfits, the $3 trln company’s resilience is impressive – and sustainable.

Court-emboldened capital puts labor on front lines

9 Aug 2024

Starbucks and SpaceX are among the employers testing the scope of a recent US Supreme Court decision against SEC tribunals. If it extends to a labor law agency, it would be a setback for reinvigorated unions and give companies proof of concept to undo rulings elsewhere.

Jay Powell excels at his top job: punching bag

8 Aug 2024

Market ructions have revived Washington’s love of bashing the Federal Reserve and its chairman. From Elizabeth Warren to Donald Trump, public figures can take potshots knowing Fed independence limits the consequences. History suggests when politics really reigns, chaos ensues.

Immovable TV empire calls for irresistible force

8 Aug 2024

Warner Bros Discovery took a $9 bln charge on its cable networks, further subverting boss David Zaslav’s woeful 2022 mega-merger. A $40 bln debt pile would give any agitator pause, but the 71% loss in market value and indefensibly high CEO pay are the stuff of investor mutiny.

Disney exhibits anxiety in more ways than one

7 Aug 2024

The emotion pervades ‘Inside Out 2,’ a blockbuster that brightened financial results. It failed, however, to reverse the recent 25% loss in market value amid angst over the $160 bln kingdom’s synergistic magic. Theme-park struggles only slow boss Bob Iger’s quest for joy.

Tech stocks await AI’s real reckoning

7 Aug 2024

Some $3 trln has been wiped off US technology firms’ value, hammering artificial intelligence champions like Alphabet and Nvidia. It may be more a case of feelings and flows than shifting assumptions about the value of silicon smarts. If that changes, the true pain begins.

KKR’s corporate PR deal hangs on more bad news

7 Aug 2024

The buyout group is taking control of financial communications company FGS from WPP. At 15 times 2024 EBITDA, the $1.7 bln valuation is rich but below peer FTI Consulting. For the bet to pay off, CEOs will have to face more major crises that require the PR firm’s pricey counsel.