ReportWire

Tag: industrial news

  • U.S. housing starts drop to lowest level since June 2020

    U.S. housing starts drop to lowest level since June 2020

    [ad_1]

    The numbers: Construction of new U.S. homes fell 11.3% in August — falling short of Wall Street expectations — as builders scaled back new projects to focus on completions.

    The pace of construction reversed course and fell as mortgage rates stayed over 7%, dampening home-buying demand. The last time construction of new homes was at this level was in June 2020.

    So-called housing starts fell to a 1.28 million annual pace from 1.45 million in August, the government said Tuesday. That’s how many houses would be built over an entire year if construction took place at the same rate every month as it did in August.

    Economists on Wall Street were expecting a drop in starts to 1.43 million. All numbers are seasonally adjusted. 

    Housing starts peaked at 1.8 million in April 2022. 

    The number of homes started in July was revised downwards, to an increase of 2% to 1.45 million, from an initial reading of a 3.9% gain. 

    More from MarketWatch: Meet the brave Americans buying and selling their homes, despite stubbornly high interest rates

    New homes have dominated the housing market, but persistently high rates are beginning to spook home builders. In anticipation of waning demand, builders said they’ve started to ramp up price cuts to boost buyer demand in September, according to a survey by the National Association of Home Builders. 

    Building permits, a sign of future construction, rose 6.9% to a 1.54 million rate. That’s the highest level since October 2022.

    Key details: The construction pace of single-family homes fell by 4.3% in August, and apartment-building construction fell by 26.3%.

    But home builders ramped up single-family home construction in the South, where starts rose by 8.1% in August.

    Housing starts fell the most in the West, by 28.9%.

    Permits for single-family homes rose 2% in August, while permits for buildings with at least five units or more surged by 14.8%.

    Around 1.69 million homes were under construction as of August. 

    Big picture: Builders are increasingly concerned about how 7% rates will impact demand, and they’re pulling back on starting new developments as a result. 

    Builder confidence in September fell to the lowest level in five months, according to the NAHB. Home builders are increasingly offering incentives, including cutting prices. The share of builders cutting prices to boost sales rose to the highest level in nine months, the NAHB noted, going up to 32% in September from 25% the previous month.

    Nonetheless, given the long-term need for housing and a decade of underbuilding, builders may not see a sustained drop in demand. 

    What are they saying? Despite starts falling sharply in August, the uptick in building permits “suggests housing starts could pick up modestly again and today’s data could reflect some volatility,” CIBC Economics said in a note. “Nonetheless, the cooling in building activity is a good sign for the Fed which is expecting to limit housing market activity in an effort to contain inflation.”

    Rates have peaked, but “will remain elevated for the rest of the year,” Capital Economics wrote in a note. And this means that with “a slowing economy, we expect this will lead single-family starts to flatten-off at around 900,000 annualised until mid-2024, after which an economic recovery will help spur buyer demand and supporting renewed homebuilder confidence,” they added.

    Market reaction: U.S. stocks
    DJIA

    SPX
    were set to open higher early Tuesday. The yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    rose above 4.3%.

    [ad_2]

    Source link

  • NIO, Moderna, Block, U.S. Steel, and More Stock Market Movers

    NIO, Moderna, Block, U.S. Steel, and More Stock Market Movers

    [ad_1]


    • Order Reprints

    • Print Article

    [ad_2]

    Source link

  • EV Maker NIO Plans to Issue $1.0 Billion in Convertible Senior Notes

    EV Maker NIO Plans to Issue $1.0 Billion in Convertible Senior Notes

    [ad_1]

    EV Maker NIO Plans to Issue $1.0 Billion in Convertible Senior Notes

    [ad_2]

    Source link

  • Instacart prices IPO at $30 a share, at upper end of expected range

    Instacart prices IPO at $30 a share, at upper end of expected range

    [ad_1]

    The grocery-delivery app Instacart on Monday priced its IPO at $30 a share, at the upper end of its expected range, raising $660 million with a fully-diluted valuation of around $10 billion after backing away from a stock-market debut last year.

    The company said it plans to begin trading on the Nasdaq Global Select Market on Tuesday under the ticker symbol “CART.” It will offer 22 million shares in the IPO. On Friday, Instacart had said it expected to price the offering at between $28 and $30 a share.

    Goldman Sachs and J.P. Morgan are acting as lead book-running managers for the offering. Instacart said it also granted the underwriters a 30-day option to purchase up to an extra 3.3 million shares at the IPO price. The offering is expected to close on Thursday.

    The debut would come amid what appears to be a thaw in the IPO market, following a year of concerns about inflation and the broader economy. But the public debut of chip designerArm Holdings
    ARM,
    -4.53%

    last week made big waves. The digital-marketing platform Klaviyo is set to debut this week as well.

    Instacart’s valuation in 2021 stood at $39 billion. Last year, as pandemic-era digital demand fizzled, the company cut its valuation multiple times, but raised it this year, according to The Information.

    Instacart, in its IPO filing, said the way people shop for groceries is undergoing a “massive digital transformation.” Evercore analysts have said the company controls around a fifth of the U.S. online grocery-delivery market.

    But the company faces steep competition — from the likes of Walmart Inc.
    WMT,
    -0.74%
    ,
    Amazon.com Inc.
    AMZN,
    -0.29%

    and DoorDash Inc.
    DASH,
    -0.01%

    — and relies on a handful of grocery chains for a big chunk of its demand. And delivery fees on top of higher-priced groceries remain threats to demand.

    [ad_2]

    Source link

  • Block’s stock has been a laggard lately. Will management shakeup provide a needed jolt?

    Block’s stock has been a laggard lately. Will management shakeup provide a needed jolt?

    [ad_1]

    Block Inc.’s stock has been a sizable laggard this year, and now it’s losing the leader of a critical business — albeit one that hasn’t necessarily lived up to investor expectations lately.

    Alyssa Henry, the head of Block’s
    SQ,
    -2.99%

    Square merchant business, is stepping down after a long tenure with the company, and Jack Dorsey will assume her role while continuing to lead Block on the whole, the company announced in a Monday filing.

    The announcement comes as Block shares have declined 18% so far this year, while the S&P 500
    SPX
    has risen 16%. Other payment-technology stocks, including Shift4 Payments Inc.,
    FOUR,
    -0.54%

    Toast Inc.
    TOST,
    +1.34%

    and even PayPal Holdings Inc.
    PYPL,
    -1.98%

    have logged better year-to-date performances.

    Block’s stock closed at its lowest level since April 7, 2020 on Monday, according to Dow Jones Market Data. It was down about 2% in after-hours trading.

    The stock is also down 82% from its all-time closing high achieved Aug. 5, 2021.

    See also: PayPal’s ‘fresh start’ isn’t enough to help its stock, analyst cautions

    The performance of the Square merchant business, which includes payment processing and other tools for sellers, has been a sore point for investors recently. Wolfe Research analyst Darrin Peller notes that Block’s second-quarter U.S. gross payment volume (GPV) was up 10% from a year earlier, a four-point spread above Visa Inc.’s
    V,
    +1.49%

    domestic growth. Historically, the spread has been in double digits, he said.

    Additionally, while the 12% overall growth in Square’s GPV “continues to imply that Square is a market-share gainer, we note that this growth spread relative to the industry has trended lower and also suggests slightly softer growth trends versus competitors like Clover,” which is part of Fiserv Inc.
    FI,
    +0.12%
    ,
    whose shares are up 20% on the year.

    “While some of Square’s success over the years should be attributed to Alyssa’s execution, the company’s more recent performance remains a concern for investors (and we suspect for management, internally),” Peller wrote.

    He pointed to “mixed” feedback from investors thus far.

    “Bulls argue that this change is positive, indicating that management is taking change seriously,” Peller said. “Further, it’s worth noting that Jack has been more receptive to cost management and other adjustments. Meanwhile, bears are citing that Alyssa was the ‘face’ of Seller and was more receptive to changes in Square’s business model compared to Jack (particularly around outsourced distribution).”

    Block, for its part, said in its filing that Henry “provided significant contributions” to the company during a tenure that spanned more than nine years.

    UBS downgraded Block shares earlier this month, in part due to concerns about the Square business. Analyst Rayna Kumar said she was concerned about a potential slowdown in gross-profit growth owing to a moderation in consumer spending.

    [ad_2]

    Source link

  • Five American captives have flown out of Iran, U.S. officials say

    Five American captives have flown out of Iran, U.S. officials say

    [ad_1]

    DUBAI, United Arab Emirates (AP) — Five prisoners sought by the U.S. in a swap with Iran flew out of Tehran on Monday, officials said.

    Flight-tracking data analyzed by the AP showed a Qatar Airways flight take off at Tehran’s Mehrabad International Airport, which has been used for exchanges in the past. Iranian state media soon after said the flight had left Tehran.

    Two people, including a senior Biden administration official, said that the prisoners had left Tehran. They both spoke on condition of anonymity because the exchange was ongoing.

    Context: Iran and U.S. set to exchange prisoners as $6 billion in once-frozen Iranian assets reaches Qatar

    Also see: Iran identifies prisoners it wants freed by U.S. even as President Raisi voices view of unfrozen funds at odds with Washington’s

    In addition to the five freed Americans, two U.S. family members flew out, according to the Biden administration official. of Tehran.

    The cash represents money South Korea owed Iran — but had not yet paid — for oil shipments. U.S. House Democrat Jason Crow said Monday that the Biden administration’s recent negotiations led to a situation in which those funds have more, rather than fewer, strings attached.

    Earlier, officials said that the exchange would take place after nearly $6 billion in once-frozen Iranian assets reached Qatar, a key element of the planned swap.

    Rep. Jason Crow, a Colorado Democrat, observed early Monday on MSNBC that the funds were available to Iran, and that South Korea could unilaterally have transferred them to Tehran, under terms of an arrangement struck by the Trump administration. The Biden administration’s recent negotiations led to a situation, he said, in which those funds have more, rather than fewer, strings attached.

    The U.S. Treasury holds the power to reject any requested fund transfers to Iran, U.S. officials have said, even as Iranian President Ebrahim Raisi claimed last week in an NBC interview that he was free under the deal’s terms to define the term humanitarian as he chose.

    Observers, seeking to reconcile those positions, noted that Raisi likely had a domestic audience in mind and was expressing a view that he knew did not comport with reality.

    Despite the exchange, tensions are almost certain to remain high between the U.S. and Iran, which are locked in various disputes, including over Tehran’s nuclear program.

    Iran says the program is peaceful, but it now enriches uranium closer than ever to weapons-grade levels.

    Iranian Foreign Ministry spokesman Nasser Kanaani was the first to acknowledge the swap would take place Monday. He said the cash sought for the exchange that had been held by South Korea was now in Qatar.

    Kanaani made his comments during a news conference aired on state television, but the feed cut immediately after his remarks.

    “Fortunately Iran’s frozen assets in South Korea were released and God willing today the assets will start to be fully controlled by the government and the nation,” Kanaani said.

    “On the subject of the prisoner swap, it will happen today and five prisoners, citizens of the Islamic Republic, will be released from the prisons in the U.S.,” he added. “Five imprisoned citizens who were in Iran will be given to the U.S. side.”

    He said two of the Iranian prisoners will stay in the U.S.

    Mohammad Reza Farzin, Iran’s Central Bank chief, later came on state television to acknowledge the receipt of over 5.5 billion euros — $5.9 billion — in accounts in Qatar. Months ago, Iran had anticipated getting as much as $7 billion.

    The planned exchange comes ahead of the convening of world leaders at the U.N. General Assembly this week in New York, where Iran’s hard-line President Ebrahim Raisi will speak.

    A Qatar Airways plane landed Monday morning at Mehrabad International Airport in Tehran, according to flight-tracking data analyzed by the AP. Qatar Airways uses Tehran’s Imam Khomeini International Airport for its commercial flights, but previous prisoner releases have taken place at Mehrabad.

    The announcement by Kanaani comes weeks after Iran said that five Iranian-Americans had been transferred from prison to house arrest as part of a confidence-building move. Meanwhile, Seoul allowed the frozen assets, held in South Korean won, to be converted into euros.

    The planned swap has unfolded amid a major American military buildup in the Persian Gulf, with the possibility of U.S. troops boarding and guarding commercial ships in the Strait of Hormuz, through which 20% of all oil shipments pass.

    The deal has also already opened U.S. President Joe Biden to fresh criticism from Republicans and others who say that the administration is helping boost the Iranian economy at a time when Iran poses a growing threat to American troops and Mideast allies. That could have implications in his reelection campaign as well.

    On the U.S. side, Washington has said the planned swap includes Siamak Namazi, who was detained in 2015 and was later sentenced to 10 years in prison on spying charges; Emad Sharghi, a venture capitalist sentenced to 10 years; and Morad Tahbaz, a British-American conservationist of Iranian descent who was arrested in 2018 and also received a 10-year sentence. All of their charges have been widely criticized by their families, activists and the U.S. government.

    U.S. official have so far declined to identify the fourth and fifth prisoner.

    The five prisoners Iran has said it seeks are mostly held over allegedly trying to export banned material to Iran, such as dual use electronics that can be used by a military.

    The cash represents money South Korea owed Iran — but had not yet paid — for oil purchased before the U.S. imposed sanctions on such transactions in 2019.

    The U.S. maintains that, once in Qatar, the money will be held in restricted accounts and will only be able to be used for humanitarian goods, such as medicine and food. Those transactions are currently allowed under American sanctions targeting the Islamic Republic over its advancing nuclear program.

    Iranian government officials have largely concurred with that explanation, though some hard-liners have insisted, without providing evidence, that there would be no restrictions on how Tehran spends the money.

    Iran and the U.S. have a history of prisoner swaps dating back to the 1979 U.S. Embassy takeover and hostage crisis following the Islamic Revolution. Their most recent major exchange happened in 2016, when Iran came to a deal with world powers to restrict its nuclear program in return for an easing of sanctions.

    Four American captives, including Washington Post journalist Jason Rezaian, flew home from Iran at the time, and several Iranians in the U.S. won their freedom. That same day, then-President Barack Obama’s administration airlifted $400 million in cash to Tehran.

    The West accuses Iran of using foreign prisoners — including those with dual nationality — as bargaining chips, an allegation Tehran rejects.

    Negotiations over a major prisoner swap faltered after then-President Donald Trump unilaterally withdrew America from the nuclear deal in 2018. From the following year on, a series of attacks and ship seizures attributed to Iran have raised tensions.

    Meanwhile, Iran’s nuclear program now enriches closer than ever to weapons-grade levels. While the head of the United Nations’ nuclear watchdog has warned that Iran now has enough enriched uranium to produce “several” bombs, months more would likely be needed to build a weapon and potentially miniaturize it to put it on a missile — if Iran decided to pursue one.

    Iran maintains its nuclear program is peaceful, and the U.S. intelligence community has kept its assessment that Iran is not pursuing an atomic bomb.

    Iran has taken steps in recent months to settle some issues with the International Atomic Energy Agency. But the advances in its program have led to fears of a wider regional conflagration as Israel, itself a nuclear power, has said it would not allow Tehran to develop the bomb. Israel bombed both Iraq and Syria to stop their nuclear programs, giving the threat more weight. It also is suspected in carrying out a series of killings targeting Iran’s nuclear scientists.

    Iran also supplies Russia with the bomb-carrying drones Moscow uses to target sites in Ukraine in its war on Kyiv, which remains another major dispute between Tehran and Washington.

    MarketWatch contributed.

    [ad_2]

    Source link

  • Klaviyo reportedly raises price range of its upcoming IPO

    Klaviyo reportedly raises price range of its upcoming IPO

    [ad_1]

    Klaviyo Inc. is reportedly raising the target of its upcoming initial public offering to more than $550 million.

    Bloomberg News reported late Sunday that Klaviyo has decided to raise the target range for its shares to $27 to $29, up from its previously stated range of $25 to $27 a share. At the top of that new range, the IPO would raise $557 million, with the company valued at about $8.7 billion, according to Bloomberg.

    [ad_2]

    Source link

  • Where the Strike Stands. What Auto Makers and UAW Say.

    Where the Strike Stands. What Auto Makers and UAW Say.

    [ad_1]

    UAW workers went on strike in the early morning hours on Friday at the GM Wentzville Assembly plant in Wentzville, Mo.


    Photograph by Nick Schnelle

    The United Auto Workers’ strike against the three auto makers with roots in Detroit starts the week with pl…

    [ad_2]

    Source link

  • UAW strike sets the stage for the 4-day work week — and a win could take it mainstream

    UAW strike sets the stage for the 4-day work week — and a win could take it mainstream

    [ad_1]

    Striking United Auto Workers want better wages, improved job security, retiree pay increases, and a 32-hour work week that could turbocharge broader acceptance of shorter work weeks.

    Right now, nearly 13,000 UAW workers have walked off the job at Ford Motor Co.
    F,
    -0.08%
    ,
    General Motors Co.
    GM,
    +0.86%

    and Jeep and Chrysler parent Stellantis
    STLA,
    +2.18%
    ,
    still considered the influential Big Three for car makers.

    If the union gets a win from on its 32-hour work week demand, that could be a big deal for momentum behind the broader four-day work week movement, experts say.

    Four days of work is “still in the early-adoption phase,” said Alex Soojung-Kim Pang, director at Four Day Week Global, where he advises companies considering how to implement a curtailed traditional work week.

    A UAW win on the 32-hour demand “would help move the four-day week from being something you do if you have a bold leader and you want to stand out in your industry, to a mainstream aspiration for every worker and business owner,” said Soojung-Kim Pang.

    “A lot more people can look at the four-day week and say if they are doing this in an auto factory, I absolutely can do it here in my small plant, or in my business,” he added.

    Even if the 32-hour work week doesn’t make it to the final deal, it’s a “game changer” that the demand is there at all, he said. The demand could plant the idea in labor talks far beyond the UAW-company standoff.

    A UAW win on the 32-hour week would cause a “massive reverberation,” said Cathy Creighton, of Cornell University’s School of Industrial and Labor Relations.

    The demand’s presence is a sign of the COVID-19 pandemic’s lasting effects, said Creighton. While five days of in-person office attendance seems like a thing of the past, “we’ve had fundamental changes in how workers and employers view work life and work-life balance.”

    Many factory workers may not be able to pull off remote work but they can press for a shortened week on the physically demanding work, she noted. Historically, the UAW was one of the first unions to deliver health benefits, vacation and pensions for its members, she noted.

    “I think the labor movement has been playing it safe for a long time, and now they are not,” Creighton said. The UAW’s 32-hour work week demand is a prime example, she said. “The five-day work week is so ingrained in our psyche that to think of something different is like an earthquake.”

    Some research indicates people are ready for a shake-up. Nearly six in 10 people who work five days say they would prefer four 10-hour days, according to an August poll in an ongoing look at worker attitudes run by academic researchers.

    “We all know that living in a plant seven days a week, 12 hours a day, isn’t a living at all. We need real work-life balance. Auto workers deserve a life,” UAW president Shawn Fain told members in a video update days before the targeted strike.

    Roughly 12,700 UAW members so far have walked off the job at a Ford Motor plant in Michigan, a GM plant in Missouri and an Ohio plant for Stellantis NV, the maker of brands like Dodge, Chrysler, Jeep and Ram Trucks.

    Of course, there’s no guarantee how far the demand gets. The companies have counter proposals for the array of union asks, as a chart shows from researchers at Evercore ISI. They don’t yet have counters on the 32-hour work week.

    Switching to a 32-hour week with a 40-hour pay rate would be a sharp labor cost on top of the wage increases the UAW is already seeking, a Stellantis spokeswoman said. It would require hiring at least 25% more workers to stick with current manufacturing schedules, she said.

    “We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers,” the company said in a statement.

    In a statement, GM said it was “disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments.”

    Ford did not respond to a request for comment.

    “It’s a big game of chess that Shawn Fain is playing. We’ll see how it turns out,” Creighton said.

    “Even if they don’t get the four-day week this time, there are going to be other moves in this game in the future,” from the UAW and beyond, Soojung-Kim Pang said.

    “Even if you have to give on the four-day week now, that doesn’t mean you give on the four-day week as an ideal or a goal.”

    [ad_2]

    Source link

  • Republican Texas AG Ken Paxton is acquitted of all 16 corruption charges at impeachment trial

    Republican Texas AG Ken Paxton is acquitted of all 16 corruption charges at impeachment trial

    [ad_1]

    Texas Attorney General Ken Paxton was acquitted Saturday of all charges at a historic impeachment trial that divided Republicans over whether to remove a powerful defender of former President Donald Trump after years of scandal and criminal charges.

    The verdict reaffirmed Paxton’s durability in America’s biggest red state and is a broader victory for Texas’ hard right after an extraordinary trial that put on display fractures within the GOP nationally heading into the 2024 elections. In the end, Paxton was fully cleared by Senate Republicans, who serve alongside his wife, state Sen. Angela Paxton.

    Angela Paxton was not allowed to vote. But she attended all two weeks of the trial, including the reading of the verdict, when all but two of her fellow 18 Republican senators consistently voted to acquit her husband on 16 impeachment articles that accused him of misconduct, bribery and corruption. Ken Paxton, who was absent for most of the proceedings, did not attend the verdict.

    It clears the way for Paxton to reclaim his role as Texas’ top lawyer, more than three months after his stunning impeachment in the Texas House forced him to temporarily step aside.

    The outcome far from ends Paxton’s troubles. He still faces trial on felony securities fraud charges, remains under a separate FBI investigation and is in jeopardy of losing his ability to practice law in Texas because of his baseless attempts to overturn the 2020 election.

    The jury of 30 senators spent about eight hours deliberating behind closed doors before emerging for the historic vote. A two-thirds majority is required to convict Paxton on any of the charges that accuse Paxton of bribery, corruption and unfitness for office.

    The trial has plunged Texas Republicans into unfamiliar waters as they confronted whether Paxton should be removed over allegations that he abused his office to protect a political donor who was under FBI investigation.

    For nearly a decade, Paxton has elevated his national profile by rushing his office into polarizing courtroom battles across the U.S., winning acclaim from Donald Trump and the GOP’s hard right.

    The case centered on accusations that Paxton misused his office to help one of his donors, Austin real estate developer Nate Paul, who was indicted in June on charges of making false statements to banks. Paul has pleaded not guilty.

    Eight of Paxton’s former deputies reported him to the FBI in 2020, setting off a federal investigation that will continue regardless of the verdict. Federal prosecutors investigating Paxton took testimony in August before a grand jury in San Antonio , according to two people with knowledge of the matter who spoke on condition of anonymity because of secrecy rules around the proceeding.

    One of the impeachment articles centered on an alleged extramarital affair Paxton had with Laura Olson, who worked for Paul. It allegeed that Paul’s hiring of Olson amounted to a bribe.

    Paxton faces an array of legal troubles beyond the impeachment. Besides the federal investigation for the same allegations that gave rise to his impeachment, he also faces a bar disciplinary proceeding over his effort to overturn the 2020 election and has yet to stand trial on state securities fraud charges dating to 2015. He pleaded not guilty in the state case, but his lawyers have said removal from office might open the door to a plea agreement.

    [ad_2]

    Source link

  • GM and Ford’s stocks are higher as UAW strike kicks off. Their bonds tell a different story.

    GM and Ford’s stocks are higher as UAW strike kicks off. Their bonds tell a different story.

    [ad_1]

    Ford Motor Co.’s and General Motors Co.’s stocks were higher Friday as workers kicked off a strike, but their bonds have been under selling pressure for some time.

    Nearly 13,000 U.S. auto workers went on strike early Friday after the three automakers and the UAW failed to reach an agreement before their national contract expired just before midnight.

    The union has opted for targeted strikes, so workers at a Ford
    F,
    -0.04%

    plant in Michigan and a GM
    GM,
    +0.83%

    plant in Missouri were first to down tools, along with workers at a Stellantis N.V.
    STLA,
    +2.12%

    plant in Ohio.

     UAW President Shawn Fain has said others could join later and asked all 150,000 members to be ready if and when they’re called to strike.

    The strike at all three U.S. carmakers is a break with tradition, as the union for many years has elected to center strike efforts at one company to protect its strike fund and picket-line firepower.

    For more, read: UAW strike: 12,700 Ford, GM and Stellantis auto workers walk off the job

    Ford’s stock was last up 0.5%, while GM was up 1.4%.

    But as the following charts from data solutions company BondCliQ Media Services shows, the bonds have seen far more selling than buying over the last 10 days. Bondholders are often viewed as “smarter” than shareholders, because they tend to be laser-focused on a company’s financials and cash flows, to ensure they will be repaid their principal when bonds mature.


    Net customer flow of Ford and GM bonds (last 10 days). Source: BondCliQ Media Sources

    The next chart shows that Ford has seen more selling than GM.


    Ford and GM’s debt trading volumes (last 10 days). Source: BondCliQ Media Services


    Most-active Ford issues with net customer flow (last 10 days). Source: BondCliQ Media Services


    Most-active General Motors issue with net customer flow (last 10 days). Source: BondCliQ Media Services

    Stellantis, meanwhile, was seeing strong buying of its U.S. dollar-denominated bonds. The company, the former Fiat Chrysler, has far less debt than Ford and GM.

    Stellantis has about $26.5 billion of total debt, according to FactSet data, about $19.7 billion of which is in bonds.

    Ford has $143 billion of debt and $124 billion of bonds. GM has $118 billion of debt, with about $107 billion in bonds, according to FactSet.


    Most active Stellantis NV issues (USD) with net customer flow (last 10 days). Source: BondCliQ Media Services

    Fitch Ratings said earlier Friday the strike will have a limited financial impact on the auto makers, at least for now with just three plants striking.

    “It seems likely the UAW will try to ratchet up pressure on the automakers over time by shifting the strike to more impactful plants and adding more plants to the strike,” Stephen Brown, a senior director at Fitch, said in emailed comments. “The impact on the automakers of striking individual plants could be similar to the semiconductor-induced disruptions that we saw over the past few years.”

    See also: Big Three need to step up for the automotive workers who keep them profitable

    Fitch had already incorporated the potential impact of strikes in its recent decision to upgrade its ratings of Ford and GM, he said. The agency moved Ford to BBB- from BB+, moving it back into investment trade from speculative, or “junk,” status.

    “Ford, GM and Stellantis all have robust liquidity positions that will help them to withstand a potentially drawn-out period of production disruption. Based on June 30 figures, we estimate Ford has over $50 billion of cash and credit facility capacity, while GM has nearly $40 billion,” said Brown.

    Stellantis stock was up 2.2% Friday and has gained 36% in the year to date, outperforming GM’s 1.2% gain and Ford’s 9.0% gain. The S&P 500
    SPX
    has gained 17% in the same time frame.

    For live coverage of the UAW strikes, click here.

    [ad_2]

    Source link

  • UAW strike: Ford, GM, Stellantis record profits haven’t been shared fairly with workers, Biden says

    UAW strike: Ford, GM, Stellantis record profits haven’t been shared fairly with workers, Biden says

    [ad_1]

    President Joe Biden on Friday offered his support to the United Auto Workers, as he addressed their strike aimed at the Big Three auto makers.

    Auto companies have seen record profits because of the “extraordinary skill and sacrifices” of UAW workers, Biden said in a brief speech at the White House.

    “Those record profits have not been shared fairly, in my view, with those workers,” the president added.

    “The companies have made some significant offers, but I believe they should go further to ensure record corporate profits mean record contracts for the UAW,” he also said.

    Biden gave his remarks after about 12,700 workers went on strike early Friday as their union and the Big Three automakers failed to reach an agreement before a contract expired.

    It’s a targeted strike at a Ford Motor 
    F,
    -0.08%

    plant in Michigan, a General Motors 
    GM,
    +0.86%

    plant in Missouri and a Stellantis NV 
    STLA,
    +2.18%

    plant in Ohio.

    The UAW so far has not endorsed Biden’s re-election bid, even as the AFL-CIO and other big unions have lined up behind the Democratic incumbent.

    The presidential race in 2024 could be a rematch of 2020’s contest between Biden and former President Donald Trump, who has won over some union households that historically have backed Democrats like Biden rather than Republicans.

    See: Here are the Republicans running for president

    Biden got more support than Trump from union households in the battleground states of Michigan and Wisconsin in 2020, but Trump got more support from such households in Ohio and Pennsylvania, according to Edison Research exit polls.

    Trump has seized on concerns that the car industry’s shift toward electric vehicles
    CARZ,
    which the Biden administration has promoted, could hurt American workers. “The all Electric Car is a disaster for both the United Auto Workers and the American Consumer,” the former president said Friday in a post on his Truth Social platform.

    On Friday, Biden said he hopes the UAW and car companies “can return to the negotiation table to forge a win-win agreement,” and he said he’s sending two administration officials to Detroit — Julie Su, the acting secretary of labor, and Gene Sperling, a senior adviser.

    GM posted a 2022 net profit of $11.04 billion, up from $10.38 billion in 2021, while Ford recorded a 2022 net profit of $7.62 billion, up from $6.43 billion in the prior year. For Stellantis, the parent company for brands such as Chrysler, Dodge and Jeep, last year’s net profit was $17.83 billion, up from $15.12 billion.

    UAW President Shawn Fain said in a statement after Biden’s speech that union members “agree with Joe Biden when he says ‘record profits mean record contracts.’” 

    Fain also said: “Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”

    Now read: Tesla may be the winner of the Big Three labor woes

    And see: Will the UAW strike push up car prices?

    Plus: UAW strike to have limited impact on Big Three, Fitch says

    Claudia Assis contributed.

     

    [ad_2]

    Source link

  • Are we bored yet? Retail investors slowing their roll on AI stocks, according to this chart

    Are we bored yet? Retail investors slowing their roll on AI stocks, according to this chart

    [ad_1]

    There are more signs that investors are cooling a bit on the hot artificial intelligence play, though no one appears ready to let go of their Nvidia stock just yet.

    That’s according to Vanda Research analysts, who shared a chart of their latest weekly data showing how retail investor’s net purchases of AI-themed stocks is “steadily waning”:

    Marco Iachini, senior vice president, Giacomo Pierantoni, head of data and Lucas Mantle, data scientist at Vanda, said they’ve also noticed fewer news stories covering the sector as well, in their Vandatrack weekly comment that published Thursday.

    The fervor for AI-related stocks and technology took off earlier this year, with a pinnacle moment in May when Nvidia
    NVDA,
    -2.89%

    made big predictions on a boom for demand for its AI-related chips. Shares of the company are still up 211% so far this year, but enthusiasm for many tech stocks faded in August as China and interest rate-hike worries cropped up and some companies stressed AI benefits might not happen right away.

    That said, Vanda analysts don’t expect Nvidia will feel the hurt of any such waning interest. They point out that short interest in the chip maker has seen a “considerable decline,” in line with its soaring stock price.

    “This phenomenon suggests that bearish institutional investors, including long/short hedge funds, may have been compelled to cover their short positions,” said Iachini and his team. “As a result they are unlikely to want to sell the stock in the near term barring strong conviction to do so.”

    “It is crucial to recognize that a slowdown in retail demand, by itself, is improbable to trigger substantial price movements, without active bearish participation from institutional investors,” they added.

    However, the story is different for smaller AI-related companies such as smaller-cap C3.ai
    AI,
    -2.78%

    as seen in their chart:

    For C3.ai, they see a selling trend persisting in coming weeks. The AI software group’s shares are up 154% so far this year, but down 9% this month, taking a hit recently from solid quarterly results that came with forecasts for a bigger-than-expected full year loss. Analysts aren’t quite giving up — among 10 covering the company tracked by FactSet most have hold or a similar rating.

    “We believe C3.ai is taking the proper steps to capitalize on Generative AI, but it will take time to prove out,” said a team of analysts at Oppenheimer led by Timothy Horan, after those results were released on Sept. 7. They rate the company perform.

    Vanda analysts said another exception to an AI buying slowdown has been IonQ
    IONQ,
    -6.21%
    ,
    “a relatively small quantum computing company that has been outperforming its AI-related counterparts.”  They noted “remarkably resilient” demand for the stock, as short interest also increases rapidly.

    “This juxtaposition raises a cautionary flag, as a potential weakening of retail interest, coupled with speculative institutional investors accumulating short positions, could create a demand-supply imbalance, potentially triggering a selloff,” they said. Shares of IONQ have soared 422% year-to-date. The company lifted its lifted full-year bookings guidance last month as it reported blowout second-quarter sales.

    Young Money blogger Jack Raines highlighted the slowing interest in AI in a post on Thursday , citing data from analytics firm Similarweb that showed ChatGPT traffic down 3.2% in August, after 10% declines in June and July.

    “While ChatGPT will probably experience a resurgence this fall as students return to the classroom and expedite their homework via chatbot, it seems like talks of AI disrupting/replacing anything and everything have cooled down,” he said, adding that the “initial euphoria was a bit much.”

    Deutsche Bank strategists hopped on the topic in a note to clients entitled “Even hype needs a summer break,” on Thursday, noting how AI interest waned as investors went to the beach and the media turned its attention to extreme weather and “silly season” stories.

    “Under the surface, though, there have been important developments indicating a slow maturing of the cycle, of the underlying technologies and of attitudes to a revolution in waiting,” said a team led by analyst Adrian Cox.

    Those include Ai being the “elephant in the earnings room,” this summer that also brought a steady stream of AI-related tech announcements. Another theme “Your job is safe..for now,” came via fresh evidence that AI might boost rather than replace white-collar jobs, while yet another saw U.S. politicians also got involved.

    This week saw Tesla CEO Elon Musk telling Capital Hill politicians that a new federal agency to oversee AI development is a must.

    Another big theme that erupted this summer was the chatter by contrarian commentators questioning the hype around generative AI. Cox alluded to the Similarweb report that got everyone excited as it showed Chat GPT traffic falling to 1.4 billion visitors in August from 1.8 billion in May.

    “The bigger picture is that open.ai had zero visitors before the launch of ChatGPT less than a year ago and is now No. 28 in the world, according to Similarweb,” said the Deutsche Bank team.

    [ad_2]

    Source link

  • Paid off your mortgage? Be careful — you’re at risk of title theft.

    Paid off your mortgage? Be careful — you’re at risk of title theft.

    [ad_1]

    Homeowners may be thrilled when they finally pay off their mortgage, but the accomplishment comes with risks. 

    Retirement Tip of the Week: Be vigilant in protecting your identity and assets, and be aware of how you could fall victim to various scams or theft associated with your home.

    With title theft, thieves transfer a house deed from the rightful owner to another person’s name by using the owner’s personal information. Title theft could also take the form of using equity in a home, such as by opening a home equity line of credit, known as a HELOC, according to Quicken Loans. When a house is unoccupied, thieves could go so far as to sell or rent out the property. 

    Title theft isn’t particularly common, but it does happen, and it’s another reason people should protect their identity and other sensitive information. Older Americans could be at higher risk, especially if they have a lot of equity in their home. About 11,500 people reported losing more than $350 million to real-estate scams in 2021, although that figure includes fraud pertaining to real-estate advertisements and rental agreements, according to the FBI

    Homeowners should keep on top of their documents and may even want to occasionally confirm their information with their county deeds office, the FBI said. Any mail from a mortgage lender should be checked to make sure it doesn’t pertain to your specific property.

    If you are a victim of title theft, open an identity-theft case with the Federal Trade Commission, alert creditors about the fraud and look over your title insurance, which protects homeowners’ rights and which mortgage companies often require home buyers to have, Quicken Loans said

    There are companies that offer title-protection services, although critics say it’s not the same as title insurance and only alerts a homeowner of a problem after it has occurred. 

    “Do you need this service to protect your home from property thieves? The answer is no,” the Maryland Attorney General’s office said in a consumer alert about title-protection services. “Title fraud is very rare, and hardly ever successful. If someone ever tries to transfer your deed without your permission or knowledge, like these title lock companies suggest could happen, the transfer is fraudulent and void from the outset.” 

    Instead, homeowners should monitor their identity and keep an eye on their credit scores, the office said.

    [ad_2]

    Source link

  • Household income rose in just 5 states last year. Is your state one of them?

    Household income rose in just 5 states last year. Is your state one of them?

    [ad_1]

    American workers are feeling the pinch.

    The median annual household income in the U.S. was $74,755 in 2022, a 0.8% decline from the previous year after adjusting for inflation, according to the latest data from the Census Bureau.

    The decline in income is “disappointing,” said Sharon Parrott, president of the Center on Budget and Policy Priorities,…

    [ad_2]

    Source link

  • Arm Stock Rises Again

    Arm Stock Rises Again

    [ad_1]

    Arm Stock Is Rising Again. The Shares Are More Popular Than Tesla or Apple.

    [ad_2]

    Source link

  • H&M shares fall as retailer misses sales expectations; CAC 40 leads advance

    H&M shares fall as retailer misses sales expectations; CAC 40 leads advance

    [ad_1]

    H&M shares slumped Friday as the Swedish retail chain missed expectations for sales growth in a quarter in which it said it focused on profitability.

    H&M stock
    HM.B,
    -5.62%

    dropped 4% in early action, though it has rallied 47% this year.

    In a brief statement, H&M said fiscal third-quarter sales in local currencies was “flattish,” missing analyst estimates for 5% sales growth. It said its goal of reaching a 10% operating margin next year “is going in the right direction” and that profitability and inventory levels have been priortized in the quarter.

    Analysts at RBC said weather may have dampened sales, but that it also has become more expensive this season — for instance, pricing 10% below average in the U.K., versus 20% traditionally. Its publicly traded rivals — Inditex
    ITX,
    +0.58%
    ,
    the Primark unit of Associated British Foods
    ABF,
    +0.24%

    and Next
    NXT,
    +0.64%

    — have each reported stronger sales growth.

    The broader tone in European markets was positive, except for tech stocks, with ASM International
    ASM,
    -5.44%

    shares losing 5% and ASML Holding
    ASML,
    -2.51%

    down 2%.

    The French CAC 40
    FR:PX1
    led the major regional indexes with a 1.3% rise, as the U.K. FTSE 100
    UK:UKX
    and German DAX
    DX:DAX
    also rose. Better-than-expected Chinese retail sales figures helped Paris-listed luxury plays.

    Stellantis shares
    STLAM,
    +0.69%

    fell 1% as the United Auto Workers began a strike at an Ohio plant, along with one plant each at fellow Big Three automakers Ford and General Motors.

    [ad_2]

    Source link

  • An Investor’s Guide to Navigating a UAW Strike

    An Investor’s Guide to Navigating a UAW Strike

    [ad_1]

    The UAW could start soon, though it might not hurt the shares of GM and Ford.


    Jeff Kowalsky/Bloomberg

    The labor contract between the United Auto Workers and the Detroit-Three automakers expired at midnight on Thursday. A deal isn’t done and the union will …

    [ad_2]

    Source link

  • UAW strike: 12,700 Ford, GM and Stellantis auto workers walk off the job

    UAW strike: 12,700 Ford, GM and Stellantis auto workers walk off the job

    [ad_1]

    Nearly 13,000 U.S. auto workers went on strike early Friday after the Big Three and the United Auto Workers failed to reach an agreement before their national contract expired just before midnight.

    UAW President Shawn Fain called the targeted strike at a Ford Motor
    F,
    -0.16%

    plant in Michigan, a General Motors
    GM,

    plant in Missouri and a Stellantis NV
    STLA,
    -0.58%

    plant in Ohio. A strike at all three U.S. car makers is a break with tradition, as the union for many years has elected to center strike efforts at one company to protect its strike fund and picket-line firepower. Fain said the union could add more plants to strike as part of its strategy to keep the automakers guessing, and urged all 150,000 UAW members to be ready if and when they’re called to strike.

    “This is our generation’s defining moment,” Fain said Thursday night as he addressed UAW workers by webcast two hours before the deadline. “The money is there. The cause is righteous.”

    Fain said the union is committed to a contract that reflects the “incredible sacrifices and contributions” that its members have made for years. The union has said wages for auto workers who make the top rate have risen about 6% over the past four years, while the three automakers’ North American profits have increased about 65% during that time.

    The union is asking for double-digit wage increases, an end to tiered wages and benefits, the restoration of pensions and cost-of-living adjustments, retiree pay increases and more.

    A Stellantis spokesperson said the company is in contingency mode and sent the following statement: “We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers.”

    A GM spokesperson said the company will continue to bargain with the union and that “we are disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments.”

    Ford did not immediately comment after the strike began, but said in a statement earlier Thursday night that it was unhappy with the union’s counterproposal: “If implemented, the proposal would more than double Ford’s current UAW-related labor costs.”

    GM’s Wentzville, Mo., plant, which the union said has about 3,600 UAW members, builds some of the car maker’s mid-size trucks and full-size vans, including the Chevy Colorado and the GMC Canyon. Ford’s plant in Wayne, Mich., makes Ford Broncos, and about 3,300 members who work in final assembly and paint would be striking. The Stellantis Toledo, Ohio, plant, which has about 5,800 UAW members, makes Jeep Gladiators and Wranglers.

    UAW members join workers around the nation and across industries — such as Hollywood writers and actors, hotel staff and healthcare workers — who are on strike or are preparing to walk off their jobs. Fain reiterated to UAW members Thursday night that amid rising economic inequality, he looks at the auto workers’ strike as part of a larger battle between the haves and the have-nots.

    Michelle Kaminski, associate professor in the School of HR and Labor Relations at Michigan State University, said in an interview with MarketWatch that “when the union president says this is a generational strike, I really agree with him.”

    She added: “When I think about economic conditions, they are more favorable to the union now than [at any point] in the 30 years I’ve been in this field.” She said auto workers have “given up a lot” over the past couple of decades as the companies have needed both government help and worker concessions to survive.

    Kaminski also cited the auto makers’ profit and financial position; the pandemic’s effect on the labor force and how workers’ commitments to their jobs have changed; and increasing inflation as factors in why she sees the timing as key. “The union’s window of opportunity is right now,” she said.

    But CFRA analyst Garrett Nelson said in an interview with MarketWatch that the union “needs to be careful not to overplay their hand, as the balance sheets of the Detroit three are flush with cash and they can probably wait things out longer than the workers can.”

    Automakers could weather a strike, although anything longer than about two weeks is viewed as more impactful and detrimental to the companies. GM has about $39 billion in cash and equivalents, while Ford has around $51 billion, according to a recent Moody’s Investors Service report. Stellantis’s cash and equivalent pile towers over the others, at $69 billion.

    The union’s strike fund starts at $825 million, and striking workers will receive $500 a week. Fain said earlier this week that a targeted strike would help the union have flexibility and apply pressure to the companies as negotiations continue; analysts say it means the union wouldn’t deplete its strike fund so quickly.

    See: Why United Auto Workers are fighting to end a two-tier system for wages and benefits

    The effects of the strike could be far-reaching, both for the companies and workers who may not necessarily be on the picket lines.

    Nelson said the union’s strategy of targeting specific plants could turn into a supply-chain “logistical nightmare” for the auto makers. They will have to adjust deliveries of specific parts to their assembly plants, and the average vehicle is made of more than 30,000 parts.

    “The automotive supply chain is among the most complex of any industry,” Nelson said. “Not knowing which plants the UAW will target in advance could create a massive level of uncertainty and have a crippling impact on production. If the strike goes on for too long, we think auto suppliers could have to cut production and furlough workers at their plants, creating a ripple effect across the industry.”

    Major suppliers’ balance sheets are not as strong, and GM, Ford and Stellantis together generally account for between 25% and 45% of their net sales, so the degradation of the supply chain is a major risk in the event of a prolonged strike.

    The U.S. Chamber of Commerce this week warned about the potential widespread impact of a UAW strike. In a letter to President Joe Biden urging him to help the parties reach an agreement, the chamber said the “Detroit Three are critical to our economy.” More than 690,000 supplier jobs are tied to the auto makers, along with about 660,000 dealership jobs, the chamber said.

    “A strike will quickly impact large segments of the economy, leading to layoffs and potentially even bankruptcies of U.S. businesses,” the chamber said.

    See: Tesla may be the winner of Big Three-UAW labor talks

    Also: Would a United Auto Workers strike push up used-car prices?

    [ad_2]

    Source link

  • Stocks are trapped in a trading range. Something’s got to give.

    Stocks are trapped in a trading range. Something’s got to give.

    [ad_1]

    The U.S. stock market, as measured by the S&P 500 Index SPX, is trapped in a trading range, and volatility seems to be damping down considerably. The significant edges of the trading range are support at 4330 and resistance at 4540. Both of those levels were touched in the latter half of August. A breakout from this range should give the market some strong directional momentum. 

    Since Labor Day, prices have hunkered down into an even narrower range. Typically, the latter half of September through the early part of October…

    [ad_2]

    Source link