UBS posted a monster quarter—the biggest ever quarterly profit for a bank because of its attractive takeover of CS. The benefit came from the difference between the price paid and the actual value acquired. They plan to retire the CS name by 2025 and effect a bunch of integration and cost cutting (3k job cuts and >$10bn in cost savings).
Core PCE (ex food + energy) is up, but not by a lot. Inflation-adjusted consumer spend rose the most since Jan, though, so if demand stays strong…guess what happens to prices? Also, unemployment benefit applications fell to a 4 week low. Tomorrow we get the jobs report, which I believe will have a greater impact on markets.
New management at Shell quietly retired the world’s largest corporate plan for carbon offsets. Per a story on BBG, mgmt. is focused on profits, cost cutting and other strategies…The former plan would have offset 10% of its emissions roughly and cost up to $100mm a year. Basically, they tried some projects and didn’t get the offsets, so they need to change course.
China made some new moves to stop the decline in its residential property market. Reductions in down payment requirements for homebuyers (minimum 20% for first-timers and 30% for second-timers), which should lead to lower rates on existing mortgages, which analysts expect may be felt at the start of 2024. Interestingly, mortgage loan policies vary from city to city in China.
Salesforce, spurred by a million (ok, exaggeration, but A LOT) activists, overdelivered on its promise to generate more profits. Marc and his team cut costs and outlined plans to spur declining growth rates, from AI features and px increases.
Dollar General cut its profit forecast for the 2nd consecutive quarter. Higher labor, inventory mgmt issues, and tougher times for its core customer base are not helping. No doubt mgmt is watching what Dollar Tree is doing with its turnaround backed by activist Mantle Ridge. It’s another sign of how the current economy is affecting different segments of consumers.
