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Sobering times for UK alcohol-free bars as many struggle to survive 2024-08-05 18:09:00+00:00 - We may be in the era of the “sober curious generation” but alcohol-free bars are struggling to survive. Although growing numbers of people are opting for alcohol-free beers and cocktails at home and in pubs, several exclusively dry bars in the UK and Ireland have closed over the past couple of years. The pop-up Love From, in Manchester, became the latest to shutter at the end of July, raising questions over the business viability of alcohol-free bars. It follows BrewDog’s decision to sell alcohol in its sober Shoreditch pub in London less than a year after opening, as well as the closure of Torstig in Brighton earlier this year and Virgin Mary in Dublin last spring, both of which blamed spiralling overheads and the cost of living crisis. But Karl Considine, the owner of Love From, said that although businesses were struggling, the alcohol-free movement was not going away. “Alcohol free is a trend right now and it’s something that’s quite topical, but also we are seeing behaviours change around that – people are looking for alternatives to socialising around alcohol,” he said. “It’s a new and emerging market, but all the data shows younger generations are drinking less and less compared to older people.” There are several alcohol-free bars still in operation in the UK including Derby’s Yada Collective, which runs events and wellbeing workshops, Liverpool’s The Brink Cafe, which is located in an addiction recovery centre and targeted at those overcoming addictions, and London’s Club Soda, which doubles as a bottle shop. View image in fullscreen The owner of a dry bar said the venues struggle with a lower rate of sale compared with that of pubs, where people drink more beverages over the course of an evening. Although Love From launched as a pop-up last October, Considine planned to turn it into a permanent bar. However, he ended it prematurely because of the challenges of running a business targeted at a niche audience during a “tough economic climate” in which consumers were spending less generally. Considine added that dry bars struggle with their lower rate of sale – a typical customer might sit enjoying a single alcohol-free cocktail with friends for a couple of hours then leave, compared with people in pubs consuming several pints over a few hours. “The economics are very different, when you’re running a venue with overheads attached it’s really difficult to make that balance,” he said, but added that the concept “seemed to really connect with a lot of people”, particularly during Dry January when “we were slammed every day”, with customers praising the high-quality cocktails and the business attracting more than 10,000 followers on Instagram. As such, Love From will continue to operate at festivals and events, and if it reopens in a permanent space it will probably focus more on events, which Considine said were the most successful nights for the business. “We’ll try to build a hook and pull around events that appeal to people, and the fact they’re alcohol free is almost secondary to that – this cool film club, but by the way the bar is booze free,” he said. Considine speculated that his business was “a tiny bit early”, contrasting the UK market with the popularity of dry bars in the US, in particular those that double as bottle shops or which serve popular functional drinks with adaptogens, such as CBD or 5-HTP, thought to relax and improve mood, or nootropics such as caffeine, L-theanine, and vitamins B6 and B12, all which can have an impact on cognitive function. Although all bars serve a growing range of non-alcohol beverages, Considine said the totally alcohol-free nature of Love From appealed to people who do not drink for religious reasons, with Manchester’s LGBTQ+ Muslims among the regular clientele. But he added that non-drinkers and drinkers alike welcomed the relaxed atmosphere, and enjoyed “a different experience that’s not centred on booze”.
Olympic boxer at center of gender dispute calls for end to 'bullying' of athletes 2024-08-05 17:56:00+00:00 - One of the two female boxers at the center of an Olympic gender controversy pleaded with the public to “avoid bullying all athletes” Sunday night. Algeria’s Imane Khelif, 25, made the plea in an interview with Algerian media as she and another female Olympic boxer, Lin Yu-ting of Taiwan, continue to face intense scrutiny and false accusations about their gender and eligibility to compete with women. “I address my message to all the people of the world to adhere to the Olympic principles, according to the Olympic Charter, and to avoid bullying all athletes, because this has a great impact and is capable of destroying people, killing people’s thinking and minds, and dividing people,” Khelif told the Algerian broadcaster SNTV in Arabic. Khelif and Lin have competed for years in women’s events, including at the pandemic-delayed Tokyo Olympics, and there is no indication that they identify as transgender or intersex, the latter referring to people born with sex characteristics that do not fit strictly into the male-female gender binary. The International Olympic Committee has fiercely defended Khelif and Lin, with its president describing the widespread incendiary online commentary as “hate speech.” “We have two boxers who were born as women, who have been raised as women, who have a passport as a woman, and who have competed for many years as women,” IOC President Thomas Bach said in a press conference Saturday. Khelif and Lin were cleared to compete in the women’s matches at the Paris Olympics, but their genders were called into question after reports surfaced that they had been disqualified by the Russian-led International Boxing Association from last year’s Women’s World Boxing Championships. The association alleged that the women failed to pass unspecified gender tests that found they had male chromosomes. Khelif previously called her 2023 disqualification a “conspiracy” and has recently denounced the allegations about her gender again, telling reporters Saturday: “I want to tell the entire world that I am a female.” “This is the question I ask myself, why is this happening until now?” she told SNTV. “I will not care about that because the important thing for me is to focus on my goal, which is the Olympics.” Lin thanked her fans for their support in recent days. On Sunday, IOC spokesperson Mark Adams called the International Boxing Association's eligibility tests “flawed” and ”not legitimate.” The association’s decision to disqualify the boxers last year also came shortly after Khelif defeated the competition’s only Russian boxer and broke the woman’s winning-streak. The International Boxing Association, whose president is Umar Kremlev of Russia, reportedly an acquaintance of President Vladimir Putin, has had its legitimacy scrutinized in recent years. Last year, the IOC stopped recognizing the association after it found years of financial and ethical impropriety. USA Boxing also cut ties with it last year, citing the “ongoing failures of IBA leadership.” The International Boxing Association reaffirmed its decision to disqualify Khelif and Lin from last year’s competition last week, saying in a statement the pair also failed similar eligibility tests at its Women’s World Boxing Championships in Istanbul in 2022. On Monday, the association held a press conference to address the controversy but offered few additional details to back its concerns about the boxers’ genders. Its officials did not explain why they allowed Khelif and Lin to compete in the 2023 competition if they failed eligibility tests in 2022. After Khelif’s first win in Paris last week, frequent critics of transgender rights, including Elon Musk and the "Harry Potter" author J.K. Rowling, quickly took the opportunity to weigh in. “A young female boxer has just had everything she’s worked and trained for snatched away because you allowed a male to get in the ring with her,” Rowling wrote last week, reposting a video of an IOC official speaking about the organization’s mental health and safeguarding initiatives. Leading politicians in the West, including former President Donald Trump, Italian Prime Minister Giorgia Meloni and Sen. Marco Rubio, R-Fla., also chimed in. “I will keep men out of women’s sports!” Trump wrote on his social media site, Truth Social, in all caps. Others have come to the pair’s defense and warned of the broader harm the scrutiny and incendiary remarks could have. Nikki Hiltz, a nonbinary American runner participating in this Olympics, attributed the criticisms to transphobia. “Transphobia is going crazyyyy at these Olympics,” Hiltz wrote in an Instagram story. “Anti-trans rhetoric is anti-woman. These people aren’t ‘protecting women’s sports,’ they are enforcing rigid gender norms and anyone who doesn’t fit perfectly into those norms is targeted and vilified.” Lin won her quarterfinal fight against Bulgarian Svetlana Staneva in a unanimous decision Sunday, securing an Olympic medal. She will fight Turkey’s Esra Yıldız Kahraman on Wednesday with the winner advancing to the women’s 57-kilogram gold medal round Saturday. (In Olympic boxing, there are no third-place matches, so two bronze medals are awarded to the semifinal losers.) Khelif also clinched an Olympic medal Saturday after defeating Hungarian Anna Luca Hamori in a unanimous decision. She will compete against Janjaem Suwannapheng of Thailand on Tuesday, with the winner advancing to the women’s 66-kilogram gold medal round Saturday. “God willing, this crisis will be crowned with a gold medal, and that would be the best response,” Khelif told SNTV.
Get ready for a long and messy August in the stock markets | Nils Pratley 2024-08-05 17:46:00+00:00 - Choose the culprit behind the sudden sell-off in stock markets but a common theme in all top contenders is complacency. In the first case, it is the US Federal Reserve that stands accused, in the eyes of the market, of being asleep to the risk of a recession in the US. Friday’s weak jobs numbers intensified the worry that policymakers have waited too long to cut interest rates. Even if a US recession in the next year remains unlikely in the eyes of most economists (a 25% possibility, says Goldman Sachs, upping its forecast from 15%), it’s the difference from previous expectations that moves markets. At the start of 2024, virtually nobody was talking about a US recession; now it is a plausible outcome to be priced into models. The second example of complacency is the super, soaraway performance of the US technology sector. From early 2023 until mid-2024, the likes of Nvidia went upwards in a straight line, more or less. Sceptics who said that it all felt a little bubbly, and pointed to parallels with the late 1990s bubble in dotcom stocks, were ignored in the stampede. But we’re now at a point where boring questions are being asked about when the vast sums of capital being invested in the AI revolution will earn a meaningful return. Given how far valuations have risen (even after the post-June mini-correction), it is impossible to say what a rethink might mean for short-term tech valuations. Momentum can work in both directions. Then there is the special contribution to complacency from Japan, where the Nikkei 225 index fell a spectacular 12% on Monday. A modest rise in interest rates in Japan last week (from an extremely low level) has upset a favourite market game of borrowing in yen to buy high-yielding assets elsewhere. The yen has risen by 10% against the dollar in less than a month, which is a huge shift. The scale of Japan-related moves on Monday carried the whiff of leveraged bets getting scorched on a grand scale. From that unlovely mix of market-moving factors, the US outlook is by far the most important. The Japanese carry trade has burned speculators many times in the past without causing wider damage. As for the AI revolution, investors in Nvidia are still sitting on a 100% capital gain this year, so should not be blind to the risk that it may be a case of too much, too soon. But nothing destroys stock market returns in all corners of the market quite like a recession. The good news, of a sort, is that a one in four chance of a US downturn, if the forecast is roughly correct, still represents decent odds of a gentle-ish landing. But the less clear part – and the element that will guarantee a twitchy summer as every piece of economic data is suddenly given extra importance – is waiting for the US Fed to act to cut rates, as bond markets are now in effect demanding. An emergency cut in interest rates feels highly unlikely, as things currently stand. Last week’s job report was bad, but Monday’s US services sector report pointed in the opposite direction by showing a strengthening in business activity and new orders. Thus plan A for the Fed will surely be to wait until its next scheduled meeting in mid-September. Anything else would be an admission of a mistake. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion But September suddenly feels a long way off. The S&P 500 index, despite it all, is still up about 10% this year, which leaves plenty of room for further wild days if investors decide the Fed has made a terrible error and the recession odds are worsening. August could be a long month.
JPMorgan Chase is opening more small-town branches in middle America 2024-08-05 17:37:00+00:00 - Three years ago, JPMorgan Chase became the first bank with a branch in all 48 contiguous states. Now, the firm is expanding, with the aim of reaching more Americans in smaller cities and towns. JPMorgan recently announced a new goal within its multibillion-dollar branch expansion plan that ensures coverage is within an “accessible drive time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for Chairman and CEO Jamie Dimon as he embarks on his 14th annual bus tour Monday. Dimon’s first stop is in Iowa, where the bank plans to open 25 more branches by 2030. “From promoting community development to helping small businesses and teaching financial management skills and tools, we strive to extend the full force of the firm to all of the communities we serve,” Dimon said in a statement. He will also travel to Minnesota, Nebraska, Missouri, Kansas and Arkansas this week. Across those six states, the bank has plans to open more than 125 new branches, according to Jennifer Roberts, CEO of Chase Consumer Banking. “We’re still at very low single-digit branch share, and we know that in order for us to really optimize our investment in these communities, we need to be at a higher branch share,” Roberts said in an interview with CNBC. Roberts is traveling alongside Dimon across the Midwest for the bus tour. Roberts said the goal is to reach “optimal branch share,” which in some newer markets amounts to “more than double” current levels. At the bank’s investor day in May, Roberts said that the firm was targeting 15% deposit share and that extending the reach of bank branches is a key part of that strategy. She said 80 of the firm’s 220 basis points of deposit-share gain between 2019 and 2023 were from branches less than a decade old. In other words, almost 40% of those deposit share gains can be linked to investments in new physical branches. In expanding its brick-and-mortar footprint, JPMorgan is bucking the broader banking industry trend of shuttering branches. Higher-for-longer interest rates have created industrywide headwinds due to funding costs, and banks have opted to reduce their branch footprint to offset some of the macro pressures. In the first quarter, the U.S. banking industry recorded 229 net branch closings, compared with just 59 in the previous quarter, according to S&P Global Market Intelligence data. Wells Fargo and Bank of America closed the highest net number of branches, while JPMorgan was the most active net opener. According to FDIC research collated by KBW, growth in bank branches peaked right before the financial crisis, in 2007. KBW said this was due, in part, to banks assessing their own efficiencies and shuttering underperforming locations, as well as technological advances that allowed for online banking and remote deposit capture. This secular reckoning was exacerbated during the pandemic, when banks reported little change to operating capacity even when physical branches were closed temporarily, the report said. But JPMorgan, the nation’s largest lender, raked in a record $50 billion in profit in 2023 — the most ever for a U.S. bank. As a result, the firm is in a unique position to spend on brick-and-mortar, while others are opting to be more prudent. When it comes to prioritizing locations for new branches, Roberts said it’s a “balance of art and science.” She said the bank looks at factors such as population growth, the number of small businesses in the community, whether there is a new corporate headquarters, a new suburb being built, or new roadways. And even in smaller cities, foot traffic is a critical ingredient. “I always joke and say, if there’s a Chick-fil-A there, we want to be there, too,” Roberts said. “Because Chick-fil-A’s, no matter where they go, are always successful and busy.”
Wife of jailed Azeri banker forfeits house near Harrods and Ascot golf club 2024-08-05 17:04:00+00:00 - A mansion in Knightsbridge and a golf club in Ascot owned by the wife of the jailed Azeri banker Jahangir Hajiyev have been forfeited to the British state as part of a settlement worth an estimated £18.5m to taxpayers. The National Crime Agency (NCA) said the luxury properties were obtained by Hajiyev as a “direct result of large-scale fraud and embezzlement, false accounting and money laundering” linked to the looting of a state-owned bank in Azerbaijan. The assets, which the NCA said were funnelled through offshore jurisdictions including Guernsey and the British Virgin Islands, were the first to be subject to “unexplained wealth orders” (UWOs) introduced in 2017. Crime agencies can use UWOs – which have previously been called “McMafia” laws after a BBC drama – to trace potentially corruptly obtained assets. The NCA said it had seized the properties after a lengthy court battle over a UWO imposed on Hajiyev’s wife, Zamira Hajiyeva. A trustee will auction off the assets, which have been estimated to have a combined value of £26.5m in previous court hearings. The government will get 70% of the proceeds, minus the NCA’s costs, with the remainder restored to Hajiyeva under the terms of a settlement agreement. The actual amount recovered will depend on what the assets are sold for. In 2018, Hajiyeva lost a court battle to prevent herself from being named as “Mrs A”, the controller of offshore companies that housed the assets. She also lost a subsequent appeal against the UWO in the supreme court. Hajiyeva, whose £1.6m-a-year shopping trips to Harrods were revealed in court, is one of several family members whom the authorities claimed Hajiyev had used to siphon money out of his home country, Azerbaijan. The family has denied the allegations. On Thursday, the NCA said it had seized two assets understood to be the 170-acre Mill Ride Golf Club in Ascot, Berkshire, and a five-bedroom home on Walton Street in Knightsbridge, London, 100 yards from the doors of Harrods department store. View image in fullscreen Mill Ride Golf Club in Ascot has been forfeited. Photograph: Mill Ride Hajiyev was convicted in 2016 of multiple offences relating to his tenure as chairman of state-owned International Bank of Azerbaijan (IBA), including abuse of office, fraud and embezzlement. In 2019, he was also convicted of embezzlement from the Moscow subsidiary of the IBA. He is now serving a 16-year jail sentence in Baku, the capital of Azerbaijan. The NCA said it had identified “numerous” examples of funds from the IBA being routed by an associate of Hajiyev’s through multiple accounts in ways consistent with money laundering. It said funds were moved through a network of accounts in multiple jurisdictions known for financial secrecy, including the British Virgin Islands, Guernsey, St Kitts and Nevis, Panama, Cyprus and Luxembourg. The funds were then used to buy luxury assets for the family, the NCA said, with no reasonable explanation provided to the agency for where the money had come from. A “significant” proportion was traced directly to loan agreements or promissory notes – effectively IOUs – used to conceal the theft of money from the IBA. The NCA applied in March 2021 for a property-freezing order over the golf club and home. skip past newsletter promotion Sign up to First Edition Free daily newsletter Our morning email breaks down the key stories of the day, telling you what’s happening and why it matters Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The agency made no finding in relation to Hajiyeva’s knowledge of how the properties were paid for. Her spending habits were revealed in 2018 after the Guardian and other media won a legal case forcing the publication of her shopping sprees. It was revealed that she spent more than £16m in Harrods alone between 2006 and 2016. She appeared to treat the department store as her corner shop, spending £24,000 on tea and coffee, £10,000 on fruit and vegetables and £32,000 on Godiva chocolates. She also spent £4.9m on Boucheron and Cartier jewellery and £300,000 on the French couture label Celine. A further £251,000 was spent in the toy department and tens of thousands on Disney princess experiences at the Bibbidi Bobbidi Boutique. View image in fullscreen Jahangir Hajiyev is former chairman of the International Bank of Azerbaijan. Photograph: Bloomberg/Getty Hajiyeva denies any wrongdoing and her lawyers have said the case against her husband was politically motivated. Tim Quarrelle, branch commander for asset denial at the NCA, said: “NCA officers worked tirelessly to track the complex movement of these funds across the international banking system, through shell companies in multiple jurisdictions, in order to ascertain their source.” “This result comes almost six-and-a-half years after we served Mrs Hajiyeva with the first unexplained wealth order ever granted, and highlights our commitment to using all the tools at our disposal to combat the flow of illicit money into, and through, the UK.” Lawyers for Hajiyeva said: “The settlement involved no finding of fact by the court about our client’s knowledge or state of mind, still less involvement, in relation to these properties.” They said Hajiyeva had settled the proceedings because it had been “impossible to defend them” due to the inability to obtain documents that were “potentially crucial to the case” from her husband during his incarceration in Azerbaijan. They said Hajiyeva and her lawyers had been denied access to her husband in prison.
CrowdStrike says it isn't to blame for Delta's flight cancellations after July outage 2024-08-05 17:03:00+00:00 - CrowdStrike on Sunday said Delta Air Lines had rejected on-site help during last month’s massive outage that sparked thousands of flight cancellations. Delta CEO Ed Bastian told CNBC’s “Squawk Box” last week that the mass cancellations following the outage, which occurred at one of the busiest times of the year, cost the company about $500 million, including customer compensation. The airline has “no choice” but to seek damages, he said. Bastian told staff on Friday that the airline had informed CrowdStrike and Microsoft that the company was “planning to pursue legal claims” to recover its losses stemming from the outage and that it had hired law firm Boies Schiller Flexner. In response, Michael Carlinsky, CrowdStrike’s lawyer and co-managing partner at Quinn Emanuel Urquhart & Sullivan, wrote to Delta’s lawyer David Boies on Sunday that Delta’s litigation threats “contributed to a misleading narrative that CrowdStrike is responsible for Delta’s IT decisions and response to the outage.” He said CrowdStrike CEO George Kurtz reached out to Bastian to “offer onsite assistance, but received no response.” Delta canceled more than 5,000 flights between the July 19 outage, caused by a botched software update, through July 25, more than its rivals. CrowdStrike shares have lost more than 36% of their value since the outages affected millions of computers running the company’s software atop Microsoft’s Windows operating system. The outage hit industries from banking to health care to air travel. “Should Delta pursue this path, Delta will have to explain to the public, its shareholders, and ultimately a jury why CrowdStrike took responsibility for its actions—swiftly, transparently, and constructively—while Delta did not,” Carlinsky’s letter said. He said Delta would have to preserve a series of documents, including those describing its information-technology infrastructure, IT business continuity plans and its handling of outages over the past five years. CrowdStrike’s contractual liability is capped in the single-digit millions, the letter said. Delta did not comment on the letter on Sunday night. In a separate statement, CrowdStrike said it hopes “Delta will agree to work cooperatively to find a resolution.” “We did everything we could to take care of our customers over that time frame,” Bastian said in an interview Wednesday on CNBC’s “Squawk Box.” “If you’re going to be having access, priority access, to the Delta ecosystem in terms of technology, you’ve got to test this stuff. You can’t come into a mission critical 24/7 operation and tell us we have a bug. It doesn’t work.” CrowdStrike vowed to release future software updates in stages in a preliminary post-incident report. On July 30, CrowdStrike shareholders filed a suit against the company in a Texas federal court and sought damages for declines in their investments. CrowdStrike reports fiscal second-quarter results Aug. 28. A Microsoft spokesperson did not immediately respond to CNBC’s request for comment.
Shares in New York and London tumble on fears of US recession 2024-08-05 16:56:00+00:00 - Shares on Wall Street and in London have fallen heavily amid a global stock market rout triggered by fears of a recession in the US. The tech-focused Nasdaq index dropped by 6% as trading in New York opened on Monday, while the broader S&P 500 index fell by 4.2% in a sell-off triggered by weak US jobs data. The Dow Jones industrial average lost more than 1,100 points, a 2.8% decline. Japan’s benchmark stock index, the Nikkei 225, suffered its biggest decline for nearly four decades. It was down by 12%, the biggest single-day fall since the Black Monday crash of 1987. Other stock indices around the world were lower as investors dumped riskier assets. South Korea’s Kospi fell by 9%, Germany’s Dax was down 2%, and share indices in Australia, Hong Kong and China also fell heavily. London’s FTSE 100 ended the day 166.5 points down at 8,008, its lowest close since April, and down more than 2% across the day. Investors are concerned that the Federal Reserve may have left it too late to try to support the world’s biggest economy, with fears of the ripple effect from a US recession shaking economies around the world. A much-anticipated report on Friday showed the US economy added just 114,000 jobs last month, well down from June and far fewer than expected, while the jobless rate rose to the highest level since October 2021. Weak factory data last week also added to concern about a recession less than 100 days from the US presidential election. The investment bank Goldman Sachs said in a note to clients that the chances of a US recession had risen from 15% to 25%. However, its economists, led by Jan Hatzius, said “we continue to see recession risk as limited” because there were no big financial imbalances. Nevertheless, investors bought up assets perceived as safer. The yield on 10-year US bonds fell 10 basis points to 3.68%, the lowest since June 2023, as prices for government bonds around the world jumped. Jim Reid, the global head of macro research at Deutsche Bank, said there had been “astonishing moves” in share prices, and “markets are melting down in Asia”. “Markets were on edge before Friday but a weak payrolls has really escalated a profound move across the globe,” he added. However, he said the US jobs numbers may have been affected by Hurricane Beryl, and that the dramatic market moves could have been exacerbated by volatility in August, with many investors on holiday. “It’s like the market has added up two plus two and made nine,” he said. Austan Goolsbee, the president of the Chicago Fed, one of 12 banks that make up the US Federal Reserve, told CNBC the US economy did not appear to be entering recession, even though Friday’s jobs data was worse than expected. Yet investors did not appear to take that message to heart. The Vix, Wall Street’s “fear gauge”, soared to its highest level since the coronavirus pandemic. The index, a measure of stock market volatility, rose to 65 points before sliding back to an 80% gain for the day. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Some of the biggest losers were the tech companies that had been buoyed in recent months by the hype around artificial intelligence. Investors began to question whether the rally could continue even before the poor economic data. Tech valuations dropped further. The US chip designer Nvidia briefly became the world’s most valuable listed company in June but it fell 10% on Monday to hit its lowest since May, 28% lower than its peak. Apple, Amazon and the Facebook owner Meta shed more than 4%. In Asian trading, the chip company TSMC and Samsung lost 10%. In London the biggest faller was THG, which sells retail technology to brands and runs online shops. In Tokyo, the Nikkei 225 has fallen heavily for three consecutive trading sessions, and it is down by a quarter from its record high just a month ago. Last week the Bank of Japan signalled the end of more than a decade of monetary stimulus, adding to the pressure on Japanese stocks. The yen rose sharply by 2.6% against the US dollar as investors reacted to the prospect of higher interest rates in Japan and lower across the Pacific. The dollar fell by 0.8% against a trade-weighted basket of currencies. Bitcoin also slumped by 16% as traders ditched the cryptocurrency, which is often seen as a speculative asset that has been bolstered by low interest rates.
Thousands of users have reported online brokerage outages as stocks tumbled. 2024-08-05 16:38:38.046000+00:00 - Online stock trading platforms, including Fidelity Investments and Charles Schwab, said users had trouble logging into their accounts on Monday morning, preventing some investors from making trades amid a panic sell-off that reverberated around the world. More than 15,000 Schwab clients, as well as 3,700 users of Fidelity and 2,800 of Vanguard, had complained about access issues by midmorning, according to Downdetector, a website that tracks outages. Account holders at the popular trading platforms E-Trade and Robinhood also reported issues. Some Schwab clients had trouble logging onto its platforms because of an unspecified technical issue, the trading platform confirmed in a post on X. Complaints dipped significantly by late morning as the brokerages started to restore access. By noon, there were fewer than 500 complaints from Schwab users, Downdetector reported, based on its own data and user reports on social media. In response to complaints from customers on X, Fidelity posted around 11 a.m. that the issue had been resolved.
Financial markets around the globe are falling. Here’s what to know about how we got here 2024-08-05 16:37:58+00:00 - NEW YORK (AP) — Markets on Wall Street and around the world are in a mini-panic. Worried about a slowing U.S. economy, investors sent the market in Japan to its worst day in decades and have sliced billions in market value off some of the world’s biggest technology companies. They’ve turned a relatively calm year in markets on its head. For most of the year, investors worldwide drove stock markets higher, convinced that central banks were successfully, if haltingly, getting inflation under control, and buoyed by a healthy U.S. economy and the promise of artificial intelligence. That confidence has taken a hit the past few days. Weak readings on the job market, manufacturing and construction last week sparked worries about a U.S. economic slowdown and criticism that the Federal Reserve waited too long to cut rates. Meanwhile, the Bank of Japan raised rates, causing turmoil in Japan’s markets. On Monday, the Nikkei plunged more than 12%, its worst drop since 1987. Investors are now listening to warnings that Apple, Nvidia and other Big Tech stocks have gotten too expensive. On Friday, the tech-heavy Nasdaq composite went into a correction, which is a 10% decline from its most recent high. It dropped an additional 3,4% Monday. Traders in the U.S. are betting the Federal Reserve will lower rates by half a percentage point in September instead of the usual quarter point. Some are calling for an emergency rate cut. The heaviest selling has been in small companies that make most if not all their sales and profits in the U.S. Prices for oil and other commodities fell because of the economic worries. However, there are opposing voices saying the sell-off is a good thing because stock prices had risen too high. For individual investors, it’s not time for rash decisions, but a moment to make sure their investments are properly diversified, experts say. Here’s a look at what’s driving the turbulence in markets: Inflation and central banks Starting in 2022, the Fed rapidly raised interest rates to combat a spike in inflation. It’s maintained its key rate at 5.4% for about a year. As part of its inflation fight, the Fed also aimed to cool down a red-hot labor market. Investors thought the Fed and other central banks were on track, even though inflation remained somewhat above their targets — in the Fed’s case, 2%. The European Central Bank and the Bank of England cut rates once and the Fed signaled it was prepared to start cutting rates in September. Anxiety over the U.S. economy Despite some signs of cooling, the U.S. economy kept chugging along even with higher rates, outpacing Europe and Asia. Then came last week’s economic reports. Weak reports on manufacturing and construction were followed by the government’s monthly report on the job market, which showed a significant slowdown in hiring by U.S. employers. Worries that the Fed may have kept the brakes on the economy too long spread through the markets. Big Tech swoons A handful of Big Tech stocks drove the market’s double-digit gains into July. But their momentum turned last month on worries investors had taken their prices too high and expectations for their profit gains had grown too difficult to meet -- a notion that gained credence when the group’s latest earnings reports were mostly underwhelming. Apple fell more than 5% Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker. Nvidia lost more than $420 billion in market value Thursday through Monday. Overall, the tech sector of the S&P 500 was the biggest drag on the market Monday. Japan’s slump The Nikkei suffered its worst two-day decline ever, dropping 18.2% on Friday and Monday combined. One catalyst for the outsized move has been an interest rate hike by the Bank of Japan last week. The BoJ’s rate increase affected what are known as carry trades. That’s when investors borrow money from a country with low interest rates and a relatively weak currency, like Japan, and invest those funds in places that will yield a high return. The higher interest rates, plus a stronger Japanese yen, may have forced investors to sell stocks to repay those loans. What should investors do? The prevailing wisdom is: Hold steady. Experts and analysts encourage taking a long view, especially for investors concerned about retirement savings,. “More often than not, panic selling on a red day is generally a great way to lose more money than you save,” said Jacob Channel, senior economist for LendingTree, who reminds investors that markets have recovered from worse sell-offs than the current one. So, don’t load up on bitcoin? As of 4 p.m. Monday, the price of the world’s largest cryptocurrency was just above $54,000 — down from nearly $68,000 one week ago, per data from CoinMarketCap. While bitcoin did serve as a safe haven of sorts during the worst of the pandemic, it mostly acts like any another risky asset that investors steer clear from during market downturns. Sell-offs are normal Greg McBride, financial analyst for Bankrate, points out that a 10% pullback in markets happens on average once every 12 months. The S&P 500 is down about 8.5% from its recent high. Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, says investors should wait to see how the recent turbulence plays out. “It remains to be seen whether this recent weakness in the labor market is the canary in the coal mine (in which case the selling is justified) or if it is just a temporary cooling of the job market (in which case this will prove to be another buying opportunity),” he wrote in a note to clients Monday. __ Cora Lewis and Wyatte Grantham-Philips in New York contributed to this report.
Elon Musk sues OpenAI again, alleging ‘deceit of Shakespearean proportions’ 2024-08-05 16:36:00+00:00 - Elon Musk is once again suing OpenAI and its chief executive, Sam Altman, resurrecting a legal battle against his former partners with a case that now claims they manipulated him into co-founding the artificial intelligence company. Months after abruptly withdrawing a similar lawsuit without explanation, Musk filed a new lawsuit on Monday in a northern California federal court. OpenAI denied the allegations in a statement to the Guardian, pointing to its previous blogposts about Musk’s initial lawsuit earlier this year. Musk’s latest complaint claims the case is a “textbook tale of altruism versus greed”, repeating allegations in his previous suit that his former co-founders in OpenAI betrayed him by turning the company from a non-profit into a largely for-profit enterprise. “The perfidy and deceit is of Shakespearean proportions,” it states. Musk’s lawyer, Marc Toberoff, claimed the new lawsuit held vast differences from the case earlier this year. The latest complaint “holds defendants accountable for intentional misrepresentations to Musk and the public, and seeks the disgorgement of their ill-gotten gains on a grand scale”, he said. The lawsuit renews a legal battle between Musk, the world’s richest man and one of its most influential tech leaders, and Altman, who has become the face of the generative AI boom in recent years and a prominent industry figure himself. The two co-founded OpenAI in 2015 before Musk left the company over an internal power struggle several years later. As Altman’s power grew, their relationship turned increasingly acrimonious. Musk’s new lawsuit centers around a similar claim to the one he filed in February, arguing that Altman, his other co-founder Greg Brockman and OpenAI broke what he calls the “founding agreement” to develop artificial intelligence for the betterment of humanity. The company breached that agreement as it pivoted towards a partnership with Microsoft and became largely for-profit, Musk alleges, threatening humanity with reckless advancement of AI. OpenAI and Altman vehemently pushed back against Musk’s original allegations, casting him as a bitter and petty ex-partner who was jealous of the company’s success after he left. In a March blogpost following the initial suit, Altman and other OpenAI executives published emails claiming to show that Musk always supported a shift toward for-profit status and stated: “We’re sad that it’s come to this with someone whom we’ve deeply admired.” “As we said about Elon’s initial legal filing, which was subsequently withdrawn, Elon’s prior emails continue to speak for themselves,” an OpenAI spokesperson told the Guardian in response to the new lawsuit. The new complaint contains additional allegations that OpenAI broke federal racketeering laws, Musk’s lawyer told the New York Times, and is “a much more forceful lawsuit” than the previous dropped suit. It also alleges that Altman and his associates participated in “numerous acts of wire fraud” through accepting financial contributions from Musk. skip past newsletter promotion Sign up to TechScape Free weekly newsletter Alex Hern's weekly dive in to how technology is shaping our lives Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion “After Musk lent his name to the venture, invested significant time, tens of millions of dollars in seed capital and recruited top AI scientists for OpenAI Inc, Musk and the non-profit’s namesake objective were betrayed by Altman and his accomplices,” the suit states. Musk’s original case against Altman and OpenAI wound through California courts for weeks and included his lawyers successfully petitioning for a change of judge, but they pulled the suit without comment one day before a San Francisco superior court judge was set to hear Altman and OpenAI’s case for dismissal. Musk also founded his own rival AI company last year, called xAI, and has pursued building a similar chatbot to OpenAI’s ChatGPT. Musk’s chatbot has failed to gain the popularity or partnerships with big tech companies that ChatGPT has achieved, however, and faced backlash for spreading misinformation. Five US secretaries of state announced on Monday that they planned to send a letter to Musk demanding changes to the chatbot after it promoted falsehoods about the 2024 presidential election.
Arm Holdings: Does the 42% Drop Signal an AI Buying Opportunity? 2024-08-05 16:28:00+00:00 - ARM Today ARM ARM $110.45 -3.00 (-2.64%) 52-Week Range $46.50 ▼ $188.75 P/E Ratio 129.27 Price Target $118.80 Add to Watchlist Arm Holdings NASDAQ: ARM stock plummeted on its fiscal Q1 2025 earnings results as investors were treated to a nasty dose of reality concerning the artificial intelligence (AI) boom. The company designs, develops, and licenses semiconductor architectures. It doesn’t manufacture or produce chips. Instead, it collects licensing fees and royalties on its architectures and IPs. This makes it the ultimate asset-light business. Get ARM alerts: Sign Up Hot Expectations Face Cold Reality The rollout of its ARMv9 architecture came with lofty expectations, enabling devices to perform artificial intelligence (AI) on the edge. Rather than sending queries to a central server, AI applications would process directly in the device. This sent shares up to $188.75 on July 9, 2024, as investors let their imaginations run wild about the potential upside. Unfortunately, shares have plunged over 42% in less than a month as the promise of outsized growth may have been over-assumed. On the other hand, this could be an overreaction presenting a buying opportunity. Arm's results were very strong. However, the market was overzealous in its valuation, with shares trading over 90x fiscal full-year 2025 EPS estimates. Arm Holdings operates in the computer and technology sector, competing with chip makers like Intel Co. NASDAQ: INTC, Samsung Electronics OTCMKTS: SSNLF, and Texas Instruments Inc. NASDAQ: TXN. Arm Holdings Dominates with a 99% Market Share of Mobile Chips When thinking about market-dominant companies, names like Taiwan Semiconductor Manufacturing Co. Ltd. NYSE: TSM, with a 62% market share of the global foundry market, or NVIDIA Co. NASDAQ: NVDA, with a 94% market share of AI chips, come to mind. ASML Holdings has over a 90% market share of the ultraviolet (UV) lithography market. However, these companies pale in comparison to the 99% market share dominance in mobile chips that Arm Holdings commands. Arm’s legacy architecture makes CPUs extremely energy efficient compared to x86 architecture. Mobile devices like smartphones rely on optimizing the limited battery power. Arm’s next-generation v9 architecture enables edge AI with its power-efficient compute platform, which requires even more power to operate and, thus, better energy efficiency. ARM Stock Triggers a Head and Shoulders Breakdown The daily candlestick chart for ARM illustrates a head and shoulders breakdown pattern. This pattern is comprised of three peaks. The left shoulder peaked at $177.31 and pulled back to the neckline at $149.50. The head has the highest peak at $188.75, and it is pulled back to the neckline at $152.22. The right shoulder is the final peak at $172.36, which triggered the breakdown through the neckline. The neckline breakdown occurred when ARM fell under $154.30 on July 26, 2024, ahead of its July 31, 2024, earnings release. The fiscal Q1 2025 results accelerated the selling, causing shares to plunge another 21% in the following days. The daily relative strength index (RSI) has plunged to the 31-band. Pullback support levels are at $102.09, $94.00, $85.61, and $77.71. Arm Holdings Q1 2025 Earnings Results Were Great, But Royalty Revenues Lagged The company reported fiscal Q1 2025 EPS of 40 cents, beating consensus estimates by 6 cents. Revenues surged 39.1% YoY to $939 million, beating $905.52 consensus estimates. License revenues surged 72% YoY to $472 million, but royalty revenues were up just 17% YoY. Licensing fees are the upfront payment that all customers pay, followed by royalties for each chip they produce. The royalty payments are the recurring element that analysts were underwhelmed by as they are the most important figures in the long term. One-Two Punch to the Gut on Horrible Intel Earnings Report Arm Holdings shares tumbled 15.7% following its earnings results. However, a sizeable earnings miss and guidance cut from Intel Co. NASDAQ: INTC caused further selling in the chip sector, adding another 6% loss to Arm shares. The positive sentiment in AI and the semiconductors took a 180-degree turn as investors signaled their anger that the lofty expectations for the AI boom may have been overstated. A Buying Opportunity Emerges for Patient Investors Driven by ARMv9 However, the jump in licensing revenues almost assures that royalty revenue will rise as its chip company customers produce more chips using ARM architecture. It’s also important to note that its ARMv9 architecture pays nearly double the royalty rate of its legacy architectures. In other words, this may be a case of short-term pain for long-term gain. It can take months to several years to go from licensing payment to royalty collection due to the complexity of the chip design. Arm shares have fallen from trading at 92x 2025 EPS targets to 69x. ARMv9 adoption continues to accelerate, accounting for 25% of royalty revenue, up from 20% in the previous quarter. Arm licensed ARMv9 to Alphabet Inc. NASDAQ: GOOGL Google’s Axion Processor and Amazon.com Inc. NASDAQ: AMZN AWS Graviton4 and enables Edge AI for Microsoft Co. NASDAQ: MSFT Windows Copilot. Arm Takes a Conservative Approach to Guidance Arm Holdings provided in-line guidance for fiscal Q2 2025 EPS of 23 cents to 27 cents versus 27 cents consensus estimates. Revenues for Q2 2025 are expected to be between $780 million and $830 million. It reaffirmed the full-year 2025 EPS of $1.45 to $1.65 versus $1.57 consensus estimates. Full-year 2025 revenues are expected to be between $3.8 billion and $4.1 billion versus $3.99 billion. Arm Holdings CEO Rene Hass commented, “Now our long-term growth drivers remain consistent. Every chip being designed today requires a CPU and these are being designed with Arm in mind with our strong tie into all the world's software. Now, that has driven significant royalty revenue growth. More value per chip, v9 up to 25% now royalty revenue overall, that's up 20% from the previous quarter. More importantly, our smartphone royalty revenue was up 50% year-on-year. That's against a single-digit increase in units.” Arm Holdings analyst ratings and price targets are at MarketBeat. There are 27 analyst ratings on ARM stock, comprised of 15 Buys, 10 Holds, and two Sells. Before you consider ARM, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and ARM wasn't on the list. While ARM currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Frontier Airlines pilot arrested at Houston airport, forcing flight’s cancellation 2024-08-05 16:17:43+00:00 - HOUSTON (AP) — A Frontier Airlines flight that had been set to go from Houston to the Dallas area last week got canceled not because of weather, but because one of its pilots got arrested. The pilot, Seymour Walker, was arrested by officers around 4 p.m. Thursday before passengers began to board the plane at Bush Intercontinental Airport, according to Houston police. Walker was taken “into custody without incident,” Houston police said. Walker, 45, was wanted on an assault-family violence arrest warrant that had been issued by the Dallas Fort Worth International Airport Department of Public Safety. It was not immediately known if Walker was still in custody Monday. The Dallas Fort Worth International Airport Department of Public Safety did not immediately reply to an open records request seeking comment. Walker could not immediately be reached for comment. In a statement, Frontier Airlines confirmed the pilot’s arrest and that it was not related to the airlines’ or the pilot’s performance of his job duties. A replacement for the pilot was not immediately available, forcing the flight’s cancellation, Frontier Airlines said. “Impacted customers were offered the option of a full refund, credit or re-accommodation on the next available Frontier flight, later that evening. Passengers were also provided a $100 flight voucher, and overnight hotel accommodations as needed,” the airline said.
Harris expected to announce her VP pick Tuesday ahead of their Philadelphia rally 2024-08-05 16:12:00+00:00 - WASHINGTON — Vice President Kamala Harris is expected to reveal her vice presidential pick Tuesday, ahead of their first rally together in Philadelphia in the evening, according to two sources familiar with the plan. These people cautioned that the timing of the announcement is still subject to change based on when Harris makes her final decision or whether there’s a media leak that impacts the current plan. The rollout Tuesday will likely look similar to past major announcements, including digital video and social media components, as well as a fundraising appeal, these sources said. The Harris campaign will also disseminate various text messages to its supporters throughout the day, as has been a common practice in the past around big moments. The exact details are still being hammered out. The highly anticipated decision comes after Harris met in person Sunday with three of the contenders who have been under consideration as her vice presidential pick — Pennsylvania Gov. Josh Shapiro, Arizona Sen. Mark Kelly and Minnesota Gov. Tim Walz — a source familiar with the meetings said. Other candidates who have been on the vetting list include Illinois Gov. JB Pritzker, Kentucky Gov. Andy Beshear and Transportation Secretary Pete Buttigieg. Former Attorney General Eric Holder, who led the vetting process for Harris' campaign as part of his role as senior counsel at Covington and Burling LLP, was seen at the vice president's residence at the Naval Observatory on Saturday and Sunday. Two sources familiar with Harris’ thinking said she needs and wants to find someone who will be comfortable following the lead of a woman and particularly a Black and Indian woman. That running mate will need to be comfortable taking on tasks they may not like (like how Harris took on the root causes of migration) and will need to be comfortable being in Harris' shadow as her running mate. Harris’ team is aware that she got this nomination in an unconventional way and allies want whoever she chooses to be loyal and not seek to undermine her position now or come 2028. A source familiar with the campaign’s thinking said the campaign is particularly interested in someone who will appeal to demographics and the voters that Biden would have brought to the table including older white voters and suburban women. Aides to Harris also would like the running mate to appeal specifically to white men who don’t like Trump but who may question whether they want to vote for a Black and South Asian woman. “Let’s just face it. There’s a lot of sexist, racist white dudes out there in America who don’t like Trump, but just need a little extra validation,” the person said. “And, bringing one of the people mentioned onto the ticket helps validate her among those constituents.” Another source said: “She needs a middle aged or maybe even slightly older white guy who’s got experience, and who brings credentials in a different way. Someone who gives moderate Republican voters a place to go, like the Haley voters that are like, ‘God JD Vance is terrifying and Trump is horrifying, but I wasn’t really sure that Biden could do the job and I’m not sure that she can do the job.” The Tuesday night rally was expected to kick off a five-day, seven-state battleground state tour with Harris and her running mate. A planned event in Savannah, Georgia, scheduled for Friday is being postponed due to Tropical Storm Debby, two campaign officials said. On Friday, Harris secured a majority of support as part of a virtual roll call from Democratic National Committee delegates needed to win the party’s nomination for president. Democrats are set to kick off their national convention in Chicago beginning Aug. 19.
Texas Roadhouse Stampedes On EPS Beat as Comp Sales Surge 9.3% 2024-08-05 16:05:00+00:00 - Texas Roadhouse Today TXRH Texas Roadhouse $161.99 -4.14 (-2.49%) 52-Week Range $91.06 ▼ $177.72 Dividend Yield 1.51% P/E Ratio 32.79 Price Target $169.86 Add to Watchlist Casual dining restaurant operator Texas Roadhouse Inc. NASDAQ: TXRH is an anomaly among dine-in restaurants. It continues to post impressive results, as evidenced by its solid Q2 2024 earnings report. The steakhouse-style restaurant chain continues to impress with its consistent growth metrics. Particularly outstanding is its 9.3% YoY same-store sales (SSS) growth in its latest quarter. This metric alone outshines some of the most well-known restaurant chains in the country. Texas Roadhouse operates in the consumer discretionary sector and competes with restaurant operators Darden Restaurants Inc. NYSE: DRI, Brinker’s International Inc. NYSE: EAT, and Bloomin’ Brands Inc. NASDAQ: BLMN. Get Texas Roadhouse alerts: Sign Up Texas Roadhouse Is Truly an Anomaly Texas Roadhouse prides itself on its fresh, made-from-scratch sides and sauces, including bacon bits, croutons, and dressings. Its iconic buns are baked fresh every five minutes and served with honey cinnamon butter. Its hand-cut steaks are always fresh and never frozen, cut by an in-house butcher. It has all the makings of an expensive premium steakhouse without the expensive décor and furnishings. As customers walk into the restaurant, they can see the meat on display and actually pick which steaks they want for their meal. It's a testament to how well management operates this chain, separating itself from the pack even among steakhouses. Texas Roadhouse is a rare anomaly of premium food served at a value. It's like Michael Porter's Theory of Competitive Advantage morphed into one strategy where a premium product is sold under a low-cost distribution strategy. Same-Store Sales Growth Is the Barometer For Restaurant Operators The metrics speak for themselves. Same-store sales, also referred to as comparable sales, are data that gauge how well a restaurant is growing. Chipotle Mexican Grill Inc. NYSE: CMG is the king of the mountain among fast casual dining restaurants, with a whopping 11.3% SSS growth in its latest quarter. Sweetgreen Inc. NYSE: SG impressed analysts with its 5% SSS growth in its Q1 2024 report. CAVA Group Inc. NYSE: CAVA was only able to squeeze out 2.3% SSS growth in its recent quarter. Among casual dine-in restaurants, Texas Roadhouse is the king of the mountain, with 9.3% SSS growth in Q2 2024. This is compared to the world's largest restaurant operator, Darden Restaurants, which posted 4% SSS growth in its recent quarter. Olive Garden posted SSS growth down 1.5%. Longhorn Steakhouse posted only 4% SSS growth, while Bloomin Brands-owned Outback Steakhouse saw SSS fall 1.2% in Q1 2024. Even premium fine dining establishment Fleming’s Prime Steakhouse & Wine Bar saw SSS fall 2%. TXRH Stock is Forming a Bullish Megaphone Pattern The daily candlestick chart for TXRH is forming a rare bullish pattern called a megaphone. This pattern forms from an upper trendline resistance comprised of higher highs and a lower trendline comprised of lower lows as the trading channel widens. The breakout triggers when shares surge through its upper trendline resistance. The daily relative strength index (RSI) has fallen to the 43-band. Pullback support levels are at $162.40, $158.06, $151.11, and $146.79. Texas Roadhouse Smokes Consensus Estimates The company reported Q2 2024 EPS of $1.79, beating consensus estimates for $1.64 by 15 cents. Revenues matched consensus estimates at $1.34 billion. Restaurant margins rose to 18.2%, up from 15.7% in the year-ago period, driven by higher average guest chat and improved labor productivity offsetting wage and other labor inflation of 4.4% and commodity inflation of 0.4%. Average weekly sales at company restaurants were $158,991, of which $19.975 were to-go sales, compared to $146,727 and $18,496, respectively, in the year-ago period. Comparable restaurant sales or same-store sales increased 9.3% YoY at company restaurants and 8.3% at franchised restaurants. The company opened six new companies and three new franchise restaurants in the quarter. Texas Roadhouse's Full Year 2024 Outlook Texas Roadhouse MarketRank™ Stock Analysis Overall MarketRank™ 3.23 out of 5 Analyst Rating Hold Upside/Downside 4.9% Upside Short Interest Healthy Dividend Strength Moderate Sustainability N/A News Sentiment 0.59 Insider Trading Selling Shares Projected Earnings Growth 9.62% See Full Details Texas Roadhouse provided its full-year 2024 outlook. Comparable sales for company-owned stores rose 8% YoY in the first four weeks of Q3 2024. Store week growth is expected to be around 7.5%, which includes the benefit of 2% from a 53rd week. Commodity cost inflation is expected to be around 2%. Total capital expenditure is expected to be between $360 million and $370 million. Wage and labor inflation is expected to be between 4% and 5%. Texas Roadhouse CEO Jerry Morgan commented, "We continued our momentum in the current quarter as strong traffic trends and some relief on commodity inflation led to increased profitability across all of our brands. With our operators delivering solid operating results and a balanced development pipeline, we are well positioned for the second half of the year." Texas Roadhouse analyst ratings and price targets are at MarketBeat. There are 22 analyst ratings on TXRH stock, comprised of 10 Buys and 12 Holds, with a 2.24% upside to the average consensus price target of $169.86. Before you consider Texas Roadhouse, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Texas Roadhouse wasn't on the list. While Texas Roadhouse currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
The Next Month in the Economy Could Be Crucial for the Presidential Election 2024-08-05 15:50:22+00:00 - It didn’t take long for former President Donald J. Trump to make a political weapon out of Monday’s market sell-off. “Stock markets are crashing, jobs numbers are terrible, we are heading to World War III, and we have two of the most incompetent ‘leaders’ in history,” Mr. Trump wrote in a post on Truth Social. “This is not good.” The post underscored Mr. Trump’s longstanding fixation on stock indexes as a barometer of economic health. It also reinforced the degree to which economic messaging — and the health of the economy itself — will play a key role in the sprint finish ahead of the presidential vote in November. American voters consistently tell pollsters that the economy and consumer prices are the most important issues facing the country. The former president and his presumptive Democratic opponent, Vice President Kamala Harris, are seeking to sell voters on diametrically opposite stories about the economy’s health. Mr. Trump wants voters to believe the economy is on the brink of catastrophe, and that Ms. Harris and President Biden are to blame. He has joined a chorus of negativity that has in some ways worked: Polls have consistently shown that a majority of Americans believe the economy is in recession, even though economic statistics suggest it is not. Economic growth was surprisingly strong in the first half of the year. Job growth has remained relatively strong, even with the slowdown in job creation in July.
Shares in Pringles maker Kellanova jump on Mars bid talks 2024-08-05 15:36:00+00:00 - Shares in the Pringles maker Kellanova have surged nearly 20% after it emerged that the family-owned snacks company Mars was considering a takeover of the $27bn (£21bn) company. Stock in Kellanova, formerly known as Kellogg’s, rose 18% in early trading on Monday after Reuters reported that Mars was interested in buying the company, known for snacks brands such as Rice Krispies Treats and Pop-Tarts, in what would be one of the biggest ever deals in the packaged food sector. “We believe that K’s portfolio of popular snack brands will fit well with Mars’ and help them expand scale in international markets,” said Robert Moskow, an analyst at TD Cowen. Dealmaking in the packaged food sector has picked up since last year, including Campbell Soup’s $2.3bn buyout of the Rao’s pasta sauce owner Sovos Brands and J.M. Smucker’s acquisition of the Twinkies maker Hostess Brands for $5.6bn. Analysts have said Kellanova’s deal with Mars could usher in more consolidation in the sector. Kellanova shares rose to $74.33 on Monday even as broader US stocks fell on fears of the country tipping into recession. Kellanova, based in Chicago, had a market value of about $27bn, including debt, on Friday, before news of Mars’ interest emerged. In its second-quarter results, the company raised its annual sales and profit forecasts, owing to steady demand for its largest brand, Pringles, and effective promotions. One US analyst said he expected Kellanova to fetch upwards of $87 a share in any takeover deal, and said the Cadbury’s owner Mondelez could also be a suitor. “Mondelez could be seen as another potential acquirer, though we view the implied leverage as a limiting factor,” said Brian Holland, of DA Davidson. Kellanova made up the global snacking business of Kellogg’s, before the packaged food giant spun off its slow-growing North America cereal division WK Kellogg last October. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Sales growth at US packaged food companies such as Kraft Heinz, Mondelez and Hershey have taken a hit as cost-conscious customers save their dollars for essential purchases and hunt for cheaper, private-label alternatives to pricier branded items. “At times like this when growth slows, balance sheets are relatively clean, and valuations dip, the market leaders in food tend to look more closely at big combinations to drive cost synergies,” TD Cowen’s Moskow said.
Why Warren Buffett Just Sold Half His Stake in Apple Stock 2024-08-05 14:54:00+00:00 - Financial markets across the globe are going on a break, an undefined and unmeasured break. Warren Buffett released his quarterly holdings over the weekend. The record cash holdings of over $218 billion for Berkshire Hathaway Inc. NYSE: BRK.A isn’t the most exciting thing investors can focus on when pouring over the release. What was once one of Buffett’s largest holdings has now been cut in half, and the message behind it is just as important as the sale. Apple Today AAPL Apple $209.27 -10.59 (-4.82%) 52-Week Range $164.07 ▼ $237.23 Dividend Yield 0.48% P/E Ratio 32.55 Price Target $234.29 Add to Watchlist Shares of Apple Inc. NASDAQ: AAPL are selling off by as much as 5% to start the trading week after the news release. Buffett sold 50% of his shares in the technology stock giant, and he quoted that the reasoning came mostly from a tax-efficient perspective. However, this is the soundbite that investors want to repeat in order to remain calm; the truth may be a lot different. Get NVIDIA alerts: Sign Up The stock market rotation is now well underway, as capital is starting to flee the technology sector and go into other spaces like bonds and commodities like gold. In fact, the iShares 20+ Year Treasury Bond ETF NASDAQ: TLT is up by over 1.2% on a day when the S&P 500 is down by roughly 3.7%. More than that, gold prices are now hovering near an all-time high, showing the market rotation is here to stay. Despite all the noise, here’s what investors can focus on to navigate this environment. Buffett’s View is Alarming, But Also Spells Opportunity for Investors The reason for the selling was pointed to Buffett's future view of tax rates for capital gains, reasoning that the government would raise these rates to close down on widening budget and trade deficits. Taking some profits off the table today (at lower tax rates) rather than tomorrow (at higher tax rates) makes sense. However, Buffett is not known nor fond of timing the market, at least the economy. At the same time, other portfolio choices reveal what his actual view of the market might be. After buying up to 29% of Occidental Petroleum Co. NYSE: OXY in a nine-day buy streak, Buffett's optimism on the energy sector might tell investors all they need to know. Higher oil prices will strengthen the energy sector, as analysts at Goldman Sachs expect them to reach $100 a barrel this year. However, commodities can only rally on perceived dollar weakness, and Buffett would be right to expect this. More than that, Buffett also sold out of some of his Bank of America Inc. NYSE: BAC stake, as reported over the weekend. By taking a less optimistic view of the financial sector, he is doubling down on the coming dollar weakness and consumer environment for the United States economy. Apart from all the selling and worrying, investors can look at the opposite end of the spectrum for opportunities. The infamous yield curve is now moving back to positive territory, an indicator that is 100% accurate in predicting rallies in the energy sector. This reiterates Buffett's view on the space. Wall Street Analysts Support the Rotation and Recommend It Looking at forecasts for earnings per share (EPS) growth in the next 12 months, namely between the technology and energy sectors, can give investors a much deeper insight. Apple MarketRank™ Stock Analysis Overall MarketRank™ 4.82 out of 5 Analyst Rating Moderate Buy Upside/Downside 10.9% Upside Short Interest Healthy Dividend Strength Strong Sustainability -1.97 News Sentiment 0.40 Insider Trading Selling Shares Projected Earnings Growth 12.25% See Full Details Occidental Petroleum's EPS growth expectations are set at 32.2%, whereas Apple analysts only forecast EPS growth of 12.2% today. If, in fact, there could be dollar weakness, investors should stick with the companies that promise above-average growth. Royal Gold Inc. NASDAQ: RGLD is another company helping Buffett's thesis. The gold miner is also getting some attention from Wall Street analysts today. Forecasting up to 24.9% EPS growth shows a better future for investors who are still hanging on to the artificial intelligence hype of yesterday. Remembering that bonds could also be an attractive investment, especially if the Federal Reserve (the Fed) ends up cutting interest rates, investors shouldn't be surprised to see Stanley Druckenmiller sell out of NVIDIA Co. NASDAQ: NVDA and reallocate into the bond ETF mentioned above. One last check for investors keeping up with Buffett's report: Why hold so much cash? This includes not only cash balances but also new liquidity found through selling Bank of America and Apple stock. Buffett has historically held larger amounts of cash when he sees no buying opportunities in the market, and that means good news for investors sitting on the sidelines waiting for all the potentially good deals that will come if the S&P 500 selloff accelerates. Apple Inc. (AAPL) Price Chart for Monday, August, 5, 2024 Before you consider NVIDIA, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list. While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Bitcoin and other cryptocurrencies plunge, mirroring global markets. 2024-08-05 14:50:55+00:00 - The prices of Bitcoin and other major cryptocurrencies plunged over the last two days, mirroring the volatility in global stock markets and ending a run of growth and excitement in the crypto industry. Bitcoin’s price has dropped about 12 percent since Sunday, falling to roughly $53,000. The price of Ether, the second most valuable cryptocurrency, was down nearly 20 percent over the same period. The precipitous falls show that digital currencies, once envisioned as an alternate asset class that would be shielded from gyrations in the world economy, remain vulnerable to the same broader economic forces that affect technology stocks and risky investments. And the panic is a reminder that Bitcoin and other cryptocurrencies are highly volatile, prone to dramatic increases and decreases in value. Just a few days ago, the crypto industry was flying high. In January, the approval of a new financial product tied to the price of Bitcoin prompted a market surge that propelled Bitcoin to its highest-ever price. The excitement even led to a wave of new memecoins, the digital currencies tied to internet jokes.
Why Put Option Volume Means a Bullish Future for Marriott Stock 2024-08-05 14:46:00+00:00 - Investors typically have two ways to express their bearish views of a stock: sell out of a stock expected to fall shortly or outright short the stock. Shorting is a bit more complex since the downside is theoretically infinite while the upside is fixed, and borrowing shares creates an interest expense for most. Marriott International Today MAR Marriott International $211.35 -2.32 (-1.09%) 52-Week Range $180.75 ▼ $260.57 Dividend Yield 1.19% P/E Ratio 21.81 Price Target $241.42 Add to Watchlist Another—less common—way to bet against a stock is to buy put options, which also have a caveat. Namely, investors need to get not only the stock’s direction (downward in this case) right but also the timing of the trade, as option contracts come with an expiration date. One of the intricacies of watching the stock options market is that there is always a hidden message. This is why rising option volume for Marriott International Inc. NASDAQ: MAR might not be a bearish sign. Now that the market is accelerating its rotation out of the technology sector and running away from some consumer discretionary names, investors can assume that the only way to go from here is up. Acting as a catalyst for this change, the Federal Reserve (the Fed) is looking to cut interest rates in the coming months to help the turnaround. Get Citigroup alerts: Sign Up Marriott Stock Poised for Strength in the Next Market Cycle Stocks in the financial sector, namely banking names like Bank of America Co. NYSE: BAC and Citigroup Inc. NYSE: C, reported a deteriorating state in consumer credit trends, particularly rising credit card delinquencies and net charge-offs. Inflation is to blame for this trend, as consumers can barely keep up with living expenses today. So why would there be an expectation that less necessary expenses like leisure and travel will expand in the coming quarters? The answer lies in the most recent jobs data. This could be better, as the United States economy has added only 114,000 jobs in the past month. What's interesting for investors is how many went into the leisure and hospitality industry, about 23,000. Taking up to 20.2% of the total jobs for the month is not insignificant, and that's where Marriott stock comes into play. If management teams are hiring for the industry, it means that there is a higher demand cycle coming to it. However, this thesis is highly dependent on the Fed following through with its interest rate cut policy, which, according to the CME's FedWatch tool, is over 90% likely to happen by September 2024. Wall Street's Take on Marriott Stock: Insurance Hedging in Focus Wall Street analysts are now forecasting up to 16.3% earnings per share (EPS) growth for Marriott stock in the next 12 months, which is enough to send the stock into bullish territory. Despite a selloff of roughly 6.2% in the past month for the Consumer Discretionary Select Sector SPDR Fund NYSEARCA: XLY, Marriott stock now trades at 84% of its 52-week high price. Adding to the optimism, J.P. Morgan Chase & Co. set a price target of $255 a share for Marriott stock. To prove these targets right, the stock must rally 19.3% from where it trades today. Marriott International MarketRank™ Stock Analysis Overall MarketRank™ 4.68 out of 5 Analyst Rating Hold Upside/Downside 14.2% Upside Short Interest Healthy Dividend Strength Moderate Sustainability -3.79 News Sentiment 0.28 Insider Trading N/A Projected Earnings Growth 16.25% See Full Details These targets would not only mean a double-digit upside but also call for Marriott stock to come close to a near-all-time high price. Given the bullish sentiment surrounding Marriott stock, investors currently holding long positions might consider hedging to mitigate potential risks. One of these risks is that the Fed ends up postponing its rate cuts, causing Marriott's stock to come down significantly. By buying put options, investors who own the stock can offset any potential losses in the stock's decline by making an equivalent gain on their put option contracts (which go up in value when a stock goes down). Investors can assume this by looking at recent buy (or sell) activity within Marriott stock. As of August 2024, First Pacific Advisors LP had increased its stakes in the company by as much as 2.1%. While this may not seem much in percentage terms, it brought the asset manager's net investment up to $148.3 million, making it the second-largest stockholder in Marriott. As a final check for investors to determine whether the rise in put option volume is bearish or bullish, the 11.3% decline in Marriott stock's short interest over the past month proves that bearish capitulation is occurring at the moment. Before you consider Citigroup, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Citigroup wasn't on the list. While Citigroup currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Advice: When the Stock Market Drops, Stay Calm and Do Nothing 2024-08-05 14:36:59+00:00 - Think of what’s happening in the stock market as a kind of fire drill. As we all know from childhood, one of the primary rules is not to panic. And in this case, panicking would mean selling stocks when the market is falling. You run drills to stay sharp, but we haven’t had much experience with the S&P 500 stock index falling by more than 3 percent in a single day. According to Howard Silverblatt of S&P Dow Jones Indices, the last time it happened was Sept. 13, 2022. Given that it’s been a nearly two-year stretch, we can excuse ourselves for getting a bit sloppy. So many people got nervous and ran to check or trade investments Monday morning, and many of them had trouble logging into brokerage firm websites and apps including those of Charles Schwab, Fidelity and Vanguard. But really, why sell at a moment like this? It’s not a rhetorical question, so let’s try to answer it.