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Tag Archives: Companies & Markets

More Airlines Collapse: Jet Airways India, Alitalia, WOW Air

And the 217 planes that Jet Airways has ordered from Boeing? By MC01, a frequent commenter, for WOLF STREET: Today, another major airline collapsed. Jet Airways, India’s largest private airline, announced “with immediate effect” that it was “compelled to cancel all its international and domestic flights.” It suspended operations on a “temporary” basis. It said: “Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel...

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What J.B. Hunt Just Said About the U-Turn in Trucking

Largest US Trucking Company: “Volume, or lack thereof, is obviously the main story.” The inventory pile-up hurts. And the driver shortage is ending. J.B. Hunt, the largest trucking company in the US by revenues, and a barometer of the goods-based sector of the economy, reported late Monday that revenues rose 7.3% on higher freight rates and fuel surcharges, that net profit inched up only 1.2% despite those price increases, and that Intermodal revenues ticked up 2% while Intermodal...

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China EV Manufacturing Bubble Faces Getting Bludgeoned

There are now 486 EV manufacturers in China, triple from two years ago. Most will disappear. New vehicle sales in China plunged 14% in the first quarter from a year earlier, according to the China Association of Automobile Manufacturers today. For the whole year 2018, new vehicle sales had dropped 4.1%, the first such drop in modern data going back to 1990. Despite this historic slump, sales of “electrified” vehicles (battery-electric EVs, plug-in hybrids, and fuel cell vehicles)...

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THE WOLF STREET REPORT

The Biggest Risk for Stocks: The moment share buybacks get slashed. A stock market that is so uniquely dependent on corporations buying back their own shares in record amounts is in a very fragile position because share buybacks have a history of suddenly getting slashed when times get tough. And then, who’ll be the buyers? (11 minutes) Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can...

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What’ll Happen to Home Prices in Silicon Valley & San Francisco after the Mega-IPOs? Last Two Times, We Got a Housing Bust

Here’s how it works. Meanwhile, the media is busy publishing real-estate industry hype. This is a shorter, less angry version of my podcast last Sunday (as many have found out, I’m freer when I talk than when I write). It’s now a standard theme in San Francisco and Silicon Valley conversations, and it’s everywhere in the media: The wave of mega IPOs – including Lyft’s IPO last month and the forthcoming IPOs of Uber, AirBnb, Palantir, etc. – will cause the Bay Area to drown in...

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Whole Foods’ Existential Threat?

“Amazon’s plunge into the $800 billion US grocery industry posed an existential threat to rivals”: CNN, August 2018. So let’s see. By John E. McNellis, Principal at McNellis Partners, for The Registry: A couple questions remained in the wake of Whole Foods’ announcement last week that it was dropping prices on over five hundred items by twenty percent. Is this Amazon’s long-awaited spring offensive or is the grocer playing defense, treading water, simply trying to keep its market...

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Uber Discloses 3-Yr $10-Billion Loss from Operations. Rideshare Revenues Stall. 50-Page “Risk Factors” Not for the Squeamish

But it had big tax benefits and one-time gains. And Uber Eats is hot, so to speak. Uber Technologies’ IPO filing was made public today. The 330-page or so S-1 filing disclosed all kinds of goodies, including detailed but still unaudited pro-forma financial statements as of December 31, 2018, huge losses from operations, big tax benefits, large gains from the sale of some operations, stagnating rideshare revenues, and an enormous list of chilling “Risk Factors” that go beyond the usual...

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This is How Stocks Get Hit When BBB-Rated Companies Try to Dodge a Downgrade to “Junk”

There are now many of them. Shoring up the balance sheet is the opposite of “shareholder friendly.” It’s “creditor friendly.” The amount of investment-grade corporate bonds outstanding by non-financial companies in the US and Europe – so excluding bonds issued by banks, insurance companies, and the like – has more than tripled (+204%) over the past ten years, from $1.66 trillion at the beginning of 2009 to $5.06 trillion by the end of 2018. Split by rating, over the same period,...

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What Would Stocks Do in “a World Without Buybacks,” Goldman Asks

Companies buying back their own shares has “consistently been the largest source of US equity demand.” Without them, “demand for shares would fall dramatically.” Too painful to even imagine. Goldman Sachs asked a nerve-racking question and came up with an equally nerve-racking answer: What would happen to stocks “in a world without buybacks.” Because buybacks are a huge deal. In the fourth quarter 2018, share repurchases soared 62.8% from a year earlier to a record $223 billion,...

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A Simon Property Group Mall Generates Largest Loss Ever for Retail CMBS

How the Brick & Mortar Meltdown works for Commercial Mortgage-Backed Securities after America’s largest mall landlord defaults on a mortgage and walks away from the mall. The dust has settled and the numbers have emerged: A $200-million commercial real estate mortgage on an indoor mall of over 1 million square feet in a suburb of Kansas City, MO, generated a $149.7 million loss for commercial mortgage-backed securities investors, for a loss ratio of 74.9%, when the mall was sold in...

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