Paramount Cuts 15% Of US Workforce, Closes TV Studio, As Traditional TV Market Slumps

Paramount Cuts 15% Of US Workforce, Closes TV Studio, As Traditional TV Market Slumps

Paramount, the parent company of CBS News, BET, MTV, Nickelodeon, dozens of local TV stations, and Paramount Pictures, announced in an internal memo from top executives to employees that the first round of job cuts is set to begin. 

The multinational media conglomerate in Manhattan plans to reduce its US-based workforce by 15%, or about 2,000 workers, by the end of September. This is troubling news for the company that struggles with migrating one-time TV viewers to its streaming video platform and an even bigger warning that the traditional TV market languishes. 

“The industry continues to evolve, and Paramount is at an inflection point where changes must be made to strengthen our business. And while these actions are often difficult, we are confident in our direction forward,” Brian Robbins, the head of Paramount Pictures; George Cheeks, the head of CBS; and Chris McCarthy, the head of Showtime and MTV Entertainment Studios, wrote in an internal memo to employees, first obtained by New York Times

The there co-CEOs said, “As we continue to advance our plan, we announced on our earnings call last week that we will be reducing our US-based workforce by approximately 15%, focusing on redundant functions and streamlining corporate teams.” 

“This process will take place in three phases, starting today and continuing through the end of the year. We expect 90% of these actions to be complete by the end of September,” they added. 

The Wall Street Journal noted, “Paramount Television Studios is shutting down this week as part of a cost-cutting effort by parent company Paramount Global.” 

Last week, during an earnings call, Paramount’s top executives said the company would incur $300 million to $400 million in charges related to the restructuring. It also took a second-quarter impairment charge of $5.98 billion across its cable networks. 

Variety provided more color on Paramount’s struggles:

Paramount is one of several big U.S. media companies struggling with the migration of one-time TV viewers to streaming video. While the company owns the big CBS broadcast network, home to many of its big-audience sports properties, the bulk of the Paramount portfolio is centered around a cluster of cable networks that only show a few original programs and have seen the communities that once clustered around them dissipate over the past decade.

Did going ‘woke’ have something to do with Paramount’s demise? 

The layoffs come as other major media players, such as Warner Bros. Discovery, the parent of CNN, TNT, and HBO, announced layoffs in mid-July. Just weeks ago, Disney cut 140 employees, or 2% of its workforce, in the television division. In news media, the cuts are worsening by month, with Axios laying off 10% of its employees in recent days. 

Meanwhile, the emergence of X, the world’s news platform, is becoming the status quo in how people retrieve information, mostly free from government and corporate media censorship.

On Monday night, the conversation between Donald Trump and X owner Elon Musk generated a billion views. 

The death of legacy media is accelerating… 

Tyler Durden
Tue, 08/13/2024 – 15:20

via ZeroHedge News https://ift.tt/tA6cQy3 Tyler Durden

USPS Sees Steep Drop In Expedited Shipping Demand

USPS Sees Steep Drop In Expedited Shipping Demand

By Max Garland of SupplyChainDive

The U.S. Postal Service’s expedited package shipping services have seen a steep drop in demand, according to quarterly results released Thursday.

U.S. Postal Service worker loads a delivery truck on Oct. 1, 2021 in Chicago, Illinois.

The agency weathered a 40.7% decline in Priority Mail Services volume year over year for the third quarter of fiscal year 2024, which ended June 30.

The category includes shipments for Priority Mail, which offers delivery in one-to-three business days, and Priority Mail Express shipments, providing delivery in one to two days with a money-back guarantee.

“Our Priority Mail Services subcategory can be more price sensitive than other services and it continues to face intense competition from more affordable products and an industry-wide trend away from expedited products,” the Postal Service said in its quarterly report.

Shippers are embracing slower parcel delivery services to save on shipping costs, a choice that’s easier to make as they move inventory closer to end consumers and carriers improve transit times within their ground transportation networks.

UPS is seeing shippers “trade down” from speedy air transportation to more cost-effective options like its SurePost product, which utilizes the Postal Service for final-mile delivery, CFO Brian Dykes told analysts during a July earnings call.

FedEx’s international customers are also opting for slower deferred services more often, tied in part to growth from e-commerce shippers that tend to utilize those offerings, President and CEO Raj Subramaniam said on a March earnings call.

The Postal Service is seeing this market shift play out within its own network.

More economical products like USPS Ground Advantage fared better for the Postal Service in Q3, leading to a 2.7% overall increase in volume within the agency’s Shipping and Packages category.

“USPS Ground Advantage, the Postal Service’s shipping offering which provides a simple, reliable, and more affordable way to ship packages, has continued to experience wide adoption and growth in the marketplace,” the agency said in a news release about the Q3 results.

Tyler Durden
Tue, 08/13/2024 – 15:00

via ZeroHedge News https://ift.tt/9Gyc7Ow Tyler Durden

Can Elon Musk save the US dollar?

I was one of the millions of people listening to the live conversation last night between Elon Musk and Donald Trump.

And if you missed it, Trump was Trump. You pretty much know exactly what you’re getting with him, and there weren’t any major revelations.

Elon, on the other hand, came off as a genuinely concerned citizen who recognizes the problems facing the country and is exasperated why the people in charge aren’t implementing common sense solutions.

Honestly, I feel bad for the guy; Elon is blasted as a hard-core, right-wing nut job… and there are people who literally want to put him in prison because of his views.

But last night he said things like:

– “the legal system is supposed to be protecting the public from violent criminals”
– “we want safe and clean cities”
– “we want secure borders”
– “we want sensible government spending”
– “we want to restore both the perception and the reality of respect in the judicial system”
– “I’m pro-environment, but I don’t think we should vilify the oil and gas industry”

These are clearly not radical values, and my guess is that most people in the country would probably agree with his values.

About an hour into the call, Elon outlined what he thinks would bring prosperity back to the United States:

1) “Solve government overspending”. He correctly explained that extreme government deficits create inflation… so if you want to really get inflation under control, you have to stop the spending.

In theory, this shouldn’t be hard.

The Treasury Department expects to collect nearly $5 trillion in tax revenue this Fiscal Year (which ends on September 30th). And $5 trillion is an absurd amount of money.

As recently as five years ago (FY2019), $5 trillion would have been enough to pay for ALL federal spending and still have a surplus of more than $500 billion to start paying down the debt.

So, if they had simply frozen spending in place at FY2019 levels, even after adjusting for inflation and higher interest rates, $5 trillion in tax revenue this year should still be sufficient to keep the national debt from growing any further. And that’s without making any significant cuts to government spending.

But spending has increased by nearly 50% in five years. Is the government 50% better? Do taxpayers receive 50% more service? Clearly not. They’ve just let spending spiral out of control with no commensurate benefit to the taxpayer.

2) Deregulate.

Elon’s second point was that a lot of regulations are destructive and make no sense. Volumes and volumes of rules hold back businesses from innovating, hold back citizens from being productive. And that’s what the country truly needs to be prosperous– innovation and productivity.

And those were his two big points… and that if a government can do those two things, the future can be much brighter.

He’s right, and the math clearly supports this view.

Various Presidential administrations over time have increased, or decreased regulations. When there have been decreases in the number of regulations, US economic productivity tends to increase, and overall GDP growth rises. During periods of growing regulations (like right now), productivity wanes.

Higher productivity means that the economy grows faster. And a faster growing economy means more tax revenue for the government. Combined with spending constraints, this would leave plenty of money left over to pay down the debt… or simply set aside for a rainy day.

Imagine being able to obliterate a major threat to the nation, or shore up security to the power grid, or support an ally, without having to go into debt? It’s unimaginable given today’s national finances. But with real productivity growth and sensible spending, it’s absolutely a reality.

Failing to do BOTH of these things most likely results in a pretty bad outcome for the United States.

If the debt keeps spiraling out of control, and government regulators continue to constrain productivity, it’s extremely difficult to imagine the US dollar remaining the world’s primary reserve currency.

Continued deficit spending and a ballooning national debt will create even more inflation and cause foreign governments, central banks, and businesses to lose confidence in the dollar. It’s already happening… and one of the reasons why gold is hovering near its all-time high.

The US dollar’s global reserve status is one of America’s premier financial benefits. Losing it would be disastrous… and Elon’s approach is pretty much the only way to save it.

Will it happen?

With Kamala I think there’s zero chance. She does not strike me as someone who will cut spending and slash regulations. Quite the opposite. So honestly if she wins, I think it’s game over at that point. America does not have another four years to waste under the rule of Inspired Idiots.

With Trump I think there’s a chance. But a lot will have to go right, so the outcome is far from certain.

Honestly this is why it makes sense to have a Plan B. And I don’t mean that as a catchphrase or hollow aphorism.

As Elon said last night, “I think we’re at a fork in the road of destiny of civilization.” I don’t think is hyperbole; the differences in the potential outcomes are monumental. Any rational person ought to consider the probable consequences… and take sensible steps to reduce the impact.

Taxes might go through the roof. But there are completely legitimate ways to keep them low and reduce what you owe.

Inflation could easily spike. But you can hedge against inflation with real assets (many of which are absurdly cheap right now).

There are so many more examples; the point is that it’s really time to think clearly about how to navigate the road ahead.

Source

from Schiff Sovereign https://ift.tt/etrGvax
via IFTTT

A $150,000 House In 1988 Now Costs $707,500; Thank You, Fed!

A $150,000 House In 1988 Now Costs $707,500; Thank You, Fed!

Authored by Mike Shedlock via MishTalk.com,

The Fed has grossly distorted the housing market and no fix is in sight. A couple of images will explain…

Chart data from Case-Shiller, mortgage calculation based on Fannie Mae 30-year mortgage rates, chart by Mish

Home Price Calculation Notes

  • Case-Shiller measures repeat sales of the same home over time.

  • Case-Shiller is a much better, but less timely measure than median or average home price. However, the measure lags. Recent data is through May representing sales in February, March, and April.

  • The price above reflects the increasing value of the Case-Shiller index over time.

Mortgage Payment and Mortgage Rate

The above chart represents the mortgage payment of the same house as the lead chart reflecting the changing price and interest rate over time.

Price, Mortgage Rate, Mortgage Payment Over Time, Same House

  • The $150,000 home purchased in January 1988 had a mortgage payment of $1,076 reflecting a mortgage rate of 10.38 percent.

  • In 2006, the home was worth about $403,634 up and the mortgage payment was $2,086 reflecting a mortgage rate of 6.52 percent.

  • If you bought at the end of 2020 when the Fed clobbered interest rates to a record low of 2.68 percent, that same home that cost $150,000 in 1988 would have cost $502,649. However, due to Fed “affordability” magic, the mortgage payment was only $1,605. Thank you Fed!

  • However, if you want to buy now (May 2024) that $150,000 1988 home will set you back a mere $707,499. Your mortgage payment would be $3,662 at a mortgage rate of 7.06 percent. Oops and Ouch!

It’s Worse Than Described Above

Mortgage rates are slightly higher in practice.

Also, prices do not include property taxes or insurance.

Mess Entirely of Fed’s Making

This is a mess entirely of the Fed’s making. And it’s what happens when the Fed, and economists in general do not count home prices as inflation.

Home prices are not directly in the CPI or PCE. The latter is the Fed’s preferred measure of inflation.

Economists consider home prices a capital expense not a consumer expense. The problem is simple: Inflation is not just a consumer price concern!

The Fed ignored obvious inflation in the Great Recession and did so again in the Covid recession.

Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record

Existing-home sales declined 5.4 percent in June. It was the 23rd decline in 29 months. But the median price hit a new record.

For Discussion, please see Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record

Existing-home sales are about where they were in December 1995 and May 1979!

Only price-insensitive buyers, the newly rich, or those who just sold their previous house, can afford to buy.

All-cash sales accounted for 28% of purchase transactions in June.

Housing, Rent, CPI Indexes Jan 2020 vs May 2024

  • Housing: 212 to 323, +52.4 Percent

  • Rent 187 to 231, +23.5 Percent

  • CPI: 153 to 185, +20.9 Percent

Haves vs Have Nots

Existing homeowners who refinanced near or perhaps even under 3.0 percent have extra money in their pocket every month to spend. And they do.

Those who spend every penny then have an unexpected expense or a big rent increase are in trouble.

The group of people who were doing OK but now aren’t is expanding. Also the unemployment rate is rising and small business employment is in a serious nose dive.

Small Business Employment Growth Is Now Negative

Data from ADP, chart by Mish

For discussion, please see Small Business Employment Growth Is Now Negative (and What It Means)

ADP data shows year-over-year payroll growth is negative 88,000 for small corporations sized 20-49. Trends are negative in all but very large corporations.

On July 26, I commented Expect the BLS to Revise Job Growth Down by 730,000 in 2023, More This Year

At the heart of these revisions is a horribly flawed birth-death model used by the BLS. My calculation closely matches an estimate by Bloomberg’s chief Economist.

In addition to the birth-death model, or perhaps explaining the birth-death model errors, small business employment is declining fast.

Unemployment Rate Jumps, Jobs Rise Only 114,000 with More Negative Revisions

On August 2, I commented Unemployment Rate Jumps, Jobs Rise Only 114,000 with More Negative Revisions

The headline jobs number was much weaker than the consensus estimate of 180,000 and the unemployment rate rose 0.2 percentage points.

The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered

On July 8 I commented Weak Data Says a Recession Has Already Started, Let’s Now Discuss When

I did an update on August 2 using a tighter trigger.

Also on August 2, I commented The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered

Recession with rising unemployment rates and 15,000 Layoffs at Intel is not the best environment to be buying a house even if mortgage rates have declined.

Tyler Durden
Tue, 08/13/2024 – 13:40

via ZeroHedge News https://ift.tt/toBNhLX Tyler Durden

Iran Signals It’s Climbing Down From Israel Attack Plans, 2 Weeks After Hanyieh Killing

Iran Signals It’s Climbing Down From Israel Attack Plans, 2 Weeks After Hanyieh Killing

We have reached two weeks since the July 31st assassination of Hamas leader Ismail Haniyeh in Tehran, and Iran’s anticipated major retaliation on Israel which its leaders have been threatening still hasn’t come.

On Tuesday Tehran leaders appear to be walking back threats. They won’t launch an attack based on key conditions, they say. Reuters and Times of Israel have cited three Iranian officials who said “An Iranian attack on Israel could be delayed amid hoped-for negotiations later this week for a hostage release and ceasefire deal in Gaza which indicates that “a successful deal could hold Iran back from direct retaliation against Israel for alleged assassinating Hamas terror chief Ismail Haniyeh on its soil.”

West Asia News Agency/Reuters

So now the pressure is on to at least proclaim the beginnings of a deal by week’s end, which has already happened several times before, after which a ceasefire agreement ultimately collapses based on wrangling over details and timing.

Once again, Iran is signaling an indefinite timeline related to the threat of an attack: “The sources did not say how long Iran would allow for talks to progress before taking action,” Reuters continues. And more:

Several reports in recent days indicated Israel believes Iran intends to attack before Thursday’s renewed talks for a deal. The new comments appeared to signal that the attack would only take place after those talks, and only if they failed to yield what Iran deems to be sufficient results.

As of Monday, Iran rejected calls from Group of Seven countries to “stand down” – saying that it has a “legal right” to counter attack given an official was brazenly assassinated on its soil.

Iran sees the leader of Hamas as essentially a politician and ‘head of state’ – while Israel and the West consider him a terrorist and legitimate target responsible for the Oct.7 mass killings of Israelis and foreigners.

Markets have generally reacted positively to what seems a ‘climb down’ – with oil prices pulling back from Monday’s rally which was driven by heightened fears of broader regional war.

Still as of Tuesday morning, Iran’s president has presented fresh warnings:

On Tuesday morning, Iranian state news agency Irna reported that Mr Pezeshkian had told Sir Keir that Western countries’ support for Israel had encouraged it to “continue atrocities” and threatened peace and security.

“Pezeshkian stated that from the point of view of the Islamic Republic of Iran, war in any part of the world is not in the interest of any country, emphasizing that a punitive response to an aggressor is a legal right of states and a way to stop crime and aggression,” Irna added.

Clearly there is a strong element of ‘psychological warfare’ motivating this, in order to keep Israeli society on edge, and increase Iran’s leverage in their dealings with Western diplomats.

But the Israeli government itself is deeply divided on the prospect of a lasting ceasefire and deal with Hamas. Lately this has led to an open split between PM Netanyahu and Defense Minister Gallant.

Tyler Durden
Tue, 08/13/2024 – 13:20

via ZeroHedge News https://ift.tt/w01AmK3 Tyler Durden

A Harris-Walz Administration Would Be A Nightmare For Free Speech

A Harris-Walz Administration Would Be A Nightmare For Free Speech

Authored by Jonathan Turley,

The selection of Minnesota Gov. Tim Walz (D) as the running mate for Vice President Kamala Harris has led to intense debates over crime policywar claimsgender identity policies and other issues.

Some attacks have, in my view, been inaccurate or overwrought. However, the greatest danger from this ticket is neither speculative nor sensational. A Harris-Walz administration would be a nightmare for free speech.

For over three years, the Biden-Harris administration has sustained an unrelenting attack on the freedom of speech, from supporting a massive censorship system (described by a federal court as an “Orwellian Ministry of Truth“) to funding blacklisting operations targeting groups and individuals with opposing views.

President Biden made censorship a central part of his legacy, even accusing social media companies of “killing people” for failing to increase levels of censorship. Democrats in Congress pushed that agenda by demanding censorship on subjects ranging from climate change to gender identity — even to banking policy — in the name of combatting “disinformation.”

The administration also created offices like the Disinformation Governance Board before it was shut down after public outcry. But it quickly shifted this censorship work to other offices and groups.

As vice president, Harris has long supported these anti-free speech policies.

The addition of Walz completes a perfect nightmare for free speech advocates. Walz has shown not only a shocking disregard for free speech values but an equally shocking lack of understanding of the First Amendment.

Walz went on MSNBC to support censoring disinformation and declared, “There’s no guarantee to free speech on misinformation or hate speech, and especially around our democracy.”

Ironically, this false claim, repeated by many Democrats, constitutes one of the most dangerous forms of disinformation. It is being used to convince a free people to give up some of their freedom with a “nothing to see here” pitch.

In prior testimony before Congress on the censorship system under the Biden administration, I was taken aback when the committee’s ranking Democrat, Del. Stacey Plaskett (D-Virgin Islands), declared, “I hope that [all members] recognize that there is speech that is not constitutionally protected,” and then referenced hate speech as an example.

That false claim has been echoed by others such as Sen. Ben Cardin (D-Md.), who is a lawyer. 

“If you espouse hate,” he said, “…you’re not protected under the First Amendment.”

Former Democratic presidential candidate Howard Dean declared the identical position:

“Hate speech is not protected by the First Amendment.”

Even some dictionaries now espouse this false premise, defining “hate speech” as “Speech not protected by the First Amendment, because it is intended to foster hatred against individuals or groups based on race, religion, gender, sexual preference, place of national origin, or other improper classification.”

The Supreme Court has consistently rejected the claim of Gov. Walz. For example, in the 2016 Matal v. Tam decision, the court stressed that this precise position “strikes at the heart of the First Amendment. Speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’”

As the new Democratic vice-presidential candidate, Walz is running alongside one of the most enthusiastic supporters of censorship and blacklisting systems.

In her failed 2020 presidential bid, Harris ran on censorship and pledged that her administration “will hold social media platforms accountable for the hate infiltrating their platforms, because they have a responsibility to help fight against this threat to our democracy.”

In October 2019, Harris dramatically spoke directly to Facebook’s Mark Zuckerberg, insisting “This is not a matter of free speech….This is a matter of holding corporate America and these Big Tech companies responsible and accountable for what they are facilitating.” She asked voters to join her in the effort.

They didn’t, but Harris ultimately succeeded in the Biden-Harris administration to an unprecedented degree with a comprehensive federal effort to target and silence individuals and groups on social media.

In my new book, “The Indispensable Right: Free Speech in an Age of Rage, I detailed how President Biden is the most anti-free speech president since John Adams. Unlike Adams, I have never viewed Biden as the driving force behind the massive censorship and blacklisting operations supported by his subordinates, including Harris. That is not to say that Biden does not share the shame in these measures. He was willing to sacrifice not only free speech but also institutions like the Supreme Court in a desperate effort to rescue his failing nomination.

The substitution of Harris for Biden makes this the second election in which free speech is the key issue for voters. In 1800, Thomas Jefferson defeated Adams, in large part based on his pledge to reverse the anti-free speech policies of the prior administration, including the use of the Alien and Sedition Acts to arrest his opponents.

With the addition of Walz, Democrats now have arguably the most anti-free speech ticket of a major party in more than two centuries. Both candidates are committed to using disinformation, misinformation and malinformation as justifications for speech controls. The third category has been emphasized by the Biden-Harris administration, which explained that it is information “based on fact, but used out of context to mislead, harm, or manipulate.”

Walz has the advantage in joining this anti-free speech ticket without the burden of knowledge of what is protected under the First Amendment.

With the Harris-Walz ticket, we have come full circle to the very debate at the start of this republic. The warnings of the Founders to reject the siren’s call of censorship remain tragically relevant today. Free speech was and remains our “indispensable right.”

As Benjamin Franklin warned, “In those wretched countries where a man cannot call his tongue his own, he can scarce call anything his own. Whoever would overthrow the liberty of a nation must begin by subduing the freeness of speech….Without freedom of thought there can be no such thing as wisdom, and no such thing as public liberty without freedom of speech, which is the right of every man.”

With her selection of Walz, Harris has decided to put free speech on the ballot in this election. It is a debate that our nation should welcome, as it did in 1800.

The Biden-Harris administration has notably toned down its anti-free speech efforts as the election approaches. Leading censorship advocates have also gone mostly silent.

If successful, a Harris-Walz administration is expected to bring back those policies and personalities with a vengeance. That could be radically enhanced if the Democrats take both houses of Congress and once again block investigations into their censorship programs.

The media has worked very hard to present Harris and Walz as the “happy warriors.” Indeed, they may be that and much more. The question is what they are happy about in their war against free speech.

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. He is the author of “The Indispensable Right: Free Speech in an Age of Rage” (Simon and Schuster).

Tyler Durden
Tue, 08/13/2024 – 12:20

via ZeroHedge News https://ift.tt/VKZjy2t Tyler Durden

If Harris Rejects ‘Unscripted’ Face-Offs, Two Proposed Debates Will Become Trump Town-Halls

If Harris Rejects ‘Unscripted’ Face-Offs, Two Proposed Debates Will Become Trump Town-Halls

Authored by Janice Hisle via The Epoch Times (emphasis ours),

A pair of proposed presidential debates could instead become town hall meetings for former President Donald Trump, his campaign confirmed with The Epoch Times on Aug. 11.

The Republican presidential nominee and his Democrat opponent, Vice President Kamala Harris, have both agreed to participate in a Sept. 10 debate on ABC News. This comes despite the former president’s concerns over a conflict of interest with the network, which faces a lawsuit in which Trump alleges the network defamed him.

He is now waiting for Harris to accept two additional proposed debates – Sept. 4 on Fox News and Sept. 25 on NBC News.

If she rejects those proposals, which Trump made during an Aug. 9 news conference, Trump will appear solo on those national TV networks, a Trump campaign adviser said.

The Epoch Times has sought comment from the Harris campaign.

I look forward to seeing Kamala at all three Debates!” Trump said in an Aug. 11 post on his social media platform, Truth Social.

He also released additional details about the moderators and locations of the proposed debates.

The Sept. 4 Fox News debate or town hall would be aired live from Harrisburg, Pennsylvania.

On Sept. 10, David Muir, anchor of “ABC World News Tonight,” will serve as moderator for a confirmed showdown at Philadelphia’s Independence Hall.

On Sept. 25, NBC’s Lester Holt would moderate the proposed faceoff in Grand Rapids, Michigan.

The confirmed and proposed locations are notable because they are in two battleground states.

The network did not immediately respond to The Epoch Times’ request for comment.

The debates are highly anticipated given the extraordinary turn of events this election cycle.

On June 27, Trump and President Joe Biden locked horns in a debate that CNN conducted in Atlanta. Biden’s performance in the contest elicited calls for him to exit the race.

On July 13, Trump survived an assassination attempt that killed a bystander and wounded three people, including him, at a campaign rally in Butler, Pennsylvania. A Secret Service sniper killed the suspected gunman, who was perched on a rooftop with a rifle. The investigation continues amid widespread criticism of security failures at the event.

Then, on July 21, Biden quit the race but said he would serve the remainder of his presidential term.

Biden endorsed Harris as his successor. Polls are indicating that she is outperforming Biden as a Democrat presidential contender and has gained a slight edge over Trump. The RealClear Politics average of opinion polls is showing Harris ahead of Trump by 0.5 percent. She is expected to receive another boost in the polls after the Democratic National Convention, which is set for Aug. 19 to 22 in Chicago.

Some independent voters who spoke to The Epoch Times said they like Harris partly because the 59-year-old is younger than Trump, who is 78. Others, however, expressed concern over what she has accomplished as vice president. They also say she hasn’t made her policy positions clear.

The Trump campaign has criticized Harris for not granting media interviews. He and his running mate, Sen. JD Vance (R-Ohio), had news conferences last week and highlighted the differences between their campaign and that of Harris.

Tyler Durden
Tue, 08/13/2024 – 10:00

via ZeroHedge News https://ift.tt/JeaCkcM Tyler Durden

Huawei Prepares New AI Chip To Challenge Nvidia’s Market Share In China

Huawei Prepares New AI Chip To Challenge Nvidia’s Market Share In China

China’s Huawei Technologies is preparing to launch a new AI chip designed to circumvent Washington’s relentless chip sanctions. This move not only overcomes US restrictions but also threatens Nvidia’s market share in the world’s second-largest economy. 

Sources familiar with the situation told the Wall Street Journal that China’s big tech firms and telecommunications operators are currently testing Huawei’s latest processor, Ascend 910C. Huawei’s representatives told customers that the new chip is comparable to Nvidia’s H100, which debuted last year but is unavailable in China. 

TikTok’s parent ByteDance, search-engine giant Baidu, and state-owned China Mobile are some companies that are discussing Ascend 910C chip orders with Huawei. The people noted that forecasted orders for the new AI chip exceed 70,000 or a market value of about $2 billion. 

Ascend 910C will likely fill a void left by Nvidia. In 2022, US export controls prevented Nvidia from exporting its most advanced AI chips in China amid worsening chip wars between the superpowers. In response, Nvidia has sold a downgraded version of its AI chips in China (called H20) that complies with Washington’s export rules. 

The people explained that Nvidia’s new China-oriented chip, B20, could have difficulty getting export approval from Washington.

Dylan Patel, an analyst at industry research firm SemiAnalysis, cautioned that any potential blockage of Nvidia’s B20 chip for export to China could spell trouble for the company’s market share in the country. He emphasized that Huawei’s Ascend 910C is a more advanced chip than B20, underscoring the urgency of the situation for Nvidia. 

SemiAnalysis estimates Huawei could produce 1.3 million to 1.4 million Ascend 910C chips next year. However, additional sanctions could complicate that forecast. It also forecasts that about a million H20 chips will be sold this year, which is about $12 billion.

In June, a Huawei executive at an industry conference said half of China’s large language models are being trained on its chips. He said that 910 B’s performance had surpassed Nvidia’s A100 in training models. 

What’s concerning for Washington’s political elites is that despite the relentless chip sanctions on China, reports like those from the WSJ indicate that these restrictions aren’t slowing China’s rise. Moreover, Nvidia’s market share in China, which represents about 9% of its total revenue, is increasingly threatened by Huawei. 

Tyler Durden
Tue, 08/13/2024 – 09:40

via ZeroHedge News https://ift.tt/QExVyvH Tyler Durden

Are Mega-Caps About To Make A Mega-Comeback?

Are Mega-Caps About To Make A Mega-Comeback?

Authored by Lance Roberts via RealInvestmentAdvice.com,

Are the “Mega-Cap” stocks dead? Maybe. But there are four reasons why they could be staged for a comeback. The recent market correction from the July peak certainly got investors’ attention and rattled the more extreme complacency. As we noted previously:

“While there have certainly been more extended periods in the market without a 2% decline, it is essential to remember that low volatility represents a high “complacency” with investors. In other words, the longer the market moves higher without a significant correction, the more confident investors become. They respond by raising their allocations to equities (risk) and reducing their allocations to cash (safety).”

As repeatedly discussed in June and July, a 5-10% correction is normal and occurs almost yearly.

Historically, when the 37-week rate of change is greater than 30%, such events typically precede short—to intermediate-term corrections. While the bulls are very confident, the risk of a 5% to 10% correction over the next three months remains elevated.” – July 13th

Unsurprisingly, retail and professional investors have witnessed a more extreme amount of selling of large-cap positioning over the last three weeks.

The level of de-grossing by some strategies, alongside the correlated drawdowns in alpha / crowding performance, suggests that we could be mostly done with the drawdown and de-grossing. However, performance/alpha/gross flows could remain choppy over the next few months.” – John Schlegel, JPM

As John notes, the question is whether the correction process is over and whether investors will return to the “mega-caps” in their portfolios.

4-Reasons Mega-Caps Are Not Dead Yet

The recent sell-off in “Mega-cap” stocks, in particular, is unsurprising. We have warned about investors crowding into relatively few stocks to chase market returns.

“The bifurcation between the top 10 companies, as measured by market capitalization, and the other 490 stocks in the index has created an illusion of market bullishness. Despite the extremely crowded trade into the three sectors comprised of those ten stocks, we continue to see professional investors crowd into those shares at a record clip.”

There are four (4) reasons why investors, both professional and retail, were chasing a handful of stocks. They are also the same reasons that “Mega-caps” will likely regain their favor.

First, these stocks are highly liquid, and managers can quickly move money into and out without significant price movements. The importance of liquidity cannot be overlooked for insurance companies, pensions, hedge funds, and endowments. These investors must move millions of dollars at a time, and small companies are not liquid enough for sizeable inflows and outflows.

Secondly, the passive indexing effect has not gone away. As investors change their investing habits from buying individual stocks to the ease of purchasing a broad index, capital inflows unequally shift into the largest capitalization stocks in the index. Over the last decade, capital inflows into exchange-traded funds (ETFs) have exploded.

As we discussed in “Career Risk,”

The top-10 stocks in the S&P 500 index comprise more than 1/3rd of the index. In other words, a 1% gain in the top-10 stocks is the same as a 1% gain in the bottom 90%. As investors buy shares of a passive ETF, the shares of all the underlying companies must get purchased.

Third, the “Mega-cap” companies have more substantial earnings growth than their small—and mid-cap brethren. For now, the large-cap, primarily the “Mega-Cap” companies, are driving most of the earnings growth. With the economy showing clear signs of deterioration, earnings of small and mid-cap companies remain the most vulnerable to changes in economic demand.

Lastly, and probably most importantly, large-cap, predominantly “Mega-cap” companies engage in share repurchases much more than small and mid-caps. Corporate share buybacks will approach $1 trillion this year and exceed that in 2025, with Apple alone accounting for more than 10% of those purchases.

As we noted previously, this is not an insignificant factor supporting the rise in asset prices. Since 2000, corporate share buybacks have provided 100% of all the “net equity purchases.”

Therefore, it should be unsurprising that there is a high correlation between the ebbs and flows of corporate share buybacks and market performance.

With earnings season mostly behind us, the “buyback window” for the largest companies is now open. Such will allow the “Mega-caps” to start repurchasing shares.

However, while the support for the “Mega-caps” remains, the current correction process is likely incomplete.

Correction Is Likely Not Over Yet

So are “Mega-Caps” likely becoming a “mega-buy?” That may be stretching it a bit, but what is likely is that the recent underperformance is likely near its conclusion.

From a purely technical perspective, the “Mega-Cap” stocks have witnessed a sharp contraction over the last few weeks. Using the Vanguard Mega Cap Growth ETF (MGK) as a proxy for the largest companies, the recent correction has reversed most of the previous overbought and extended conditions.

MGK is oversold on multiple levels, and the MACD indicator is well below zero, which has previously coincided with short-term market bottoms. Furthermore, MGK tested and held the 200-DMA, which was also the lowest in October 2023. However, while technically oversold, many investors are “trapped” by the recent decline, so we will likely see some “selling pressure” as they look to exit, which would set up a retest of the 200-DMA before the correction is complete.

MGK already completed an initial 38.2% correction level using a Fibonacci retracement sequence from the recent high. While the 200-DMA is providing initial support to MGK, a failure of that support would bring a 50% retracement level into focus. Such would align with the lows of the April correction.

Given the short-term oversold conditions and the decline in sentiment, the reflexive bounce in the “Mega-Caps” we saw last week was unsurprising. However, as we suggested, given such a sharp rotation from recent highs, it may only be a “tactical trading opportunity” before the completion of the correction process. This is because “bullish sentiment” remains elevated, historically not what is seen at corrective lows.

We suspect that while we could see an oversold bounce following the recent sell-off, “trapped longs” will likely use any such opportunity to exit positions. Therefore, we suggest the following rules for whatever comes next.

The Rules

The rules are simple but effective.

  1. Raise cash levels in portfolios.
  2. Reduce equity risk, particularly in areas highly dependent on economic growth.
  3. Add or increase the duration of bond allocations, which tend to offset risk during recessionary downturns.
  4. Reduce exposure to commodities and inflation trades as economic growth slows.

If a further correction occurs, the preparation allows you to survive the impact. Protecting capital will mean less time spent getting back to breakeven afterward. Alternatively, it is relatively easy to reallocate funds to equity risk if the market reverses and resumes its bullish trend.

Investing during periods of market uncertainty can be difficult. However, you can take steps to ensure that increased volatility is survivable.

  • Have excess emergency savings, so you are not “forced” to sell during a decline to meet obligations.
  • Extend your time horizon to 5-7 years, as buying distressed stocks can get more distressed.
  • Don’t obsessively check your portfolio.
  • Consider tax-loss harvesting (selling stocks at a loss) to offset those losses against future gains.
  • Stick to your investing discipline regardless of what happens.

If I am correct, and this current corrective process is incomplete, the risk reduction will lower portfolio volatility. However, if I am wrong, we can reallocate to equities and rebalance our portfolios for growth as needed,

Follow your process.

Tyler Durden
Tue, 08/13/2024 – 09:02

via ZeroHedge News https://ift.tt/ZAcPzMy Tyler Durden

Home Depot Slashes Sales, Profit Outlook As Higher Rates “Pressure Demand”

Home Depot Slashes Sales, Profit Outlook As Higher Rates “Pressure Demand”

The largest home improvement retailer in the US beat second-quarter earnings and sales expectations but lowered its comparable sales and profit forecasts for the year. This aligns with our ongoing theme of an emerging consumer slowdown. 

Here’s a quick look at Home Depot’s second-quarter results (courtesy of Bloomberg): 

  • Comparable sales -3.3% vs. -2% y/y, estimate -2.39%

  • US comparable sales -3.6% vs. -2% y/y, estimate -2.63%

  • Net sales $43.18 billion, +0.6% y/y, estimate $43.79 billion

  • Adjusted EPS $4.67, estimate $4.52

  • EPS $4.60 vs. $4.65 y/y

  • Customer transactions -1.8%

  • Average ticket sales $88.90, -1.3% y/y 

  • Average ticket -1.3%

  • Sales per square foot -3.6%

  • Merchandise inventories $23.06 billion

  • Total location count 2,340, +0.6% y/y

  • SG&A expense $7.14 billion, +3.3% y/y

“During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,” Home Depot CEO Ted Decker wrote in a statement. 

The focus is on Home Depot’s full-year outlook. It now expects comparable sales to decrease by 3% to 4% compared to the previous forecast of -1%. This is far worse than the average Wall Street estimate tracked by Bloomberg of -1.65%. It lowered earnings per share for the year to -2% to -4%, down from +1%. 

Snapshot of the full-year forecast (courtesy of Bloomberg):

  • Sees comparable sales -3% to -4%, saw about -1%, estimate -1.65% (Bloomberg Consensus)

  • Sees sales +2.5% to +3.5%, saw about +1%

  • Sees operating margin 13.5% to 13.6%, saw about 14.1%

  • Sees EPS growth -2% to -4%, saw about +1%

  • Sees adjusted EPS growth -1% to -3%

Here is Goldman’s reaction to earnings: 

HD – Weak, As Expected. Will They Also Get a Pass Like Housing Peers?: We think a comp miss and FY comp sales cut was widely expected. It was always going to just be a matter of magnitude and whether or not the stock would get punished for it. Whether fair or not, most housing/big ticket exposed names who cut have acted pretty well on 2Q EPS day, despite many cutting 2H numbers. Ultimately, they did miss the mark slightly here on top-line for the quarter and the guide. Commentary on the call about whether they have seen further deterioration, or just still sluggish trends will be important to watch. Would expect some weakness to start, but expect the move in rates the next couple days to matter just as much for the stock as actual results, if other housing prints are any indication. They beat EPS, with upside from revenue and SG&A. Comps were -3.3% (US was -3.6%) vs Consensus -2.1% and we think the bogey was -3%. They took FY comps down to down 3-4%. They said -3% is where it will be if the demand holds where it is now into 2H. We think they bogey for the guide was down 2-3%.

In an interview with CNBC, CFO Richard McPhail said consumers have been undergoing a “deferral mindset” since the middle of 2023. The reason is straightforward: high mortgage rates have paralyzed the housing market, and elevated inflation and high interest rates, in general, have led households to pull back on spending. 

McPhail said, “Pros tell us that, for the first time, their customers aren’t just deferring because of higher financing costs,” adding, “They’re deferring because of a sense of greater uncertainty in the economy.”

“What our customers tell their pros is, ‘Everything I read tells me interest rates will be lower in three to six months,'” the exec said, explaining,” ‘Why would I borrow to finance the project now rather than just wait a few months?'”

Companies heavily exposed to consumers have posted weak results this earnings season and warned about consumer weakness. 

Rate traders are currently pricing in as many as four 25bps cuts by the end of the year. The labor market is cooling, and the economy is trending in the wrong direction. 

Low/mid-tier consumers have been tapping out in the Biden-Harris economy, plagued with elevated inflation and high interest rates. Many of these folks have depleted savings and maxed out credit cards. The big question is whether lowering interest rates will create a soft economic landing, or if the Fed has already missed the mark.

Tyler Durden
Tue, 08/13/2024 – 08:45

via ZeroHedge News https://ift.tt/nX84SoY Tyler Durden