August 10, 2023

Global Rice Prices Surge Close To 12-Year Highs

Disney Posts Mixed Results For Quarter Plagued By Subscriber Losses. The company reported 146.1 million Disney+ subscribers during the most recent quarter, a 7.4% decrease. One bright spot for the company was its parks, experiences, and products division, which saw a 13% increase.
Amazon Is in Talks to Become Anchor Investor in Arm IPO. The closely watched IPO would value Arm at as much as $70 billion. The offering is expected to raise as much as $10 billion and is expected next month. Arm also has held discussions with Intel Corp. and Nvidia Corp.

Biden Restricts U.S. Investment in China. The executive order is expected to cover direct investments in three technology sectors: semiconductors, quantum computing, and artificial intelligence. It would prohibit investments in some forms of those technologies.

Sony Raises Forecast On PlayStation Gaming Growth But Profit Drops 31%. Sony cited a decrease in profits at its financial services and movie businesses. The company raised sales forecasts for the full year, which is largely thanks to a boost from its PlayStation games business.

Lyft Increased Revenue, Trimmed Loss During Tumultuous Quarter. Lyft recently clawed back some market share from larger rival Uber Technologies. Lyft’s gains came after the company used the money it saved from the latest layoffs to cut ride prices and bring them in line with Uber’s.
Global Rice Prices Surge Close To 12-Year Highs. The FAO All Rice Price Index rose by 2.8% in July to 129.7 points, its highest value since September 2011. Rice prices surged on the back of India’s rice export ban and adverse weather conditions that could impact production, said the United Nations’ food agency.

Property values in commercial real estate are beyond bear market territory. Office buildings are down nearly 30% over the last year alone. Apartments are down 15% and underperforming malls. Hotels are flat as markets await a potential drop in consumer spending. Source.
Mortgage demand drops again after FHA loan interest rate hits 21-year high. The rate on FHA loans, which are favored by first-time or lower-income borrowers because they offer low down payments, hit 7.02% the highest since 2002. Source.
Only 15% of production home builders have not offered mortgage rate buydown incentives, per a survey of the execs who build ~20% of the new homes in America. Source.
Growth in consumer credit throughout June was boosted significantly by nonrevolving credit. The spread between monthly change in nonrevolving vs. revolving was the widest since July 2020. Source.
The trend for long-bond rates has gone from down to sideways. With debt levels as high as they are, nobody can afford much higher rates. Eventually the Fed will have to step in to keep a lid on rates. Source.

You learn investing by investing - by putting your money on the line and feeling the consequences of your decisions.

Ian Cassel

Procter & Gamble Expects a Commodity Tailwind. In fiscal 2024, management expects commodity pressure to turn around and become a tailwind to the tune of $800 million but it has contracts that have to roll over before it will benefit from lower prices.
Roblox Shares Drop After Company Misses Estimates On Top And Bottom Line. The company reported a net loss of $282.8 million for the quarter, which ended June 30, but its average daily active users is up 25% at 65.5 million.
Compass Drives Down Losses, Lifts Agent Count Amid Q2 Revenue Slide. Compass' 2Q revenue dropped 26% year over year to $1.5B, according to the earnings call. Despite lower revenue, the brokerage reached free cash flow positivity and slimmed net losses.
Fannie 'Real Estate Owned' inventory Decreased in Q2. Single-family Real Estate Owned (REOs) decreased to 8,615 at the end of Q2 2023. This is well below a normal level of REOs for Fannie, and REO levels will increase further in 2023, but there will not be a huge wave of foreclosures.
$1 Trillion In Credit Card Debt Is Not Necessarily A Sign Of A Looming Economic Crisis. Credit card debt has been increasing in recent years, but this is largely due to people paying off their debts during the pandemic. Additionally, the economy, household net worth, and home equity have all grown substantially faster than credit card debt since the pandemic started.

ESPN Strikes $2 Billion Sports-Betting Deal With Penn Entertainment. Penn's Barstool Sportsbook app will be rebranded as ESPN Bet this fall as part of the 10-year agreement. In addition to $1.5 billion in cash, ESPN will receive warrants worth about $500 million to purchase shares in Penn. Source(2:01)
Weak Bank Stocks Weigh On US And European Markets. The biggest takeaway from what Moody’s has done is that it’s effectively saying that the banking turmoil is not over yet. Banks are dealing with interest rate risk in a way not really foreseen back in March, and it's affecting both big and small banks. Source(2:33)

Novo Nordisk's Obesity Drug Cuts Risk Of Strokes And Heart Attacks. The study found that patients who took the drug had a 20 percent less chance of suffering a cardiovascular event such as a heart attack or a stroke than those who received a placebo. Source(5:19)
WeWork Warns Of Possible Bankruptcy. The company’s stock price has been trading below $1 since early this year. Membership has been weaker than expected, which the company attributed in part to a struggling economy. WeWork’s stock has been trading below $1 since mid-March. Source(20:17)
Interest Rate Rise Challenges Economic Stimulus Impact. The recent rise in Federal Reserve interest rates hasn't had the expected impact on the economy due to private sector stagnation and increased private funds. This challenges the efficacy of using interest rates to address strong economic growth driven by fiscal stimulus. Source(6:46)