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Market Selloff Challenges Kamala Harris, But Her Platform Could Revitalize Hard-Hit Sectors - Advanced Micro Devices (NASDAQ:AMD), Box (NYSE:BOX) 2024-08-06 21:57:00+00:00 - The recent market downturn might be more than a bump in the road for Vice President Kamala Harris and her newly launched presidential campaign. Major indices began recovering on Tuesday after a selloff in stocks and other assets rattled global markets between Friday and Monday. The S&P 500 and the Nasdaq Composite regained about 2% each on Tuesday, while the Dow Jones was up 1.5%. While several experts and analysts dismissed the fact that the market slump is indicative of a recession, negative economic events can have unfavorable consequences for the incumbent Democratic Party in the 2024 election. Republican nominee former President Donald Trump was quick to pin the blame of the market downturn on Harris and the Biden administration. While every four-year presidential term normally experiences periods of market pessimism, the politicization of the event was an almost unavoidable consequence in the context of the upcoming election. In 2018, during Trump's presidency, the stock market experienced its worst decline in 10 years, since the 2008 financial crash. The dip was many times worse than what the market experienced this week. Regardless of whether current economic markets are indicative of a recession or not — which is a discussion that has kept economists engaged for at least three years — public perception of the economy's health is a key variable in the upcoming election. The public's perception of the economy is not necessarily tied to hard economic data and can be widely influenced by news events. A recent survey found that most Americans were wrong about the current state of the economy. Read also: Economist Justin Wolfers Weighs In On Market Meltdown And Fast Changing Democratic VP Nominee Odds: ‘Even A Small Bet Can Lead Prices To Shift Sharply’ While incumbency typically provides an advantage in elections, poor economic indicators can sway voters away from reelecting the current administration. The recent market meltdown, as well as the worse-than-expected jobs data that contributed to the drop, will likely affect monetary policy, putting extra pressure on the Fed to reduce interest rates sooner rather than later. On Monday, interest rate futures had fully priced in a 50-basis-point rate cut in September. The Tuesday selection of Tim Waltz as the Democratic vice presidential candidate sparked heated comments across the business community. The decision was praised by billionaire investor Mark Cuban as well as tech CEOs from LinkedIn's Reid Hoffman to Box Inc's BOX Aaron Levie. Harris’s economic plans aim to continue the administration’s strategy of incentivizing strategic industries where the U.S. can compete with China and other global economic powerhouses. A 2023 economic plan published by the White House placed "making smart public investments in America" as a central item in the administration's economic strategy, which involves attracting private investment in specific industries by providing tax incentives and grants through policies like the Inflation Reduction Act (IRA); the CHIPS and Science Act; as well as the Infrastructure Investment and Jobs Act. Green energy, electric vehicles and semiconductors stand to benefit from said plans, along with the construction and manufacturing sectors. Major semiconductor companies have been some of the worst hit by the recent market meltdown, although many analysts described it as a natural correction to a sector that has experienced unprecedented growth in the wake of the recent artificial intelligence revolution. NVIDIA Corp NVDA was up 3.7% on Tuesday, after registering losses worth several hundred billions on Monday. Intel Corp INTC finished 1.3% lower on Tuesday, adding to a drop that took down its stock price more than 34% in the last five trading days. Advanced Micro Devices, Inc. AMD lost an extra 3.4% on Tuesday and adds 13% in losses since last week. VanEck Semiconductor ETF SMH recovered 1.9% on Tuesday, after a drop of 9% in the last five trading days. iShares Semiconductor ETF SOXX recovered 0.9% on Tuesday, after falling 10% in the last five trading days. Now Read: Image made from Shutterstock pictures.
Americans continue to rack up credit card debt, hitting a record $1.14 trillion 2024-08-06 21:48:00+00:00 - U.S. consumers collectively owe a record $1.14 trillion in credit card debt, figures released Tuesday by the Federal Reserve Bank of New York show. That's $27 billion more than the $1.13 trillion in credit card debt they carried during the second quarter of 2024. The high tally comes amid concerns of an economic downturn triggered by modestly rising unemployment, and as soaring costs in food, housing and auto rates continue to drain household budgets. Americans have increasingly been relying on credit cards to make ends meet, with 6 in 10 adults, or 60%, using credit cards to buy groceries in 2023, according to a May report by the Urban Institute. Prolonged debt also plays a factor in the historic amount as more Americans fall behind on their credit card bills. About 7.18% of cardholders fell into delinquency in the second quarter, up from 5% in the previous quarter, Fed statistics show. "More people are carrying more debt for longer periods of time," Ted Rossman, senior industry analyst at Bankrate, said in a statement. Americans paid down some of their credit card debt in 2020, using pandemic-related federal stimulus funds, Rossman noted. But beginning in 2021, credit card balances "rocketed upward by 48%, fueled by a post-pandemic boom in services spending as well as high inflation and high interest rates," he added. Debt owed on mortgages and auto loans also climbed by $77 billion and $10 billion, respectively, according to the Fed's data. Total consumer debt grew to $17.8 trillion. Rising interest rates Compounding the problem is the soaring price of plastic, as interest rates on credit cards also continue to reach record highs. The average interest rate on a new credit card is now at 24.84%, the highest since LendingTree started tracking rates in 2019. To be sure, both credit card debt and credit card interest rates could decline if the Federal Reserve decides to cut its benchmark rate in September — or perhaps even sooner. The time for a rate cut "is approaching, and if we do get the data we hope we get, then reduction of our policy rate could be on the table at our September meeting," Fed Chairman Jerome Powell said last week. The Federal Reserve's benchmark rate doesn't translate directly into movements in credit card annual percentage rates, or APRs, but because card rates are tied to the prime rate used by banks, which closely follows the Fed's federal funds rate, there is an indirect correlation. In other words, credit card companies could lower their APRs in response to a rate cut by the Fed, LendingTree credit analyst Matt Schulz told CBS News, providing some relief for borrowers in the months ahead.
Boeing, Spirit AeroSystems defend safety improvements at NTSB hearing 2024-08-06 21:44:00+00:00 - Federal aviation safety officials on Tuesday pressed Boeing executives for answers about what caused a near disaster when a panel on a 737 Max 9 aircraft fell off in-flight. The January 5 incident on a jet operated by Alaska Airlines was so severe that the aircraft's cockpit blew open and tore off the co-pilot's headset, according to documents released as part of a two-day hearing by the National Transportation Safety Board. "It was chaos," the co-pilot said in comments released by the agency as part of the proceedings. Four bolts that helped secure the panel, called a door plug, were not replaced after a repair job in a Boeing factory, but the company said the work was not documented, the government agency found in a preliminary report. The captain of the Alaska Airlines described "an explosive experience" and said he could not communicate with flight attendants, according to the documents. The pilots quickly landed the aircraft back in Portland, Oregon, and the door plug was later found in a backyard in Cedar Hills, Oregon. Seven passengers and a single fight attendant received minor physical injuries. "Quite traumatic" "This was quite traumatic to the crew and passengers," NTSB Chair Jennifer Homendy said in the hearing. "We are so sorry for all that you experienced during this very traumatic event," she added, speaking to anyone who may have been on the flight or knew someone aboard. Homendy and other NTSB members pressed executives from Boeing and Spirit AeroSystems, which makes fuselages for Max jets, to explain what may have led up the incident and what steps the companies have taken to ensure safety. "This is not a PR campaign for Boeing. What I want to know, what we want to know, is what happened in March, April, May, June, July, August, September, leading up to this, leading up to what happened in January?" Homendy said. Witnesses for Boeing and Spirit defended the companies' respective safety systems and inspection practices. "Every fuselage goes through a final product verification which is a dedicated area in the Spirit factory where we have Boeing inspectors," Doug Ackerman, vice president of supplier quality for Boeing commercial airplanes, told the panel, describing a change in procedure that began March 1. The inspections involve "going over the fuselage front to back, inside and outside to identify any discrepancy," said Ackerman, and typically take a couple of days. Boeing takes ownership of the fuselage as it exits the Spirit factory in Wichita, Kansas, he added. "We want to have acceptance verification at the location where it is manufactured," Ackerman said. The NTSB will not determine what caused the blowout after the hearing — that could take another year or longer. Rather, the federal agency is calling the unusually long hearing a fact-finding step. Design changes planned Elizabeth Lund, Boeing's senior vice president of quality — a new position as of Febuary — said in the hearing that the company hopes to have a fix in place within the year to potentially prevent such a blowout from happening again. "They are working on some design changes that will allow the door plug to not be closed if there's any issue until it's firmly secured," Lund said in responding to questions as to why Boeing did not have a warning system for door plugs akin to what's in place for regular doors. The NTSB in June found Boeing had broken investigation rules when Lund provided non-public information to media and speculated about possible causes. Boeing in July agreed to plead guilty to a criminal fraud conspiracy charge and pay at least $243.6 million to resolve a Justice Department probe into two 737 Max crashes that killed 346 people. Still in crisis mode, Boeing's stock has shed more than a third of its value this year, with the company hemorrhaging cash amid its greatly reduced production. Lund said production of Max jets declined to under 10 a month after the Alaska Airlines blowout and has increased, but remains at less than 30 a month. Boeing announced a new CEO last week, and has agreed to repurchase Spirit to get better control of its manufacturing. —CBS News' Kris Van Cleave and Kathryn Krupnik, along with the Associated Press, contributed to this report.
How the stock selloff could affect the Federal Reserve — and your money 2024-08-06 21:31:00+00:00 - How likely is the Federal Reserve to cut interest rates in September? How likely is the Federal Reserve to cut interest rates in September? 04:14 Renewed concerns about the U.S. economy could have a major impact on Americans that go well beyond this week's free fall in stocks. Experts say the recent slide in financial markets, triggered by mounting evidence that the economy is bogging down, raises the odds that the Federal Reserve will aggressively ease monetary policy starting next month in a bid to avert a severe downturn. Wall Street analysts now forecast a series of interest rate cuts starting in September, and continuing into 2025. Prior to the rout, economists polled by financial data firm FactSet had penciled in a rate cut at the Fed's September 18 meeting, predicting the central bank would trim borrowing costs by just 0.25 percentage points. But that conviction has shifted, and economists overwhelmingly predict that the Fed will trim rates by double the prior forecast, or 0.5 percentage points, FactSet data shows. Wall Street forecasters also think the Fed will further trim borrowing costs at its November and December meetings, with the majority predicting the benchmark rate could be as low as 4% to 4.25% by year-end, or about 1.25 percentage points lower than its current 23-year high. Larger rate cuts would provide welcome relief to borrowers, including home and car buyers who have been priced out of the market due to high financing costs. The downside would be felt by savers, given that high-interest rate savings accounts and CDs would likely offer less favorable terms following Fed cuts. Typically, the Fed lowers rates in 0.25 percentage-point increments (or what Wall Street calls 25 basis points, which are equal to 1/100th of a percentage point), but the Fed has occasionally made cuts that were double or even quadruple that size. For instance, the Fed cut rates by 0.5 and 1 percentage points in March 2020 during two emergency meetings as the pandemic was crippling the economy. "The market is demanding a lot of rate cuts — and aggressive rate cuts," Amanda Agati, chief investment officer of PNC Financial Services Group's asset management unit, told CBS MoneyWatch. "It's very possible a 50 basis point rate cut is what happens in September, versus the traditional 25." Will the Fed have an emergency meeting? As markets plunged on Monday, some analysts and investors questioned whether the Fed could choose enact an emergency rate cut before its September meeting. The pressure from some quarters to act swiftly in easing rates comes in wake of the Fed's July 31 meeting, when the central bank decided to keep its benchmark rate steady. At a press conference that day, Fed Chair Jerome Powell acknowledged that the highest interest rates in decades posed growing risks to the labor market, but said he and other officials wanted to see more evidence that inflation was cooling before cutting rates. But the August 2 jobs report was much weaker than expected, sparking fears the Fed has been tardy in lowering rates and spurring some investors to call for for an emergency cut. That's highly unlikely, many economists say. The Fed typically reserves emergency action for when it perceives broader risks to the financial system or to the economy, such as the pandemic. The July labor data that sparked fears of a recession also only captures a single month of hiring, while experts note that job growth, while slowing, isn't collapsing. "[C]urrent economic data do not warrant an emergency intermeeting rate cut, and this would only ignite a new round of panic into the markets," Nationwide chief economist Kathy Bostjancic noted in an email. Will interest rates fall in 2024? Wall Street is betting on significant rate reductions throughout the remainder of 2024, although Powell last month hedged about the chances of a September cut. The Fed's benchmark rate has sat at 5.25% to 5.5% since July 2023, which marked the last time the central bank hiked rates. The Fed hasn't lowered rates since March 2020. The time for a rate cut "is approaching, and if we do get the data we hope we get, then reduction of our policy rate could be on the table at our September meeting," Powell told reporters on July 31. But those remarks were made before Friday's weak jobs report, which has sent economists back to the drawing table. Here's how much experts think the Fed is likely to cut rates over its final three meetings of the year, according to FactSet: September 18 meeting : A cut of 0.5 percentage points, bringing the federal funds rate to 4.75% to 5%, according to all economists surveyed by FactSet. : A cut of 0.5 percentage points, bringing the federal funds rate to 4.75% to 5%, according to all economists surveyed by FactSet. November 7 meeting: Almost 6 in 10 economists are penciling in another 0.5 percentage point cut, which would lower the benchmark rate to 4.25% to 4.5%. About 4 in 10 predict a 0.25 percentage point cut. Almost 6 in 10 economists are penciling in another 0.5 percentage point cut, which would lower the benchmark rate to 4.25% to 4.5%. About 4 in 10 predict a 0.25 percentage point cut. December 18 meeting: More than half of economists forecast another quarter-point cut, which would bring the federal funds rate to between 4% and 4.25%. But some analysts expect even deeper cuts, with almost 20% forecasting the benchmark rate could be as low as 3.75% to 4% by year-end. "With rates at a 23-year high, the Fed has plenty of flexibility to support the economy and markets," noted Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management, in a report. She forecasts that rates by year-end will be 1 percentage point lower, or in a range of 4.25% to 4.5%. Solita added, "Given recent evidence that inflation is moving sustainably back to the Fed's target, we think the central bank has an incentive and justification to move more swiftly than previously expected to bring rates lower."
Super Micro announces 10-for-1 stock split, shares plunge 13% on earnings miss 2024-08-06 21:31:00+00:00 - Shares of server company Super Micro Computer plunged 13% on Tuesday after the company announced fiscal fourth-quarter earnings that missed analyst expectations. The company also announced a 10-for-1 stock split, set to begin trading on a split-adjusted basis on Oct. 1. Here's how the company did vs. LSEG estimates for the quarter that ended in June: Earnings: $6.25 adjusted vs. $8.07 expected $6.25 adjusted vs. $8.07 expected Revenue: $5.31 billion vs. $5.30 billion expected Super Micro said gross margin dropped to 11.2% from 17% in the year-ago quarter and from 15.5% in the third quarter, which means it's making less profit on each product it sells, despite noting that it "continues to experience record demand of new AI infrastructures." The company announced net income of $352.7 million, or $5.51 per share, up from $193.5 million, or $3.43 per share, in the year-ago quarter. Super Micro said it expects first-quarter revenues between $6 billion and $7 billion, beating Wall Street's estimate of $5.46 billion. It expects EPS of $5.59 to $8.27, or a $7.48 midpoint, compared to the consensus estimates of $7.58. Shares in the company, which competes with companies like Dell and Hewlett Packard Enterprise , have surged over recent years as investors bet it will be an essential vendor of servers for Nvidia , whose graphics cards are powering the artificial intelligence boom. Stock splits do nothing to change the financial fundamentals of a company but they do make each share cheaper, which can have a positive psychological effect on retail investors. Shares of Super Micro, which joined the S&P 500 in March, surged 246% in 2023 and are up 117% year-to-date. The stock closed Tuesday at $618.94. WATCH: Nvidia's August earnings report unlikely to have any 'major issue'
NASA delays next crew launch to buy more time at the space station for Boeing’s troubled capsule 2024-08-06 21:24:23+00:00 - NASA is delaying its next astronaut launch to buy more time at the International Space Station for Boeing’s troubled new crew capsule. The space agency said Tuesday it’s bumping SpaceX’s four-person flight from this month to next. It’s now targeted for Sept. 24 at the earliest. Officials said that will give them more time to analyze thruster and leak problems that hit Boeing’s Starliner capsule after its June liftoff, its first with a crew on board. Tuesday marked the two-month point at the space station for Starliner’s test pilots, Butch Wilmore and Suni Williams, who should have been back by mid-June. NASA is weighing all its options for returning the two veteran astronauts, including a ride home in a SpaceX capsule. “NASA and Boeing continue to evaluate the spacecraft’s readiness, and no decisions have been made regarding Starliner’s return,” NASA said in a statement. Further details were expected at a news conference set for Wednesday. Only two docking ports at the space station can accommodate U.S. astronaut capsules and, right now, both are occupied. So one will need to be vacated before the next SpaceX crew can arrive. Russia has its own parking places for its Soyuz capsules. The latest setback means the four astronauts who flew up with SpaceX in March now also face a longer mission than planned. Over the past several weeks, Boeing has conducted thruster test firings on the ground as well as in space to better understand why five thrusters failed ahead of Starliner’s June 6 arrival at the space station. All but one came back online. Helium leaks in the capsule’s propulsion system also cropped up. Citing the testing, the company late last week said: “Boeing remains confident in the Starliner spacecraft and its ability to return safely with crew.” Boeing and SpaceX topped NASA’s list for astronaut taxi service to and from the space station, after the shuttles retired in 2011. NASA signed contracts worth billions with both companies in order to have a backup in case one of them got sidelined by an accident. SpaceX launched its first crew in 2020; the upcoming flight will be its 10th astronaut flight for NASA. It’s also sent a few private crews into orbit. Boeing has had to overcome multiple Starliner problems over the years. The company had to launch an empty Starliner twice before committing to a crew, repeating the initial flight test because of bad software and other issues. The delays have cost the company more than $1 billion. ___ The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.
Jenna Ortega responds to backlash to her controversial age-gap movie with Martin Freeman: 'It's supposed to be awful at times' 2024-08-06 21:13:06+00:00 - Jenna Ortega addressed criticism over the 31-year age gap with "Miller's Girl" costar Martin Freeman. The two actors play a student and teacher in an inappropriate relationship. "It's not supposed to be a comfortable movie. It's supposed to be awful at times," Ortega said. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Advertisement Jenna Ortega has spoken out after critics expressed discomfort over the age gap between her and her costar Martin Freeman in the controversial film "Miller's Girl." "It's not supposed to be a comfortable movie. It's supposed to be awful at times," Ortega, 21, told Vanity Fair in a cover story published on Tuesday. "Art isn't always meant to be pleasant or happy, and everyone skips off into the sunset at the end. We all have fucked-up experiences at one point or another." This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
Rivian tops Wall Street's second-quarter expectations amid cost cuts 2024-08-06 21:12:00+00:00 - Rivian Automotive beat Wall Street's top- and bottom-line expectations for the second quarter as the electric vehicle maker continues to take costs out of its business. Here is how the company did, compared to estimates from analysts polled by LSEG: Earnings per share: Loss of $1.13 adjusted vs. loss of $1.21 expected Loss of $1.13 adjusted vs. loss of $1.21 expected Automotive revenue: $1.16 billion vs. $1.14 billion expected The company's adjusted net losses widened during the second quarter to $1.46 billion, or a loss of $1.46 per share, compared with a year earlier of $1.2 billion, or a loss of $1.27 per share. Its adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA was about level from the same period as a year ago at a loss of $860 million. Rivian on Tuesday reaffirmed its 2024 guidance of 57,000 total units of production, a loss of $2.7 billion in adjusted EBITDA and $1.2 billion in capital expenditures. Through the first six months of the year Rivian produced about 23,600 vehicles, including only 9,162 during the second quarter due to downtime at the company's plant to retool and reduce costs. The second-quarter results come more than a month after Rivian held an investor day that focused on cost-cutting efforts, efficiency gains and in-house technologies and software. The event came days after Rivian announced plans for Volkswagen to invest up to $5 billion in the EV startup, starting with an initial investment of $1 billion. Shares of Rivian are off 37% this year amid slower-than-expected demand for EVs as well as Rivian's significant cash burn. The stock closed Tuesday at $14.80, up 1.3%. Rivian, which is still losing thousands of dollars for every vehicle it makes, has been focused on reducing costs. Rivian CEO RJ Scaringe said in June that efficiencies earlier this year in products and manufacturing are expected to lead to 20% material cost reductions in its current vehicles, followed by 45% targeted reductions in its upcoming "R2" vehicles, which are projected to begin production in early 2026. Rivian's expenditures through the first half of the year were $537 million, including $283 million during the second quarter. Rivian ended the second quarter with $9.18 billion in total liquidity, including $7.87 billion in cash, cash equivalents and short-term investments.
Global stock volatility hits the presidential election, with Trump decrying a ‘Kamala Crash’ 2024-08-06 21:10:27+00:00 - WASHINGTON (AP) — Republican presidential nominee Donald Trump is hoping a dramatic sell-off in the U.S. stock market creates an opening to attack his Democratic rival, Kamala Harris, over who is best positioned to shepherd the economy. Trump’s campaign labeled the Monday drop as a “Kamala Crash,” a message designed to undercut the energy created by the vice president’s entrance into the race. But Wall Street recovered on Tuesday as stocks posted gains. Several economists said the economic data disprove Trump’s comments about a coming crisis, as unemployment remains relatively low and inflation has eased. For Trump, who has long broken with political norms by openly encouraging market volatility that he hopes will boost his candidacy, the turmoil was a chance to highlight his credentials as a businessman. Trump’s allies and outside strategists have long urged him to focus more on pocketbook issues that resonate with voters beyond the GOP base. Americans are more likely to think Trump’s presidency helped the country with job creation and cost of living compared to President Joe Biden’s administration, according to an AP-NORC poll conducted in April. It’s unclear whether the stock market volatility points to more serious economic trouble worldwide that could distract from Harris’ core campaign themes, such as protecting abortion rights and presenting Trump as a threat to Americans’ freedom. For now, many economists say major investors are less interested in the presidential race than what happens at the Federal Reserve, where pressure is building to cut benchmark interest rates. “We have an economy that is still moving forward,” said Gregory Daco, chief economist at the consultancy EY-Parthenon. “The panic that we’re seeing in the markets — which may already be subsiding — is an overblown interpretation of the Fed being behind the curve, rather than weak economic fundamentals.” Trump has long staked his campaign on the markets Trump wrote more than a dozen posts on his social media network on Monday about the markets and U.S. economic policy, along with a video by the Republican’s campaign that seeks to yoke Harris to the market headlines and President Biden, who ended his reelection bid last month. The video features Harris saying, “Bidenomics is working” juxtaposed with news commentators describing the stock market decline. “VOTERS HAVE A CHOICE — TRUMP PROSPERITY, OR THE KAMALA CRASH & GREAT DEPRESSION OF 2024,” Trump said in a post on his Truth Social account. What to know about the 2024 Election Democracy: American democracy has overcome big stress tests since 2020. More challenges lie ahead in 2024. American democracy has overcome big stress tests since 2020. AP’s Role: The Associated Press is the most trusted source of information on election night, with a history of accuracy dating to 1848. Learn more. The Associated Press is the most trusted source of information on election night, with a history of accuracy dating to 1848. Stay informed. Keep your pulse on the news with breaking news email alerts. Sign up here Trump has proposed ramping up energy production and making tips and Social Security payments exempt from income taxes. That message has at times been drowned out by a flurry of news — including a gunman trying to assassinate him at a July rally — and by his own mix of messages and personal attacks on issues like Harris’ racial identity. Monday’s stock market drop as well as higher price levels for groceries and gasoline during Biden’s presidency were evidence of failed policies, argued Chris LaCivita, a Trump campaign senior adviser. “The bottom line is the chickens are coming home to roost and it’s undeniable. The impacts of bad policy are undeniable,” he said. “This enables us to demonstrate and to show, again, this is what bad policy brings.” The Harris campaign declined to comment. But Trump’s remarks drew condemnation from some Democrats for seeming to cheer for a downturn that, were it to come to pass, could cause millions to lose their jobs or see their retirement savings suffer. “It’s a foolish judgment not supported by any serious analysis of data,” said Harvard University economist Larry Summers, a former treasury secretary during Bill Clinton’s presidency. “While there’s increased uncertainty and risk in the economy, it’s just wildly irresponsible to say this is going to be causing a depression.” Trump has a history of claiming credit for the markets whether they rise or fall. In 2020, he said that the stock market would crash if he was not reelected that year. He was not reelected. The S&P 500 stock index has climbed roughly 35% during Biden’s presidency. In early January of this year, Trump said in an interview with the late Lou Dobbs that “when there’s a crash, I hope it’s going to be during this next 12 months because I don’t want to be Herbert Hoover.” Later that same month, as the S&P 500 hit another record high, Trump sought to take credit for it. “THIS IS THE TRUMP STOCK MARKET BECAUSE MY POLLS AGAINST BIDEN ARE SO GOOD THAT INVESTORS ARE PROJECTING THAT I WILL WIN, AND THAT WILL DRIVE THE MARKET UP,” Trump said on social media. Lower markets can bring good and bad news The financial markets are something of a double-edged sword: Lower stock prices hurt people’s retirement savings and prompt them to spend less, but the selloff has also accompanied falling interest rates and oil prices — which could help relieve some of the inflationary pressures felt by consumers that have hurt Democrats politically. Indeed, the markets responded to the selloff by betting the Fed will be more aggressive in slashing interest rates to support the economy, something that Trump has previously warned the U.S. central bank against because he thinks it could help Harris. The CME Group’s FedWatch tool estimates a 0.5% cut in the Fed’s benchmark rate at its next meeting in September, twice as large as a week ago. A rate cut at that level would almost certainly contribute to lower interest rates for mortgages and auto loans — a potential boost for Harris’ campaign just as voting begins. The Federal Reserve’s chair and vice chair are appointed by the president and confirmed by the Senate, but the central bank acts independently of the White House in setting rates.
Reddit reports better-than-expected results for second quarter as digital ad market improves 2024-08-06 21:09:00+00:00 - Reddit CEO Steve Huffman hugs mascot Snoo as Reddit begins trading on the New York Stock Exchange on March 21, 2024. Reddit reported second-quarter results on Tuesday that topped analysts' estimates. Here are the key numbers: Loss per share: 6 cents vs. the loss of 33 cents expected by LSEG 6 cents vs. the loss of 33 cents expected by LSEG Revenue: $281 million vs. $254 million expected by LSEG Sales in the second quarter rose 54% from a year earlier. The company's net loss narrowed to $10.1 million from $41.1 million in the same quarter a year earlier. Online advertising revenue climbed 41% from a year prior to $253.1 million. The digital ad market is continuing to recover from a tough 2022, when businesses pulled back on promotional spending because of inflation and other factors. Reddit's "other revenue" which includes the company's data licensing business, rose 691% to $28.1 million. Reddit said it expects third-quarter sales of $290 million to $310 million. Analysts were expecting $278.7 million. The company said its average revenue per user was $3.08 in the second quarter, topping analyst estimates of $3.02. The number of daily active users rose 51% year-over-year to 91.2 million, topping analyst estimates of 84.5 million, according to FactSet. This is Reddit's second quarterly earnings report since the company went public in March on the New York Stock Exchange. WATCH: TechCheck: Apple, Nvidia lead big tech stocks lower
Airbnb shares drop 14% on earnings miss as company warns of slowing U.S. demand 2024-08-06 21:09:00+00:00 - Airbnb CEO and co-founder Brian Chesky speaks at The Fast Company Innovation Festival on September 21, 2022, in New York. Airbnb shares dropped 14% in after-hours trading after the company reported second-quarter earnings that missed analyst expectations and warned that it's seeing signs of slowing demand from U.S. customers. Here's how the company did compared to LSEG estimates for the quarter ended June 30: Earnings per share: 86 cents vs. 92 cents expected 86 cents vs. 92 cents expected Revenue: $2.75 billion vs. $2.74 billion expected Revenue increased 11% year over year. Airbnb reported a net income of $555 million, or 86 cents per share, down 15% from $650 million, or 98 cents per share, in the year-earlier quarter. The vacation rental company guided to third-quarter revenue of $3.67 billion to $3.73 billion, but also warned that it expected moderation in year-over-year growth in its key "Nights and Experiences" category, relative to the current quarter. It also cautioned that it was "seeing shorter booking lead times globally and some signs of slowing demand from U.S. guests." Airbnb said users booked 125.1 million Nights and Experiences, its highest second-quarter result. "We saw continued growth across all regions compared to Q2 2023, with Asia Pacific and Latin America again leading the way," it said in its letter to shareholders. The company also said it had removed more than 200,000 low-quality listings since it launched its "quality system" more than a year ago. Investors are carefully watching for signs to see if the consumer is under pressure, as the Federal Reserve has held off on rate cuts until next month at the earliest. There have been some troubling signs in other companies' results. McDonalds , for example, warned that consumers were feeling "the pinch" from the economy in its most recent earnings report, which saw same-store sales fall 1%.
Yup, AI is basically just a homework-cheating machine 2024-08-06 21:07:45+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Access your favorite topics in a personalized feed while you're on the go. download the app Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview When ChatGPT first came out in late 2022, it was instantly clear there was one immediate and obvious use: writing term papers. This has been a thorn in the side of teachers and professors. But as generative AI is more widely adopted, has it become more than just a homework helper? Two new pieces of information point us toward a conclusion we probably all knew in our hearts: Chatbots and generative AI are a bonanza for students looking for writing help. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. First, The Washington Post just published "What do people really use chatbots for? It's a lot of sex and homework." They looked at a large research dataset of AI chatbot conversations called WildChat and categorized the conversations. They found that the most common use — at 21% — was "creative writing and role play." A sample of what that might be: asking the bot to write fan fiction, movie scripts, or Dungeons & Dragons characters. Advertisement The second most common category of chatbot conversations — at 18% — was for homework help. (One example: "Explain the Monroe Doctrine in a sentence.") The other lesser-used categories included things like search, translation, and coding/programming use. Aside from the Post's reporting, there's another new reason to suspect that homework "help" — and maybe cheating! — is a massively popular use for ChatGPT and other text-based AI. The Wall Street Journal reported that OpenAI has been developing a tool that could detect writing that used ChatGPT — but it won't release the tool (yet). Advertisement The tool would make it so that ChatGPT would create a sort of "watermark" in the way it chooses words. The watermark would be undetectable to human eyes but could be picked up by AI — and it would be 99.9% accurate in being able to tell if something was written by ChatGPT or a real human. Still, OpenAI hasn't released this tool, much to some people's frustration inside the company, according to the report. A spokesperson for OpenAI told the WSJ that the company had concerns the tool could hurt non-native English speakers who use ChatGPT. "The text watermarking method we're developing is technically promising but has important risks we're weighing while we research alternatives," the spokesperson told the WSJ. Related stories OK, reasonable. I think we all like the idea of OpenAI taking its time and thinking long and hard about the potential harms of releasing a new tool. But here's the other part: According to the report, "OpenAI surveyed ChatGPT users and found 69% believe cheating detection technology would lead to false accusations of using AI. Nearly 30% said they would use ChatGPT less if it deployed watermarks and a rival didn't." (Emphasis mine). Advertisement That sounds like a pretty good sign that "cheating on my homework" is a pretty popular use of ChatGPT — and OpenAI knows it. When Sam Altman was seen driving a multimillion-dollar Koenigsegg Regera, the most common comments on TikTok were things like, "Bro carried me through half of my classes last year I hope he enjoys that beauty." There's also evidence from last summer that ChatGPT use dropped as soon as summer vacation started — a good indication that student use was a big driver. Of course, there are plenty of unique and wonderful uses for generative AI text creation, like writing a fan letter to your favorite Olympian. Advertisement I admit that my skepticism about how useful ChatGPT is other than just a homework-cheating machine comes with my own baggage: AI is an existential threat to my job as a person who types words, and I don't mind writing things myself. Although I get to write things like this instead of, say, a three-paragraph summary of the Monroe Doctrine. If I were an 11th grader right now, I suspect I'd probably be pretty enthused by it.
Ford turns 'dirty' business into a profit driver. GM and Stellantis are taking notice 2024-08-06 21:04:00+00:00 - DETROIT — A once “dirty” word, and business, in the automotive industry has become a multibillion-dollar battleground for U.S. automakers, led by Ford Motor. The Dearborn, Michigan-based automaker has turned its fleet business, which includes sales to commercial, government and rental customers, into an earnings powerhouse. And Ford’s crosstown rivals General Motors and Chrysler parent Stellantis have taken notice, restructuring their operations as well. “There’s much more of an emphasis now on profitability and how fleet can help that,” said Mark Hazel, S&P Global Mobility associate director of commercial vehicle reporting. ”[Automakers] are looking at how they strategically go about this. It’s been a very targeted approach with how they deal with fleets.” Many fleet sales, especially daily rentals, have historically been viewed as a negative for auto companies. They are traditionally less profitable than sales to retail customers and are used by automakers at times as a dumping ground to unload excess vehicle inventories and boost sales. But Ford has proven that’s not always the case by breaking out financial results for its “Ford Pro” fleet business. The operations have raked in about $18.7 billion in adjusted earnings and $184.5 billion in revenue since 2021. Such results have led Wall Street to praise the business, as analysts have called it a “hidden gem” and Ford’s “Ferrari,” referring to the highly profitable Italian sports car manufacturer. “No other company has Ford Pro. We intend to fully press that advantage,” Ford CEO Jim Farley said July 24 during the company’s second-quarter earnings call, in which Ford Pro was the dominant performer. Fleet sales typically account for 18% to 20% of annual industrywide U.S. light-duty vehicle sales, which exclude some larger trucks and vans, according to J.D. Power. Part of the opportunity in fleet sales comes from the aging vehicles on U.S. roadways. The average age of the 25 million fleet and commercial vehicles on American roads was 17.5 years last year, according to S&P. That compares with light-duty passenger vehicles at 12.4 years in 2023. While commercial sales, which are viewed as the best fleet sales, are estimated to be slightly lower this year compared with 2023, both GM and Stellantis have recently redesigned and doubled down on such operations. However, neither reports such results out separately. “Breaking apart the fleet channel, we see that Commercial sales have been the weakest. And zooming in further, there are just two [original equipment manufacturers] that appear especially challenged: STLA and, to a lesser extent, GM,” Wolfe Research said in an investor note Wednesday. Meanwhile, Ford’s commercial volumes have increased a “strong” 7% this year compared with 2023, Wolfe said. While fleet sales data isn’t as available as retail, Wolfe Research estimates Ford is by far the leader in such earnings at a forecast of $9.5 billion this year. That compares with North American operations at GM at $5.5 billion and Stellantis around $3.5 billion, Wolfe estimates. S&P Global Mobility reports Ford has been the fleet leader for some time. Since 2021, Ford’s market share of new fleet vehicle registrations (categorized by businesses with 10 or more vehicles weighing under 26,000 pounds) has been about 30%. GM, meanwhile, had around 21%-22% during that time, and Stellantis about 9%. GM, citing third-party data, claims it outsold Ford last year in a segment of fleet sales: commercial vehicles sold exclusively to businesses (with five or more vehicles) and not individual buyers. Ford, meanwhile, said it counts “all customers who register their full-size, Class 1-7 truck or van under their business,” not just those with five or more vehicles. Ford claims to lead sales of commercial vehicles, categorized as Class 1-7 trucks and vans, with a roughly 43% share of U.S. registrations through May of this year. That’s up 2.3 percentage points compared with a year earlier, the company said. Ford Pro The Ford Pro business is led by sales of the automaker’s Super Duty trucks, which are part of its F-Series truck lineup with the Ford F-150, and range from large pickups to commercial trucks and chassis cabs. It also covers sales of Transit vans in North America and Europe, all sales of the Ranger midsize pickup in Europe, and service parts, accessories and services for commercial, government and rental customers. But automakers, including Ford, also see fleet operations as a key driver in other ways, including for electric vehicle sales, as well as reoccurring revenue options such as software and logistical services. “This revenue has gross margins of 50-plus-percent which drives significant operating leverage and improved capital efficiency,” Farley said during the quarterly call. “The major part of this new software business is actually Ford Pro.” Ford is aiming to achieve $1 billion in sales of software and services in 2025, led by its fleet and commercial business. “Ford Pro is core to Ford, and there is potential upside on volumes as well as in software and service,” BofA’s John Murphy said Thursday in an investor note. “On software, Ford Pro accounts for ~80% of Ford’s software subscriptions with an attach rate of only 12%, which is projected to grow to 35%+ over the next few years.” Ram, GM retool As Ford touts its fleet business, its closest rivals have amped up their operations. Chrysler parent Stellantis is relaunching its “Ram Professional” unit this year with goals of achieving record profitability in 2025 and, eventually, becoming the No. 1 seller of light-duty commercial vehicles, which exclude some larger vehicles. Christine Feuell, CEO of Stellantis’ Ram brand, declined to disclose a time frame for achieving that target but said the automaker believes it can do so after completely revamping its operations to focus on better mainstreaming operations for customers and earnings growth through sales and new services. “It’s a highly profitable business. Not only on the product side, but on the services side,” she told CNBC during a media event last week. “Software and connected services are really a significant growth opportunity for us as well. “We’re a little bit behind Ford in launching those services, but we definitely expect to see similar kinds of growth and revenues generated from those connected services.” Ram makes up about 80% of Stellantis’ U.S. fleet and commercial business. It has a new or revamped lineup of trucks and vans coming to market, plus a host of connected and telematics products to assist fleet customers. It also increased the availability of financing and lending for commercial customers. “This year truly begins our commercial offensive,” Ken Kayser, vice president of Stellantis North American commercial vehicle operations, said during the media event. “2024 is a foundational year for our brand, as we look to build momentum into 2025.” GM isn’t sitting idle either. It has revamped its fleet and commercial business. It launched “GM Envolve” last year, its overhauled fleet and commercial business focused on fleet sales, digital telematics and logistics for commercial customers. Sandor Piszar, vice president of GM Envolve in North America, said the Detroit automaker views the business as a competitive advantage not just to sell vehicles but to create reoccurring revenue and relationships with businesses. GM Envolve, formerly known as GM Fleet, reorganized the automaker’s business to be a one-stop shop for fleet customers — from sales and financing to fleet management, logistics and maintenance. “GM Envolve is a critically important piece of General Motors business. It’s a profitable business,” he told CNBC earlier this year. “We think it is a competitive advantage in the approach we’re taking in this consultative approach of a single point of contact and coordinating the full portfolio that General Motors has to offer.” GM and Stellantis declined to disclose the earnings and profitability of their fleet businesses. EV goals GM Envolve includes the company’s EV commercial business BrightDrop, which was folded back into the automaker last year instead of it acting as a subsidiary. It didn’t accomplish the growth GM had expected, but EVs have an opening for automakers’ fleet and commercial sales. “BrightDrop is a great opportunity for General Motors and for GM Envolve,” Piszar said, citing all-electric vans specifically for last-mile deliveries as well as small local businesses. “There’s a lot of use cases and as we ramp up production and get customers to try the vehicle that’s a key piece of our model.” Unlike retail customers, many fleet and commercial customers have predefined routes or schedules that could accommodate EVs well because they drive locally in a region and could charge overnight when electricity costs are lower. S&P Global reports EV startup Rivian Automotive led the U.S. in all-electric cargo van registrations last year, roughly doubling Ford, its closest competitor, at No. 2. While the upfront investment is high, automakers have argued the eventual payback could be worthwhile for some businesses. All three of the legacy Detroit automakers are touting such advantages to their fleet customers, while still offering traditional vehicles with internal combustion engines. Stellantis and Ford also have started highlighting their portfolios of different powertrains such as hybrids and plug-in hybrid electric vehicles as adoption of EVs has not occurred as quickly as many had expected. Ford last month announced plans valued at about $3 billion to expand Super Duty production, including to “electrify” Super Duty trucks. “We’ve gone to, on all of our commercial vehicles, a multi-energy platform so we will offer customers the choice that we think no other competitor will have,” Farley said during the earnings call. “We believe we will be a first mover, if not the first mover, in multi-energy Super Duty.” — CNBC’s Michael Bloom contributed to this report.
Here's how Kamala Harris' running mate Tim Walz could help shape the child tax credit 2024-08-06 20:53:00+00:00 - Minnesota Governor Tim Walz in the Governors Reception room in the State Capitol Wednesday, November 30, 2022 St. Paul, Minn. Star Tribune Via Getty Images | Star Tribune | Getty Images How Minnesota's child tax credit stacks up How Walz could shape federal policy As a key priority for Walz, Minnesota's child tax credit upgrades were the single biggest line item in his latest supplemental budget. The policy could resurface to support an expanded federal child tax credit on the presidential campaign trail. But enacting federal changes could be more challenging, depending on which party controls Congress, experts say. "It's really hard to draw straight lines from any state policymaker to federal policymaking," said Richard Auxier, a principal policy associate for the Urban-Brookings Tax Policy Center who focuses on state and local tax policy. In Minnesota, the child tax credit was enacted via a Democratic-controlled state legislature, along with a significant budget surplus, which is different from the federal climate, he said. Still, while Walz enacted state tax breaks like other governors, "he was able to turn the dial up a few extra notches," Auxier said. "The child tax credit is probably the most obvious example." Walz's office did not immediately respond to CNBC's request for comment. watch now
Theravance Q2 Loss Wider Than Expected, Revenues Rise Y/Y - Repare Therapeutics (NASDAQ:RPTX), Halozyme Therapeutics (NASDAQ:HALO) 2024-08-06 20:46:00+00:00 - Theravance Biopharma, Inc. TBPH reported a second-quarter 2024 adjusted net loss of 13 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 9 cents per share. In the year-ago quarter, the company had reported a loss of 13 cents per share. The reported loss excludes share-based compensation expense, non-cash impairment of long-lived assets, income tax expense and non-cash interest expense. Including these items, the company reported a loss of 34 cents per share in the second quarter. Total revenues came in at $14.3 million, missing the Zacks Consensus Estimate of $16 million. Revenues, however, rose 4.4% year over year owing to increased collaboration revenues from partner Viatris VTRS. Quarter in Detail The top line fully comprised Viatris' collaboration revenues in relation to Yupelri (revefenacin) sales. Theravance and Viatris have collaborated for the development and commercialization of Yupelri. Viatris and Theravance share U.S. profits and losses received in connection with the commercialization of Yupelri. While Viatris gets 65% of the profits, Theravance receives 35%. Viatris collaboration revenues include Theravance's 35% share of net sales of Yupelri, as well as its proportionate amount of the total shared costs incurred by the two companies. VTRS recognizes product sales from Yupelri and also owns a stake in Theravance. Shares of Theravance have declined 14.7% year to date compared with the industry's decline of 3.3%. Image Source: Zacks Investment Research Research and development expenses (excluding share-based compensation) totaled $8.8 million, up almost 17.3% from the year-ago quarter's level. Selling, general and administrative expenses (excluding share-based compensation) declined around 13.4% year over year to $12.9 million. As of Jun 30, 2024, Theravance had cash, cash equivalents and marketable securities worth $96.1 million compared with $100 million as of Mar 31, 2024. 2024 Guidance Theravance continues to expect adjusted R&D expenses (excluding share-based compensation) in the $30-$36 million range. Adjusted SG&A expenses (excluding share-based compensation) are projected between $45 million and $55 million. TBPH continues to expect share-based compensation expenses of $18-$22 million in 2024. For the remainder of 2024, TBPH now expects levels of both adjusted losses and cash burn to be the same as the first half of 2024. Earlier, the company expected to achieve breakeven in the second half of 2024 while expecting limited cash burn for the year. Pipeline Updates Theravance is developing an investigational candidate, ampreloxetine (TD-9855), a norepinephrine reuptake inhibitor for the treatment of neurogenic orthostatic hypotension (nOH) in patients with multiple system atrophy. The FDA has granted Orphan Drug designation to ampreloxetine for the given indication. The company initiated the phase III CYPRESS study evaluating ampreloxetine for nOH MSA in the first quarter of 2024. The CYPRESS study is expected to complete patient enrollment by mid-2025, which was earlier expected to be completed by the second half of 2024. Top-line data from the same is expected almost six months after enrollment is completed. TBPH plans to submit regulatory filings for ampreloxetine if the study data is found to be positive. Theravance Biopharma, Inc. Price, Consensus and EPS Surprise Theravance Biopharma, Inc. price-consensus-eps-surprise-chart | Theravance Biopharma, Inc. Quote Zacks Rank & Stocks to Consider Theravance currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector are Halozyme Therapeutics, Inc. HALO and Repare Therapeutics Inc. RPTX, each sporting a Zacks Rank #1 (Strong Buy) at present. In the past 60 days, estimates for Halozyme's 2024 earnings per share have improved from $3.69 to $3.90. Earnings per share estimates for 2025 have improved from $4.50 to $4.81. Year to date, shares of HALO have soared 40.9%. HALO's earnings beat estimates in three of the trailing four quarters and met the same on the remaining occasion, the average surprise being 9.40%. In the past 60 days, estimates for Repare Therapeutics' 2024 loss per share have narrowed from $2.42 to $2.35. Loss per share estimates for 2025 have narrowed from $3.29 to $3.21. Year to date, shares of RPTX have plunged 57.2%. RPTX's earnings beat estimates in three of the trailing four quarters while missing the same on the remaining occasion, the average surprise being 123.58%. To read this article on Zacks.com click here.
A second Iranian attack on Israel would likely dwarf its first 2024-08-06 20:38:17+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Access your favorite topics in a personalized feed while you're on the go. download the app Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Iran has repeatedly vowed it will attack Israel in response to the assassination of Hamas' political leader in Tehran on July 31. Its main proxy, Hezbollah in Lebanon, has also vowed to join Iran to avenge Israel's killing of one of its most senior commanders, Fuad Shukr, in Beirut the day before. If Iran and its allies want to show Israel the killings have a cost, they will likely try to catch Israel's defenses off guard or to overwhelm them — suggesting an even larger and more dangerous confrontation than their April barrage. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The killing of Hamas' Ismail Haniyeh was a humiliation for Iran and Israelis wait anxiously to see what form of revenge Iran may take. US Secretary of State Antony Blinken warned Sunday that an attack could come within 24-48 hours. However, in a Monday briefing, Biden's national security team said it remains unclear when exactly Iran and Hezbollah will attack. Iran directly attacked Israel for the first time in April, two weeks after Israel assassinated Iranian paramilitary commanders at an Iranian consulate annex in Damascus, Syria. That attack consisted of over 300 drones and missiles. It was telegraphed days earlier and the overwhelming majority of the projectiles were tracked and intercepted by Israel with the help of the US, Britain, France and Jordan. Israel responded on April 19 with a single pinprick strike against the radar of an Iranian air defense system near Iran's Natanz enrichment facility. Advertisement "My sources suggest that the Iranian regime intends the attack to cause more surprise this time," Arash Azizi, senior lecturer in history and political science at Clemson University and author of "The Shadow Commander: Soleimani, the US, and Iran's Global Ambitions" told Business Insider. "There are many internal debates about this with some pushing against the idea of an attack or trying to keep it limited." "Iran is indicating that it wants to bring about a larger attack this time around," Azizi said. "It appears that this is definitely what some are pushing for, but they might still be outvoted in the National Security Council or pressured otherwise." "It's not clear how much damage Iran wants to bring with the attack and how much damage it can bring," Azizi added."This is part of what's being deliberated upon in Tehran right now." The Iran analyst also noted the upcoming Shiite pilgrimage of Arbaeen may influence Iran's timeline. Beginning on August 25 this year, the ritual sees millions of Shiite Iranian pilgrims traveling to Iraq's shrine city of Karbala, many of them on foot. Advertisement "I think it will have to be on a larger scale than the April attack because the Israeli strike was more significant," James Devine, associate professor in the Department of Politics and International Relations at Mount Allison University, told BI. "If Iran wants to maintain deterrence, it has to scale up its responses to Israel's attacks," Devine said. "If the response stays the same, or is smaller, there is no reason for Israel not to escalate its attacks on Iranian targets and territory in the future." Israeli defenses like the Iron Dome were supported by US-fired interceptors during an Iranian barrage in April. MENAHEM KAHANA/AFP via Getty Images Aiming for more damage Another risk is that the attack could be multi-directional. In addition to Hezbollah, Iran's other regional proxies, such as the Houthis in Yemen and the militias in Iraq and Syria are expected to join Tehran's attack. They supported Iran's April attack, albeit with limited strikes. The Houthis struck Tel Aviv for the first time using a drone on July 19. Israel responded by bombing Yemen's Hodeidah port the following day. "Hezbollah will likely play a more active role by firing several — but not many — guided ballistic missiles at Israeli targets in northern Israel, probably including some ballistic missile defense sites," Farzin Nadimi, a defense and security analyst and senior fellow of the Washington Institute for Near East Policy, told BI. "The Houthis will probably continue to play a supporting role." Advertisement Devine also believes the Houthis may participate in an attack alongside Iraqi militias but noted that Tehran has "remained clear that it does not want the situation to escalate into a regional war" and remains focused on deterrence. "Nevertheless, they will likely want to structure the attack so it does more damage," Devine said. "Therefore, it may not be as telegraphed as the first. It may include parallel attacks from multiple directions and some closer launch points." Related stories Tehran may also restrict its attacks to military targets rather than civilian areas to reduce the risk the tit-for-tat strikes trigger an all-out war. "It is also possible that an Israeli embassy somewhere will be targeted," Devine said. "Tehran has said the strike must be against Israeli territory, but embassies as we saw with the April crisis, are considered to be national territory by the Iranians. But this is just a guess on my part." Advertisement Devine and Azizi are skeptical that Hezbollah, despite having its red line crossed in Beirut, would risk attacking Tel Aviv and trigger a major retaliation that would threaten Hezbollah's arsenal, which consists of up to 150,000 surface-to-surface rockets and missiles. "A Hezbollah strike in Tel Aviv killing significant numbers of civilians would quite possibly precipitate a full-out war on the Israeli-Lebanese border — the sort of situation Iran has said it wants to avoid," Devine said. Hezbollah commander Fuad Shukr was killed in an Israeli strike in Beirut in an attack that the group has vowed to avenge. Marwan Naamani/picture alliance via Getty Images What happens next The scale of the Iranian attacks is drawing in the US military to play defense, and it's increasingly possible that some Iran-backed militants could target US forces in the region during a large attack. On Monday, a rocket attack carried out by Iran-backed militias on Iraq's Ain al Asad Airbase injured at least five American troops. "The fact that the regime has openly declared US complicity in the assassination of Haniyeh means that they're likely considering attacking US forces as well," Azizi said. Advertisement How Israel would retaliate for any Iranian attack would likely depend on certain factors. "If the coming Iranian attack causes Israeli casualties, they are likely to want to respond harshly," Azizi said. "But they might be restrained by the US and other sides whose priority is avoiding an all-out regional war." On the other hand, Israel may not necessarily wait until Iran strikes. "It is also possible for Israel to conduct preemptive strikes on Iran before Iran gets to attack," Azizi said. "If Israel wanted to truly up the ante, it could strike Iranian refineries, which would cause a major crisis in Iran." Advertisement "There is a chance that the IDF has already thought about these plans, especially since the new phase of hostilities began in April." Devine believes Israel's response will depend on the "amount of damage and casualties" any Iranian attack ultimately causes. "Iran did very little damage the first time, so it is a very low bar to clear," Devine said. "If Iran is more aggressive than expected, or there is an accident, and there are significant civilian casualties, or Israel's defenses come off looking inadequate, Israel's response could be severe." An unprecedented Iranian attack could lead to an unprecedented Israeli response. Advertisement "Israel will likely try to retaliate more strongly than April 19, especially if they suffer casualties or a significant building is destroyed by Iran," The Washington Institute's Nadimi said. "In that case, some of Iran's nuclear sites will likely be targeted as well."
Airbnb’s second-quarter profit fell 15% despite its revenue rising 11% on stronger bookings 2024-08-06 20:35:54+00:00 - Airbnb says its profit fell 15% in the second quarter from a year earlier, as higher income tax costs cut into the short-term rental giant’s bottom line even as bookings and revenue rose. The profits fell short of Wall Street’s expectations and Airbnb’s shares tumbled. The San Francisco-based company reported on Tuesday net income of $555 million, or 86 cents per share, for the three months ended June 30. That compares with net income of $650 million, or 98 cents per share, in the same quarter last year. Analysts’ consensus estimates called for earnings of 91 cents per share, according to FactSet. Revenue rose 11% from a year earlier to $2.75 billion, slightly higher than what analysts forecast. The vacation-rental platform said it booked 125.1 million nights and experiences in the second quarter, a 9% increase from a year earlier. The average daily rate rose 2% to $170. Airbnb shares were down roughly 14% in after-market trading Tuesday.
Qatar CEO says the airline isn't ditching its Airbus A380s just yet. See inside the superjumbo, complete with a bar and lounge. 2024-08-06 20:25:48+00:00 - Qatar Airways' new CEO told reporters in July that the airline is keeping its beloved A380s. The decision came down to demand, airport and sky congestion, and the delayed Boeing 777X. Qatar is also developing a new first-class cabin for its A380s, reemphasizing its commitment. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Advertisement Qatar Airways has gone back and forth on what to do with its Airbus A380s. Its former CEO, Akbar al Bakar, said told Simple Flying in 2021 that buying the planes was a "big mistake," given its high costs and inefficiencies. However, on the sidelines of the Farnborough Airshow in July, Qatar's new CEO, Badr Mohammed Al Meer, told the media that the quad-engine is getting a second life. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
Americans who moved abroad say this big expense isn't worth it 2024-08-06 20:25:00+00:00 - Alex Ingrim knows a lot about how to move to a new country. He was studying in San Diego when a study abroad trip to France led him to meet his now-wife, Louisa; in the 17 years since, the pair have grown their family and lived in Canada, France, the UK, Malta and now Italy. Ingrim, 36, is a financial advisor with Chase Buchanan USA based in Florence, which has roughly 70 clients, where he advises fellow Americans about taxes and other financial planning involved with moving to Europe. In his years helping Americans move overseas, he says one major expense ends up not be worth it: paying to ship your belongings to your new home. “You can’t just pick up everything from your old house and put it into your new house in Europe,” Ingrim tells CNBC Make It. “It’s not going to fit the same way or look and feel the same way.” A lot of times, larger furniture pieces simply don’t fit in oftentimes smaller European spaces, he says. Plus, “The plugs on the appliances are a lot different. Certain things about TVs might be at a different standard. People underestimate a lot of those aspects. So that’s been one piece of feedback we’ve gotten from people, they didn’t think [shipping their belongings] was that worthwhile.” Instead, Ingrim says people have a better time of selling most of their belongings in the U.S. and moving to their new home country with a few suitcases. The good news is that people are often “pleasantly surprised” at “how much cheaper a lot of the furniture is in Europe,” Ingrim says. That goes for appliances, too: “A new kitchen in Europe is a lot cheaper than it is in the U.S.” No. 1 piece of advice for a successful move Overall, Ingrim says his No. 1 piece of advice for people moving to a new country is to be realistic with their expectations and generally throw any ideas of space, efficiency and speed out the window. “The one piece of advice I always give people is that your move is set up to fail when your expectations don’t match reality,” Ingrim says. “You need to go in with relatively loose and low expectations around what what your lifestyle in that country is going to look like. Expect life in Spain to be slow, because it’s going to be. Don’t expect it to be efficient.” “Don’t expect a 2,000-square-foot apartment, it’s not going to happen most of the time,” he adds. Of course, where there may be logistical challenges in making the move, there are plenty of cultural benefits to look forward to. “Expect the food to be good. Expect the people to be pretty friendly and nice, as long as you treat them with respect,” Ingrim says. On that note, defer to local customs and consider how showing respect may look different in your new home country. “As long as you set your expectations accordingly, then you can take it slow and adjust at your own pace,” Ingrim says. “If you expect your American life to be transplanted to Paris, that’s going to be really, really hard to adjust to.”
Microsoft fires back at Delta after massive outage, says airline declined 'repeated' offers for help 2024-08-06 20:23:00+00:00 - Microsoft fired back at Delta Air Lines on Tuesday accusing the carrier of not modernizing its technology before it canceled thousands of flights in the wake of last month’s global massive IT outage. Delta CEO Ed Bastian told CNBC last week that the carrier has “no choice” but to seek damages from Microsoft and CrowdStrike for the mass disruptions, which he said cost the company, an airline that prides itself on reliability, about $500 million. Delta struggled more than rival airlines to recover from the outage, canceling more than 5,000 flights in the days following the July 19 incident, which was sparked by a botched software update from CrowdStrike and affected millions of computers running Microsoft Windows. Mark Cheffo, a Dechert partner representing Microsoft, said in a letter Tuesday to Delta’s attorney David Boies of Boies Schiller Flexner, said Microsoft is still trying to figure out why American Airlines, United Airlines and others were able to recover more quickly than Delta. “Our preliminary review suggests that Delta, unlike its competitors, apparently has not modernized its IT infrastructure, either for the benefit of its customers or for its pilots and flight attendants,” Cheffo wrote. Delta responded on Tuesday that it has “a long track record of investing in safe, reliable and elevated service for our customers and employees. “Since 2016, Delta has invested billions of dollars in IT capital expenditures, in addition to the billions spent annually in IT operating costs,” Delta said in response to the Tuesday letter from Microsoft,” the airline said in a statement. In a July 29 letter, Boies told Microsoft’s chief legal officer, Hossein Nowbar: “We have reason to believe Microsoft has failed to comply with contractual requirements and otherwise acted in a grossly negligent, indeed willful, manner in connection with the Faulty Update” from CrowdStrike that caused Windows computers to crash, Boies told Microsoft’s chief legal officer, Hossein Nowbar, in a letter dated July 29. Microsoft lawyer Cheffo wrote in his response that the company empathizes with Delta and its customers on the impact of the CrowdStrike incident. “But your letter and Delta’s public comments are incomplete, false, misleading, and damaging to Microsoft and its reputation,” he said. Microsoft’s letter followed a similar one from CrowdStrike on Sunday rejecting claims from the Atlanta-based airline. Cheffo wrote that Microsoft offered to help Delta for free. Each day from July 19 to July 23, Microsoft employees said they could help, but Delta turned them away, according to the letter. Delta CEO Bastian told CNBC’s Squawk Box” that CrowdStrike didn’t offer any financial compensation but did extend “free consulting advice” on dealing with the fallout from the outage. Microsoft CEO Satya Nadella emailed Bastian, “who has never replied,” Cheffo wrote Tuesday. CrowdStrike also said its CEO George Kurtz had reached out to his counterpart at Delta “but received no response.” Cheffo described a letter on July 22, from Microsoft to a Delta employee, offering help. The Delta employee wrote back: “All good. Cool will let you know and thank you.” Delta executives said the outage, which led to more cancellations than in all of 2019, overwhelmed its crew-scheduling platform that matches crews to flights. But Cheffo said Delta doesn’t rely on Windows or Microsoft’s Azure cloud services. In 2021, IBM announced a multiyear deal with Delta to help it implement a hybrid-cloud architecture running on Red Hat’s OpenShift software. In 2022, Amazon said Delta had picked the digital commerce company’s Amazon Web Services unit to be its preferred cloud provider. “It is rapidly becoming apparent that Delta likely refused Microsoft’s help because the IT system it was most having trouble restoring — its crew-tracking and scheduling system — was being serviced by other technology providers, such as IBM, because it runs on those providers’ systems, and not Microsoft Windows or Azure,” Cheffo wrote in his letter. Bastian said last week Delta had to manually reset 40,000 servers. Microsoft demands that Delta retain records showing how much technologies from IBM, Amazon and others contributed to the airline’s issues from July 19 to July 24, Cheffo wrote. Spokespeople for IBM and Amazon didn’t immediately provide comment. Bastian told CNBC last week, “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.”