ReportWire

Tag: Industrial Goods

  • German business sentiment improves in November

    German business sentiment improves in November

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    Business confidence in Germany increased in November, beating expectations, as companies foresee a less severe recession than previously expected.

    The Ifo business-climate index rose to 86.3 points in November from a revised reading of 84.5 points in October, data from the Ifo Institute showed Thursday. Economists polled by The Wall Street Journal had expected the index to come in at 85.0.

    While companies were somewhat less satisfied with their current business, pessimism regarding the coming months reduced sharply, Ifo President Clemens Fuest said in the report.

    The index of the current situation fell to 93.1 in November from 94.2 in October, while the gauge assessing companies’ expectations rose to 80.0 from 75.9.

    The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.

    Write to Maria Martinez at maria.martinez@wsj.com

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  • Virginia Walmart shooter was store manager, police and witness say

    Virginia Walmart shooter was store manager, police and witness say

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    CHESAPEAKE, Va. (AP) — A Walmart manager opened fire on fellow employees in the break room of a Virginia store, killing six people in the country’s second high-profile mass shooting in four days, police and a witness said Wednesday.

    The gunman, who apparently shot himself, was dead when police found him, Chesapeake Police Chief Mark G. Solesky said. There was no clear motive for the shooting, which also put four people in the hospital.

    In One Chart: Chart shows 4-year high for lone shooters like at the Virginia Walmart and Colorado LGBTQ club — but they’re not the worst perpetrators of gun violence

    The store was busy just before the attack Tuesday night as people stocked up ahead of the Thanksgiving holiday, a shopper told a local TV station.

    Employee Briana Tyler said workers had gathered in the break room as they typically did ahead of their shifts. “I looked up, and my manager just opened the door and he just opened fire,” she told ABC’s “Good Morning America,” adding that “multiple people” dropped to the floor.

    “He didn’t say a word,” she said. “He didn’t say anything at all.”

    Solesky confirmed that the shooter, who used a pistol, was a Walmart employee but did not give his name because his family had not been notified. The police chief could not confirm whether the victims were all employees.

    Employee Jessie Wilczewski told Norfolk television station WAVY that she hid under the table and the shooter looked at her with his gun pointed at her, told her to go home and she left.

    “It didn’t even look real until you could feel the … ‘pow-pow-pow,’ you can feel it,” Wilczewski said. “I couldn’t hear it at first because I guess it was so loud, I could feel it.”

    President Joe Biden in a statement said he and first lady Jill Biden “grieve for the family, for the Chesapeake community and for the Commonwealth of Virginia.”

    Gov. Glenn Youngkin tweeted that he was in contact with law-enforcement officials in Chesapeake, Virginia’s second largest city, which lies next to the seaside communities of Norfolk and Virginia Beach.

    “Our hearts break with the community of Chesapeake this morning,” Youngkin wrote. “Heinous acts of violence have no place in our communities.”

    It was the second time in a little more than a week that Virginia has experienced a major shooting. Three University of Virginia football players were fatally shot on a charter bus as they returned to campus from a field trip on Nov. 13. Two other students were wounded.

    “I am devastated by the senseless act of violence that took place late last night in our city,” Mayor Rick W. West said in a statement posted on the city’s Twitter account Wednesday. “Chesapeake is a tight-knit community, and we are all shaken by this news.”

    A database run by the Associated Press, USA Today and Northeastern University that tracks every mass killing in America going back to 2006 shows this year has been especially violent.

    The U.S. has now had 40 mass killings so far in 2022, compared with 45 for all of 2019. The database defines a mass killing as at least four people killed, not including the killer.

    The attack at the Walmart came three days after a person opened fire at a gay nightclub in Colorado, killing five people and wounding 17. Last spring, the country was shaken by the deaths of 21 when a gunman stormed an elementary school in Uvalde, Texas.

    Tuesday night’s shooting also brought back memories of another at a Walmart in 2019, when a gunman who targeted Mexicans opened fire at a store in El Paso, Texas, and killed 22 people.

    A 911 call about the shooting came in just after 10 p.m. Solesky did not know how many shoppers were inside, whether the gunman was working or whether a security guard was present.

    Joetta Jeffery told CNN that she received text messages from her mother who was inside the store when the shots were fired. Her mother, Betsy Umphlett, was not injured.

    “I’m crying, I’m shaking,” Jeffery said. “I had just talked to her about buying turkeys for Thanksgiving, then this text came in.”

    One man was seen wailing at a hospital after learning that his brother was dead, and others shrieked as they left a conference center set up as a family reunification center, The Virginian-Pilot reported.

    Camille Buggs, a former Walmart employee, told the newspaper she went to the conference center seeking information about her former co-workers. “You always say you don’t think it would happen in your town, in your neighborhood, in your store — in your favorite store, and that’s the thing that has me shocked,” Buggs said.

    Walmart
    WMT,
    +0.74%
    tweeted early Wednesday that it was “shocked at this tragic event.”
    In the aftermath of the El Paso shooting, Walmart made a decision in September 2019 to discontinue sales of certain kinds of ammunition and asked that customers no longer openly carry firearms in its stores.

    It stopped selling handgun ammunition as well as short-barrel rifle ammunition, such as the .223 caliber and 5.56 caliber used in military style weapons. Walmart also discontinued handgun sales in Alaska.

    The company had stopped selling handguns in the mid-1990s in every state but Alaska. The latest move marked its complete exit from that business and allowed it to focus on hunting rifles and related ammunition only.

    Many of its stores are in rural areas where hunters depend on Walmart to get their equipment.

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  • The U.S. economy is losing speed, S&P surveys show

    The U.S. economy is losing speed, S&P surveys show

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    The numbers: Business conditions at U.S. companies deteriorated again in November and pointed to a slowing economy.

    The “flash” U.S. services sector index drop to a three-month low of 46.1 this month from 47.8 in October, keeping it near the lowest level of the pandemic era. The service side of the economy employs most Americans.

    The S&P Global U.S. manufacturing sector index, meanwhile, slid to a 2 1/2-year low of 47.6 from 50.4.

    Any number below 50 reflects a contracting economy.

    Key details: New orders, a sign of future sales, fell in November at the fastest pace since early in the pandemic in 2020, S&P Global found. Exports also declined.

    The cost of supplies, a measure of inflation, eased again in a sign that intense inflationary pressures are on the wane. Companies also raised prices at the slowest rate in more than two years.

    Shortages of supplies, a big problem during the pandemic, also continued to diminish.

    These shortages were one of the biggest contributors to the U.S. and global surge in inflation. While they are fading, they remain a big problem.

    Big picture: Businesses are still expanding by some measures, but they are also preparing for slower economic growth.

    Rising interest rates orchestrated by the Federal Reserve have dampened sales in the U.S. while a strong dollar has hurt exports by making American products more expensive.

    Looking ahead: “Inflationary pressures should continue to cool in the months ahead, potentially markedly, but the economy meanwhile continues to head deeper into a likely recession,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.28%
    and S&P 500
    SPX,
    +0.59%
    rose in Wednesday trades.

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  • Durable-goods orders jump 1%, but momentum unlikely to last as U.S. economy slows

    Durable-goods orders jump 1%, but momentum unlikely to last as U.S. economy slows

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    The numbers: Orders at American factories for long-lasting goods such as autos and computers jumped 1% in October, marking a strong showing that probably isn’t sustainable because of a slowing U.S. economy.

    Economists polled by the Wall Street Journal had forecast a 0.5% increase. Durable goods are items such as autos, appliances and computers meant to last at least three years.

    A key measure of business spending, meanwhile, also rose a solid 0.7% last month.

    Orders tend to rise steadily in an expanding economy and shrink when it weakens. Yet the results in October don’t look quite as strong after inflation is taken into account. The consumer price index rose 0.4% last month.

    Big picture: Manufacturers are able to produce more of what their customers want after two years of chronic shortages, but mostly because demand has softened. Rising U.S. interest rates have curbed sales at home while a strong dollar has dented exports.

    The situation could get worse. The Federal Reserve is jacking up interest rates to bring down high inflation, but higher borrowing costs are expected to slow the economy even further.

    Key details: Orders for new cars climbed 0.6% in October. Orders for aircraft rose a sharper 7.4%. The transportation segment is a large and volatile category that often exaggerates the swings in industrial production.

    Outside of transportation, new orders rose a still-decent 0.5%. Bookings increased in every major category except for primary metals.

    The rate of growth in business investment, or core orders, has slowed considerably. however. The figure excludes military spending and the auto and aerospace industries.

    Looking ahead: “Business equipment investment continues to hold up reasonably well in the face of higher borrowing costs,” said senior U.S. economist Andrew Hunter of Capital Economics, but “we doubt that resilience will continue indefinitely.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    +0.50%
    and S&P 500
    SPX,
    +0.59%
    were set to open slightly higher in Wednesday trades.

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  • ‘There are plenty of storm clouds on the horizon’: 5 things not to buy on Black Friday

    ‘There are plenty of storm clouds on the horizon’: 5 things not to buy on Black Friday

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    It’s a year for shopping prudently.

    Americans will spend between $942.6 billion and $960.4 billion this holiday season, according to projections from the National Retail Federation. That’s up from last year when holiday sales hit a record $889.3 billion, the trade association said.

    However, people are not willing to go as crazy this Black Friday compared to previous years: that 6% to 8% year-over-year growth expectation is slower than the 13.5% annual increase in holiday season spending in 2021 when consumers had pandemic-era government benefits to spend.

    Once again, millions of people will also be shopping from the comfort of their home and avoiding the Black Friday crowds. Online and other non-store sales are predicted to rise 10% to 12% (to between $262.8 billion and $267.6 billion).

    “People have reason to be concerned about their spending. ”

    “The economy is probably doing better than it feels right now, but that’s not true for everyone of course,” said Ted Rossman, senior industry analyst at Bankrate.com. “There are plenty of storm clouds on the horizon.” He cited rising interest rates, 40-year high inflation and tech layoffs. 

    People have reason to be concerned about their spending. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — fell to 3.3% in the third quarter from 3.4% in the prior quarter, the government said last month. 

    Despite a strong labor market and unemployment hovering at 3.7% in October, Rossman said, “it still seems like a recession is likely in 2023, although the best guess is that it will be a mild one.”

    So what should you not buy this Black Friday? Quite a lot, if you don’t believe in living large. Here are 5 things to think about avoiding:

    — Quentin Fottrell

    Tech accessories

    For tech accessories — like earbuds and headphones — waiting until December may be a better way to score better deals, added Ryan McGonagill, director, industry research at Savings.com, another site that aggregates discounts.

    The most popular electronic products like Apple AAPL iPads, MacBooks and iPhones have scant Black Friday deals. “For a limited time, get an Apple Gift Card to use on a later purchase when you buy an eligible iPhone, Apple Watch, Mac, AirPods, and more,” according to Apple’s Black Friday offer.

    Computer makers and retailers, however, are coming off the work-from-home boom and may have inventory they need to thin before year’s end. Holiday discounts on computers, at least through October, were at 10% off the base price, according to analysis from Adobe
    ADBE,
    +2.92%    .
     

    The software and analytics provider said computer discounts could go much steeper, up to 32% off the base price before the end of the year. Cyber Monday could be the best day for bargains on computers, Adobe said, but computer deals may stick around for the rest of 2022.

    Pay attention to early deals, if you desperately need a new laptop. “Many retailers offer the same pricing on Black Friday and Cyber Monday,” said Kristin McGrath, editor at RetailMeNot.com, a site that promotes deals. “So start looking on Black Friday and use Cyber Monday as a second chance to snag what you missed.”

    — Andrew Keshner

    Seasonal items

    Winter wear is usually not going to be on sale before Christmas, so it’s best to shop for your puffy jackets and snow boots in the New Year, if you can. The same goes for white linen, tools and holiday decorations, said Charles Lindsey, associate professor in the Marketing School of Management at the University at Buffalo.

    Most stores put their coats, hats, scarves and flannel pajamas on sale — with discounts on big-name brands of 50% or more in January — to make room for their spring collections. Similarly, buy summer clothes in the fall and winter. 

    “The best time to buy holiday decor is immediately after said holidays,” according to DealNews, a site offering shopping advice. “After Christmas sales are generally your best bet for snagging deeply discounted ornaments, lights, and inflatables in order to be well prepared for next year.” 

    Fashion-conscious shoppers inclined to snap up discounted items may want to practice patience on Black Friday. Apparel may have even deeper discounts after the holidays. If you feel compelled to buy something new to wear to the office party, invest in quality pieces. Fast fashion has a cost: It has contributed to a waste crisis, in part because such items are not meant to last very long in your closet.

    But that does not mean you should not keep your eyes peeled for some seasonal goods on Black Friday. Walmart
    WMT,
    +0.34%    ,
    for instance, is pushing out the boat early with some discounts on toys, including hoverboards, bicycles, remote-control cars, and karaoke machines. Similarly, Kohl’s
    KSS,
    +4.17%
    has discounts on a range of doll’s houses.

    — Quentin Fottrell and Emma Ockerman

    Appliances and white goods

    There might be tempting Black Friday deals on appliances, mattresses and furniture. Discounts on appliances may reach up to an 18% from the base price, Adobe said. Still, “you’re going to get another shot at them during New Year’s Eve sales and again during Presidents Day sales in February,” McGrath said.

    If Black Friday is “too chaotic …you’ll have plenty of opportunities to save,” she added. Department stores usually run very attractive discounts on houseware in the days following Christmas. “Stores know they’ll be getting a lot of traffic with so many people returning gifts — and hope to convince shoppers to make an impulse self-gifting purchase or two,” McGrath said.

    If you can’t wait, Costco
    COST,
    +1.64%
    is already rolling out deals on white goods and appliances, including $70 off a Sonos
    SONO,
    +1.87%
    WiFi speaker. However, Consumer Reports cautions consumers against falling for big deals without checking out the reliability of the brand first, as you could end up paying more in repairs down the road. 

    You might be tempted by offers and rebates on matching kitchen suites — typically a refrigerator, range, dishwasher, and microwave — from the same maker,” Consumer Reports said. “But price is only part of the equation when you’re purchasing appliances. Reliability is key, and it can vary within a brand’s offerings.”

    — Andrew Keshner

    Fitness equipment

    One of the best times to buy exercise equipment is around the New Year, when people are making resolutions to improve their health, said Regina Conway, who researches sales and promotions for Slickdeals, a site that tracks retail discounts.

    When you make your purchase, think twice before buying equipment that runs on proprietary technology, like Peloton
    PTON,
    -1.13%
    or Lululemon’s
    LULU,
    +1.79%
    Mirror exercise products, mainly because the at-home fitness boom faces an uncertain future post-pandemic, Conway noted.

    However, this Black Friday is a little different than previous years, and there are some deals in categories that traditionally don’t have good Black Friday discounts, including exercise equipment. “This year we’re seeing strong Black Friday deals from industry stalwarts like NordicTrack,” Conway said.

    Peloton Interactive, which is facing a challenging time since people are no longer stuck at home due to the pandemic, is currently offering $600 off this fitness bike package. However, consumers will still have to fork over $2,195 for the machine and exercise regime.

    “We think consumers are likely to continue to prefer out-of-home experiences in the near-term and believe Peloton is still working through pandemic pull-forward,” Cowen & Co. analyst John Blackledge wrote in an analyst note on Tuesday, citing “limited visibility” on Peloton’s fiscal 2023 performance.

    — Leslie Albrecht and Quentin Fottrell

    Big-ticket items like TVs 

    Does Amazon
    AMZN,
    +0.80%
    founder Jeff Bezos have a point about the dangers of splurging this year? In something of a Black Friday surprise, Bezos offered some shocking spending tips as Americans gear up for the holiday shopping season — amid four-decade-high inflation. Or, to be more accurate, he offered tips on what not to spend your money on.

    ‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table,” Bezos said in a recent interview on CNN
    WBD,
    +2.27%    .
    The remarks drew a significant amount of scorn on social media, with some critics advising people to avoid shopping on Amazon too.

    About those TVs: “They’re normally not going to be a high-end TV brand,” Lindsey said. “It will be a lower to mid-tier brand. Companies utilize these TVS as doorbusters to get people in the store and people clicking on their website. You’re probably better off shopping around the Superbowl in late January.”

    Rossman said consumers are becoming more judicious about their Black Friday splurging. “People seem to be pulling back on some big-ticket purchases,” he told MarketWatch. “For example, sellers of appliances, electronics and furniture all posted disappointing results in the most recent retail sales report.”

    “Yet discretionary sectors such as travel and dining are seeing sharp increases in spending,” he added. “I think the main explanation is pent-up demand. People are prioritizing experiences over things right now, largely due to the pandemic. There was also a pull-forward in demand for many physical goods the past couple of years as many out-of-home activities were curtailed.”

    — Quentin Fottrell

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  • The PC boom has gone bust, and we are about to see the results ahead of Black Friday

    The PC boom has gone bust, and we are about to see the results ahead of Black Friday

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    The pandemic-fueled personal-computer boom has ended, so how will that affect demand and pricing for PCs and the retailers that sell them this holiday season?

    A sense of the fallout will be provided in the week ahead with results due from PC makers Dell Technologies Inc.
    DELL,
    +0.67%
    and HP Inc.
    HPQ,
    +0.17%    ,
    along with videoconferencing platform Zoom Video Communications Inc.
    ZM,
    -1.15%
    and electronics chain Best Buy Co Inc.
    BBY,
    +2.88%

    All of those companies will report amid signs of deep holiday discounting for products such as clothing and electronics, after many customers — stuck at home in 2020 and 2021 — loaded up on laptops and other goods and turned Zoom into a digital conference room. But this year, decades-high inflation, and a return to prepandemic spending on travel and hanging out in person, have forced retailers and electronics makers to adjust to a world where more people are spending on essentials.

    PC shipments have fallen at rates not seen since at least the 1990s. Adobe
    ADBE,
    -2.06%
    has said online holiday discounts for electronics have been as steep as 17%. For computers, they’ve run for as much as 10% less. TVs are also being sold for cheaper. Holiday-season forecasts have generally called for sales increases, helped by price increases and enduring demand despite those price increases.

    In-depth: The pandemic PC boom is over, but its legacy will live on

    However, results from Target
    TGT,
    +0.54%
    on Wednesday missed big on third-quarter earnings, and the big-box retailer said it was bracing for a possible decline in fourth-quarter same-store sales, citing “softening sales and profit trends that emerged late in the third quarter and persisted into November.” Results from Walmart
    WMT,
    +1.51%
    were almost the opposite, however, detailing earnings that beat by a wide margin and a raised full-year outlook.

    Among smaller retailers, discounter Ross Stores Inc.
    ROST,
    +9.86%
    hiked its full-year profit forecast, citing sales momentum but easier year-over-year comparisons up ahead. But Williams-Sonoma Inc.
    WSM,
    -6.15%
    noted “macro uncertainty” and “increasingly inconsistent” demand.

    This week in earnings

    The companies report during a shortened, quieter week — thanks to Thanksgiving — and after concerns about a recession have hung over much of the year. With 94% of S&P 500
    SPX,
    +0.48%
    companies having already reported third-quarter results, only a dozen are set to release earnings in the week ahead.

    But among those 94%, there are signs that preoccupations with a downturn might be easing, after the economy grew during the third quarter and reversed after two quarters of declines.

    FactSet senior analyst John Butters, in a report on Thursday, said 179 companies have mentioned the term “recession,” during earnings calls in the third quarter. That’s still above the average over 10 years, but it’s below the 242 companies that mentioned a recession in the second quarter.

    Previously: Executives seem pretty convinced a recession is coming

    Elsewhere on Monday, J.M. Smucker Co.
    SJM,
    +1.11%
    — best known for Folgers and Jif — reports results, following concerns about higher food prices and how much higher they might go. Life-sciences electronics maker Agilent Tecnologies Inc.
    A,
    +1.21%
    report results on Monday as well. Fast-food chain Jack in the Box Inc.
    JACK,

    reports Tuesday. Tractor and construction-vehicle Deere & Co.
    DE,
    +0.31%
    reports Wednesday, following production and supply-chain snarls but steady demand.

    The calls to put on your calendar

    Clothing demand, discount demand: Urban Outfitters Inc.
    URBN,
    +2.44%
    reports Monday, while Burlington Stores Inc.
    BURL,
    +4.63%    ,
    Nordstrom Inc.
    JWN,
    +1.71%
    and dollar-store chain Dollar Tree Inc.
    DLTR,
    -0.21%
    report on Tuesday.

    The discounting wave across clothing retailers, an effort to clear inventories, might attract more consumers, but it’s worried Wall Street analysts focused on margins and the bottom line. Still, some analysts have said that more younger shoppers feel like their wardrobes are getting stale, and they say Nordstrom, whose customers tend to have more money, is best geared for “an upcoming wardrobe refresh.”

    Off-price clothing and home-goods retailer Burlington, meanwhile, will report after rival discounters Ross and TJX received a lift from investors this week.

    See also: The holiday-shopping season has a different problem this year than last — and it could lead to some deals

    Ross’ chief executive, Barbara Rentler, noted that rising prices had hurt its lower-income consumers. But Jefferies analysts said that Burlington and other discounters, which often buy up goods that other retailers don’t want, stood to benefit from the inventory purge.

    Dollar Tree, meanwhile, reports as more shoppers seek cheaper grocery options, but as food prices rise nonetheless. But Bank of America analysts, in a note last month, said traffic data implied a “slowdown” heading into the results.

    The numbers to watch

    Demand trends for PCs, electronics: Dell and HP report in the wake of deeper job cuts across the tech industry, while Zoom tries to tack on more features — such as calendar and email functions — to appeal to small business and adapt to a hybrid-work world.

    The PC boom’s demise hit home at Dell during its prior quarter, reported in August, after personal-computer sales at the company came in below estimates. Executives, at that time, said PC demand had fallen and that “customers are taking a more cautious view of their needs given the uncertainty.”

    Opinion: Tech earnings are about to dive, and there’s no life preserver in sight

    Some analysts, however, signaled that some degree of investor pessimism was already baked into the stock prices.

    “We recognize the deteriorating industry fundamentals in relation to PCs as well as incremental slowdown in IT Infrastructure. That said, we believe the magnitude of the cuts last quarter set up Dell to be less exposed to another round of material earnings revisions,” JPMorgan analysts said in a note. And even as HP feels similar pain, analysts there said share buybacks could be “a bright spot.”

    Results from HP and Dell could also have implications for Best Buy, which sells laptops, TVs, phones and other electronic devices.

    “Recall that initial expectations for the year were that BBY would face pressure as it lapped stimulus-fueled spending and broad-based demand for technology products and services,” Wedbush analysts said in a note on Friday.

    “However, the macro has been more volatile than expected with consumers facing significant inflationary pressures and lower-income households are making decisions to trade down in some categories such as televisions.”

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  • Economy may be in a recession already, Conference Board says, after leading index drops for eighth straight month

    Economy may be in a recession already, Conference Board says, after leading index drops for eighth straight month

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    The U.S. leading economic index fell 0.8% in October, the Conference Board said Friday.

    Economists polled by The Wall Street Journal had expected a 0.4% fall.

    This is the eighth straight decline in the leading index.

    The long period of declines suggests “the economy is possibly in a recession,” said Ataman Ozyildirim, senior director of economic research at the Conference Board. He said the data show a recession is likely to start around the end of the year and last through mid-2023.

    The coincident index, which measures current conditions, rose 0.2% in October after a 0.1% gain in the prior month. The lagging index increased by 0.1%, matching the September gain. 

    The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys.

    Stocks
    DJIA,
    +0.59%

    SPX,
    +0.48%
    were trading higher on Friday morning and the yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.827%
    rose to 3.8%.

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  • Amazon CEO says more layoffs are coming in 2023

    Amazon CEO says more layoffs are coming in 2023

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    Amazon.com Inc. plans more layoffs, but employees will have to wait until 2023 to see if their jobs are affected.

    Chief Executive Andy Jassy said Thursday that while Amazon
    AMZN,
    -2.34%
    already confirmed that it was eliminating jobs in its devices and books businesses, an unknown number of layoffs impacting other teams are still to follow.

    See more: Amazon confirms layoffs, becoming latest tech powerhouse to slash roles

    “Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments,” he said in a blog post on the company’s corporate site. “Those decisions will be shared with impacted employees and organizations early in 2023.”

    While Jassy doesn’t know “exactly how many other roles will be impacted,” he does know “that there will be reductions in our Stores and PXT organizations.” The company already announced a “voluntary reduction offer for some employees” working in PXT, or People Experience and Technology Solutions.

    The Wall Street Journal reported earlier this week that Amazon could end up slashing 10,000 jobs.

    Jassy took over as Amazon’s CEO in July 2021 and said Thursday that “without a doubt,” the move to cut staff is “the most difficult decision we’ve made” since he’s been in the role.

    “It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions and responsibilities whose lives will be impacted,” Jassy said.

    He added that Amazon “has weathered uncertainty and difficult economies in the past, and we will continue to do so.” Jassy emphasized that Amazon will continue to plug away on more established areas like stores, advertising and cloud computing, as well as newer initiatives like Prime Video, the Alexa voice assistant and healthcare.

    Amazon joins other technology companies including Meta Platforms Inc.
    META,
    -1.57%    ,
    Snap Inc.
    SNAP,
    -1.36%    ,
    Shopify Inc.
    SHOP,
    -2.05%
    and Twitter in recently eliminating jobs. An activist investor earlier this week urged Alphabet Inc.
    GOOG,
    -0.49%

    GOOGL,
    -0.50%
    to cut positions as well.

    See more: Here are the companies in the layoffs spotlight

    Shares of Amazon were up 0.3% in after-hours trading Thursday after declining 2.3% in the regular session.

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  • Nancy Pelosi steps down as leader of House Democrats after two decades

    Nancy Pelosi steps down as leader of House Democrats after two decades

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    Speaker Nancy Pelosi on Thursday said she will no longer serve as the top Democrat in the U.S. House of Representatives, with her departure coming after her party lost its majority in the chamber in this month’s midterm elections.

    “With great confidence in our caucus, I will not seek re-election to Democratic leadership in the next Congress,” Pelosi said during a speech on the House floor.

    “For me, the hour’s come for a new generation to lead the Democratic caucus that I so deeply respect, and I’m grateful that so many are ready and willing to shoulder this awesome responsibility.”

    She said she will continue to represent her district in the House.

    Some Democratic lawmakers have long called for new leadership in the House, wanting the California Democrat and her deputies to make way for the next generation. Pelosi, 82, has led the chamber’s Democrats in both the majority and minority for about two decades — since January 2003.

    The No. 2 House Democrat, Majority Leader Steny Hoyer of Maryland, who is 83, announced Thursday that he also will not seek a leadership position next year. 

    New York Democratic Rep. Hakeem Jeffries, 52, is seen as a frontrunner to become House minority leader.  

    Pelosi is the country’s first female speaker and has been in Congress for about 35 years. She had made a deal with House members to serve for two more terms as leader — or four years — after Democrats scored a majority in that chamber of Congress in the 2018 midterms.

    Pelosi said earlier this month that family issues would be key in her decision about her future plans. Her husband, Paul Pelosi, was attacked by an intruder in their San Francisco home last month and faces a long recovery from his injuries.

    While Republican hopes for a strong red wave on Election Day — which was Nov. 8 — have been dashed, the Associated Press projected Wednesday that the GOP had won enough House seats to control that chamber of Congress.

    The GOP’s slim majority is expected to cause trouble for the party’s leaders in the House. Meanwhile, the battle for control of the U.S. Senate went to the Democrats late Saturday. 

    The major laws passed during Pelosi’s time as speaker have included 2010’s Affordable Care Act, also known as Obamacare and which overhauled the U.S. healthcare
    XLV,
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    system; 2010’s Dodd–Frank Wall Street Reform and Consumer Protection Act that targeted banks
    KBE,
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    ; and 2021’s Infrastructure
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    -0.92%
    Investment and Jobs Act.

    U.S. stocks
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    -0.23%

    DJIA,
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    lost ground Thursday as a key Federal Reserve official suggested interest rates may need to rise much further in order to subdue inflation.

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  • This record number in Nvidia earnings is a scary sight

    This record number in Nvidia earnings is a scary sight

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    Nvidia Corp.’s financial results had a bit of a surprise for investors, and not on the good side — product inventories doubled to a record high as the chip company gears up for a questionable holiday season.

    Nvidia reported fiscal third-quarter revenue that was slightly better than analysts’ reduced expectations Wednesday, but the numbers weren’t that great. Revenue fell 17% to $5.9 billion, while earnings were cut in half thanks to a $702 million inventory charge, largely relating to slower data-center demand in China.

    Gaming revenue in the quarter fell 51% to $1.57 billion. Nvidia said it is working with its retail partners to help move the currently high-channel inventories.

    While the company was writing off the inventory for China, its own new product inventory was growing. Nvidia
    NVDA,
    -4.54%
    reported that its overall product inventory nearly doubled to $4.45 billion in the fiscal third quarter, compared with $2.23 billion a year ago and $3.89 billion in the prior quarter. Executives cited its coming product launches, designed around its new Ada and Hopper architectures, when asked about the inventory gains.

    In the semiconductor industry, high inventories can make investors nervous, especially after the industry had so many supply constraints in recent years that quickly swung to a glut of chips in 2022. With doubts about demand for gaming cards and consumers’ willingness to spend amid sky-high inflation this holiday season, having all that product on hand just amps up the nerves.

    Full earnings coverage: Nvidia profit chopped in half, but tweaked servers to China offset earlier $400 million warning

    Chief Financial Officer Colette Kress told MarketWatch in a telephone interview Wednesday that the company’s high level of inventories were commensurate with its high levels of revenue.

    “I do believe….it is our highest level of inventory,” she said. “They go hand in hand.” Kress said she was confident in the success of Nvidia’s upcoming product launches.

    Nvidia’s revenue reached a peak in the April 2022 quarter with $8.3 billion, and in the past two quarters revenue has slowed, with gaming demand sluggish amid a transition to a new cycle, and a decline in China data-center demand due to COVID-19 lockdowns and U.S. government restrictions.

    For its data-center customers, the new architectures promise major advances in computing power and artificial-intelligence features, with Nvidia planning to ship the equivalent of a supercomputer in a box with its new products over the next year. Those types of advanced products weigh on inventory totals even more, Kress said, because of the price of the total package.

    “It’s about the complexity of the system we are building, that is what drives the inventory, the pieces of that together,” Kress said.

    Bernstein Research analyst Stacy Rasgon believes that products based on Hopper will begin shipping over the next several quarters, “at materially higher price points.” He said in a recent note that he believes Nvidia’s numbers were likely hitting a bottom in this quarter.

    “We remain positive on the Hopper ramp into next year, and believe numbers have at this point likely reached close to bottom, with new cycles brewing and an attractive secular story even without China potential,” Rasgon said in an earnings preview note Tuesday.

    Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

    Nvidia Chief Executive Jensen Huang reminded investors on a conference call that the company’s inventories are “never zero,” and said everyone is enthusiastic about the upcoming launches. But it doesn’t take too long of a memory to conjure up a time when Nvidia went into a holiday with an inventory backlog that included new architecture and greatly disappointed investors: Four years ago, Huang had to cut his forecast for holiday earnings twice amid a “crypto hangover” with similar dynamics to the current moment

    Investors need faith that this holiday season will not be the same, even as demand for some videogame products declines after a pandemic boom just as the market for cryptocurrency — some of which has been mined with Nvidia products — hits a rough patch. Huang said that Nvidia’s RTX 4080 and 4090 graphics cards based on the Ada Lovelace architecture had an “exceptional launch,” and sold out.

    Nvidia shares gained more than 2% in after-hours trading Wednesday, suggesting that some are betting that this time will be different. That enthusiasm needs to translate into revenue for Nvidia so that this big gain in inventories does not end up being part of another write-down at some point in the future.

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  • Republicans clinch slim majority in House, likely signaling gridlock ahead

    Republicans clinch slim majority in House, likely signaling gridlock ahead

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    Republicans will take over the U.S. House of Representatives two years into President Joe Biden’s term, though their narrow majority looks set to cause headaches for GOP leaders.

    Republican hopes for a strong red wave have been dashed, but the Associated Press said Wednesday that the party won enough House seats — 218 — to control that chamber of Congress, as results from the midterm elections continue to be tabulated.

    The battle for the U.S. Senate went to the Democrats late Saturday. Democrats will retain their hold on the Senate after winning a key race in Nevada, giving Biden’s party control of at least one chamber of Congress for the next two years.

    “Republicans have officially flipped the People’s House!” Rep. Kevin McCarthy, R-Calif., the front-runner to become House Speaker, tweeted late Wednesday. “Americans are ready for a new direction, and House Republicans are ready to deliver.”

    While Republicans will control just one chamber of Congress, they now are expected to deliver a check on Biden’s policy priorities, such as by potentially using a debt-ceiling showdown to force spending cuts. 

    In a statement late Wednesday, President Joe Biden called for bipartisanship: “The American people want us to get things done for them. They want us to focus on the issues that matter to them and on making their lives better. And I will work with anyone — Republican or Democrat — willing to work with me to deliver results.”

    Related: Democrats weigh end run around Republicans to raise debt limit

    And see: Republican lawmakers likely to target ‘woke capitalism’ after the midterm elections, analysts say

    The Republican House majority has yet to be finalized but could be the narrowest of the 21st century, even less than in 2001, when the GOP had a nine-seat majority with two independents.

    Washington is likely to face new periods of gridlock, with Democrats also keeping their hold on the White House since Biden still has two years to serve before the 2024 presidential election. That’s after Democrats in the past two years used party-line votes to push through measures such as March 2021’s stimulus law and this past summer’s package targeting healthcare, climate change and taxes.

    The House switching to red from blue fits the historical pattern in which a first-term president’s party tends to lose congressional ground in the midterms. The GOP highlighted raging inflation in its effort to win over American voters.

    The House seats to flip to the GOP included one held by Democratic Rep. Elaine Luria of Virginia, who lost to Republican challenger Jen Kiggans, as well as two seats in Florida. But Democrats also flipped House seats and won re-elections in bellwether races, with Virginia Rep. Abigail Spanberger and Indiana Rep. Frank Mrvan notching victories.

    Read more: Here are the congressional seats that have flipped in the midterm elections

    Democrats have had a grip on the House since the 2018 midterms. They’ve run the Senate for two years, controlling the 50-50 chamber only because Vice President Kamala Harris can cast tiebreaking votes.

    Among the competitive Senate races, Democrats kept their hold on seats in Arizona, Colorado and New Hampshire, while scoring a pick-up in Pennsylvania. Republicans maintained their control of seats in North Carolina, Ohio and Wisconsin.

    Georgia’s Senate contest is headed to a Dec. 6 runoff, but its outcome has become less significant.

    Related: Ohio’s J.D. Vance tells MarketWatch he wants to end tax loopholes for tech companies and ban congressional stock trading

    Betting markets since late on Election Day have been seeing Democrats staying in charge of the Senate and Republicans winning the House. Ahead of last Tuesday’s voting, betting markets had signaled confidence in GOP prospects for taking over both the Senate and House.

    Analysts had said voters last month appeared increasingly focused on Republican issues such as high prices for gasoline
    RB00,
    -0.35%
    and other essentials, at the expense of Democrats’ agenda items such as climate change and abortion rights.

    But exit polls suggested that Republicans performed worse than expected because many Democrats and independents voted partly to show their disapproval of former President Donald Trump — and those voters were energized by the Supreme Court’s Dobbs decision that overturned Roe.

    See: Anti-Trump vote and Dobbs abortion ruling boost Democrats in 2022 election

    The former president announced his 2024 White House run late Tuesday. Earlier Tuesday, House Republicans chose Rep. Kevin McCarthy of California, the current minority leader, as their candidate for speaker. Thirty-one Republicans voted against McCarthy, signaling that he must shore up his support before the vote on the speakership takes place in January.  It’s an early sign of how Republicans’ narrow majority is creating turbulence for the House GOP leadership. 

    Now read: What a Republican-controlled House might mean for tech: Plenty of hand-wringing over Section 230 liability shield

    And see: DeSantis viewed as frontrunner for Republican 2024 presidential nomination after Trump’s candidates flop in midterm elections

    Plus: Senate Republicans pick Mitch McConnell as their leader, as Rick Scott’s challenge flops

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  • NASA’s mightiest rocket lifts off 50 years after Apollo

    NASA’s mightiest rocket lifts off 50 years after Apollo

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    CAPE CANAVERAL, Fla. (AP) — NASA’s new moon rocket blasted off on its debut flight with three test dummies aboard early Wednesday, bringing the U.S. a big step closer to putting astronauts back on the lunar surface for the first time since the end of the Apollo program 50 years ago.

    If all goes well during the three-week, make-or-break shakedown flight, the rocket will propel an empty crew capsule into a wide orbit around the moon, and then the capsule will return to Earth with a splashdown in the Pacific in December.

    After years of delays and billions in cost overruns, the Space Launch System rocket thundered skyward, rising from Kennedy Space Center on 8.8 million pounds (4 million kilograms) of thrust and hitting 100 mph (160 kph) within seconds. The Orion capsule was perched on top, ready to bust out of Earth orbit toward the moon not quite two hours into the flight.

    The moonshot follows nearly three months of vexing fuel leaks that kept the rocket bouncing between its hangar and the pad. Forced back indoors by Hurricane Ian at the end of September, the rocket stood its ground outside as Nicole swept through last week with gusts of more than 80 mph (130 kph). Although the wind peeled away a 10-foot (3-meter) strip of caulking high up near the capsule, managers gave the green light for the launch.

    NASA expected 15,000 to jam the launch site, with thousands more lining the beaches and roads outside the gates, to witness NASA’s long-awaited sequel to Project Apollo, when 12 astronauts walked on the moon from 1969 and 1972.

    Crowds also gathered outside NASA centers in Houston and Huntsville, Alabama, to watch the spectacle on giant screens.

    Cheers accompanied the rocket as it rode a huge trail of flame toward space, with a half-moon glowing brightly and buildings shaking as though hit by a major quake.
    “For the Artemis generation, this is for you,” launch director Charlie Blackwell-Thompson called out, referring to all those born after Apollo.

    The liftoff marked the start of NASA’s Artemis lunar-exploration program, named after Apollo’s mythological twin sister. The space agency is aiming to send four astronauts around the moon on the next flight, in 2024, and land humans there as early as 2025.

    “You have earned your place in history,” Blackwell-Thompson told her team following liftoff. “You’re part of a first. Doesn’t come along very often. Once in a career maybe. But we are all part of something incredibly special: the first launch of Artemis. The first step in returning our country to the moon and on to Mars.”

    The 322-foot (98-meter) SLS is the most powerful rocket ever built by NASA, with more thrust than either the space shuttle or the mighty Saturn V that carried men to the moon. A series of hydrogen fuel leaks plagued the summertime launch attempts as well as countdown tests. A fresh leak erupted at a new location during Tuesday night’s fueling, but an emergency team managed to tighten the faulty valve on the pad. Then a U.S. Space Force radar station went down, resulting in another scramble, this time to replace an ethernet switch.

    Orion should reach the moon by Monday, more than 230,000 miles (370,000 kilometers) from Earth. After coming within 80 miles (130 kilometers) of the moon, the capsule will enter a far-flung orbit stretching about 40,000 miles (64,000 kilometers) beyond.

    The $4.1 billion test flight is set to last 25 days, roughly the same as when crews will be aboard. The space agency intends to push the spacecraft to its limits and uncover any problems before astronauts strap in. The mannequins — NASA calls them moonequins — are fitted with sensors to measure such things as vibration, acceleration and cosmic radiation.

    “There’s a fair amount of risk with this particular initial flight test,” said mission manager Mike Sarafin.

    The rocket was supposed to have made its dry run by 2017. Government watchdogs estimate NASA will have spent $93 billion on the project by 2025.

    Ultimately, NASA hopes to establish a base on the moon and send astronauts to Mars by the late 2030s or early 2040s.

    But many hurdles still need to be cleared. The Orion capsule will take astronauts only to lunar orbit, not the surface.

    NASA has hired Elon Musk’s SpaceX to develop Starship, the 21st-century answer to Apollo’s lunar lander. Starship will carry astronauts back and forth between Orion and the lunar surface, at least on the first trip in 2025. The plan is to station Starship and eventually other companies’ landers in orbit around the moon, ready for use whenever new Orion crews pull up.

    Reprising an argument that was made during the 1960s, Duke University historian Alex Roland questions the value of human spaceflight, saying robots and remote-controlled spacecraft could get the job done more cheaply, efficiently and safely.

    “In all these years, no evidence has emerged to justify the investment we have made in human spaceflight — save the prestige involved in this conspicuous consumption,” he said.

    NASA is waiting until this test flight is over before introducing the astronauts who will be on the next one and those who will follow in the bootsteps of Apollo 11’s Neil Armstrong and Buzz Aldrin.

    Most of NASA’s corps of 42 active astronauts and 10 trainees were not even born yet when Apollo 17 moonwalkers Gene Cernan and Harrison Schmitt closed out the era, 50 years ago next month.

    “We are jumping out of our spacesuits with excitement,” astronaut Christina Koch said Tuesday.

    After a nearly yearlong space station mission and all-female spacewalk, Koch, 43, is on NASA’s short list for a lunar flight. So is astronaut Kayla Barron, 35, who finally got to witness her first rocket launch, not counting her own a year ago.

    “It took my breath away, and I was tearing up,” Barron said. “What an amazing acccomplishment for this team.”

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  • University of Virginia shooting suspect in custody, university police announce

    University of Virginia shooting suspect in custody, university police announce

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    CHARLOTTESVILLE, Va. (AP) — The three students killed in a shooting at the University of Virginia were all members of the school’s football team, the school’s president said.

    President Jim Ryan told a Monday morning news conference the shooting happened Sunday night on a school bus of students returning from an off-campus trip.

    The suspect has been identified as Christopher Darnell Jones Jr., who is also student.

    The incident occurred Sunday near a university parking garage. In addition to the three football players killed, two others were reported to have been wounded.

    Police went on a manhunt Monday in search of the student suspected in the attack, officials said.

    During a press conference in the 11 o’clock hour local time, the university police chief, Tim Longo, was given word that the suspect was in custody. He immediately returned to the microphone and reported that update to the assembled reporters.

    Classes at the university were canceled Monday, following the violence Sunday night, and the Charlottesville campus was unusually quiet as authorities searched for the suspect, whom university President Ryan identified as Christopher Darnell Jones Jr.

    A shelter-in-place order to the university community had been lifted less than an hour earlier after a law-enforcement search of the campus.

    In a letter to the university posted on social media, Ryan said the shooting happened around 10:30 p.m. Sunday.

    The university’s emergency management issued an alert Sunday night notifying the campus community of an “active attacker firearm.” The message warned students to shelter in place following a report of shots fired on Culbreth Road on the northern outskirts of campus.

    Access to the shooting scene was blocked by police vehicles Monday morning.

    Officials urged students to shelter in place and helicopters could be heard overhead as a smattering of traffic and dog-walkers made their way around campus.

    The university police department posted a notice online saying multiple police agencies including the state police were searching for a suspect who was considered “armed and dangerous.”

    In his letter to campus, the university president said Jones was suspected to have committed the shooting and that he was a student.

    “This is a message any leader hopes never to have to send, and I am devastated that this violence has visited the University of Virginia,” Ryan wrote. “This is a traumatic incident for everyone in our community.”

    Eva Surovell, 21, the editor in chief of the student newspaper, The Cavalier Daily, said that after students received an alert about an active shooter late Sunday night, she ran to the parking garage, but saw that it was blocked off by police. When she went to a nearby intersection, she was told to go shelter in place.

    “A police officer told me that the shooter was nearby and I needed to return home as soon as possible,” she said.

    She waited with other reporters, hoping to get additional details, then returned to her room to start working on the story. The gravity of the situation sunk in.

    “My generation is certainly one that’s grown up with generalized gun violence, but that doesn’t make it any easier when it’s your own community,” she said.

    The Bureau of Alcohol, Tobacco, Firearms and Explosives said agents were responding to the campus to assist in the investigation.

    The Virginia shooting came as police were investigating the deaths of four University of Idaho students found Sunday in a home near the campus. Officers with the Moscow Police Department discovered the deaths when they responded to a report of an unconscious person just before noon, according to a news release from the city. Authorities have called the deaths suspected homicides but did not release additional details, including the cause of death.

    On April 16, 2007, another Virginia university was the scene of what was then one of the deadliest shootings in U.S. history. Twenty-seven students and five faculty members at Virginia Tech were gunned down by Seung-Hui Cho, a 23-year-old mentally ill student who later died from a self-inflicted gunshot wound.

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  • Live Q&A: Ask us about the midterm election results, and what comes next

    Live Q&A: Ask us about the midterm election results, and what comes next

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    MarketWatch readers: Ask our Washington bureau chief Robert Schroeder about the results of Tuesday’s midterm elections — and what comes next — during a live, dynamic session beginning at 11 a.m. Eastern on Wednesday.

    Before the Q&A starts, please start leaving your questions and comments here and let us know what’s on your mind.  

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  • All eyes on China as Apple and Foxconn outline zero-COVID issues. Meanwhile, cases are rising again in the U.S.

    All eyes on China as Apple and Foxconn outline zero-COVID issues. Meanwhile, cases are rising again in the U.S.

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    China’s strict zero-COVID policy was making headlines Monday after Apple and iPhone manufacturer Foxconn said over the weekend that restrictions are crimping production and will delay shipments of the high-end iPhone 14.

    “We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple
    AAPL,
    -0.82%
    announced in a Sunday evening press release. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.” 

    Also read: Will Apple’s latest production issues destroy demand?

    Foxconn, meanwhile, which trades as Hon Hai Precision Industry Co.
    2317,
    -0.50%    ,
    lowered its fourth-quarter guidance and said anti-COVID measures were affecting some of its operations in Zhengzhou, China, as Dow Jones Newswires reported.

    Foxconn said that the Henan provincial government had made it clear that it would fully support the company. Foxconn’s most advanced iPhone plant, located in the provincial capital of Zhengzhou, has been battling a COVID outbreak.

    Foxconn said it is working with the government to halt the outbreak and resume production at full capacity as quickly as possible.

    Workers at the world’s biggest assembly site for Apple’s iPhones walked out last week as Foxconn struggled to contain a COVID-19 outbreak. The chaos highlighted the tension between Beijing’s rigid pandemic controls and the need to keep production on track. Photo: Hangpai Xinyang/Associated Press

    Investors have been closely watching China for signs that its government would start to lift the tough pandemic restrictions that have been in place for almost three years. The Wall Street Journal reported Monday that the country’s leaders are considering steps but have not yet set a timeline.

    Chinese  officials have become concerned about the costs of their zero-tolerance approach to COVID, which has resulted in lockdowns of cities and whole provinces, crushing business activity and confining hundreds of millions of people to their homes for weeks and sometimes months on end.

    But they are weighing those concerns against the potential costs of reopening on public health and on support for the Communist Party. On Saturday, officials from China’s National Health Commission again reaffirmed their commitment to a firm zero-COVID strategy, which they described as essential to “protect people’s lives.”

    Still, there are plans in Beijing to further cut the number of days incoming travelers must quarantine in hotels from 10 to seven, followed by three days of home monitoring, the paper reported, citing people involved in the discussions.

    And officials have told retail businesses that they intend to reduce the frequency of PCR testing as soon as this month, partly because of the cost.

    In the U.S., known cases of COVID and hospitalizations are climbing again for the first time in a few months.

    The daily average for new cases stood at 39,954 on Sunday, according to a New York Times tracker, up 6% compared with two weeks ago. But cases are sharply higher in several states, led by Nevada, where they are up 96% from two weeks ago, followed by Tennessee, where they are up 69%; Louisiana, where they are up 68%; Utah, where they have climbed 61%; and New Mexico, where they are up 56%.

    Cases are climbing in 30 states and in Washington, D.C.

    The daily average for hospitalizations was up 2% to 27,419, while the daily average for deaths was down 11% to 320.

    Physicians are reporting high numbers of respiratory illnesses like RSV and the flu earlier than the typical winter peak. WSJ’s Brianna Abbott explains what the early surge means for the winter months. Photo illustration: Kaitlyn Wang

    The Centers for Disease Control and Prevention said the BQ.1 and BQ.1.1 variants accounted for 35.3% of new cases in the week through Nov. 5, up from 27.1% a week ago.

    The two variants accounted for 52.3% of all cases in the New York region, which includes New Jersey, Puerto Rico and the Virgin Islands, up from 42.5% the previous week. That was more than the BA.5 omicron subvariant, which accounted for 24.9% of new cases in the New York area in the latest week.

    The BA.5 omicron subvariant accounted for 39.2% of all U.S. cases, the data show.

    BQ.1 and BQ.1.1 were still lumped in with BA.5 variant data as recently as three weeks ago, because at that time, their numbers were too small to break out. BQ.1 was first identified by researchers in early September and has been found in the U.K. and Germany, among other places. 

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • BioNTEch SE
    BNTX,
    +2.84%    ,
    the German biotech that has partnered with Pfizer
    PFE,
    -0.53%
    on a COVID vaccine, posted earnings early Monday, showing a roughly 50% drop in profit that sent its stock lower, despite beating consensus estimates. The Mainz-based company said it had invoiced about 300 million doses of its bivalent vaccine, which targets the omicron variant as well as the original virus. The company chalked up €564.5 million ($563.9 million) in direct COVID vaccine sales in the quarter, down from €1.351 billion a year ago. BioNTech raised the lower end of its full-year COVID vaccine revenue range to €16 billion to €17 billion, from a previous €13 billion to €17 billion.

    • Thousands of runners took to the streets of the Chinese capital on Sunday for the return of Beijing’s annual marathon after a two-year hiatus, the Associated Press reported. However, the good news was offset by anger about another death related to COVID restrictions, this time of a 55-year-old woman in a sealed building. An investigation report released Sunday in Hohhot, the capital of China’s Inner Mongolia region, blamed property management and community staff for not acting quickly enough to prevent the death of the woman after being told she had suicidal tendencies.

    • The U.S. flu season is off to an unusually fast start, contributing to an autumn mix of viruses that have patients filling hospitals’ and physicians’ waiting rooms, the AP reported separately. Reports of flu are already high in 17 states, and the hospitalization rate hasn’t been this high this early since the 2009 swine flu pandemic, according to the Centers for Disease Control and Prevention. So far, there have been an estimated 730 flu deaths, including at least two children. The winter flu season usually ramps up in December or January.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 632.6 million on Monday, while the death toll rose above 6.60 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 97.7 million cases and 1,072,598 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 227.3 million people living in the U.S., equal to 68.5% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 26.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 8.4% of the overall population.

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  • Apple warns that iPhone 14 Pro shipments will be hit by China production snags

    Apple warns that iPhone 14 Pro shipments will be hit by China production snags

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    Apple Inc. said Sunday that it now expects lower shipments of its high-end iPhone 14 Pro and iPhone 14 Pro Max devices than it did previously, as COVID-19 issues hamper production in China.

    “We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” the company announced in a Sunday evening press release. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”

    Apple
    AAPL,
    -0.19%
    acknowledged in its release that COVID-19 issues have “temporarily impacted” production of the devices at the Zhengzhou site that is the “primary” assembly facility for the iPhone 14 Pro and iPhone 14 Pro Max. That facility is currently seeing “significantly reduced” operating capacity.

    “We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker,” the company added in the release.

    Analysts have been discussing iPhone production disruption at manufacturer Foxconn’s
    2354,
    +1.31%
    Zhengzhou facility for the past week amid fallout from COVID-19 restrictions in the city.

    “Although Apple earnings were only a week ago, supply shortages at the high end of the market and recent COVID lockdowns in China impacting a Foxconn plant could negatively impact iPhone units in the December quarter,” UBS analyst David Vogt wrote Wednesday, ahead of Apple’s press release. “While we believe iPhone demand tends to not be perishable, a slippage of a couple of million units is possible below our 86 million forecast.”

    While Apple was the only Big Tech company to see its shares rally in the wake of its late-October earnings report, shares have struggled more since then. They logged their worst weekly performance since March 2020 last week.

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  • Qualcomm stock plunges to lowest price in more than two years as magnitude of smartphone shortfall shocks Wall Street

    Qualcomm stock plunges to lowest price in more than two years as magnitude of smartphone shortfall shocks Wall Street

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    Wall Street had braced for a bumpy ride as Qualcomm Inc. navigated an oversupplied market for smartphone chips, but the chip maker’s stock still got T-boned Thursday after a disappointing holiday forecast.

    Qualcomm
    QCOM,
    -6.01%
    shares fell as much as 9.4% Thursday morning to an intraday low of $101.93, the lowest price for the company’s shares since July 2020. Investors were reacting to executives saying the company had up to 10 weeks of inventory in the channel, and that its record handset sales would be followed up by, at best, a $2 billion shortfall in the current quarter, compared with the Wall Street consensus at the time.

    “A weak market, and even a potential inventory correction, was likely not entirely unexpected,” Bernstein analyst Stacy Rasgon wrote, while adding that “the magnitude is probably worse than what some might have had in mind (though it is certainly not confined to Qualcomm, with virtually all handset-exposed players showing similar dynamics).”

    Rasgon cut his price target on the stock to $140 from $165, while pointing out that executive color suggested that Qualcomm would keep Apple Inc.’s
    AAPL,
    -3.63%
    business through at least the next iPhone cycle, an important note as the iPhone maker seeks to start building its own wireless components.

    More than half of the analysts who cover Qualcomm cut their price targets in reaction to the report, according to FactSet tracking. Evercore ISI analyst C.J. Muse cut his target to $120 from $130 while maintaining an in-line rating; he wrote that while Qualcomm set up for a miss, as it did last quarter, the actual read was much worse than expected.

    “While the buyside was clearly set up for a miss, the magnitude for the December Q was clearly a lot worse than expected with revenues/EPS guided 20%/32% below consensus,” Muse said.

    Read: More about Qualcomm earnings

    “Here, management highlighted demand weakness (CY22 handsets now expected down low double-digits% vs. prior down mid-single digits%; largely Android market and includes premium tier) and elevated channel inventory (now 8-10 weeks oversupply) as the key drivers of weakness,” the Evercore analyst noted.

    Of the 32 analysts who cover Qualcomm, 20 have buy-grade ratings and 12 have hold ratings. Of those 32 analysts, 19 cut price targets resulting in an average target price of $153.75, down from a previous $172.71, according to FactSet data.

    Qualcomm stock has declined more than 42% so far this year, in line with a 41.2% decline for the PHLX Semiconductor Index
    SOX,
    -0.65%    ,
    but well past the 21.1% year-to-date decline for the S&P 500 index
    SPX,
    -0.50%    .

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  • Qualcomm stock drops more than 7% after poor outlook, months-long chip glut

    Qualcomm stock drops more than 7% after poor outlook, months-long chip glut

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    Qualcomm Inc. shares fell in the extended session Wednesday following the chip maker’s poor outlook, and estimates of about two months or more of inventory it needs to clear in its core business.

    Qualcomm
    QCOM,
    -4.12%
    shares dropped 7.6% after hours, following a 4.1% decline to close at $112.50 in the regular session. In late July, the San Diego-based chip maker cut its forecast because of weakness in the smartphone market that had yet to creep into the premium handset market.

    On the call with analysts, Chief Executive Cristiano Amon said the accelerated weak demand was related to “macro economic headwinds and the prolonged COVID in China,” and “the rapid deterioration in demand and easing of supply constraints” across the chip industry.” would take out about 80 cents a share in first-quarter earnings.

    “It’s the major factor,” Amon told analysts on the call. “It’s mostly a handset consumer story.” Earnings for the first quarter, as a results, would take a hit of 80 cents a share, the company said.

    Another big factor is that companies are just spending less. Amon said “companies across the board had much higher inventory policies, supply chain got resolved, and you got that macro economic uncertainty, you have a drawdown trying to bring inventory to a different level than it was during the situation of demand constraint.”

    Qualcomm forecast first-quarter earnings of $3 to $3.30 a share on revenue of $9.2 billion to $10 billion, while the Street estimated $3.43 a share on revenue of $12.02 billion.

    Read: Meta spending slams Facebook stock, but here are the chip stocks that are benefiting

    Chief Financial Officer Akash Palkhiwala told analysts there is about eight to 10 weeks of elevated in the channel. In the meantime, Qualcomm was instituting a hiring freeze, and looking into cost-saving measures, execs told analysts.

    While handset-chip sales surged 40% to a record $6.57 billion from a year ago, topping the Street’s expectation of $6.55 billion, the company’s forecast indicates a big glut in inventory in Qualcomm’s CDMA Technologies unit, the one that includes handset and RF chips as well as chips for autos and Internet of Things.

    Qualcomm expects QCT sales of $7.7 billion to $8.3 billion, and sales from Qualcomm’s technology licensing, or QTL, segment of $1.45 billion to $1.65 billion. Analysts had forecast forecast $10.42 billion in QCT sales and QTL revenue of $1.71 billion.

    Qualcomm reported fourth-quarter QCT revenue of $9.9 billion, a 28% gain from a year ago. Analysts had estimated $9.84 billion, based on the company’s forecast of $9.5 billion to $10.1 billion.

    Fourth-quarter auto-chip sales zoomed up 58% to a record $427 million, and Internet of Things, or IoT, sales rose 24% to a record $1.92 billion. The Street was expecting auto sales of $362.4 million, and IoT sales of $1.82 billion.

    Revenue from the QTL segment fell 8% to $1.44 billion compared with Wall Street estimates of $1.58 billion, based on a company forecast of $1.45 billion to $1.65 billion.

    Read about: Intel’s quarterly results, AMD’s quarterly results

    The company reported fiscal fourth-quarter net income of $2.87 billion, or $2.54 a share, compared with $2.8 billion, or $2.45 a share, in the year-ago period. The chip maker reported adjusted earnings, which exclude stock-based compensation expenses and other items, of $3.13 a share, compared with $2.55 a share in the year-ago period. Total revenue for the third quarter rose to $11.4 billion from $9.34 billion in the year-ago period.

    Analysts had estimated earnings of $3.13 a share on revenue of $11.32 billion, based on Qualcomm’s forecast of $3 to $3.30 a share on revenue of $11 billion to $11.8 billion.

    Year to date, Qualcomm shares are down 38%, compared with a 41% decline for the PHLX Semiconductor Index 
    SOX,
    -3.09%    ,
     a 21% decline by the S&P 500 index 
    SPX,
    -2.50%
     and a 33% drop by the tech-heavy Nasdaq Composite Index 
    COMP,
    -3.36%    .

    Shares of Advanced Micro Devices Inc.
    AMD,
    -1.73%
    outperformed the broader market Wednesday after the chip maker said it would clear excess inventory by the end of the year, and forecast that data-center and embedded product sales would continue to rise.

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  • Qualcomm stock drops more than 7% after poor outlook, months-long chip glut

    Qualcomm stock drops more than 7% after poor outlook, months-long chip glut

    [ad_1]

    Qualcomm Inc. shares fell in the extended session Wednesday following the chip maker’s poor outlook, and estimates of about two months or more of inventory it needs to clear in its core business.

    Qualcomm
    QCOM,
    -4.12%
    shares dropped 7.6% after hours, following a 4.1% decline to close at $112.50 in the regular session. In late July, the San Diego-based chip maker cut its forecast because of weakness in the smartphone market that had yet to creep into the premium handset market.

    On the call with analysts, Chief Executive Cristiano Amon said the accelerated weak demand was related to “macro economic headwinds and the prolonged COVID in China,” and “the rapid deterioration in demand and easing of supply constraints” across the chip industry.” would take out about 80 cents a share in first-quarter earnings.

    “It’s the major factor,” Amon told analysts on the call. “It’s mostly a handset consumer story.” Earnings for the first quarter, as a results, would take a hit of 80 cents a share, the company said.

    Another big factor is that companies are just spending less. Amon said “companies across the board had much higher inventory policies, supply chain got resolved, and you got that macro economic uncertainty, you have a drawdown trying to bring inventory to a different level than it was during the situation of demand constraint.”

    Qualcomm forecast first-quarter earnings of $3 to $3.30 a share on revenue of $9.2 billion to $10 billion, while the Street estimated $3.43 a share on revenue of $12.02 billion.

    Read: Meta spending slams Facebook stock, but here are the chip stocks that are benefiting

    Chief Financial Officer Akash Palkhiwala told analysts there is about eight to 10 weeks of elevated in the channel. In the meantime, Qualcomm was instituting a hiring freeze, and looking into cost-saving measures, execs told analysts.

    While handset-chip sales surged 40% to a record $6.57 billion from a year ago, topping the Street’s expectation of $6.55 billion, the company’s forecast indicates a big glut in inventory in Qualcomm’s CDMA Technologies unit, the one that includes handset and RF chips as well as chips for autos and Internet of Things.

    Qualcomm expects QCT sales of $7.7 billion to $8.3 billion, and sales from Qualcomm’s technology licensing, or QTL, segment of $1.45 billion to $1.65 billion. Analysts had forecast forecast $10.42 billion in QCT sales and QTL revenue of $1.71 billion.

    Qualcomm reported fourth-quarter QCT revenue of $9.9 billion, a 28% gain from a year ago. Analysts had estimated $9.84 billion, based on the company’s forecast of $9.5 billion to $10.1 billion.

    Fourth-quarter auto-chip sales zoomed up 58% to a record $427 million, and Internet of Things, or IoT, sales rose 24% to a record $1.92 billion. The Street was expecting auto sales of $362.4 million, and IoT sales of $1.82 billion.

    Revenue from the QTL segment fell 8% to $1.44 billion compared with Wall Street estimates of $1.58 billion, based on a company forecast of $1.45 billion to $1.65 billion.

    Read about: Intel’s quarterly results, AMD’s quarterly results

    The company reported fiscal fourth-quarter net income of $2.87 billion, or $2.54 a share, compared with $2.8 billion, or $2.45 a share, in the year-ago period. The chip maker reported adjusted earnings, which exclude stock-based compensation expenses and other items, of $3.13 a share, compared with $2.55 a share in the year-ago period. Total revenue for the third quarter rose to $11.4 billion from $9.34 billion in the year-ago period.

    Analysts had estimated earnings of $3.13 a share on revenue of $11.32 billion, based on Qualcomm’s forecast of $3 to $3.30 a share on revenue of $11 billion to $11.8 billion.

    Year to date, Qualcomm shares are down 38%, compared with a 41% decline for the PHLX Semiconductor Index 
    SOX,
    -3.09%    ,
     a 21% decline by the S&P 500 index 
    SPX,
    -2.50%
     and a 33% drop by the tech-heavy Nasdaq Composite Index 
    COMP,
    -3.36%    .

    Shares of Advanced Micro Devices Inc.
    AMD,
    -1.73%
    outperformed the broader market Wednesday after the chip maker said it would clear excess inventory by the end of the year, and forecast that data-center and embedded product sales would continue to rise.

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  • 20 dividend stocks that may be safest if the Federal Reserve causes a recession

    20 dividend stocks that may be safest if the Federal Reserve causes a recession

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    Investors cheered when a report last week showed the economy expanded in the third quarter after back-to-back contractions.

    But it’s too early to get excited, because the Federal Reserve hasn’t given any sign yet that it is about to stop raising interest rates at the fastest pace in decades.

    Below is a list of dividend stocks that have had low price volatility over the past 12 months, culled from three large exchange traded funds that screen for high yields and quality in different ways.

    In a year when the S&P 500
    SPX,
    -0.40%
    is down 18%, the three ETFs have widely outperformed, with the best of the group falling only 1%.

    Read: GDP looked great for the U.S. economy, but it really wasn’t

    That said, last week was a very good one for U.S. stocks, with the S&P 500 returning 4% and the Dow Jones Industrial Average
    DJIA,
    -0.32%
    having its best October ever.

    This week, investors’ eyes turn back to the Federal Reserve. Following a two-day policy meeting, the Federal Open Market Committee is expected to make its fourth consecutive increase of 0.75% to the federal funds rate on Wednesday.

    The inverted yield curve, with yields on two-year U.S. Treasury notes
    TMUBMUSD02Y,
    4.540%
    exceeding yields on 10-year notes
    TMUBMUSD10Y,
    4.064%    ,
    indicates investors in the bond market expect a recession. Meanwhile, this has been a difficult earnings season for many companies and analysts have reacted by lowering their earnings estimates.

    The weighted rolling consensus 12-month earning estimate for the S&P 500, based on estimates of analysts polled by FactSet, has declined 2% over the past month to $230.60. In a healthy economy, investors expect this number to rise every quarter, at least slightly.

    Low-volatility stocks are working in 2022

    Take a look at this chart, showing year-to-date total returns for the three ETFs against the S&P 500 through October:


    FactSet

    The three dividend-stock ETFs take different approaches:

    • The $40.6 billion Schwab U.S. Dividend Equity ETF
      SCHD,
      +0.15%
      tracks the Dow Jones U.S. Dividend 100 Indexed quarterly. This approach incorporates 10-year screens for cash flow, debt, return on equity and dividend growth for quality and safety. It excludes real estate investment trusts (REITs). The ETF’s 30-day SEC yield was 3.79% as of Sept. 30.

    • The iShares Select Dividend ETF
      DVY,
      +0.45%
      has $21.7 billion in assets. It tracks the Dow Jones U.S. Select Dividend Index, which is weighted by dividend yield and “skews toward smaller firms paying consistent dividends,” according to FactSet. It holds about 100 stocks, includes REITs and looks back five years for dividend growth and payout ratios. The ETF’s 30-day yield was 4.07% as of Sept. 30.

    • The SPDR Portfolio S&P 500 High Dividend ETF
      SPYD,
      +0.60%
      has $7.8 billion in assets and holds 80 stocks, taking an equal-weighted approach to investing in the top-yielding stocks among the S&P 500. It’s 30-day yield was 4.07% as of Sept. 30.

    All three ETFs have fared well this year relative to the S&P 500. The funds’ beta — a measure of price volatility against that of the S&P 500 (in this case) — have ranged this year from 0.75 to 0.76, according to FactSet. A beta of 1 would indicate volatility matching that of the index, while a beta above 1 would indicate higher volatility.

    Now look at this five-year total return chart showing the three ETFs against the S&P 500 over the past five years:


    FactSet

    The Schwab U.S. Dividend Equity ETF ranks highest for five-year total return with dividends reinvested — it is the only one of the three to beat the index for this period.

    Screening for the least volatile dividend stocks

    Together, the three ETFs hold 194 stocks. Here are the 20 with the lowest 12-month beta. The list is sorted by beta, ascending, and dividend yields range from 2.45% to 8.13%:

    Company

    		 Ticker

    		 12-month beta

    		 Dividend yield

    		 2022 total return
    Newmont Corp.

    		 NEM,
    -0.78%         		0.17

    		 5.20%

    		 -30%
    Verizon Communications Inc.

    		 VZ,
    -0.07%         		0.22

    		 6.98%

    		 -24%
    General Mills Inc.

    		 GIS,
    -1.47%         		0.27

    		 2.65%

    		 25%
    Kellogg Co.

    		 K,
    -0.93%         		0.27

    		 3.07%

    		 22%
    Merck & Co. Inc.

    		 MRK,
    -1.73%         		0.29

    		 2.73%

    		 35%
    Kraft Heinz Co.

    		 KHC,
    -0.56%         		0.35

    		 4.16%

    		 11%
    City Holding Co.

    		 CHCO,
    -1.45%         		0.38

    		 2.58%

    		 27%
    CVB Financial Corp.

    		 CVBF,
    -1.24%         		0.38

    		 2.79%

    		 37%
    First Horizon Corp.

    		 FHN,
    -0.18%         		0.39

    		 2.45%

    		 53%
    Avista Corp.

    		 AVA,
    -7.82%         		0.41

    		 4.29%

    		 0%
    NorthWestern Corp.

    		 NWE,
    -0.21%         		0.42

    		 4.77%

    		 -4%
    Altria Group Inc

    		 MO,
    -0.18%         		0.43

    		 8.13%

    		 4%
    Northwest Bancshares Inc.

    		 NWBI,
    +0.10%         		0.45

    		 5.31%

    		 11%
    AT&T Inc.

    		 T,
    +0.63%         		0.47

    		 6.09%

    		 5%
    Flowers Foods Inc.

    		 FLO,
    -0.44%         		0.48

    		 3.07%

    		 7%
    Mercury General Corp.

    		 MCY,
    +0.07%         		0.48

    		 4.38%

    		 -43%
    Conagra Brands Inc.

    		 CAG,
    -0.82%         		0.48

    		 3.60%

    		 10%
    Amgen Inc.

    		 AMGN,
    +0.41%         		0.49

    		 2.87%

    		 23%
    Safety Insurance Group Inc.

    		 SAFT,
    -1.70%         		0.49

    		 4.14%

    		 5%
    Tyson Foods Inc. Class A

    		 TSN,
    -0.40%         		0.50

    		 2.69%

    		 -20%
    Source: FactSet

    Any list of stocks will have its dogs, but 16 of these 20 have outperformed the S&P 500 so far in 2022, and 14 have had positive total returns.

    You can click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

    Don’t miss: Municipal bond yields are attractive now — here’s how to figure out if they are right for you

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