Chip Shortage Continues | GME & LULU Earnings | Facebook “Smart” Glasses

Jobs Report Disappoints | Chip Shortage Continues | GME & LULU Earnings | Facebook “Smart” Glasses

‍

10th September 2021

Global Economic News

'Federal Reserve officials will seek to forge an agreement at their coming meeting to begin scaling back their easy money policies in November'

• Fed officials have said in interviews or public statements that they could begin tapering the $120 billion monthly purchases of Treasurys and mortgage-backed securities this year.
• They are unlikely to start the process at the Sept. 21-22 meeting but could signal that they will begin the process at their following session on Nov. 2-3.

'The European Central Bank said it would slightly scale back its bond-buying program, despite a resurgence in Covid-19 cases globally and signs of slowdowns in China and the U.S. that have prompted caution from the Federal Reserve'

• Christine Lagarde, the ECB President, signalled the bank will keep monetary policy loose due to the resurgence in Covid-19.
• The ECB will still slightly scale back its bond-buying program to reflect the strengthening eurozone economy.

'Crypto assets and distributed ledger technology (DLT) topped the 2021 @ESMAComms list of financial innovations that require deeper analysis and potential policy responses.'

• The European Securities and Markets Authority’s (ESMA) released a report called “Trends, Risks, and Vulnerabilities”

‍“Most crypto assets (CAs) are highly volatile in price and operate outside of the existing EU regulatory framework, which raises investor protection issues.” – ESMA

Business News

'Affirm stock skyrockets after reporting 71% revenue growth and strong guidance'

• Affirm stock (AFRM) is up over 22% in pre-market trading.
• Revenue came in at $261.8 million, topping estimates of $225 million.
• AFRM also gave upbeat guidance of $240 million – $250 million in 1Q2022 revenue.
• Last month, Affirm announced a partnership with Amazon.

'Software security company Zscaler posts quarterly earnings that top analysts’ forecasts and issues a revenue outlook ahead of estimates.'

• Revenue came in at $197.1 million, an increase of 57% YoY, slightly beating analyst estimates.
• Zscaler (ZS) also bumped up revenue guidance for the next quarter.
• ZS shares are up 3% in the pre-market.

'Facebook unveiled its long-awaited smart glasses in partnership with Ray-Ban, entering a nascent wearables market with a focus on capturing photos rather than augmented reality.'

• The $299 Facebook (FB) glasses will let users take photos and videos, listen to music, and answer phone calls.
• They lack functionality, but FB eventually plans to embed that feature.

'Wells Fargo has been fined $250 million after regulators said the lender had failed to fix problems first identified in a 2018 order, in which the bank was found to have made improper charges to home lending customers'

‍

9th September 2021

Global Economic News

'The Biden administration is offering its first detailed road map to lower prescription-drug prices'

• The plan backs legislation to empower the federal government to negotiate for drug prices in Medicare and pass lower costs to the private sector.
• The road map also outlines administrative actions by agencies and departments that could come in concert with possible legislative changes.

'Aluminum notches a fresh 13-year high on supply woes and a surge in demand'

Business News

'Lululemon boosted its outlook for the year and reported sales that outpaced expectations in its latest quarter, sending shares up in late trading on Wednesday'

• Lululemon stock (LULU) is up 12.5% in pre-market.
• The company now expects revenue will be as much as $6.26 billion for fiscal 2022. Previous guidance was $5.91 billion.
• For more details on LULU’s earnings, I will dig deeper in a separate post.

'GameStop fell in extended trading after reporting a second-quarter loss that was wider than Wall Street projections'

• GameStop (GME) posted a wider-than-expected Q2 loss, took no questions on the earnings call, and is down 10% in pre-market trading.

'Sea, Southeast Asia’s most valuable listed company, plans to raise about $6 billion or more, capitalizing on investor enthusiasm for the region’s tech industry.'

• Sea (SE) said some of the proceeds would help expand its business, while funds could also be deployed on “potential strategic investments and acquisitions.”
• Sea plans to sell 11 million ADSs and $2.5 billion of five-year convertible bonds.

‍

8th September 2021

Global Economic News

'Bitcoin, the largest cryptocurrency by market value, edged lower a day after it briefly dropped 17% over the course of a few minutes'

The crypto market experienced a deep flash crash, with Bitcoin dropping from over $50,000 to as low as $44,000 in a matter of minutes.

Things have stabilized slightly, but most major cryptos are still down.

There isn’t any single catalyst anyone can point to that caused the selloff, but “CryptoTwit” is pointing out that there was a very large Bitcoin deposit to Binance before the flash crash.

The crash also happened right as El Salvador’s adoption of Bitcoin as legal tender went into effect, making the move a bit suspicious, with some suspecting foul play by the “establishment”. But El Salvador’s president Nayib Bukele tweeted that the country bought more Bitcoin upon weakness.

Business News

'PayPal acquires Japan’s Paidy for $2.7B to crack the buy-now, pay-later market in Asia'

• The transaction is expected to close in the fourth quarter of this year.
• Japan has the 3rd largest e-commerce market in the world.

'Microsoft Start will allow users to personalize their newsfeeds with content from more than 1,000 publishers, similar to offerings from Apple and Google'

• The new Microsoft Start platform is now available on mobile apps, Microsoft’s website, widgets in the new Windows 11, and through the Windows 10 taskbar.
• Similar to offerings at Apple and Google, the platform uses AI and machine learning to customize news feeds.

'Ford is hiring the head of Apple’s car project away from the iPhone maker'

‍

7th September 2021

Global Economic News

'Goldman Sachs economists revised down their forecast for U.S. growth this year to 5.7% from a prior 6%'

• Goldman economists are pointing to a “harder path” ahead for American consumers.
• The economists specifically cited headwinds including the emergence of the Delta variant, fading fiscal support, and a switch from demand for goods to services.

'Airlines and hotels had hoped that business travel would start to bounce back, but companies are delaying sending employees back on the road this fall amid a resurgence of coronavirus cases'

• Delta said U.S. corporate travel returned to about 40% of pre-pandemic levels this summer.
• About 60% of the more than 400 business travellers who responded to a survey by Morning Consult for the American Hotel & Lodging Association said they would postpone coming trips.

'The pandemic is shredding logistics textbooks as global supply tangles worsen'

Business News

'Chinese technology stocks rallied to their highest level in more than a month after a new round of share buybacks by Tencent'

• The Hang Seng Tech Index has now extended its gains to 17% off of last month’s lows.
• Tencent has been repurchasing its shares in the public market almost daily since announcing second-quarter earnings results on August 18.
• Tencent is buying back an additional HK$100.5 million ($12.9 million) in shares.

'Ryanair, Boeing ’s biggest customer outside of the U.S., said it is walking away from talks over a potential new order for the 737 MAX'

• Ryanair walked away from the talks due to a pricing dispute.
• Ryanair has a reputation for swooping in when the aviation sector is in a downturn to scoop up heavily discounted planes.

'Instacart CEO Fidji Simo is leading the company to expand as a digital ad platform, going up against supermarkets and tech giants as the grocery delivery business slow.'

‍

Thank you for reading this weekly economics news digest and business news analysis, please share this blog if you found it interesting and check out my second post detailing Lululemon's earnings report here!