US FINANCIAL MARKET
Nasdaq 100 Up 1% as GDP Fuels ‘Soft Landing’ Calls: Markets Wrap – Bloomberg, 7/27/2023
- Stocks rose as data signaled the world’s largest economy remains strong despite the Federal Reserve’s aggressive tightening campaign, bolstering the case for a so-called soft landing.
- Major equity benchmarks gained as a report showed gross domestic product unexpectedly picked up steam in the second quarter, while US pending home sales unexpectedly rose in June.
- The S&P 500 rose 0.5%. The Nasdaq 100 rose 1.1%. The Dow Jones Industrial Average rose 0.2%.
- On Wednesday, Fed Chair Jerome Powell said his staff had ditched the recession forecast it put in place in March, when banking turmoil had raised fears about a potential credit crunch.
- The Nasdaq 100 climbed about 1% as a bullish forecast from Facebook parent Meta Platforms spurred an 7% rally in the shares.
- The S&P 500 was set for its highest since March 2022 while the Dow Jones Industrial Average advanced for a 14th straight session — on pace for a record winning run.
- A gauge of big banks rose even after US regulators unveiled plans for a 19% boost in capital requirements for the eight largest financial institutions.
- Two-year US yields, which are more sensitive to imminent Fed moves, rose six basis points to around 4.9%.
- The dollar halted a two-day decline.
- West Texas Intermediate oil hovered near $80 a barrel.
- European stocks held onto gains and the euro retreated after the region’s central bank raised rates and kept options open for the next meeting.
- Meantime, investors are still split about the outlook for the economy: 58% of respondents in JPMorgan Chase’s weekly survey expect a soft landing, while 42% are bracing for a recession.
- The Stoxx Europe 600 rose 1.3%.
- The Bloomberg Dollar Spot Index rose 0.5%.
- The yield on 10-year Treasuries advanced seven basis points to 3.94%.
- West Texas Intermediate crude rose 1.4% to $79.90 a barrel.
- Gold futures fell 1.3% to $1,983.30 an ounce.
Meta’s Improved Ad Sales Buy Time for Zuckerberg’s Metaverse – Bloomberg, 7/27/2023
- Meta Platforms said that a recovery in advertising will drive revenue growth at the fastest rate since 2021, helping Chief Executive Officer Mark Zuckerberg rekindle investor support for his longer-term ambitions.
- Meta reported revenue of $32 billion for the second quarter, beating analyst estimates of $31.1 billion.
- Zuckerberg and Li made sure to associate their plans to increase spending with improvements in the core business.
- That includes AI chatbots, “agents” and “coaches” that Zuckerberg teased on the call.
- AI “is going to both complement and touch and transform every single thing that we’re doing. And I’m really excited for it,” he said.
- Reels have been played more than 200 billion times on Instagram and Facebook, becoming more popular due to improvements in targeting each person’s feed with videos that will fit their interests, Meta said.
- Still, revenue from Reels is growing, reaching an annual sales rate of $10 billion, Zuckerberg said, up from $3 billion in the third quarter of 2022.
- In Wednesday’s report, Meta said Reality Labs, the division that makes metaverse tech, posted an operating loss of $3.7 billion.
- Even news that expenses will continue to climb over the next two years didn’t dampen the shares, which rose more than 7% in after-market trading following the earnings report.
- Meta’s revenue could grow as much as 20% in the current quarter, the company said Wednesday.
McDonald’s Grimace Shake Trend Pays Off for Burger Chain – Wall Street Journal, 7/27/2023
- The burger giant reported $6.5 billion in sales for the most recent quarter, exceeding analysts’ expectations of $6.3 billion.
- Quarterly revenue increased 14% from the prior-year period, the company said.
- A meal celebrating the “birthday” of the retro purple mascot last month helped drive McDonald’s U.S. same-store sales, up 10.3% in its second quarter from the same period last year.
- McDonald’s said menu price increases and more customer orders also helped boost its U.S. sales.
- The company reported digital sales in its six largest markets of around $8 billion for the quarter.
- The company reported a global same-store increase of 11.7% during the quarter compared with the same period last year.
- Earnings per share were $3.17 when adjusting for charges related to layoffs conducted by McDonald’s earlier this year and other one-time items.
- Analysts polled by FactSet expected $2.78 a share.
Mastercard earnings bring the latest signal of healthy spending – Market Watch, 7/27/2023
- Mastercard became the latest payments company to call out healthy spending levels as the financial-technology giant beat profit expectations for its latest quarter.
- Revenue rose to $6.3 billion from $5.5 billion, while analysts were anticipating $6.2 billion.
- Gross dollar volume rose 12% in the quarter on a local-currency basis, while cross-border volume was ahead 24%.
- Switched transactions increased by 17%.
- On an adjusted basis, Mastercard earned $2.89 a share, up from $2.56 a year earlier and ahead of the FactSet consensus, which was for $2.83.
Southwest Airlines to Revamp Flight Schedule as Consumer Travel Changes – Wall Street Journal, 7/27/2023
- Southwest Airlines plans to revamp its flight schedule next year to better reflect what it says are changing travel patterns as it reported the impact of rising labor costs on its second-quarter profit.
- The carrier reported record operating revenue of $7 billion during the second quarter.
- However, Chief Executive Bob Jordan said business travel’s recovery to prepandemic levels remains elusive, and the airline plans to revamp its flight schedule next year to adapt.
- Among the changes, Southwest will fly less on Tuesdays, pull back from some short-haul markets and trim early-morning and late-night flights, Jordan told CNBC.
- Business travel hasn’t fully bounced back.
- Southwest reported a profit of $683 million in the three months ended June 30, down about 10% from the same period a year earlier.
- The airline’s adjusted profit of $1.09 per diluted share was in line with analysts’ forecasts.
- Southwest said it expects the third quarter to bring another revenue record, but it said that revenue per seat flown a mile could be as much as 7% lower than in the same period in 2022.
Comcast Loses Broadband Customers, Benefits from ‘Super Mario’ Success – Wall Street Journal, 7/27/2023
- Comcast shed broadband customers in the second quarter and reported another steep loss tied to its Peacock streaming service, while its “The Super Mario Bros. Movie” boomed at the box office.
- The Philadelphia-based company said it lost 19,000 domestic broadband subscribers, making the June quarter only the second in its history in which Comcast’s base of core customers eroded.
- Those losses were less severe than some analysts had forecast.
- Revenue grew by 1.7% year-over-year to $30.5 billion in the second quarter, with most of that gain coming from its NBCUniversal media empire. Revenue for its cornerstone broadband business was flat.
- Net profit rose 25.1% year-over-year to nearly $4.25 billion, or $1.02 per share, helped by lower operating expenses in areas such as programming and marketing.
- The company reported $3.42 billion in free cash flow, up 8% from the second quarter of 2022.
- Comcast’s revenue growth was stronger than the $30.11 billion in revenue that analysts polled by FactSet expected, and its net profit was stronger than the $3.98 billion, or 90 cents per share, that Wall Street forecast.
- Revenue for Comcast’s connectivity and platforms segment—which includes the U.S.-based Xfinity business and its European Sky business—grew 0.1%, to $20.36 billion.
- Continued cord-cutting contributed to a loss of 543,000 domestic video customers.
Chipotle shares slide as sales fall short of Wall Street’s expectations – CNBC, 7/27/2023
- Chipotle Mexican Grill on Wednesday reported quarterly earnings that crushed expectations, but the burrito chain’s sales fell short.
- Earnings per share: $12.65 adjusted vs. $12.31 expected.
- Revenue: $2.51 billion vs. $2.53 billion expected.
- Restaurant-level operating margins expanded to 27.5% from 25.2% in the year-ago period.
- Avocado prices were lower than the second quarter of 2022, but higher prices for tortillas, dairy, beef and other ingredients put some pressure on profit.
- The company’s same-store sales grew 7.4%, falling shy of StreetAccount estimates of 7.5%.
- Digital sales accounted for 38% of the company’s food and beverage revenue this quarter.
- Chipotle opened 47 new locations, 40 of which included drive-thru lanes to pick up digital orders.
- Wall Street is anticipating same-store sales next quarter of 5.9%, according to StreetAccount.
ServiceNow Earnings Top Estimates. But the Stock is Lower. – Barron’s, 7/27/2023
- ServiceNow posted better-than-expected results for its latest quarter and lifted its full-year outlook.
- ServiceNow also unveiled two major additions to its suite of generative artificial intelligence tools, and announced an alliance with Nvidia and Accenture to help companies develop generative AI software.
- For the second quarter, ServiceNow posted revenue of $2.15 billion, up 23% from the year-ago quarter, and ahead of the Street consensus forecast as tracked by FactSet of $2.13 billion.
- Subscription revenue was $2.075 billion, up 25%, ahead of both the Street consensus forecast at $2.043 billion, and the company’s guidance range of $2.04 billion to $2.045 billion.
- Non-GAAP earnings were $2.37 a share, above the Street consensus forecast at $2.05 a share. Current remaining performance obligations at quarter-end were $7.2 billion, up 25%; Service Now’s guidance had called for the measure to increase 23%.
- For the September quarter, ServiceNow sees subscription revenue of $2.185 billion to $2.195 billion, above Street consensus at $2.144 billion.
- The company sees operating margin on an adjusted basis of 27%, edging consensus at 26.4%.
- The company also lifted its full-year subscription revenue forecast, projecting $8.58 billion to $8.6 billion, up from a previous estimate of $8.47 billion to $8.52 billion.
- ServiceNow inched up its full-year operating margin forecast to 26.5% from 26%.
Lam Research sales forecast beats estimates on AI boom – Reuters, 7/27/2023
- Chip-making tools supplier Lam Research forecast quarterly revenue above Wall Street estimates, as semiconductor makers scramble to meet a surge in demand fueled by rising adoption of artificial intelligence technology.
- “Advanced AI servers have significantly higher leading-edge logic, memory and storage content versus traditional servers, and every incremental 1% penetration of AI servers and data centers is expected to drive $1 billion to $1.5 billion of additional (chip equipment) investment,” Archer said on a conference call with analysts.
- Lam reported fourth-quarter revenue of $3.21 billion, lower than $4.64 billion a year ago but above market expectations of $3.13 billion.
- Excluding items, the company posted a profit of $5.97 per share, compared with estimates of $5.07.
- The company expects first-quarter revenue of $3.4 billion plus or minus $300 million, above expectations of $3.3 billion, according to IBES data from Refinitiv.
EBay’s higher investments weigh on profit forecast, shares fall – Reuters, 7/27/2023
- EBay forecast third-quarter profit below market expectations on Thursday as the e-commerce platform spent more to bolster categories such as auto parts, refurbished goods and collectibles, sending its shares down 4.5% after the bell.
- Revenue in the quarter ended June 30 was $2.54 billion, compared to expectations of $2.51 billion.
- Gross merchandise value, a key industry metric that denotes the total value of goods and services sold on the marketplace, fell 2%, to $18.2 billion in the second quarter.
- The company forecast third-quarter revenue in the range of $2.46 billion and $2.52 billion, compared to analysts’ average estimates of $2.47 billion.
- The company forecast third-quarter profit to be between 96 cents and $1.01 per share, compared to analysts’ estimates of $1.02, according to Refinitiv data.
AbbVie shares climb after quarterly results beat expectations – Market Watch, 7/27/2023
- AbbVie shares gained premarket on Thursday after the pharmaceutical giant reported stronger-than-expected revenue for the second quarter and raised its full-year guidance.
- Second quarter revenue came to $13.87 billion, versus $14.58 billion a year earlier, ahead of the FactSet consensus of $13.54 billion.
- Adjusted earnings per share came to $2.91, versus $3.37 a year earlier, beating the FactSet consensus of $2.83.
- Sales of blockbuster arthritis drug Humira totaled $4.01 billion in the quarter, topping the FactSet consensus of $3.95 billion.
- The company now expects full-year 2023 adjusted earnings per share in the range of $10.90 to $11.10, versus previous guidance of $10.57 to $10.97.
Honeywell stock dips after profit tops expectations but revenue comes up a bit shy – Market Watch, 7/27/2023
- Shares of Honeywell International slipped in premarket trading Thursday, after the aerospace and defense company reported second-quarter profit that topped expectations but revenue that came up a bit shy as continued strength in aerospace was offset by weakness in safety and productivity.
- Sales grew 2.2% to $9.15 billion, just below the FactSet consensus of $9.18 billion.
- Excluding nonrecurring items, adjusted earnings per share of $2.23 beat the FactSet consensus of $2.21.
- For 2023, the company nudged up its guidance ranges for adjusted EPS to $9.05 to $9.25 from $9.00 to $9.25 and for sales to $36.7 billion to $37.3 billion from $36.5 billion to $37.3 billion.
Bristol Myers stock takes a hit from earnings miss and lower outlook amid disappointing Revlimid sales – Market Watch, 7/27/2023
- Shares of Bristol Myers Squibb shed in premarket trading Thursday, after the drugmaker missed second-quarter earnings expectations and cut its full-year outlook, amid a more rapid than expected decline in sales of its cancer treatment Revlimid.
- Revenue fell 5.6% to $11.23 billion, below the FactSet consensus of $11.81 billion, as Revlimid sales dropped 41%.
- Excluding nonrecurring items, adjusted earnings per share of $1.75 missed the FactSet consensus of $1.98.
- For 2023, the company cut its guidance ranges for EPS to $7.35 to $7.65 from $7.95 to $8.25 and for revenue growth to a low single-digit percentage decline from an increase of about 2%.
- Revlimid sales are now expected to be about $5.5 billion, down from previous expectations of $6.5 billion.
Teradyne 2Q Revenue, Net Income Decline – Market Watch, 7/27/2023
- Teradyne posted a decline in revenue and net income in the latest quarter.
- Revenue declined 19% to $684.4 million from $840.8 million.
- Analysts polled by FactSet expected $656.9 million.
- Adjusted earnings were 79 cents a share, above analysts’ estimates of 66 cents.
- Teradyne guided for revenue between $650 million and $710 million and adjusted earnings between 61 cents a share and 81 cents a share, in line with analysts’ estimates.
Sunnova Misses Earnings and Sales Estimates – Barron’s, 7/27/2023
- Rooftop solar provider Sunnova Energy International released its second-quarter financial results after Wednesday’s close, missing Wall Street estimates sales and earnings estimates, sending shares lower.
- Sunnova reported a per-share loss of 76 cents and positive adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, of $28.1 million from sales of $166.4 million.
- Wall Street was looking for a per-share loss of 42 cents and adjusted EBITDA of $44.5 billion from sales of about $196 million.
- The company says it added about 39,000 new customers in the second quarter, up from 30,100 added in the first quarter.
- The company expects to generate about $245 million in adjusted EBITDA in 2023, while Wall Street currently projects about $233 million.
- For the full year, Sunnova now expects to add between 135,000 and 145,000 customers—up from April’s estimate which predicted somewhere between 125,000 and 135,000.
L3Harris Technologies 2Q Revenue Up 13%; Costs Weigh on Profit – Market Watch, 7/27/2023
- L3Harris Technologies posted higher second-quarter revenue on increased demand in all of its segments, while profit fell due to higher costs.
- Revenue rose 13%, to $4.69 billion, topping analyst estimates for $4.37 billion.
- Revenue increased 8% for integrated mission systems, 9% for space and airborne systems and 30% for communications systems.
- Adjusted for certain items, per-share earnings came in at $2.97.
- Analysts recently polled by FactSet expected $2.94 a share.
- The company said the cost of product sales and services rose to $3.48 billion from $2.91 billion a year earlier.
Netflix Reworks Microsoft Pact, Lowers Ad Prices in Bid for Growth – Wall Street Journal, 7/27/2023
- Netflix is restructuring its advertising partnership with Microsoft a year into their deal and lowering ad prices in a bid to jump-start that fledgling corner of its business.
- The streaming company launched a $6.99 a month ad-supported option for consumers last year.
- Microsoft won a competition to provide technology for the service and sell ads on Netflix’s behalf, in part because it offered to pay a “revenue guarantee,” pledging to deliver a large amount of money to Netflix.
- With the new ad tier gaining traction slowly, Netflix has had preliminary discussions to sell ads through other partners, in addition to Microsoft, people familiar with the matter said.
- Netflix is reworking its pact with Microsoft to reduce the revenue guarantee.
- Those terms are still being settled.
Bud Light Brewer Lays Off Hundreds of U.S. Workers – Wall Street Journal, 7/27/2023
- Anheuser-Busch laid off hundreds of workers at its U.S. offices after months of slumping sales at Bud Light.
- The world’s largest brewer, which also sells Stella Artois and Budweiser, on Wednesday said the cuts would affect less than 2% of its roughly 18,000 U.S. workforce.
- The layoffs won’t impact front-line workers such as brewery and warehouse staff, the company said.
US ECONOMY & POLITICS
US GDP Growth Accelerates to 2.4%, Blowing Past Estimates – Bloomberg, 7/27/2023
- US economic growth unexpectedly picked up steam in the second quarter thanks to resilience among consumers and businesses in the face of high interest rates.
- Gross domestic product rose at a 2.4% annualized rate after a 2% pace in the previous three months, the Commerce Department’s initial estimate showed Thursday.
- Consumer spending increased at a 1.6% pace, more than forecast, after surging at the start of the year.
- The Federal Reserve’s preferred underlying inflation metric advanced at a slower-than-expected 3.8% pace.
- The personal consumption expenditures price index grew at an 2.6% annualized pace in the April to June period, the smallest advance since the closing months of 2020.
- Excluding food and energy, the index rose at the slowest pace in more than two years. June data will be released Friday.
- The GDP data showed services spending rose at a 2.1% annualized rate, led by housing and utilities, health care and financial services.
- Outlays on goods increased at a 0.7% rate, after surging by the most in nearly two years in the prior period.
- Outlays for equipment surged at a 10.8% rate, the most in more than a year, after decreasing in the previous two quarters.
- Spending on intellectual property products also accelerated.
- Inflation-adjusted final sales to private domestic purchasers — a key gauge of underlying demand — rose 2.3% after a 3.2% at the start of the year. Those are the strongest back-to-back gains since 2021.
- Net exports subtracted 0.12 percentage point from GDP in the second quarter, while inventories added 0.14 point.
US Pending Home Sales Surprise With First Advance in Four Months – Bloomberg, 7/27/2023
- US pending home sales unexpectedly rose in June for the first time in four months, despite ongoing supply and financing challenges facing the resale market.
- The National Association of Realtors’ index of contract signings to purchase previously owned homes advanced 0.3% last month to 76.8, data out Thursday showed.
- The median estimate in a Bloomberg survey of economists called for a 0.5% drop.
- Sales rose in the Northeast and Midwest and fell in the South and the West.
- From a year earlier, US home purchases were down 14.8% on an unadjusted basis.
Fed Raises Interest Rates to 22-Year High, Leaves Door Open for More – Bloomberg, 7/27/2023
- The Federal Reserve resumed raising interest rates and Chair Jerome Powell left open the possibility of further hikes, which he emphasized will depend on incoming data that has recently signaled a resilient US economy.
- After pausing rate increases in June, policymakers lifted borrowing costs again at their policy meeting on Wednesday for the 11th time since March 2022 to curb inflation.
- The quarter percentage-point hike, a unanimous decision, boosted the target range for the Fed’s benchmark federal funds rate to 5.25% to 5.5%, the highest level in 22 years.
- While Powell pointed to encouraging signs that the Fed’s rate hikes are working to curb price pressures, he reiterated that policymakers have a long way to go to return inflation to their 2% goal.
- The Fed chief refused to be pinned down on when officials may hike again, citing a raft of economic reports due before the Fed’s next meeting in September, including two jobs reports, two reports on consumer-price inflation and data on employment costs.
Jobless claims drop to two-month low of 228,000, as labor market is still going strong – Market Watch, 7/27/2023
- The number of Americans who applied for unemployment benefits last week fell to a two-month low of 228,000, reaffirming that the U.S. job market remains quite strong.
- New jobless claims declined by 9,000 from 237,000 in the prior week, the government said.
- New jobless claims dropped in 29 of the 53 states and territories that report these figures to the federal government.
- The other 24 posted higher claims, with the biggest increases in just handful of states, including California, Georgia and South Carolina.
- The actual or unadjusted number of new jobless claims barely budged, slipping to 257,976 from 258,302 in the prior week.
- The number of people collecting unemployment benefits in the U.S., meanwhile, rose by 33,000 to 1.75 million.
Regulators unveil sweeping changes to capital rules for banks with $100 billion or more in assets – CNBC, 7/27/2023
- U.S. regulators on Thursday unveiled a sweeping set of proposed changes to banks’ capital requirements to address evolving international standards and the recent regional banking crisis.
- The changes, designed to boost the accuracy and consistency of regulation, will revise rules tied to risky activities including lending, trading, valuing derivatives and operational risk, according to a notice from the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
- The changes would also force banks to replace internal models for lending and operational risk with standardized requirements for all banks with at least $100 billion in assets.
- They would also be forced to use two methods to calculate the riskiness of their activities, then adhere to the higher of the two for capital purposes.
Justice Department and EPA Probe Telecom Companies Over Lead Cables – Wall Street Journal, 7/27/2023
- The Justice Department and Environmental Protection Agency are investigating the potential health and environmental risks stemming from a sprawling network of toxic lead-sheathed telecom cables across the U.S.
- The Justice Department’s civil inquiry, by the U.S. attorney’s office for the Southern District of New York, is in preliminary stages and focuses partly on whether telecom companies had knowledge of the potential risks to their workers and future environmental impact when they left behind the lead cables, according to a person familiar with the inquiry.
- The EPA’s enforcement office, using the agency’s authority under the “Superfund” law, on Wednesday directed AT&T and Verizon Communications to provide inspections, investigations and environmental sampling data, including future testing plans, about their lead cables and related lead infrastructure within 10 days.
- Under the EPA’s Superfund law, known as the Comprehensive Environmental Response, Compensation and Liability Act, the agency can compel or undertake major environmental cleanups in certain cases.
EUROPE & WORLD
ECB Hikes Rates Again While Keeping September Options Open – Bloomberg, 7/27/2023
- The European Central Bank lifted interest rates by another quarter-point while keeping options for the next meeting open as its unprecedented hiking campaign nears an end.
- A ninth straight increase since last July brought the deposit rate to 3.75% on Thursday — as economists expected.
- The lack of guidance for September’s decision means the ECB may raise again, or hold, depending on the strength of its conviction that inflation is headed back to the 2% goal.
- “Future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary,” the ECB said in a statement.
- “The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.”
- “The near-term economic outlook for the euro area has deteriorated owing largely to weaker domestic demand,” President Christine Lagarde told reporters in Frankfurt.
- “Over time, falling inflation rising incomes, and improving supply conditions should support the recovery.”
Microsoft Faces Mounting Scrutiny Over China-Linked Email Hack – Wall Street Journal, 7/27/2023
- Microsoft is attracting renewed scrutiny and accusations of negligent security over a hack that allowed China to spy on top Biden administration officials, as some security researchers say the breach may be worse than initially suspected.
- The Chinese hack, disclosed earlier this month, compromised the unclassified Microsoft email inboxes of senior State Department officials, including the U.S. ambassador to China, as well as Commerce Secretary Gina Raimondo and others, according to U.S. officials.
- Full details about the attack, including how it began, aren’t publicly known, but it has prompted a number of congressional inquiries.
- On Thursday a leading lawmaker on cybersecurity issues, Sen. Ron Wyden (D-Ore.), asked for three separate federal probes of Microsoft’s “negligent cybersecurity practices” that he said enabled a Chinese espionage campaign against the U.S. government.
Microsoft Faces European Antitrust Investigation Over Bundling of Teams Software – Wall Street Journal, 7/27/2023
- The European Union opened an antitrust investigation into whether Microsoft is abusing its dominant position by bundling its Teams videoconferencing app with its popular Office productivity software, marking the first formal EU probe of the software giant in more than a decade.
- The bloc’s executive body, the European Commission, said it is concerned that Microsoft may be giving Teams an unfair advantage by not allowing customers to choose whether access to the product is included when they subscribe to the company’s productivity software.
- Microsoft may also have limited interoperability between its productivity suites and other products that compete with Teams, the commission said.
- Microsoft said it respects the European Commission’s work on the case and takes its responsibilities very seriously.
In Need of Allies, Putin Courts African Leaders in St. Petersburg – Wall Street Journal, 7/27/2023
- At a high-profile meeting in St. Petersburg beginning Thursday with top officials from dozens of African nations, Russian President Vladimir Putin will be under pressure to reassure some of Russia’s closest allies that his war in Ukraine hasn’t compromised the Kremlin’s ability to provide military and political support to the continent.
- Putin will meet over the next two days with top officials from 49 African nations, according to the Kremlin—a summit that comes at a particularly delicate time for Russian-African relations.
- While Putin has looked to some African nations as crucial allies in the face of Western isolation, a recent threat to his leadership at home and his decision last week to withdraw from an international deal that facilitated grain exports from Ukraine could erode that relationship.
- Meanwhile, Moscow could struggle to retain its status as the biggest supplier of munitions to African nations given the enormous demands the Ukraine conflict is placing on the Russian arms industry.
North Korea Celebrates Major Holiday With Special Guests From China and Russia – Wall Street Journal, 7/27/2023
- North Korea welcomed senior officials from China and Russia to celebrate the anniversary of the end of armed conflict in the Korean War, the latest expression of the three countries’ tightening bonds in the face of increasing U.S. military presence in the region.
- Thursday marks the 70th anniversary of the truce that ended three years of fighting in the Korean War.
- North Korea was expected to hold a military parade, where it would likely flaunt the country’s largest nuclear missiles and latest weapons.
- As part of the celebrations, Kim, North Korea’s 39-year-old dictator, welcomed groups this week led by Russian Defense Minister Sergei Shoigu and a Chinese Politburo member, Li Hongzhong.
Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors – Wall Street Journal, 7/27/2023
- Weaker oil and natural-gas prices and softer demand for everything from chemicals to U.S. renewable power took a bite out of Shell’s second-quarter profit a year after the war in Ukraine supercharged commodity prices, fueling a record haul for Europe’s biggest energy company.
- Shell’s adjusted earnings for the quarter, which strip out certain commodity price adjustments and one-time charges, were $5.1 billion, missing tempered expectations.
- The result compared with a consensus forecast of $5.6 billion, based on a survey of 23 analysts compiled for Shell by an outside firm.
- Shell’s core integrated-gas unit, which includes its leading business selling liquefied natural gas, also fell short of analyst expectations.
- The division posted $2.5 billion in adjusted earnings, compared with $2.6 billion forecast by analysts.
- Still, the U.K.-based company on Thursday increased its dividend and said it would buy back $3 billion more in shares this quarter, reflecting new Chief Executive Wael Sawan’s quest to keep cash-thirsty investors happy amid energy-price drops and economic uncertainty.
- Shell said Thursday it aims to exceed that with at least $2.5 billion in buybacks in the fourth quarter, on top of the $3 billion this quarter.
Royal Caribbean Soars After Boosting Full-Year Profit Forecast – Bloomberg, 7/27/2023
- Royal Caribbean Cruises rose Thursday after raising its full year profit forecast to a level that significantly beat expectations, as demand for its cruises is increasing.
- The cruise operator said it now sees adjusted earnings per share of $6.00 to $6.20, up from its prior forecast of $4.40 to $4.80, and eclipsing the average analyst estimate of $4.73.
- “Demand for cruising and our brands is exceptionally strong and we have seen another step change in booking volumes and pricing, leading us to now expect double-digit net yield growth for the full year,” Royal Caribbean Chief Executive Officer Jason Liberty said in a statement.
- The company also added that consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2019 levels driven by greater participation at higher prices.
Samsung reports 95% drop in profit, but expects global demand to recover in second half of the year – CNBC, 7/27/2023
- Samsung Electronics posted a second-quarter profit drop Thursday as weak demand for memory chips persists.
- Revenue: 60.01 trillion Korean won (about $47.21 billion), vs. 60.8 trillion Korean won expected by analysts, according to Refinitiv consensus estimates.
- Operating profit: 0.67 trillion Korean won, vs. 0.6 trillion Korean won expected by the company.
- Samsung said that robust artificial intelligence demand led to more DRAM shipments than expected in the second quarter, compared with the first quarter.
- Both DRAM and NAND flash memory chips also saw “more limited price drops” which improved second-quarter performance, compared with the first quarter, Samsung said.
- Global shipments of smartphones are expected to decline 3.2% in 2023 to 1.17 billion units, according to global market intelligence firm International Data Corporation.
Centrica hikes dividend as profits at British Gas soar – CNBC, 7/27/2023
- Britain’s Centrica announced bumper returns for shareholders on Thursday after its first-half profits surged on an almost ten-fold increase at its British Gas supply business.
- The results come as millions of British households struggle to pay energy bills following a jump in prices due to Russia’s invasion of Ukraine, piling pressure on energy firms to help share the burden.
- Centrica has doubled its support package for struggling customers to 100 million pounds ($130 million), it added.
- The British Gas Energy supply division posted adjusted profits of 969 million pounds versus 98 million a year earlier.
- Profits at the Rough gas storage site rose to 251 million pounds from 76 million the year before, after the company last year reopened the site to help improve security of supplies.
- Overall, Centrica’s adjusted operating profit for the first six months of 2023 rose to 2.08 billion pounds from 1.34 billion pounds a year earlier.
TotalEnergies 2Q Profit Falls Short of Expectations – Wall Street Journal, 7/27/2023
- TotalEnergies posted a profit below analysts’ expectations in a second quarter marked by a softening oil and gas environment, and said it plans to buy back $2 billion worth of shares in the third quarter.
- Sales fell to $56.27 billion from $74.77 billion. Hydrocarbon production increased 2% on year to 2.47 million barrels of oil equivalent a day, in line with TotalEnergies’ forecast of around 2.5 million barrels of oil equivalent a day.
- Adjusted net profit—one of TotalEnergies’ most closely watched metrics by analysts and investors—plunged 49% to $4.96 billion.
- Analysts had forecast an adjusted net profit of $5.12 billion, according to FactSet.
- TotalEnergies said its board of directors had approved a second interim dividend of EUR0.74 a share, up 7.25% on year.
- For the year, TotalEnergies confirmed its guidance for net investments between $16 billion and $18 billion.
- For the current quarter, the group is forecasting hydrocarbon production of around 2.5 million barrels of oil equivalent a day.
- Union general George B. McClellan was put in command of the Army of the Potomac during the Civil War. – 1861
- Bugs Bunny made his debut in the cartoon A Wild Hare. – 1940
- An armistice was signed ending the Korean War. – 1953
- The House Judiciary Committee voted to impeach Richard Nixon for obstructing justice in the Watergate case. – 1974
- The Korean War Veterans Memorial was dedicated in Washington, DC. – 1995
- A pipe bomb exploded in an Atlanta park during the Olympic Games. – 1996
- Lance Armstrong won his fifth straight Tour de France, tying Miguel Indurain’s record. – 2003
- The 2012 Summer Olympics began in London. – 2012