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American Express
delivered a fifth consecutive quarter of record revenue and all-time high earnings per share, but the group remains cautious on debt struggles among cardholders as it continued to build its reserves for credit losses.
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Bud Light sales are still falling, as the impact of a boycott against the beer continues to stick. But Morgan Stanley analysts on Thursday said that impact was already reflected into shares of its parent company, Anheuser-Busch InBev, and that AB-InBev’s global footprint and the falling costs of beer ingredients would help sales and margins up ahead even if struggles in the U.S. spill over into next year.
Morgan Stanley assumed coverage of AB-InBev
BUD,
with an overweight rating, a step up from its prior equal-weight rating. The firm bumped its price target on the stock higher, to $68.50 from $64. Shares of AB-InBev were up 0.4% on Thursday.
The analysts also said that AB-InBev’s second-quarter results, set for Aug. 2, could be a clarifying moment for investors.
“While investors are currently sitting on the sidelines, waiting for the company to fully quantify the impact of the Bud Light situation, we see upcoming H1 results as likely timing for such clarification,” the analysts said in a research note.
“We think ABI shares now price in the U.S. Bud Light challenges, which have stabilised, but not the gross margin recovery and de-leveraging upside into next year,” they added later.
The conservative-led boycott against Bud Light began in April, after the brand briefly partnered with Dylan Mulvaney, a trans influencer. That anti-trans anger has translated into weeks of sharp declines, generally above 20%, for Bud Light sales. Mulvaney said Bud Light never reached out to her, despite what she said was “more bullying and transphobia than I could have ever imagined” as a result of the partnership and calls for a boycott.
The fall-off has spread to some of other AB-InBev’s other beer brands, and benefited its rivals. Modelo Especial has recently dethroned Bud Light as the best-selling beer in the U.S.. Constellation Brands Inc.
STZ,
sells Modelo beer in the U.S., after a deal a decade ago to acquire Grupo Modelo’s U.S. beer business from AB-InBev.
Still, the Morgan Stanley analysts emphasized Anheuser-Busch’s worldwide reach, and said that even a 13.5% drop in U.S. yearly sales — broadly, where things stand in the U.S. now — would only mean a 4% drop for the company’s sales overall. And they said double-digit growth expected elsewhere, in regions like South America and the Asia-Pacific, would drive organic sales growth of 6% for the company overall in its fiscal 2023. They also said a “wind-back” on commodity costs and sales incentives to U.S. beer sellers would help margins up ahead.
Still, they didn’t expect much of a break for sales trends in the U.S. They said they expected the 13.5% drop in U.S. sales to ease to a 12% drop in AB-InBev’s fiscal 2024.
Overall, however, the analysts were upbeat on beer sales and profits for next year. Falling ingredient costs would help brewers overall. A pandemic-era jump in U.S. demand for spirits — or hard liquor like gin, Scotch and vodka — had now “normalized,” they said.
Shares of Anhueser-Busch InBev are down 1.4% so far this year. By comparison, the S&P 500 Index
SPX,
is up 18.9% over that period.
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Tesla Inc. late Wednesday reported second-quarter earnings and sales that topped Wall Street’s expectations and kept intact its 2023 goal of making about 1.8 million vehicles this year, but the stock headed lower as results didn’t quite match expectations of a blowout quarter.
Losses for the shares accelerated after Chief Executive Elon Musk warned investors to expect “slightly” lower production in the current quarter due to factories that need to undergo upgrades. At last check, Tesla shares were down 4.3% in after-hours trading.
Tesla
TSLA,
earned $2.7 billion, or 78 cents a share, in the quarter, compared with $2.3 billion, or 65 cents a share, in the year-ago period. Adjusted for one-time items, the EV maker earned 91 cents a share.
Revenue rose 47% to $24.9 billion.
Analysts polled by FactSet expected Tesla to report adjusted earnings of 80 cents a share on sales of $24.2 billion.
In a call with analysts after the results, Musk said demand for the Cybertruck, Tesla’s electric pickup expected to be available later this year, “is so off the hook you can’t even see the hook.”
Musk used the word “turbulent” to describe the global economic background, but said that he has “high confidence in the long-term value of Tesla.”
Tesla’s bottom-line beat was “fairly sizeable,” CFRA analyst Garrett Nelson said in an interview with MarketWatch. But “this was sort of an uneventful release with no change to prior 2023 volume guidance,” he said.
“The truth is that the bar had been set pretty high heading into this release given Tesla’s meteoric run-up so far in 2023,” Nelson said. Tesla shares have more than doubled thus far in the year.
Tesla’s gross margins, another perennial preoccupation for Tesla investors in the face of several price cuts this year, were worse than expected at 18.2%, compared with consensus around 18.8%, and 25% in the second quarter of 2022, he added.
During the call with analysts, Tesla Chief Financial Officer Zach Kirkhorn called the margin drop “modest.”
The factory upgrades will carry “some amount of factory idle cost,” but Tesla is working to minimize these costs as much as possible, Kirkhorn said.
Don’t miss: Cathie Wood’s ARK funds shed more Tesla and Coinbase shares, continue Twilio buying spree
Tesla delivered a “Goldilocks” second quarter, Wedbush analyst Dan Ives said in a note late Wednesday. Margins were better than feared despite the “aggressive” price cuts, he said.
Operating margins and revenue dropped to 9.6%, from operating margins of 11% in the first quarter.
Tesla called them “healthy” even with the price cuts the auto maker went for earlier in the year, and said the margins reflected “ongoing cost reduction efforts”; the production ramp in the Berlin, Germany, and Texas factories; and the “strong performance” of its energy and services businesses.
Tesla is focusing on “cost reduction, new product development that will enable future growth, investments in R&D, better vehicle financing options, continuous product improvement and generation of free cash flow,” executives said in a letter to shareholders accompanying results.
“The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high-potential projects,” the letter said.
Tesla earlier this month reported second-quarter deliveries, its proxy for sales, well above Wall Street expectations, sparking another rally for the stock. Tesla has gained 137% so far this year, compared with gains of around 19% for the S&P 500 index
SPX,
Related: Tesla, Rivian are the most shorted stocks in autos, but the trade is far from profitable
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https://www.barrons.com/articles/stock-market-movers-98396473
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By Dominic Chopping
Nokia on Friday lowered its full-year net sales guidance and narrowed its operating margin outlook amid a weaker demand picture in its network infrastructure and mobile networks businesses due to a tougher macroeconomic environment and as customers work through built-up inventory.
The Finnish telecommunications-equipment company now sees sales of between 23.2 billion euros and 24.6 billion euros ($26.05 billion-$27.62 billion) from EUR24.6 billion to EUR26.2 billion previously.
The comparable operating margin is seen at 11.5% to 13% from 11.5% to 14% previously.
“Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024–notably in North America,” Nokia said.
“There is also inventory normalization happening at customers after the supply chain challenges of the past two years.”
Ahead of the company’s second-quarter earnings on July 20, Nokia also reported preliminary net sales of around EUR5.7 billion for the three-month period and a comparable operating margin of around 11%, with operating profit boosted by EUR80 million related to catch-up payments in its technologies unit.
The company said it will continue to take measures to ensure it remains on track towards its long-term targets of growing faster than the market and delivering a comparable operating margin of at least 14%.
Write to Dominic Chopping at dominic.chopping@wsj.com
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For the first time in recent years, sales of electric vehicles didn’t grow as fast as market observers expected, creating what Barclays analysts characterized Wednesday as a “step back from EV euphoria” for companies that are not Tesla Inc. or BYD Co.
The analysts, led by Dan Levy, said that in 2020 and 2021, Wall Street was “willing to look past EV losses,” betting that demand was “unlimited.”
“We’ve now seen a market where demand is constrained, capital has been tighter, and there is less tolerance for EV related losses,” the analysts said in a note.
“Moreover, going a layer deeper, we find that while [Tesla
TSLA,
] and [China’s BYD
002594,
BYDDY,
] have continued to grow, … growth for the rest of the industry has been less robust in Europe and China,” they wrote.
Don’t miss: Tesla is looking at its best sales quarter ever
Global EV penetration volumes have tracked below expectations so far this year, at 13.5% through May, up 50 basis points, or 0.5%, from 2022 and “well below” estimates from BNEF of just under 18%. It is “likely marking the first time in recent years that EV penetration has disappointed,” the Barclays analysts said.
In comparison, penetration topped 16% for several months in the second half of 2022. While the second half of this year is likely to bring some improvement, it is possible that it will still fall short of expectations.
Aside from Tesla and BYD, growth has been modest, the analysts said. For Ford Motor Co.
F,
and General Motors Co.
GM,
there are “shades of softness in EV sales,” the Barclays analysts said.
There are concerns about weak U.S. EV sales and also reports of “sharply rising EV inventory,” the analysts said.
Citing data from Wards, Barclays pointed at EV inventory of 95,000 vehicles by the end of June, the highest ever, with the highest amount of stock for Ford’s electric Mustang Mach-E SUV, at about 16,000 vehicles in inventory, and Volkswagen’s ID.4, also an SUV, at 14,000 vehicles in inventory.
GM is not off the hook, either: Despite the company’s increase in EV sales and “robust” market-share gain, much of that came from its Chevy Bolt models, which are nearing the end of production, the analysts said.
GM announced in April it was phasing out the Bolt and the bigger Bolt EUV, underscoring the challenges in making a profit on EVs despite soaring new-vehicle prices and as several automakers throw all their weight toward a full transition to EVs.
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J. Sainsbury sees same-store sales rise 9.8% in first quarter, backs 2024 view
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Tesla Inc. delivered a record number of vehicles in the second quarter, beating market estimates after the electric-car maker increased discounts and incentives, the company reported Sunday. The news sent the stock up more than 6% in premarket trade Monday.
The Elon Musk-led electric vehicle manufacturer delivered 466,140 vehicles in the three months ended June 30 and produced 479,700 vehicles. The second quarter of 2023 marked the fifth period in a row when Tesla reported a higher level of vehicles produced compared to deliveries.
Analysts on average had expected Tesla to deliver 445,000 cars, according to analysts polled by Refinitiv. Tesla delivered 254,695 vehicles in the year-ago quarter.
“This was a massive delivery beat and will send the Tesla bears back into hibernation mode,” Wedbush analyst Dan Ives tweeted Sunday. “This was a trophy case quarter for Musk & Co.”
Deliveries are a carefully watched number by Tesla shareholders and are the closest approximation of sales disclosed by the company.
Tesla said total production rose 85.5% to nearly 480,000 vehicles in the three months ended June 30, from a year earlier.
The company delivered 446,915 Model 3 compact cars and Model Y sport-utility vehicle, as well as 19,225 of its Model S and Model X premium vehicles.
Tesla increased discounts for vehicles to a $1,600-to-$7,500 range and made all of its Model 3s eligible for full federal credits of $7,500 starting in June in the U.S.
Earlier this year, Tesla cut prices globally by as much as 20% after missing Wall Street delivery estimates for 2022.
Tesla is expected to achieve record sales yet again in China, its second-largest market after North America, despite competition from market leader BYD.
The company said it will post financial results for the second quarter after the market close on Wednesday, July 19.
Earlier this year, Ford Motor
F,
and General Motors
GM,
as well as fast-charging equipment makers, agreed to adopt Tesla’s North American Charging Standard (NACS).
Tesla
TSLA,
shares closed at $261.77 on Friday ahead of the second-quarter deliveries report, and are up more than 112% year to date.
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Tesla Inc. delivered a record number of vehicles in the second quarter, beating market estimates after the electric carmaker increased discounts and incentives, the company reported on Sunday.
The Elon Musk-led electric vehicle manufacturer delivered 466,140 vehicles in the three months ended June 30 and produced 479,700 vehicles. The second quarter of 2023 marked the fifth period in a row when Tesla reported a higher level of vehicles produced compared to deliveries.
Analysts on average had expected Tesla to deliver 445,000 cars, according to analysts polled by Refinitiv.
Tesla delivered 254,695 vehicles in the year-ago quarter.
Deliveries are a carefully watched number by Tesla shareholders and are the closest approximation of sales disclosed by the company.
Tesla said total production rose 85.5% to nearly 480,000 vehicles in the three months ended June 30, from a year earlier.
The company delivered 446,915 Model 3 compact cars and Model Y sport-utility vehicle, as well as 19,225 of its Model S and Model X premium vehicles.
Tesla increased discounts for vehicles to a $1,600-to-$7,500 range and made all of its Model 3s eligible for full federal credits of $7,500 starting in June in the United States.
Earlier this year, Tesla cut prices globally by as much as 20% after missing Wall Street delivery estimates for 2022.
Tesla is expected to achieve record sales yet again in China, its second-largest market after North America, despite competition from market leader BYD.
The company said it will post financial results for the second quarter after the market close on Wednesday, July 19, 2023.
Earlier this year Ford Motor
F,
and General Motors
GM,
as well as fast-charging equipment makers agreeing to adopt Tesla’s North American Charging Standard (NACS).
Tesla
TSLA,
shares closed at $261.77 on Friday ahead of the second-quarter deliveries report.
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https://www.barrons.com/articles/constellation-stock-price-earnings-bud-light-a7957686
Constellation Brands‘ earnings beat Wall Street’s expectations as the company reported strong beer sales for the latest quarter on Friday. The stock fell anyway.
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Are stores getting more desperate to sell sneakers? Fourth-quarter results from Nike Inc. on Thursday will probably provide part of the answer.
Even as its some of its basketball shoes still put up double-digit sales gains — like those named after NBA icons LeBron James, Luka Doncic and Giannis Antetokounmpo — the athletic-gear maker, like its rivals, has faced weaker consumer demand overall. With customers forced to spend more money on necessities over the past year, they’ve had less to spend on new shoes.
In March, Nike
NKE,
executives said that the demand backdrop remained “promotional” — one in which anyone selling sneakers and clothing was cutting prices more aggressively to attract customers. But ahead of Thursday’s results, some analysts also wondered whether the stalling demand has forced bigger changes to the way management thinks about its broader turn away from retailers — a core piece of its sales strategy.
Nike over recent years has embarked on a plan to rely less on shoe retailers for sales and more on sales made directly to customers through its own stores and online. But recently, it decided to start selling clothing again at Macy’s
M,
and shoes again at DSW, the shoe-store chain run by Designer Brands Inc.
DBI,
— this after ending partnerships with both retailers over the past two years.
The return to traditional retail has raised questions about whether Nike is looking to more aggressively clear product it’s had trouble selling, and whether management is re-evaluating the company’s go-it-alone sales strategy overall.
“The big question on our minds heading into [Nike’s] quarter is what is going on with the [direct-to-consumer] pivot?” Quo Vadis analyst John Zolidis said in a note on Monday. “Reopening Macy’s and DSW seems odd in context of previous dismissive statements about undifferentiated retail.”
He continued: “Further, neither of these retailers has a customer that correlates strongly with [Nike’s] highest-value segments. The easiest explanation is that [Nike] overestimated the dollars it could recapture from closed wholesale accounts and now has too much inventory it needs to clear.”
Earnings: Analysts polled by FactSet expect Nike to earn 68 cents a share, down from 90 cents in the same quarter a year ago. Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — expect earnings per share of 75 cents.
Revenue: Analysts polled by FactSet expect $12.58 billion in sales for Nike. Forecasts from Estimize call for sales of $12.72 billion.
Stock price: Nike’s stock is only up 1.3% over the past 12 months. Shares got hit in September, after company executives warned of further price-cutting from rivals due to weaker demand. The stock rebounded later but gave up some gains in May. The stock was up 2% on Monday.
Nike in March said demand for product sold at full pricing remained solid. Still, sneaker chain Foot Locker Inc.
FL,
recently cut its outlook. Lots of Vans shoes are running at a discount, one analyst said last month, as the skater-centric brand competes with casual fare from the likes of Adidas
ADS,
and others.
Other analysts were also wondering about Nike’s return to Macy’s and DSW. But not everyone believed the move was a sign of deeper problems.
“Investors are worried that this is a reversal in Nike’s shift from wholesale to [direct-to-consumer], but we don’t think the strategy is broken,” BofA analyst Lorraine Hutchinson said in a research note on Wednesday. “We expect to hear an explanation of these moves on the [conference] call rather than an about-face on its focus on reducing undifferentiated wholesale.”
Still, the company faced concerns about sales abroad. Zolidis also said markets were increasingly worried about growth in China, whose recovery from pandemic lockdowns has stumbled.
“Our recent conversations with companies in China suggest that trends are mixed,” Zolidis said. “The consumer is more value oriented, and job uncertainty is higher.”
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Rite Aid Corp. said Thursday that its fiscal first-quarter pharmacy sales got a boost from a new class of drug.
Pharmacy sales, which rose 3.4% from a year ago, were boosted by higher sales of Ozempic and other GLP-1 receptor agonists, which are used to treat Type 2 diabetes and obesity.
The higher sales did not translate into profit, however.
“As the cost of these drugs is also high, the impact of the increase in volume of these drugs on our gross profit dollars is minimal,” Rite Aid Chief Financial Officer Matthew Schroeder told analysts on the company’s earnings call, according to a FactSet transcript.
Still, the company
RAD,
cheered investors by raising its full-year revenue guidance due to the sales bump from Ozempic and other high-dollar GLP-1 drugs. It now expects revenue of $22.6 billion to $23 billion, ahead of the FactSet consensus of $22.3 billion.
Ozempic, Wegovy and Rybelsus, which are made by Novo Nordisk
NOVO.B,
NOVO.B,
and Mounjaro, which is made by Eli Lilly & Co.
LLY,
have become so popular in the U.S. that supplies have at times run short and the U.S. Food and Drug Administration has been forced to warn patients against using knockoff versions.
The drugs are administered by injection and mimic the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.
Ozempic, Rybelsus and Mounjaro have been approved by the Food and Drug Administration for treatment of Type 2 diabetes, while Wegovy is approved for people with obesity and for certain people with excess weight combined with weight-related medical problems.
Last year, more than 5 million prescriptions for Ozempic, Mounjaro, Rybelsus or Wegovy were written for weight management, up from 230,000 in 2019, according to data and analytics firm Komodo Health.
Obesity drugs could be a $54 billion market by 2030, up from $2.4 billion in 2022, Morgan Stanley said in a report last year. Reports of people who take GLP-1 drugs seeing improvements in addictive behaviors such as smoking and drinking have lately amplified interest in the medications.
For more, read: The dark side of the weight-loss-drug craze: eating disorders, medication shortages, dangerous knockoffs
Drug companies, including Lilly and Pfizer Inc.
PFE,
are now working to develop treatments in the form of pills that could be more convenient alternatives to the injectables.
See now: Weight-loss drugs in development aim to replace injections with pills
Rite Aid’s overall numbers surprised on the upside, as its loss was narrower than expected and revenue beat the consensus estimate.
For more, see: Rite Aid’s stock soars 7.5% after company surprises with earnings that are less bad than feared
Eleanor Laise contributed.
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Micron Technology Inc. shares rose in the extended session Wednesday after the memory-chip maker’s chief executive called the bottom on the sector, and quarterly results came in better than expected.
Micron
MU,
shares had jumped more than 5% after hours following the release of results, but by the end of the company’s conference call with analysts, the stock was up less than 2%. Shares finished Wednesday’s session with a 0.4% gain to close at $67.07, while the S&P 500 index
SPX,
declined less than 0.1%.
The Boise, Idaho-based company forecast an adjusted loss of $1.26 to $1.12 a share on revenue of $3.7 billion to $4.1 billion for the fourth quarter, while analysts surveyed by FactSet had estimated a loss of $1.07 a share on revenue of $3.88 billion for the fourth quarter, and a loss of $4.65 a share on revenue of $15.32 billion for the year.
Read: Snowflake stock rallies as ‘blizzard’ of AI product announcements make Wall Street happy
In the near term, Micron Chief Executive Sanjay Mehrotra told analysts on the call that while sales forecasts received a considerable boost from larger-than-expected AI sales, forecasts for PC, smartphone and standard server sales are looking worse than feared, and will eat into those gains. All told, however, the CEO told analysts that supply reductions are beginning to stabilize the market.
Micron Chief Financial Officer Mark Murphy said the company took about $400 million in inventory write-downs in the third quarter, contributing to negative gross margins of 16%, an improvement of 15 percentage points sequentially. When Micron reported its worst loss ever a quarter ago, the company had taken a $1.4 billion inventory charge. When Micron started flashing signs of negative margins earlier in the year, many analysts saw that as signs of a bottom on the horizon.
Read: Is Micron selling memory chips for less than they cost to make? That may mean the bottom is near.
Micron makes two types of memory chips: DRAM, or dynamic random access memory, the type of memory commonly used in PCs and servers; and NAND, the flash memory chips used in smaller devices like smartphones and USB drives. After prices for memory soared early in the COVID-19 pandemic, companies overbought large stores of chips to avoid shortages, creating a glut.
“As we have said before, AI servers have six to eight times the DRAM content of a regular server and three times the NAND content,” Mehrotra told analysts on the call. “In fact, some customers are deploying AI compute capability with substantially higher memory content.”
For the third quarter, Micron reported third-quarter loss of $1.9 billion, or $1.73 a share, versus net income of $2.63 billion, or $2.34 a share, in the year-ago period.
The adjusted loss, which excluded stock-based compensation expenses and other items, was $1.43 a share, versus net income of $2.59 a share in the year-ago period.
Revenue dropped to $3.75 billion from $8.64 billion in the year-ago quarter, as a two-year shortage of chips, triggered by the COVID pandemic, flipped quickly, but unevenly, into a glut around this time last year. Analysts surveyed by FactSet had forecast a loss of $1.61 a share on revenue of $3.65 billion.
“We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored,” Mehrotra had said in an earlier statement.
The CEO also called a recent order by the Chinese government to stop using Micron chips because of alleged serious, but unspecified, risks “a significant headwind that is impacting our outlook and slowing our recovery.”
On the call with analysts, Mehrotra said he expects to see a “record total addressable market in calendar 2025 along with a return to more normalized levels of profitability.”
Leading up to earnings, analysts had said that Micron is “at the bottom of this deep downturn,” but “China complicates the recovery plan.” For the year, Micron shares are up 34%, compared with the S&P 500’s 14% gain.
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Shares of Nvidia Corp. and Advanced Micro Devices Inc. slumped in the extended session Tuesday following a report that the Biden administration is considering a new ban on sales of AI chips to China.
Nvidia shares
NVDA,
A fell 3% after hours, following a 3.1% gain to close at $418.76, while AMD shares
AMD,
also fell 3%, after a 2.7% gain in the regular session to close at $110.39.
Late Tuesday, the Wall Street Journal reported the Commerce Department could further block sales of AI chips to China unless U.S. companies first obtain a special license.
The ban would follow upon similar actions last year that threatened $400 million in Nvidia sales, but the company found a workaround in supplying a version of products that avoided the ban.
Read: AMD launches new data-center AI chips, software to go up against Nvidia and Intel
Both Nvidia and AMD have launched new AI chips this year: Nvidia in March and AMD earlier in the month. Last year’s release of Open AI’s ChatGPT generative AI — with billions of dollars invested by Microsoft Corp.
MSFT,
— resulted in an explosion of interest in artificial-intelligence technology, prompting luminaries to herald the technology as the biggest thing in tech since … you name it.
Read: Bill Gates says AI is only the second revolutionary tech advancement in his lifetime
News of the possible ban happened to follow a claim earlier in the day from Baidu Inc.
BIDU,
on the Chinese search company’s blog, which said its Ernie 3.5 version AI outperformed ChatGPT’s earlier version “in comprehensive ability scores,” and its latest iteration, GPT-4, which was released in mid-March, “in several Chinese-language capabilities.”
Baidu’s claim appeared to be based upon performance metrics published in China Science Daily. On Wall Street, ADRs of Baidu were down 0.7% after hours, following a 3.1% gain to close at $143.90.
As of Tuesday’s close, Nvidia shares were up 187% in 2023, and AMD shares were up 70% for the year.
Read: Snowflake adds partnerships with Nvidia and Microsoft for AI double play
Shares of Super Micro Computer Inc.
SMCI,
which have benefited from AI, also declined 3% after hours, while shares of Intel Corp.
INTC,
which supplies chips to data centers, saw shares decline 1% after hours.
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Shopping online has just gotten safer.
The INFORM Consumers Act, which went into effect Tuesday, aims to limit the sales of stolen and counterfeit products on e-commerce platforms.
The measure, which requires e-commerce sites to verify and disclose information about their high-volume third-party sellers, was passed into law following a lobbying campaign to address counterfeit products after being left out of the bipartisan Chips and Science Act last year.
All online marketplaces, including eBay, Etsy, Poshmark and Amazon’s third-party sales platform, will now be required to collect information from high-volume sellers, defined as those selling 200 items or more totaling at least $5,000 over the previous 12 months. These third-party sellers must submit information such as a government-issued ID, a bank-account number, a working email address and phone number, and a taxpayer identification number.
Customers will also be able to find the verified contact information for bigger third-party sellers — those with sales of over $20,000 a year — and to get in touch with them outside of the e-commerce platform. In the past, consumers often had to engage within the platform operator in order to communicate with a seller.
Those bigger sellers will also have their full names and physical addresses listed on their product pages in addition to their contact information, according to the Federal Trade Commission’s business guide.
“This is a game changer,” said Teresa Murray, director of the consumer watchdog office at U.S. PIRG, a nonprofit that lobbies on behalf of the public interest. “For bad guys, stealing items has generally been the difficult part. Selling things online once you’ve stolen them is easy. We hope that with the INFORM Act, it’s not nearly as easy in the future.”
“‘The only people opposing this may be thieves.’”
The act goes into effect just weeks before Amazon Prime Day, when the world’s biggest e-commerce site rolls out discounts for Prime members. This year, Prime Day will be held over two days, on July 11 and 12.
Also see: Amazon sued by FTC, which alleges people were ‘tricked and trapped’ into Prime subscriptions
Several e-commerce platforms, including Amazon and eBay, supported the INFORM Consumers Act. TechNet, a national network of technology CEOs and senior executives representing what it calls the innovation economy, wrote to leaders in Congress last December, saying the law would improve consumer safety and increase transparency.
In a statement provided to MarketWatch, eBay
EBAY,
said it “fully supports transparency and is committed to a safe selling and buying experience for our customers. We were proud to support” the law “to protect consumers from bad actors who seek to misuse online marketplaces, while also ensuring important protections for sellers. We are fully prepared to comply with the new law.”
Etsy
ETSY,
said it “has long been supportive of the INFORM Act passing into law, as a balanced and thoughtful approach to make the ecommerce landscape safer for both consumers and sellers.” In a statement provided to MarketWatch, the company said, “We are taking appropriate steps to comply with the INFORM Act requirements.”
Amazon
AMZN,
and Poshmark, owned by South Korea–based Naver Corp.
035420,
did not immediately respond to MarketWatch requests for comment.
Some analysts, however, said the new law lacks stronger protections that were included the SHOP SAFE Act, an earlier bill that did not get passed by Congress. The INFORM Act, they noted, does not hold online platforms liable when a third party sells harmful counterfeit products or when the platform has not followed certain best practices.
“Notably, the legislation is supported by Amazon and other marketplaces as it’s seen as a watered-down bill that would head off more stringent legislation like the SHOP SAFE Act,” Ben Koltun, director of research at Beacon Policy Advisors, wrote in a note last year.
So how can consumers spot counterfeit or stolen items? A guide from PIRG has tips, such as keeping an eye out for products with suspiciously low prices or featuring misspellings or mislabeling or low-quality, photoshopped photos in their listings.
PIRG also cautions consumers about purchasing medications online. Always check the legitimacy of online pharmacies, it says.
“Many online marketplaces haven’t been doing enough to protect consumers from sellers who appear to be peddling stolen or counterfeit goods,” Murray said. “The only people opposing this [new law] may be thieves.”
Victor Reklaitis contributed.
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The summer haze settling over stocks doesn’t look ready to budge Thursday, with the S&P 500 index
SPX,
in the throes of its longest losing streak since May.
On the bright side, the index is looking at a 6% gain for the June quarter, whose end is just a few days away.
In other corners of the market, the quarter has been less forgiving. Consumer staples, those things you can’t live without, have lost over 1%, perhaps reflecting the tougher economic times we are living in. Within that sector, though, is beer and one name that has indeed had a quartarius horriblis.
Anheuser-Busch InBev’s
ABI,
BUD,
U.S.-listed shares are down about 15%, as Bud Light sales have tumbled following consumer backlash to a social-media campaign featuring trans activist Dylan Mulvaney in April.
But our call of the day from Deutsche Bank says it’s time to buy this unloved stock, even if those Bud Light sales never recover. A team of analysts led by Mitch Collett have upgraded Anheuser-Busch shares to buy from hold and lifted their price target to €60 euros from €59 euros (they didn’t offer an ADR price target).
Recent underperformance of the stock “implies a permanent reduction in ABI’s U.S. business. Our proprietary survey data suggests these headwinds are likely to fade even if we do not expect the U.S. business ever to fully recover from its current challenges,” said Collett.
The analysts pointed to recent Nielson data that showed ABI’s U.S. business currently down 12%, with Bud Light sales off 24% and the rest of its portfolio down 7%. But an analysis of distribution data shows ABI itself isn’t “losing shelf presence” as sales velocity is the primary driver of the decline, which bodes well if consumer sentiment improves, said Deutsche Bank.
Those declines are about a 12% headwind to ABI’s annual net income, which is in line with European underperformance seen by the stock, added Collett and the team.
Read: Bud Light dethroned as top-selling beer by Modelo, as boycott cuts into sales
Deutsche Bank conducted its own survey that showed 24% of Bud Light consumers are no longer buying that brand, with 18% buying less, but 21% buying more and 37% buying the same amount. Those findings are largely consistent with Nielson;s, said the analysts.
Deutsche Bank’s own survey also showed that 42% of Bud Light drinkers expect to be buying Bud Light again in three to six months, versus 29% who see that as unlikely. And 50% expect that battered beer’s reputation will recover in time, versus 30% who says it won’t. “We believe this bodes well for the brand, recapturing some of its lost share,” said Collett and the team.
Analysts at RBC Capital also recently pushed back on the selloff for the stock, saying the hit to the shares and forecasts for the stock are “excessive,” as they don’t see Bud Light’s troubles hurting AB InBev outside the U.S.. They said AB InBev is a “nerve-racking buying opportunity.”
Ahead of Thursday’s open, U.S.-listed Bud shares were up about 1.3%, tracking gains from its Belgian shares.
U.S. stock index futures
ES00,
NQ00,
are drifting lower, with bond yields
TMUBMUSD02Y,
TMUBMUSD10Y,
on the rise and oil prices
CL.1,
also weaker. The Norwegian krone
USDNOK,
is up 1.5% against the dollar after the country’s central bank hiked interest rates 50 basis points. Switzerland also hiked rates, but the Swiss franc is steady
USDCHF,
The British pound
GBPUSD,
is higher after the Bank of England also hiked interest rates by 50 basis points. The Turkish lira was falling slightly after the central bank, under new management, hiked interest rate to 15% from 8.5%, against forecasts for a hike to 20%.
China markets were closed for a holiday, with losses elsewhere, such as Japan
NIK,
and Australia
XJO,
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Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill kicks off at 10 a.m. Eastern. On Wednesday, he said higher interest rates should be expected , but didn’t offer any clues on timing. U.S. weekly jobless benefit claims and current account data are due at 8:30 a.,m. ET, with leading indicators also at 10 a.m., alongside a speech from Cleveland Fed President Loretta Mester. Richmond Fed President Tom Barkin will speak at 4:30 p.m.
The Bank of England will announce an interest-rate decision at 7 a.m. ET and after worse-than-expected inflation data on Wednesday, a 50 basis-point hike hasn’t been ruled out.
Darden Restaurants
DRI,
will report ahead of the open, with Smith & Wesson
SWBI,
due after the close.
Tesla stock
TSLA,
is down 2% in premarket trading on the heels of the EV maker’s worst loss in two months.
Joining recent actions by other big stakeholders cashing in on big gains for Nvidia
NVDA,
a board member just sold $51 million in stock.
A giant drilling machine is moving Stockholm toward an emissions-free future
These were the top searched tickers on MarketWatch as of 6 a.m. :
| Ticker | Security name |
|
TSLA, |
Tesla |
|
MULN, |
Mullen Automotive |
|
NVDA, |
Nvidia |
|
AMC, |
AMC Entertainment |
|
APE, |
AMC Entertainment preferred holdings |
|
NIO, |
Nio |
|
PLTR, |
Palantir Technologies |
|
MANU, |
Manchester United |
|
SPCE, |
Virgin Galactic Holdings |
|
AAPL, |
Apple |
Are Elon Musk and Mark Zuckerberg ready for a cage match?
It’s summertime. Let your kids get bored.
Tokyo streets now offer the chance to snuggle an alpaca
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The numbers: For the first time in nearly a year, home builders are upbeat about the housing market outlook.
The shortage of previously-owned sales is helping to buoy builders’ confidence.
With mortgage rates above 6%, many homeowners find little incentive to sell—nearly 92% have an outstanding mortgage with a rate below 6%, according to a recent survey conducted by Redfin
RDFN,
a brokerage and real estate listings company. And 23.5% of homeowners have a mortgage rate of less than 3%. Consequently, the number of new home listings has dropped by 22%, as compared with the same period a year ago, according to a Realtor.com housing trends report.
In turn, home builders are feeling good about their business. The National Association of Home Builders’ (NAHB) monthly confidence index rose 5 points to 55 in June, the trade group said Monday.
This is the sixth month in a row that sentiment has improved among builders. It is also the first time in 11 months that builder confidence has moved into positive territory of above 50.
The June reading of 55 was the strongest since July 2022. A year ago, the index stood at 67.
Key details: Builders were starting to pull back on sales incentives. The share of builders cutting prices to boost sales has dropped to 25% in June, from a peak of 36% in November 2022.
The typical builder was cutting prices by 7% in June, the NAHB said.
The three gauges that underpin the overall builder-confidence index were up.
Big picture: Due to pandemic-era monetary policies that depressed mortgage rates, the home buyers, real-estate agents, mortgage brokers and the rest of the industry are stuck trying to find solutions to a major supply crunch of homes.
Builders seem to be one of the few participants who have benefited from the supply crunch, given the nature of their business of new construction. The homebuilder ETF,
XHB,
is up 25% year-to-date.
What the NAHB said: “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year,” Robert Dietz, chief economist at the NAHB, wrote.
And with the “Federal Reserve nearing the end of its tightening cycle,” the statement read, it’s “good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.”
Markets were closed on Monday in observance of the Juneteenth holiday.
Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.
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By Dominic Chopping
STOCKHOLM–Sweden’s H&M Hennes & Mauritz on Thursday reported fiscal second-quarter sales that were slightly below expectations.
The fashion retailer said sales for the quarter ended May 31 increased by 6% on year to 57.62 billion Swedish kronor ($5.38 billion), while net sales in local currencies were “flattish”.
Analysts…
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