Consumer Products and Services

Apple tries to be both desirable and predictable

2 Feb 2023

The $2.4 trillion iPhone maker’s growth increasingly comes from services – and its valuation has risen as a result. But investors prize some kinds of service more highly than others. They seem to be betting that Apple has zoomed in on the more stable, less cyclical kind.

Crypto’s big unwind is far from over

2 Feb 2023

Investors piled into digital assets last month for the first time since the summer, and prices have recovered from FTX’s collapse. But issues – regulation, fraud, volatility – still threaten popular currencies, like bitcoin. Another big event will wipe out newfound confidence.

Goldman’s Marcus is a lesson in self-made failure

2 Feb 2023

The Wall Street firm’s blueprint for a digital bank was a good idea, until it buckled under an ambitious, top-down culture. CEO David Solomon is taking the blame, partly because almost everyone else who backed Marcus has quit. He can recoup the losses, but not the wasted time.

Investors are ignoring Meta’s hardware reality

1 Feb 2023

The $400 bln social media firm’s shares surged on a strong sales outlook and more stock buybacks. But a better 2023 after revenue fell last year is a long shot. Plus Meta’s big problem is its hardware pivot. Other tech companies that similarly transitioned did not have much luck.

Leery buyers put screws to U.S. homebuilders

31 Jan 2023

Pulte, which constructs more upscale houses, lifted quarterly sale prices 17%, but D.R. Horton and Lennar sacrificed operating margin to offload homes. High interest rates are keeping 80% of Americans downcast about the market. Optimistic valuations tell an oddly different story.

Big oil can be lean and not mean

31 Jan 2023

Net debt at Exxon and Chevron declined nearly $50 bln last year, and both are on path to having no debt at all. Neither seem inclined to lever up given oil’s murky and volatile future. But excess cash must go somewhere. Shareholders are in line for big payouts.

Pfizer goes back to the pharma meat-grinder

31 Jan 2023

Its warning that revenue will fall by one-third this year is a return to pre-pandemic doldrums, where pharma companies wrestled with the meager, declining returns of developing new drugs. The best shot for Pfizer and peers is to focus new technology on hard-to-treat diseases.

Global supply chain scars will spark sea change

31 Jan 2023

The business of shifting goods around the world plunged into chaos during the pandemic. In this Exchange podcast Alan Murphy, boss of researcher Sea-Intelligence, explains China’s changing role in global trade and how that impacts the price of everything from iPhones to cars.

Capital Calls: TikTok’s Beltway visit

30 Jan 2023

Concise views on global finance: The social media app’s CEO Shou Zi Chew is going in front of a U.S. Congressional committee. But it’s leaders outside of Washington that Chew needs to convince.

China’s reopening generates mirage of normality

27 Jan 2023

Movie sales during the Lunar New Year holiday beat last year's to hit $900 mln as travel rebounds. The relief bounce is unsurprising, but retail growth has yet to recover to pre-pandemic levels. Scarred consumers have too many reasons to avoid splurging.

Meme stocks give bankruptcy new excitement

26 Jan 2023

When a company like Bed, Bath & Beyond lurches towards failure, investors try to reckon what it would be worth after a cleanup. That’s harder when retail traders push its stock to unexpected highs, as happened to car rental firm Hertz. What was once a science has become a game.

Microsoft’s revenue sniffles are tech’s flu

24 Jan 2023

The software developer's growth rarely falters, but its 2% top-line expansion was the slowest in 22 quarters. Customers who overinvested during the pandemic are now retrenching, even on Microsoft’s software staples. It’s a poor omen for firms built on more dispensable offerings.

Amazon creates bazaar for U.S. banking wannabes

24 Jan 2023

The e-commerce titan’s latest debt, an $8 bln loan, is curious, but not as much as the foreign institutions providing it. Australia’s ANZ, Spain’s BBVA, Singapore’s DBS and others rarely turn up in such deals. The likelihood of them leveraging this one into more business is slim.

Layoffs take Big Tech back to more modest future

20 Jan 2023

Alphabet has joined the ranks of U.S. technology firms cutting staff, with roughly 5% looking like the norm. Job openings are shrinking fast too. Proposed trims only partly cut back the 420,000 workers added since Covid-19 hit. The industry will still emerge bigger than it was.

Macau bounces into Year of the Rabbit

19 Jan 2023

Spring has sprung in the casino hub with the end of China’s zero-Covid. Operators will return to profit. Yet from Sands to SJM, balance sheets are stretched. How quickly they are repaired depends on if punters spend as much as before. Pandemic policies will leave other scars too.

Disney investors pay twice for half-leadership

18 Jan 2023

Between outgoing chief Bob Chapek and returning CEO Bob Iger, the media giant earmarked $60 mln in pay and severance for last year. By contrast, Apple boss Tim Cook is in line for a downsized $49 mln this year. Disney’s generosity is at odds with its poor succession planning.

Capital Calls: Activism, Bond spat, Airline M&A

18 Jan 2023

Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.

Goldman slams into unwelcome sort of volatility

17 Jan 2023

The investment bank’s push into consumer lending was meant to bring stable growth to balance out trading swings. Instead, it has done the opposite, losing $4 bln and counting. Belated, patchy disclosures don’t help, nor does archrival Morgan Stanley’s wealth management success.

Will Disney’s real activist please stand up?

13 Jan 2023

Dan Loeb started a campaign, but took an easy win. Nelson Peltz is using velvet gloves to persuade current boss Bob Iger to get the $180 bln media giant on the right track. But activists’ main job is forcing a regime change. At Disney, that’s going to take some muscle.

Banks dress up for a business-casual recession

13 Jan 2023

A downturn is coming, warn lenders like JPMorgan, Bank of America and Citi, but nothing too fancy. Even as bad-debt charges mount, they keep lending, especially through credit cards. After years of enforced discipline, banks are appropriately attired even if things get much worse.