New Samsung fab in Texas to eye orders from major US vendors

Samsung Electronics has disclosed plans to set up an advanced wafer fab in Texas. The new fab that will be equipped with advanced process manufacturing equipment and facilities will be striving to win advanced chip orders from AMD and other US chip vendors, according to industry sources......»»

Category: topSource: digitimesNov 25th, 2021

Forget Black Friday. A flood of bargains is coming in January.

Products delayed by the supply chain crisis will end up heavily discounted at stores next year, analysts say. Analysts say we'll see major discounting next year.Vickie Flores/In Pictures via Getty Images Analysts say shoppers should prepare for major discounts in January.  This is because supply chain delays are causing products to arrive too late for the holidays. These items will likely end up on discount racks, they say. If you didn't get the deals and discounts you were hoping for this Black Friday, fear not, for January is likely to be awash with bargains, analysts say. This is because the ongoing supply chain crisis, which is preventing products from getting to where they need to be in time for the holidays, is likely to lead to major discounts in the post-holiday season, a group of BMO analysts wrote in a note to clients this week. "We believe it critical to point out that unlike last year's actual supply-chain shutdown (factories shut, vendors shut, stores shut), supply chains are not shut down this year, they are slowed down. Meaning, the issue is less one of creation and more one of transportation," these analysts wrote.They continued: "That means that product is slowly inching its way across the globe and country. Unfortunately, that will likely lead to mistimed floorsets as product misses its intended season, likely triggering promotions and clearance."In other words, when product finally makes its way to stores, it's likely headed straight for the discount racks. Some retailers shed light on how grave the situation has become in recent earnings calls. Victoria's Secret CEO Martin Waters said that 45% of the brand's fall season inventory has been delayed. Though it has already canceled 10 million units that would arrive too late, it's expected to head into next year with more product than usual. And these products, which may be seasonal, are likely to be more vulnerable to discounts. This is particularly concerning for retailers who, in the past year, had finally managed to break the 12 year cycle of discounting which has plagued the retail sector since the last recession.The pandemic forced retailers to think lean, BMO analyst Simeon Siegel said. "They canceled their purchase orders, supply chains shut down, and there was no product coming out," he told Insider on a recent call."For the first time in a very long time, retailers were protected from themselves," he said. Now, retailers are more likely to fall back into the discounting trap again, which is hard to break, he added. Some might just choose to offload inventory rather than having it clogging up their stores next year, which should present lots of buying opportunities for off-price stores such as TJ Maxx and Ross, experts say. While discounts might be good news for shoppers who are already feeling the pinch from rising inflation rates and watered-down promotions this Black Friday, they nonetheless may not get the deals they're hoping for, Siegel said. "Anything that is good will sell out. Anything that is bad and that misses a deadline? That is going to sit on the shelf and rack up promotions again," he said. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 30th, 2021

Highlights of the day: TSMC expands partnership with OSATs

To meet surging demand for heterogeneous chips, TSMC is expected to adopt a more agile mode of cooperation with OSATs. TSMC's majr foundry competitor Samsung Electronics has announced plans to build a new fab in the US state of Texas. Samsung is eyeing orders from major US chip vendors. China first-tier lithium battery makers have refrained from raising prices this year, but they are now looking to raise prices by 20% next year......»»

Category: topSource: digitimesNov 25th, 2021

New Samsung fab in Texas to eye orders from major US vendors

Samsung Electronics has disclosed plans to set up an advanced wafer fab in Texas. The new fab that will be equipped with advanced process manufacturing equipment and facilities will be striving to win advanced chip orders from AMD and other US chip vendors, according to industry sources......»»

Category: topSource: digitimesNov 25th, 2021

Highlights of the day: Smartphone chip vendors reserving 12-inch fab capacity for PWMICs

Shortage of foundry supply is sending major smartphone application processors vendors booking 12-inch fab capacity in advance to facilitate shipments of their power management ICs next year. Memory maker Winbond expects to run at full capacity next year to fulfill robust NOR flash chip orders. DIGITIMES recently talked to Stephen Ezell, ITIF VP of Global Innovation Policy, about why India and others should joint ITA-3......»»

Category: topSource: digitimesNov 24th, 2021

Americans Panic-Buy Firewood And Stoves Amid Energy Crisis

Americans Panic-Buy Firewood And Stoves Amid Energy Crisis The global energy crisis has led to a spike in natural gas, heating oil, propane, and power prices, making the cost of heating a home this fall/winter very expensive. As a result, Americans are panic buying cords of wood and stoves to deflect soaring fossil fuel prices.  Bloomberg spoke with US firewood vendors who said sales are booming ahead of winter. They reported the price of a cord of wood is skyrocketing.  At Firewood By Jerry in New River, Arizona, a cord of seasoned firewood -- roughly 700 pieces or so -- goes for $200 today. That's up 33% from a year ago. At Zia Firewood in Albuquerque, the price is up 11% since the summer to $250. And at Standing Rock Farms in Stone Ridge, a bucolic, little town in the Hudson Valley that's become popular with the Manhattan set, the best hardwoods now fetch $475 a cord, up 19% from last year. - Bloomberg  Randy Hornbeck, the owner of Standing Rock Farms in Stone Ridge, New York, said his sales are already 27% higher than all of last season. "Everybody wants firewood," he said, calling the start of the cold season a "crazy one."  Some of the increased demand Hornbeck is speaking about comes from white-collar workers moving out of metro areas to suburban or rural locations over the last 18 or so months and have discovered their homes are outfitted with stoves and or fireplaces. The price for heating a suburban home is much higher than an apartment in the city, and perhaps with soaring energy inflation, wood is the cheapest way to heat a home (at the moment).  Besides the price jump in firewood, wood stove dealers are reporting overwhelming demand. "You can't get a stove until at least April," Lakin Frederick, an employee at Central Arkansas Fireplaces in Conway, a suburb of Little Rock.  Customers have told Frederick that the spike in energy prices, such as heating oil, natural gas, and propane, is the reason why they're resorting to woodburning this year. He added wood has become scarce in his area because "there are not enough people who are cutting and supplying wood right now."  Bloomberg points out several firewood booms in US history:  Over the course of American history, there have been any number of booms in the firewood business. One of the earliest episodes came during the British siege of Boston at the outset of the Revolutionary War. That winter, the price of a cord -- a centuries-old benchmark measuring 128 cubic feet -- soared to $20, the historian David McCullough documented in his book "1776." That's the equivalent of some $635 in today's dollars, according to calculations by the website In more recent times, just about every major spike in energy prices in the past half century has triggered a rush into woodburning among some segments of the population. These fevers invariably fade as soon as the energy crisis does. -Bloomberg Today, the energy crisis is felt worldwide will inflict more financial pain on working poor families as cold weather sets in. The Biden administration is attempting to cool red hot inflation by releasing strategic petroleum reserves to arrest crude prices, which is likely to backfire.  "Everyone is extremely concerned about how they are going to pay for the cost of home heating," said Brian Pieck, the owner of House of Warmth Stove and Fireplace Shop in New Milford, a town in rural western Connecticut. He said that concern had led people to panic buying woodstoves, adding his sales for woodstoves over $2,800 are up 50%. "Our manufacturer is working feverishly around the clock."  Hornbeck's wealthier customers in the Hudson Valley are buying firewood no matter the cost. He has already sold 3,300 cords of hardwood and will deplete reserves by February. Some of his clients are already locking in orders for next season.  According to EIA figures, just 1% of US households use firewood or wood pellets as their primary heating source, and about 8% use them as their secondary heating source.  A global energy crisis has metastasized and pushed the world into panic buying fossil fuels ahead of the Northern Hemisphere winter thanks to ambitious green policies.  Tyler Durden Sun, 11/21/2021 - 09:55.....»»

Category: worldSource: nytNov 21st, 2021

Learning From Trader Joe’s, Joe Coulombe

It’s a rare person who can run their own business, and rarer still are those who can do it well. And in a world of stiff competition and consumer fickleness, those people who’s businesses can both survive and thrive in that environment are probably the rarest of them all. Q3 2021 hedge fund letters, conferences […] It’s a rare person who can run their own business, and rarer still are those who can do it well. And in a world of stiff competition and consumer fickleness, those people who’s businesses can both survive and thrive in that environment are probably the rarest of them all. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more If you choose a manager to whom you entrust your capital, in the words of Charlie Munger, choose a ‘business fanatic.’ Such individuals live, sleep and breathe their businesses. They’re not bound by the same restraints as most business people; constantly pushing boundaries, trialing new approaches, thinking outside the box, challenging conventional wisdom and always looking for business improvements. If you’re in business, these are the last type of people you want to compete with. One man that epitomized such fanaticism was the late Joe Coulombe, founder of the convenience store chain that carried his name, Trader Joe’s. “Edward H. Heller, a pioneer venture capitalist used the term ‘vivid spirit’ to describe the type of individual to whom he was ready to give significant financial backing. He said that behind every unusually successful corporation was this kind of determined entrepreneurial personality with the drive, the original ideas, and the skill to make such a company a truly worthwhile investment.” Phil Fisher Joe tells his story in the book, ‘Becoming Trader Joe - How I Did Business My Way and Still Beat the Big Guys.’ It contains a wealth of wisdom, particularly when it comes to thinking about running a successful retailer. Over more than a quarter of a century, Trader Joe’s sales grew at a compound rate of 19% per year and the company’s net worth grew at a compound rate of 26% per annum over the same period - no mean feat for a commodity business that’s hard to differentiate. Furthermore, the business never lost money in a year and incredibly each year was more profitable than the last. When the competitor 7-Eleven extended it’s footprint into California in the 1970’s, Pronto Markets, the precursor to Trader' Joe’s, already enjoyed the highest sales per store of any convenience operator in America by a factor of three. A high wage policy, strong locations, a few liquor licences, and the beginnings of a differentiated strategy through product knowledge was the core of their success. One of the mental models I particularly enjoyed in the book was Joe’s concept of ‘Double Entry Retailing.’ A form of second level thinking, Joe recognised that making changes to Demand Side factors had an influence on Supply Side factors which aren’t always obvious. A striking example was the introduction of orange juice freshly squeezed on the premises. While a great Demand Side success - customers embraced the product - it was a total nightmare to administer because of the Supply Side issues; the great variation in sweetness of oranges over the course of a year, difficulty in ensuring machines squeezed the right amount and disposal of the leftover rinds. As a result it was eventually phased out. You’ll recognise many of the characteristics that form a common link with the other great businesses we’ve studied. I’ve included some of my favourite extracts from the book below. Harnessing Demographic & Technological Change ‘The clue, the keystone of the arch of Trader Joe’s, was a small news item in Scientific American in 1965. When we left Stanford, my father-in-law, Bill Steere, a professor of botany, gave me a subscription to Scientific American. In terms of creating my fortune, it’s the most important magazine I’ve ever read. The news item said that, of all the people in the US who were qualified to go to college in 1932, in the pit of the Depression, only 2 percent did. By contrast, in 1964, of all the people qualified to go to college 60 percent in fact actually did. The big change, of course, was the GI Bill of Rights that went into effect in 1945. A second news item, one from the Wall Street Journal, told me that the Boeing 747 would go into service in 1970, and that it would slash the cost of international travel. In Pronto Markets we had noticed that people who travelled - even to San Francisco - were far more adventurous in what they were willing to put in their mouths. Travel is, after all, a form of education. Trader Joe’s was conceived from those two demographic news stories. What I saw here was a small but growing demographic opportunity in people who were well educated. 7-Eleven, and the whole convenience store genre, served the most basic needs of the most mindless demographics with cigarettes, Coca-Cola, milk, Budweiser, candy, bread, eggs. I saw an opportunity to differentiate ourselves radically from mainstream retailing to mainstream people.” Obliquity “I hope you’ll consider the following, my favourite quote from my favourite book on Management, ‘The Winning Performance’ by Clifford and Cavanaugh,’ ‘The fourth (general themes in winning corporations] is a view of profit and wealth-creation as inevitable byproducts of doing other things well. Money is a useful yardstick for measuring quantitative performance and profit and an obligation to investors. But … making money as an end in itself ranks low.’” A Bias to Action & Tenacity “In 1962, Barbara Tuchman published ‘The Guns of August’, an account of the first ninety days of WWI, It’s the best book on management - and, especially, mismanagement - I’ve ever read. The most basic conclusion I drew from from her book was that, if you adopt a reasonable strategy, as opposed to waiting for an optimum strategy, and stick with it, you’ll probably succeed. Tenacity is as important as brilliance.” “Trying to find an optimum solution in business is a waste of time; the factors in the equation are changing all the time.” Value, Empower & Pay Employees Well “You’ve got to have something to hang your hat on. The one core value I chose was our high compensation policies, which I put in place from the very start in 1958… This is the most important single business decision I ever made: to pay people well. First Pronto Markets and then Trader Joe’s had the highest-paid, highest benefitted people in retail.” “Time and again I am asked why no one has successfully replicated Trader Joe’s. The answer is that no one has been willing to pay the wages and benefits, and thereby attract - and keep - the quality of people who work at Trader Joe’s.” “[I was asked,] ‘But how could you afford to pay so much more than your competition?’ The answer, of course, is that good people pay by their extra productivity. You can’t afford to have cheap employees.” “Equally important was our practice of giving every full-time employee an interview every six months. At Stanford I’d been taught that employees never organise (join unions) because of the money; they organise because of un-listened-to grievances.” “The [store] Captains had the salary plus a bonus that theoretically had no limit. The bonus was based on Trader Joe’s overall profit, allocated among the stores based on each store’s contribution. In 1988, several Captains made bonuses of more than 70 percent of their base pay. Unless a bonus system promises, and delivers big rewards, it should be abandoned.” “My idea, often stated to everybody, was that the [store] Captains should have the chance to make more than executives in the office. In a traditional chain store, managers aspire to become bureaucrats with cushy, high-paying jobs in the office. I wanted to kill such aspirations at the start.” “Part timers .. at a time when the minimum wage was $4.35, we often paid $13.00 per hour because these people were worth it.” “Productivity in part is a product of tenure. That’s why I believe that turnover is the most expensive form of labor expense.” “We instituted full health and dental insurance back in the 1960's when it was cheap. When I left, we were paying $6,000 per employee per year!” “Each full-timer was supposed to be able to perform every job in the store, including checking, balancing the books, ordering each department, stocking, opening, closing, going to the bank, etc. Everybody worked the check stands in the course of the day, including the [store] Captain.” “In thirty years we never had a layoff of full-time employees. Seasonal swings in business were handled with overtime pay to full-time employees, and by adjusting part-time hours. The stability of full-time employment at Trader Joe’s was due in part to caution opening new stores, and insisting on high volume stores.” “Cost of goods sold is the dominant expense. The funny thing is that grocers seem to spend more effort squeezing payroll than squeezing Cost of Goods Sold, though there is at least five times more opportunity in the latter.” Retail & Real Estate Decisions ‘First we upped the investment ante by taking only prime locations, which could generate the most sales, even though the rents were higher. A lease is an investment, perhaps the most serious and certainly the least changeable a retailer can make. Financially, a lease is simply a long-term loan… Most retail bankruptcies come from bad real estate leasing decisions… Early in my career I learned there are two kinds of decisions: the ones that are easily reversible and the ones that aren’t. Fifteen-year leases are the least-reversible decisions you can make. That’s why, throughout my career, I kept absolute control of real estate decisions.” “The keys to management are strong locations with good people.” “People often ask me, how many stores did we have at such-and-such time? It’s the wrong question to ask. What’s important is dollar sales. For example, from 1980 to 1988, we increased the number of stores by 50 percent but sales were up 340 percent.” “My preference is to have a few stores, as far apart as possible, and to make them as high volume as possible.” “Too many stores, to many irreversible leases, too much geographical saturation was a recurrent theme in the failure of American retail chains in the twentieth century.” “Ancient Mariner Retailers claim that ‘volume solves everything.’ If it’s profitable volume, they’re right. Things go most sour in the lowest-volume stores. It’s like riding a bicycle, the faster it goes, the more stable it is. The ‘normal distribution’ of most chains is 20% dogs, 60% okay stores, and 20% winners. I believe in ruthlessly dumping the dogs at whatever cost. Why? Because their real cost is in management energy. You always spend more time trying to make the dogs acceptable than in raising the okay stores into winners. And it’s in the dogs that you always have the most personnel problems." “I believe that the sine qua non for successful retailing is demographic coherence: all your locations should have the same demographics whether you are selling clothing or wine.” “I liked semi-decayed neighbourhoods, were the census tract income statistics looked terrible, but the mortgages were all paid-down, and the kids had left home. Housing and rental prices tend to be lower, and more suitable for those underpaid academics. Related to this, I was more interested in the number of households in a given area than the number of people in a ZIP code. Trader Joe’s is not a store for kids or big families. One or two adults is just fine.” “Computerisation has radically upgraded the statistics available: I’d probably do it more formally now. But there’s no substitute for ‘driving’ a location to ferret out traffic problems. And do it at night, too.” “I hardly need to mention that a trading area is rarely determined by a radius. It’s determined by geographical barriers, boulevard access, and where the demographics lie.” “Let’s go back to the question of number of stores. How do you space them? Here are some parameters: You need to have enough stores in a trading area to economically amortise the radio advertising. You need enough stores in an area to have a large enough pool of employees. My rule was that distance between stores should not be measured in miles but in driving time. I wanted no less than twenty minutes between stores. That pretty much avoided the dread word, cannibalisation. Could a given trading area support more Trader Joe’s? Almost certainly! I figured we could break even at ten thousand core residences. But I wanted super-volume stores. If the credo that super-volume stores have the fewest operating problems is valid, then the overall health of the chain, in the long run, is maximised.” “How many trading areas should you enter? As long as you can preserve the culture of the company, and as long as logistics don’t kill you, go ahead.” “Never, never, never sign a lease with a ‘continuous operation’ clause. That clause means you must stay open - you can’t ‘go dark’ and just pay the rent.” Product Knowledge “The buyers at the supermarket chains knew nothing about what they sold, and they don’t want to know. What they did know all about was extorting slotting allowances, cooperative ad revenue, failure allowances, and back-haul concessions from the manufacturers.” Four Tests “The advantage of hard liquor merchandise was that it met three tests: a) A high value per cubic inch, essential to a small store format b) A high rate of consumption c) It had to be easily handled If we could have added a fourth test, it would be that we had to be outstanding in the field. Still trying to maximise the use of a small store, I looked for categories that met the Four Tests; high value per cubic inch, high rate of consumption; easily handled; and something in which we could be outstanding in term of price or assortment. For example, diamonds met the first test but flunked the second. Fruits and vegetables met the first and second but flunked the third because produce requires constant reworking. Fresh meat flunked the third test even more.” Purpose “Most of my ideas about how to act as an entrepreneur are derived from ‘The Revolt of the Masses’ by Jose Ortega y Gasset, the greatest Spanish philosopher of the twentieth century. I believe it offers a master ‘plan of action’ for the would-be entrepreneur, who usually has no reputation and few resources. Ortega offers an explanation of how such a person can get an enterprise started. In the context of the career of Julius Caesar, an entrepreneur who started without power, Otega says of the state: ‘Human life, by its very nature, has to be dedicated to something, an enterprise glorious or humble, a destiny illustrious or trivial .. The State begins when groups, naturally divided, find themselves obliged to live in common. The obligation is not of brute force, but implies an impelling purpose, a common task which is set before the dispersed groups. Before all, the State is a plan of action and a Programme of Collaboration. The men are called upon so that together they may do something .. It is pure dynamism, the will to do something in common, and thanks to this the idea of the state, is bounded by no physical limits.” Most of my career has been spent selling ‘plans of action and programmes of collaboration.’ If you want to know what differentiates me from most manager’s that’s it. From the beginning, thanks to Ortega y Gasset, I’ve been aware of the need to sell everybody.” Radical Transparency “Throughout my career, my policy has been full disclosure to employees about the true state of affairs, almost to the point of imprudence. I took a cue from General Patton, who thought that the greatest danger was not that the enemy would learn the plans, but that his own troops would not.” Growth “Growth for the sake of growth still troubles me. It seems unnatural, even perverted. This helps explain why I went from 1974 to 1978 without opening another store. To keep sales increasing during the mid-1970s, we relied on new ideas implemented in existing stores. This was my favourite form of growth. I don’t think that any given store ever fully realises its potential.” Smallness & Empowerment “We developed a prototype [Trader Joe’s] store of 4,500 square feet. Here’s a good question: Given my need to get away from convenience stores, why did I stick with small stores? The answer was verbalised for us in ‘In Search of Excellence,’ Tom Peter’s best-selling book on management. He called it ‘The Power of Chunking’: ‘The essential building block of a company is the section [which] within its sphere does not await executive orders but takes initiatives. The key factor for success is getting one’s arms around almost any practical problem and knocking it off… The small group is the most visible of the chunking devices.’ The fundamental ‘chunk’ of Trader Joe’s is the individual store with its highly paid [store] Captain and staff; the people who are capable of exercising discretion. I admire Nordstrom’s fundamental instruction to its employees: use your judgement. Trader Joe’s finally settled down at an average of about eight thousand square feet in the 1980’s, but the concept of a relatively small store with a relatively small staff remains in force.” Marketing & Customers “At all times I wrote the Fearless Flyer [marketing newsletter] for over-educated, underpaid people. This requires two mindsets: Trader Joe’s Fearless Flyer Newsletter 1) There are no such things as consumers - dolts who are driven by drivel to buy stuff they don’t need or even want. There are only customers, people who are reasonably well informed, and very well focused in their buying habits. 2) We always looked up to the customers in the text of the Fearless Flyer. We assumed they knew more than they did, we never talked down to them. 3) Given the first two assumptions, we assumed that our readers had a thirst for knowledge, 180 degrees opposite from supermarket ads. We emphasised ‘informative advertising.’ Originally, we distributed the Fearless Flyer only in stores and to a small but growing list. [Later,] by mailing to addresses rather than to individuals - by blanketing entire ZIP codes - we were able to tremendously expand the distribution of the Fearless Flyer. The ZIPs to which we mailed, of course, were chosen on the basis of the likely concentration of over-educated and underpaid people.” Word of Mouth “Word of Mouth: The Power of True Believers. As everyone knows, word of mouth is the most effective advertising of all. I have been known to say that there’s no better business to run than a cult. Trader Joe’s became a cult of the over-educated and underpaid, partly because we deliberately tried to make it a cult and partly because we kept the implicit promises with our clientele.” “There aren’t many cult retailers who successfully retain their cult status over a long period of time. A couple in California are In-N-Out Burger and Fry’s Electronics. But across America, in every town, there’s a particular donut shop, pizza parlour, bakery, greengrocer, bar, etc. that has a cult following of True Believers.” Pricing “One of the fundamental tenets of Trader Joe’s is that retail prices don’t change unless costs change. There are no weekend ad prices, no in-and-out pricing… I have always believed that supermarkets pricing is a shell game and I wanted no part of it.” Retailing “The fundamental job of a retailer is to buy goods whole, cut them into pieces, and sell the pieces to the ultimate consumers. This is the most important mental construct I can impart on those of you who want to enter retailing. Most ‘retailers’ have no idea of the formal meaning of the word. Time and again, I had to remind myself just what my role in society was supposed to be.” “[We decided] no outsiders of any sort were permitted in the store. All the work was done by employees.]” “From 1958 through 1976, we tried to carry what the customer asked for, given the limits of our small stores and other operational parameters. Each store probably had access to ten thousand stock keeping units (SKUs), of which about three thousand were actually stocked in any given week. By the time I left in 1989, we were down to a band of 1,100 to 1,500 SKUs, all of which were delivered through a central distribution system.” “Along the way not only did we drop a lot of products that our customers would have liked us to sell, even at not-outstanding prices, but we stopped cashing checks in excess of the amount of purchase, we stopped full-case discounts, and we persistently shortened the hours. We violated every received wisdom of retailing except one: we delivered great value, which is where most retailers fall.” “[We were] willing to discontinue any product if we were are unable to offer the right deal to the customer.” “Instead of national brands, [we] focused on either Trader Joe’s label products or ‘no label’ products like nuts and dried fruits.” “We wouldn’t try to carry a whole line of spices, or bag candy, or vitamins. Each SKU had to justify itself as opposed to riding piggyback into the stores just so we had a ‘complete’ line. Depth of assortment was of no interest.” “Each SKU would stand on its own two feet as a profit centre. We would earn a gross profit on each SKU that was justified by the cost of handling that item. There would be no ‘loss leaders.’” “Above all we would not carry any item unless we could be outstanding in terms of price (and make a profit at that price) or uniqueness.” ‘I do not believe in keeping ‘spoils’ in the back room until some salesperson comes by to pick them up. I believe that products should move in only one direction, never back up the supply chain. When a bottle was broken, a can dented, or a ‘short fill’ was discovered, it went to the trash bin.” “A guideline: No private label product was introduced for the sake of having a private label. This is 100 percent contrary to the policy of most supermarkets… Each private label product had to have a reason, a point of differentiation.” “The willingness to do without any given product is one of the cornerstones of Trader Joe’s merchandising philosophy.” “No bulky products like paper towels or sugar, because the high-value-per-cubic inch rule still prevailed.. We simply went out of business on the ‘bulkers’ and did not replace them with private labels.” “I believe in the wisdom that you gain customers one by one, but you lose them in droves.” “Back in 1967, [we] made a bet that rising levels of education would fragment the masses, that a small but growing group of people would be dissatisfied with having to consume what everybody else consumed… This philosophical approach put us in conflict with the mainstream of American retailing, which emphasises continuous products. Thus when a supermarket promotes Coca-Cola it doesn’t have to explain that Coca-Cola is a secret formula for a soft drink created a century ago in Atlanta.. Wines have not been popular in America because, intrinsically, they are not continuous products. You can’t just order up some more sugar and chemicals and make another batch. In 1987, I outlined to the buyers where I thought we should go: 1) we want continuous products. Any sane person does. We want continuous products which are profitable without creating a high-price image. 2) to create such products, they needed to be differentiated at least in order to avoid direct price comparison. 3) products in which we had an absolute buying advantage. For example, we were the largest seller of cheap Bordeaux blanc in the United States. 4) I was willing to continue to indulge in the spectacular ‘closeout’ sales of branded products, but I wanted to do so in the context of much greater overall sales, principally generated by continuous products, most of them private label.” “I don’t think that the internet grocery store will successfully invade food retailing because you’re dealing with four different temperatures: dry grocery, refrigerated products, frozen products, and ice cream when you try to home-deliver foods.” “Showmanship is the sum total of all efforts to make contact with the customer. It’s the most ephemeral, the most difficult, and the most important of the Demand Side activities.” “All the research on whether people turn to the left or the right, or whether you can ‘force’ people to the rear of the store, is irrelevant if you’re a value retailer.” Win-Win “Honour thy vendors: After all, these are the guys you’re buying from. They should not be treated as adversaries. Five year plan 1977 said, ‘Buying, therefore, is not just a matter of trying to beat down suppliers on price. It is a creative exercise of developing alternatives.’ Many of our best product ideas and special buying opportunities came from our vendors.” “Vendors should be regarded as an extension of the retailer, a Marks and Spencer concept. Their employees should be regarded almost as employees of the retailer. Concern for their welfare should be shown, because employee turnover at vendors sometimes can be more costly than turnover of your own employees.” “Tenants who enter negotiations with the idea of beating the landlord at the objective future game usually get the kind of landlords they deserve. And vice versa.” “Other non-merchandise vendors are very much extensions of Trader Joe’s and should be treated as much. Since we owned no trucks, warehouses, etc., I asked our people to keep track of the outsourced drivers and do their best to see that our contractors were paid reasonable wages with reasonable working conditions. Turnover is the most expensive labour expense!’ Committees “I want to make it quite clear that I called all the shots. I reject management by committee.” Economies of Scale “The point where the ‘buying power’ and ‘selling power’ curves cross each other creates the magical physical thresholds. There are two magical physical thresholds that a retailer must achieve to be competitive: the truckload, and the ocean container load. These thresholds mark the limit of most economies of scale.” Focus & Outsource “We tried to stay out of all functions that were not central to our primary job in society: namely, buying and selling merchandise.. [We’d] been getting rid of all functions except those buying and selling. We got rid of our own maintenance people, we sold off almost all the real estate we had acquired during the 1970’s, we never took mainframe computing in-house, etc. Some choice quotes from Dr. Drucker: ‘In-house service activities have little incentive to improve their productivity .. The productivity is not likely to ramp up until it is possible to be promoted for doing a good job at it. And that will happen in support work only when such work is done by separate, free standing enterprises.’” Business Problems “All businesses have problems. It’s the problems that create the opportunities. If a business is easy, every simple bastard would enter it.” “This is one of the most important things I can impart; in any troubled company the people at lower levels know what ought to be done in terms of day-to-day operations. If you just ask them, you can find answers.” Adapt, Challenge the Status Quo “Believe me, you have to have a system for everything that has to happen in your business - you just may not be conscious of it. And you probably have still other systems that are not needed. That’s why The Winning Performance calls for a ‘continued contempt for business as usual.’ To practice ‘constitutional contempt,’ you have to arrive every day with the attitude, ‘Why do we do such-and-such that way?’ Better yet, why do we do it at all? Usually the answer is, ‘We’ve always done it that way,’ ‘That’s the way we did it at my last job,’ or ‘All our competitors are doing it.’ Mental Model - Double Entry Retailing “I hit on the idea of using double entry accounting as an analogy, what I call Double Entry Retailing. On the left side of the ledger is the business in terms of how its customers see it: I call this the Demand Side. On the right side of the ledger are the factors that limit or determine the retailer's ability to satisfy those demands: the Supply Side. All businesses, whether manufacturing, wholesaling, services, etc., have [the] fearful symmetry of both Demand and Supply sides. And all businesses are subject to the ultimate supply-side constraint of cash: you can do anything, no matter how stupid, within that fearful symmetry, as long as you don't run out of cash. From my view, the Demand Side of Retailers can be analysed in terms of five variables: The assortment of merchandise offered for sale. Pricing: stability and relative to competition. Convenience: geographical, in-store, and time. Credit: the accepted methods of payment. Showmanship: the sum of all activities that result in making contact with the customer, from advertising to store architecture to employee cleanliness. Here are factors on the Supply Side: Merchandise Vendors Employees  The way you do things: "habits" and "culture" Systems Non-merchandise vendors Landlords Governments Bankers and investment bankers Stockholders Crime As in double entry accounting, the change in any factor must be matched by a corresponding change in another factor. For example, a decision to increase geographical convenience (Demand Side) obviously involves some change of policy with landlords (Supply Side) including the amount of rent you're willing to pay. Consider how Barney's paid through the nose because they thought they had to offer the geographical convenience of being in Beverly Hills. How big a factor was this in Barney's subsequent bankruptcy? Was it Demand Side success at the price of Supply Side failure? The lists above aren't much different from other businesses. What distinguishes retailing is the asymmetry of the fearful symmetry: the huge number of customers (Demand Side) vs. the number of suppliers. This is the exact opposite of a government defence contractor. This lopsided butterfly may cause a retailer to act as if the only people they have to ‘sell’ to are customers: the Demand Side. That’s a major mistake. All the people on the supply side have to be sold, too.” “One of the smartest things we ever did was to cut the hours of Trader Joe’s. This is mostly a Supply Side question, but the quality and attitude of the employees handling our customers is a Demand Side factor.” Employee Ownership “From the beginning of Pronto Markets, one of my basic principles, one of my basic goals, was employee ownership of the business. Getting there, however, was complicated.” Summary I found the similarities between Trader Joe’s approach to retailing and the German retailer Aldi strikingly similar. Despite being on opposite sides of the world, both businesses evolved complementary retailing practices: a focus on private label, above market wages for employees, a win-win mentality and continuous innovation. It’s little wonder the Albrecht family were attracted to the business. Aldi acquired Trader Joe’s in 1979 and retained Joe as the independent manager for another ten years. Paying staff well, empowering and sharing information with them and maintaining smallness are consistent themes across many of the successful business stories we’ve studied. When it comes to the specifics of retailing, the analogy of super-volume stores better able to provide balance is a useful one. As are the insights into economies of scale, pricing strategy, jettisoning poorly performing stores, the power of word-of-mouth marketing and the means to abolish bureaucracy through the outsourcing of non-essential functions. Every business has its own quirks and idiosyncrasies. Identifying what they are and how they contribute to a firm’s success can provide clues in our own quest to find compounding machines; in the long run, it’s business success which determines share prices. The more businesses you study, the larger the toolkit of mental models you’ll have to apply in your investment endeavours. Source: 'Becoming Trader Joe - How I Did Business My Way & Still Beat the Big Guys,’ Joe Coulombe, Patty Civalleri. Harper Collins. 2021. Follow us on Twitter : @mastersinvest * NEW * Visit the Blog Archive Article by Investment Masters Class Updated on Oct 26, 2021, 1:11 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 26th, 2021

How Afghan E-Commerce Startup Aseel Is Pivoting to Help Its Compatriots In Need

Aseel used to find global buyers for Afghan art. Now it uses its platform to get food to the country's most desperate When Mohammad Nasir went to a camp for internally displaced refugees in Kabul for the first time, people swarmed around him, trying to get their hands on packages of food he was carrying. In the desperate scrummage, Nasir was dragged around and manhandled, his clothes torn. “It’s a terrible feeling when someone is asking you for food and you can’t help because you have limited resources,” the 25-year-old says of that late August visit. Nasir is a staff member of Aseel, an e-commerce startup that created a marketplace for rural artists in Afghanistan. The platform has enabled more than 400 artists to sell their handmade pottery, embroidery and jewellery to people around the world. Since the Taliban took control of the country in August, however, the company has switched focus to allow its global customers to buy food and medicine for Afghans. [time-brightcove not-tgx=”true”] “We are now using the supply chain that we created earlier to focus on the humanitarian crisis in Afghanistan,” Nasir says. The situation is desperate. With a cash-strapped Afghan economy facing rampant food shortages and inflation, the United Nations has warned that millions of Afghans could run out of food as winter approaches. A million children face the risk of starvation and death if their immediate needs are not met and many rural areas may be cut off by snow as the bad weather sets in. Read More: How Female Afghan Governor Salima Mazari Escaped the Taliban The situation “is magnifying and accelerating at an incredible pace,” warns Mary-Ellen McGroarty, the Afghanistan country director for the World Food Programme (WFP). To be sure, Afghanistan faced food shortages before the Taliban came to power. The country is one of the most vulnerable to the effects of rising temperatures, and has faced two major droughts in three years. According to the WFP, 14 million Afghans face food insecurity. “In large parts of the country, farmers have just watched their lands and crops disintegrate into dust,” McGroarty says. But the situation has deteriorated markedly since the Taliban seized power, forcing international aid agencies to evacuate their staff. Humanitarian aid flowing into Afghanistan has also slowed down as the U.S. and other Western countries figure out how to deal with a regime that they have fought for years. In late August, President Joe Biden’s administration froze Afghan government’s reserves, worth $7 billion, held in U.S. banks. Courtesy Aseel Aseel workers convene at Logar province, Afghanistan, for the distribution of food and medicines on Oct. 2, 2021 Helping to rebuild the Afghan economy Watching this crisis unfold in his country from afar in London, Aseel founder Nasrat Khalid knew it couldn’t be business as usual. The 30-year-old started the platform in 2017 to promote Afghan art. Having grown up as a refugee in Pakistan, Khalid had always wanted to use his self-taught coding and technology skills to help people in his country—and it was only natural to shift Aseel’s focus to humanitarian aid at this critical juncture. “If there are tools to order food and get it delivered in 10 minutes, it’s also important to have a tool for people who were failed by the global system to get food for survival,” he tells TIME. Aseel now sells emergency food packages—consisting of rice, flour, cooking oil, lentils and tea—which people from around the world can buy on the company’s website or app. They also sell first aid kits, diapers and formula for babies, as well as tents, scarves and blankets. The company uses previous relationships with vendors to source the materials. So far, Aseel has distributed food and medicines to more than 1,400 families across different provinces in Afghanistan. Read More: The Man the U.S. Didn’t Mean to Kill in Afghanistan The rapid pivot has meant pausing the company’s mid-term plan to add every Afghan artist to its platform by 2022, and create thousands of jobs in the country by 2023. “No one is going to be talking about the economy or trade now,” Khalid says. “You cannot build nations and institutions on empty stomachs.” The company’s situation is emblematic of the plight of Afghanistan’s startup scene, which flourished in recent years and played a major role in creating jobs. But regime change has forced many startups to shut down or change their operations, fearing for the safety of their staff. Aseel had to halt operations after the fall of Kabul. Most staff members stopped working for a few weeks as they tried to cope with their new reality. Some fled the country. Many other Afghans who could have left have stayed back, however, among them Nasir—an only child with parents to look after. Watching people evacuate to safety wasn’t easy for him. But, he says, “I was waiting for the evacuation to end so that I could stop thinking about it and instead focus on working for Afghanistan.” Before the rise of the Taliban, his job consisted of traveling to rural parts of the country to seek out artisans willing to list their products for sale. He took photos and wrote stories about the products, before assisting with shipping. “We were trying to bring a big technology revolution for Afghan artists, especially for women in rural areas,” he says. Read More: How You Can Help the People of Afghanistan He now spends most of his day scouting refugee camps and the neighborhoods of Kabul to find people in need of food and medicines. On weekdays, he works with his team to compile a list of people in need of aid, then processes orders and matches them with beneficiaries. During the weekend, Nasir and his team go around the city to distribute packages. Outside Kabul, the company has a network of volunteers, among them artists they have worked with in the past, to find people in need of food and to distribute aid. Nasir says he doesn’t know what the future holds for him and his country. But what keeps him going is the spirit of Afghans and the willingness of people to help. “If nobody is going to take responsibility for our country and our people, it is on us,” he says. “Someone has to do it.”.....»»

Category: topSource: timeOct 19th, 2021

Highlights of the day: Components suppliers see little change to iPhone 13 orders

Makers in Apple's supply chain have seen no major changes to orders for iPhone 13 devices despite speculation about the US vendor looking to cut production for the new smartphones. The memory sector is entering a period of correction, with commodity DRAM prices likely to fall 15-20% in first-quarter 2022. Rising components, production and logistic costs are heaping pressure on notebook vendors......»»

Category: topSource: digitimesOct 18th, 2021

Highlights of the day: Taiwan IC vendors to raise prices

Increasing foundry and materials costs are prompting some major IC vendors in Taiwan to decide to raise their product prices in fourth quarter of 2021. In China, many components makers are being affected by the Chinese government's decision to cut power supply to industrial users in line with its carbon reduction policy. PCB suppliers will find out this week whether Apple will increase or cut orders for the iPhone 13 series......»»

Category: topSource: digitimesSep 27th, 2021

Commercial notebook chips order visibility clear through 3Q20

Taiwan-based IC design houses continue to see an influx of additional orders from major brand vendors, with clear order visibility for diverse niche and peripheral chips extending to late third-quarter 2020, according to industry sources......»»

Category: topSource: digitimesMay 13th, 2020

5G chip vendors mulling price cuts

Despite the coronavirus pandemic, market watchers remain upbeat about the market for 5G mobile chips in 2020. Nevertheless, major chip suppliers have been mulling reducing prices in order to secure more orders, according to industry sources......»»

Category: topSource: digitimesMar 23rd, 2020

ASE to see strong 1Q20 with robust 5G mobile SoCs backend orders

Robust orders for 5G smartphone application processors from the world's major Android phone vendors will allow backend house ASE Technology Holding to enjoy a particularly strong first quarter of 2020, according to industry sources......»»

Category: topSource: digitimesDec 11th, 2019

Compal expects double-digit growths in server business in 2019 and 2020

Compal Electronics president Martin Weng expects the company's server business to achieve double-digit percentage on-year growths in both 2019 and 2020 as the company has obtained orders from major enterprise server vendors......»»

Category: topSource: digitimesMar 25th, 2019

ASE obtains major orders for new Qualcomm mobile SoC

Taiwan's leading backend house ASE Technology and its affiliate Siliconware Precision Industries (SPIL) have obtained major orders for processing Qualcomm's just-unveiled flagship mobile SoC, according to industry sources......»»

Category: topSource: digitimes17 hr. 40 min. ago

The Rise Of Fintech-as-a-Service (FaaS) And What This Means For The Global Economy

The rise of fintech has been a wake up call for legacy financial institutions. Consumers have wanted cheaper and more convenient banking solutions for years, yet traditional banks have historically lagged behind in technological development. Regulatory restrictions in the finance industry meant established banks rarely had to worry about new competition. Because of this, for […] The rise of fintech has been a wake up call for legacy financial institutions. Consumers have wanted cheaper and more convenient banking solutions for years, yet traditional banks have historically lagged behind in technological development. Regulatory restrictions in the finance industry meant established banks rarely had to worry about new competition. Because of this, for over a century the cost of financial services remained consistently expensive. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Banks can no longer downplay the importance of fintech or rely on their reputation alone to retain customers. However, traditional financial institutions needn’t fear the increasing popularity of fintech either. By working hand-in-hand with fintech companies, traditional banks can harness their technological expertise to design customized solutions for their clients. Application programming interfaces (APIs) can now be coded to seamlessly integrate with a bank’s existing technology. The power of legacy banking combined with the agility of tech companies can help old-fashioned banking and innovative technology work in unison. Fintech-as-a-service (FaaS) will usher legacy financial institutions into the 21st century and change the face of finance in the future. Fintech Is Here To Stay Let’s take a moment to fully appreciate how fintech has changed the game in terms of money management. In the past several years, we’ve seen the introduction of financial mobile apps such as Venmo and Cashapp, which allow smartphone users from all around the world to easily transfer money from their bank accounts with the tap of a screen. Before this development, it wasn’t uncommon for people to have to wait in line at a Western Union or wait 2-5 days for a wire transfer if they were sending money abroad. Stock brokerages - once the gatekeepers of market information -  have been forced to pare down fees as much as possible to compete with the likes of Robinhood and Acorns. These are just a few examples of the democratizing effects of fintech. Once the realm of wealthy insiders and trust fund recipients,  investing and trading on the stock market has finally spread to the masses. As the pandemic taught us, we are living in an increasingly globalized society. Businesses and their funds need to be able to move cash across borders quickly to keep up. FaaS companies offer fully integrated financial services that can easily embed this function in any application. Fintech applications can give financial institutions the ability to transfer money, withdraw funds, and convert currency online, lending cutting-edge technology to some of the biggest names in banking. Furthermore, FaaS companies take responsibility for the regulatory aspect of their work, one of the largest hurdles to creating apps that handle sensitive information. Covid-19 had a profound effect on fintech and digitalization in general. As whole populations headed towards lockdown and were forced to work remotely, the ability to complete tasks online became the central focus. Tech stocks soared as even the most technologically illiterate found themselves forced to learn how to do things online. As such, the unique situation of Covid-19 has accelerated fintech adoption across all age demographics. Why Banks Need Fintech There are many reasons for banks to embrace fintech companies beyond the lower cost and convenience they provide. Consumers still want the sense of security provided by established financial institutions. Although you might know a lot of people who use PayPal, few would trust an application in lieu of a bank to hold all their money. In fact, according to recent surveys, 71% of customers report a credit or debit card is their preferred way to complete transactions. In spite of this loyalty, credit card companies are changing to fit their customer’s changing needs. Visa, one of the most well-known credit card companies in the world, recently announced that they will be the first major credit card to offer Bitcoin rewards. And fintech companies are increasingly moving into the debit and credit card space, integrating their platform with the consumer’s own bank account whether the bank likes it or not. The strength of fintech lay in its ability to take basic financial transactions and transform them by making them easier, more convenient, and less expensive. By harnessing the innovative solutions offered by fintech, traditional banks can offer better services and expand their customer base. Generally, FaaS companies offer cutting-edge technology, sleek designs, and a better user experience than the applications designed by financial institutions themselves. This makes sense, as the main area of expertise for banks is in finance, not technology. What’s more, banks who develop apps on their own must spend a lot of time hiring the right developers, cyber security experts, and regulatory advisors before they can even begin planning the pipeline of a new online service. By using a FaaS company, the technology is ready to go almost immediately. Many FaaS companies offer customization, giving banks the ability to utilize their own colors, logos and images within their APIs. In many cases, customers won’t even know that they are using third party technology when they are completing transactions. Banks that use FaaS integrations also don’t have to worry about software maintenance, which can be time-consuming and expensive. FaaS vendors take full responsibility for prioritizing cybersecurity and keeping their platforms up-to-date. Furthermore, many of the applications designed by banks make it easy for their own customers to send or receive money, but may not work in tandem with those offered by other banks. Unburdened by the fear of introducing customers to competitors, fintech can bridge the gap between different financial institutions. Why Fintech Needs Legacy Financial Institutions New technology can be glamorous, but few want to be anything but conservative when it comes to their hard-earned money. While alternatives to banks have gotten a lot of buzz in recent years, it doesn’t seem that there will be a huge shift away from traditional banks in favor of fintech. People want to trust their money in time-honored institutions with name recognition. They feel reassured knowing that they can walk into their local branch and speak to someone if they have a problem, even if they rarely (if ever) do so. Most fintech apps remain anonymous to customers, and the technology industry in general doesn’t have a great reputation for customer service. By working with banks, fintech companies can gain access to customer data that will help them shape their products and marketing to reach wider audiences. Fintech and alternative investment solutions, such as cryptocurrencies and non-fungible tokens, need banks to lend them reputability and legitimacy in the austere world of finance. Conclusion Legacy financial institutions realize the importance of technology to make processes less time consuming and expensive for their clients. Fintech, once an adversary of traditional banks, have now become valued partners. By leveraging the expertise offered by FaaS companies, banks can provide their customers with both excellent customer service and convenient online solutions. Together, financial technology can become more secure and accessible for all. Updated on Dec 3, 2021, 2:18 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk17 hr. 41 min. ago

Panicked New York bagel shop owners are hoarding cream cheese and crossing state lines for supply as dairy companies struggle against supply chain crisis

Several business owners told the New York Times they only have enough cream cheese to last a handful of days and are at a loss for alternatives. iStock/Getty Images New York City bagel shops are experiencing a shortage of cream cheese due to heightened demand and supply chain constraints.  Several store owners told the New York Times they've started hoarding cream cheese or driving to New Jersey for supply.  The schmear is the latest consumer product to be hit by the ongoing supply chain crisis.  The supply chain crisis has come for yet another beloved commodity — New York City bagels. Bagel shops in the nation's largest city are experiencing an unprecedented shortage of cream cheese, causing many to begin hoarding the spread, with some even crossing over state lines to get it, the New York Times reported. Local favorites from Zabar's and Tompkins Square Bagels in Manhattan to Shelsky's in Brooklyn said they are struggling to find ways to meet demand for the schmear.According to the New York Times, dairy manufacturers and suppliers have come up short in filling orders of pallets of unprocessed and unwhipped cream cheese in recent weeks. Bagel shops use this raw cream cheese as a foundation to create their own flavors, and thus typically don't turn to grocery store alternatives to fill voids. Several business owners told the Times they only have enough cream cheese to last a handful of days, and are at a loss for alternatives. On Thursday, the owner of Tompkins Square Bagels in Lower Manhattan was informed his 800-pound order of cream cheese would not be arriving at all. "Sunday bagels are sacred," Christopher Pugliese, the owner of Tompkins Square Bagels, told the New York Times. "I hate feeling like I've let people down."The spread is the latest in a growing list of consumer products plagued by shortages thanks to the supply chain crisis. Everything from personal-care products to popular food items continue to face bottlenecks, leading to recent price hikes across major consumer packaged goods companies like Unilever and Procter & Gamble. According to Kraft Heinz, the parent company of Philadelphia Cream Cream, the cream cheese shortage is tied to increased demand for "several of its products," partially driven by a rise in Americans eating from home during the pandemic. "We continue to see elevated and sustained demand across a number of categories where we compete," Jenna Thornton, a Kraft Heinz spokeswoman, told the Times. "As more people continue to eat breakfast at home and use cream cheese as an ingredient in easy desserts, we expect to see this trend continue."And while bagel shop owners said they have no immediate plans to increase prices, some are cutting less popular flavors of cream cheese from their lineups in an effort to preserve the commodity. "This is bad. This is very bad," Pedro Aguilar, a manager at Pick-a-Bagel, told the Times.  Read the original article on Business Insider.....»»

Category: topSource: businessinsider17 hr. 41 min. ago

Bruker (BRKR) Assay to Offer Reliable Omicron Variant Detection

Bruker's (BRKR) FluoroType SARS-CoV-2 varID Q assay is anticipated to provide reliable detection of the novel Omicron (B.1.1.529) variant of SARS-CoV-2. Bruker Corporation BRKR announced a major update related to its FluoroType SARS-CoV-2 varID Q real-time multiplexed polymerase chain reaction (PCR) assay. The company noted that this CE-IVD marked assay reliably detects all SARS-CoV-2 variants and is expected to provide a clear indication of Omicron (B.1.1.529). It is worth mentioning that the Omicron has been recently declared a ‘variant of concern’ by the World Health Organization (WHO).More specifically, the FluoroType SARS-CoV-2 varID Q assay, based on Bruker´s proprietary LiquidArray technology, can detect and quantify all major SARS-CoV-2 variants. This assay simultaneously identifies the S-gene mutations Del69-70 and N501Y, which are anticipated to be clear indications of the novel Omicron (B.1.1.529) variant. The FluoroType SARS-CoV-2 varID Q also offers a viral load result according to WHO standard (IU/ml), CP values, and easy mutation interpretation.Few Words on FluoroType SARS-CoV-2 varID QThe FluoroType SARS-CoV-2 varID Q test contains reagents for 96 reactions and is verified for use with nasopharyngeal and oropharyngeal swabs. In less than 3-4 hours, sample extraction, amplification and PCR results are available. This assay can be run on the FluoroCycler XT PCR instrument after sample preparation with the GenoXtract fleXT system, which offers fully automated extraction and PCR setup. The FluoroSoftware analyzes results from the FluoroCycler XT, delivering easy-to-read results and direct indication of mutations.Image Source: Zacks Investment ResearchThe FluoroType SARS-CoV-2 varID Q assay enables users to run a screening tool for detecting SARS-CoV-2 viral load and get an early indication of the Omicron variant.More on the NewsBruker also confirmed that the Omicron variant (B.1.1.529) is expected to be detected by their entire range of other FluoroType SARS-CoV-2 assays. These assays include CE-IVD assays such as FluoroType SARS-CoV-2 plus, FluoroType SARS-CoV-2 varID Q and FluoroType SARS-CoV-2/Flu/RSV. However, these assays are not available for sale in the United States. Another notable assay in this range involves the FluoroType SARS-CoV-2 evo Research Use Only (RUO), which is not available for use in clinical diagnostics procedures.Bruker’s SARS-CoV-2 assays are CE-IVD-labeled per the European IVD Directive 98/79/EC and are primarily sold in European Markets. Notably, the FluoroType SARS-CoV-2 plus is registered and sold in various African markets, including South Africa.Industry ProspectsPer a report by Fortune Business Insights published in GlobeNewswire, the global COVID-19 diagnostics market is expected to see a CAGR of 7.9% during 2020-2027. Factors such as the uncontrolled spread of coronavirus, and several efforts by medical and regulatory bodies to encourage innovation and accelerate research in developing coronavirus detection tools are expected to drive the market.Given the market prospects, Bruker’s FluoroType SARS-CoV-2 varID Q assay, which detects all SARS-CoV-2 variants and expectedly the novel Omicron (B.1.1.529) variant, bears significant market potential.Notable DevelopmentsIn November 2021, Bruker acquired MOLECUBES NV-- a dynamic innovator in benchtop preclinical nuclear molecular imaging (NMI) systems. The combination of Bruker's preclinical imaging technologies and global footprint with MOLECUBES' modular benchtop CUBES systems will offer a more extensive NMI offering, thereby accelerating preclinical NMI adoption at academic medical centers and biopharma firms worldwide.In October 2021, Bruker secured orders for two 1.1 GHz NMR Avance Neo systems from National Science Foundation (NSF)-funded academic institutions in the United States. The Network for Advanced NMR (NAN) was established with funds from NSF and it connects three institutions, including the University of Connecticut School of Medicine, the University of Georgia and the University of Wisconsin–Madison.Share Price PerformanceThe stock has outperformed its industry over the past year. It has grown 51.5% compared to the industry’s growth of 34.5%.Zacks Rank and Other Key PicksCurrently, Bruker carries a Zacks Rank #2 (Buy).Other top-ranked stocks in the broader medical space are Varex Imaging Corporation VREX, McKesson Corporation MCK and NextGen Healthcare, Inc. NXGN, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Varex has a long-term earnings growth rate of 5%. The company surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 115.3%.Varex has outperformed the industry it belongs to in the past year. VREX has gained 73.7% versus the industry’s 8% fall.McKesson has a long-term earnings growth rate of 8.9%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.9%, on average.McKesson has outperformed its industry over the past year. MCK has gained 22% versus the 7.4% industry rise.NextGen has a long-term earnings growth rate of 8.5%. The company surpassed earnings estimates in the trailing four quarters, delivering an average surprise of 16%.NextGen has outperformed its industry over the past year. NXGN has declined 8.7% versus the industry’s 41.5% fall. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McKesson Corporation (MCK): Free Stock Analysis Report Bruker Corporation (BRKR): Free Stock Analysis Report VAREX IMAGING (VREX): Free Stock Analysis Report NEXTGEN HEALTHCARE, INC (NXGN): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Ulta Beauty (ULTA) View Up on Q3 Earnings Beat, Stock Gains

Ulta Beauty's (ULTA) third-quarter fiscal 2021 results reflect higher earnings and sales, backed by growth in all major categories. Management raises fiscal 2021 view. Shares of Ulta Beauty, Inc. ULTA moved up 5.2% in the after-market trading session on Dec 2, as the company posted splendid third-quarter fiscal 2021 results. The company raised its fiscal 2021 guidance. During the quarter, the top and the bottom line advanced year over year and surpassed the Zacks Consensus Estimate.Results were backed by strength in the beauty category along with benefits from the company’s differentiated model. During the quarter, Ulta Beauty’s major categories posted robust double-digit year-over-year comparable sales or comps growth. The uptick was driven by the cycling of last year's pandemic-induced disruption, product newness along with solid performance from strategic promotional events.Despite the dynamic operating landscape and uncertainties amid the pandemic, Ulta Beauty pulled up the sales, comps, operating margin and earnings guidance for fiscal 2021.Ulta Beauty Inc. Price, Consensus and EPS Surprise  Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote Quarterly NumbersUlta Beauty posted earnings per share (EPS) of $3.94, which beat the Zacks Consensus Estimate of $2.51. In third-quarter fiscal 2020, adjusted EPS was $1.64.Net sales of this beauty products retailer surged 28.6% year over year to $1,995.8 million and beat the Zacks Consensus Estimate of $1,900.2 million. The uptick can be attributed to increased consumer confidence and the relaxation of pandemic-related curbs.Comps rose 25.8% against a decline of 8.9% recorded in the prior-year quarter. The metric was driven by 16.8% improvement in transactions along with a 7.7% increase in average ticket. Compared with third-quarter fiscal 2019 levels, comparable sales jumped 14.3%. Comps take into account stores that were open for at least 14 months, including stores temporarily closed due to the pandemic and e-commerce sales.E-commerce sales penetration in the quarter was almost 500 basis points less, as the company cycled year-ago period’s solid online growth. Buy online, pick up in-store or BOPIS orders rose 28% year over year, forming 20% of e-commerce sales in the quarter compared with 16% during the prior year.Gross profit advanced from $545.5 million to $789.5 million. Gross margin rose from 35.1% to 39.6%, mainly led by favorable channel mix shifts, better merchandise margins and leverage of fixed costs as well as salon costs.SG&A expenses escalated from $416.4 million to $503.4 million in the third quarter of fiscal 2021. SG&A expenses (as a percentage of net sales) came in at 25.2%, down from 26.8% reported in the year-ago quarter. This was caused by leveraging of corporate overhead, store expenses and store payroll as well as gains from increased sales. These were somewhat offset by increased marketing expenses.Operating income came in at $284.2 million and the operating margin was 14.2%. In the third quarter of fiscal 2020, the company had posted an operating income of $101.3 million, with the operating margin coming in at 6.5%. Solid top-line performance and the ongoing cost-optimization efforts boosted the operating margin performance.Other UpdatesUlta Beauty ended the third quarter with cash and cash equivalents of $605.1 million. Net merchandise inventories came in at $1.92 billion. Stockholders’ equity at the end of the quarter stood at $1,986.8 million. Net cash provided by operating activities was $414.9 million in the 39 weeks ended Oct 30, 2021.The company repurchased shares worth $126.4 million during the third quarter and worth $762.2 million in the nine months of fiscal 2021. As of Oct 30, 2021, the company had $759.8 million worth of shares remaining under its $1.6-billion buyback program announced in March 2020. The company expects share buybacks of nearly $850 million in fiscal 2021. For fiscal 2021, capital expenditures are expected in the bracket of $200-$225 million.During the reported quarter, the company introduced seven new stores along with relocating two, remodeling three and closing one. Ulta Beauty ended the quarter with 1,302 stores. For fiscal 2021, the company expects 44 net new stores along with 17 store remodeling and relocation projects.Image Source: Zacks Investment ResearchGuidanceThe company is impressed with its year-to-date performance as well as solid trends experienced so far in the fiscal fourth quarter. Management raised its fiscal 2021 view. It now expects net sales of $8.5-$8.6 billion, up from the $8.1-$8.3 billion expected before. The Zacks Consensus Estimate for fiscal 2021 top-line is currently pegged at $8.38 billion. Comps growth is now expected in the range of 36-37% compared with the prior band of 30-32%.Management expects the operating margin to be between 14.3-14.5%, up from nearly 13% projected before. Growth in operating margin is likely to be driven by an expansion in gross margin, which, in turn, is expected to benefit from fixed cost leverage, better merchandise margin, lower salon costs and reduced headwinds related to channel shift.Earnings are now envisioned in the range of $16.7-$17.1 per share compared with $14.5-$14.7 forecast earlier. The Zacks Consensus Estimate is currently pegged at $15.12 per share.The Zacks Rank #3 (Hold) stock has gained 4.9% in the past three months against the industry’s decline of 2.5%.3 More Stocks Hogging the LimelightSome other top-ranked stocks in the Retail - Wholesale sector are Boot Barn Holdings BOOT, Tractor Supply Company TSCO and Target TGT.Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). Shares of the company have jumped 42.8% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period’s levels. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average. Tractor Supply Company, a rural lifestyle retailer in the United States, flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of the company have increased 14.5% in the past three months. The Zacks Consensus Estimate for Tractor Supply Company’s current financial year sales and EPS suggests growth of 19% and 23.9%, respectively, from the year-ago period’s levels. TSCO has an expected EPS growth rate of 9.6% for three-five years. Target, a renowned omnichannel retailer, presently carries a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 19.7%, on average. The stock has inched up 0.5% in the past three months.The Zacks Consensus Estimate for Target’s current-year sales and EPS suggests growth of 14.3% and 39.6%, respectively, from the corresponding year-ago period’s levels. TGT has an expected EPS growth rate of 14.4% for three-five years. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report Tractor Supply Company (TSCO): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears U.S. index futures regained some ground alongside Asian markets while European stocks slumped to session lows in a delayed response to yesterday's late Omicron-driven US selloff, as markets remained volatile following the biggest two-day plunge in more than a year, spurred by concern about the omicron coronavirus variant and Federal Reserve tightening. Investors await data for unemployment claims, as well as earnings from companies including Dollar General and Kroger. Tech is the weakest sector, dropping in sympathy after Apple warned its suppliers of slowing iPhone demand. Nasdaq futures pared earlier gains of up to 0.8% to trade down 0.1% while S&P futures are only 0.2% higher after rising as much as 0.9%. While the knee-jerk reaction of stock investors may “continue to be to take profits before the end of the year,” there is “plenty of liquidity available to drive stock prices higher as dip-buyers enter the market,” Ed Yardeni wrote in a note. The U.S. economy grew at a modest to moderate pace through mid-November, while price hikes were widespread amid supply-chain disruptions and labor shortages, the Federal Reserve said in its Beige Book survey Tuesday. Cruise-ship operator Carnival jumped 3.8% in premarket trading, while Pfizer and Moderna fell as the World Health Organization said that existing vaccines will likely protect against severe cases of the variant. Boeing contracts gained 3.4% after a report that the flagship 737 Max aircraft has regained airworthiness approval in China. With lots of uncertainty surrounding the pandemic and Fed policy, the size of potential market swings is still considerable.  Here are some other notable premarket movers today: Apple (AAPL US) shares fell 1.8% in premarket trading after the iPhone maker was said to tell suppliers that demand for its flagship product has slowed. Wall Street analysts, however, remained bullish. U.S. stocks tied to former President Donald Trump rise in premarket trading following a report his media group is in talks to raise new financing. Digital World Acquisition (DWAC US) +24%, Phunware (PHUN US) +38%. Katapult (KPLT US) shares sink 14% in premarket after the financial technology firm said its gross originations over a two-month period were lower than 2020 levels. Vir (VIR US) shares jump 8.1% in premarket trading after its Covid-19 antibody treatment, co-developed with Glaxo, looked to be effective against the new omicron variant in early testing. Snowflake (SNOW US) is up 17% premarket following quarterly results that impressed analysts, though some raise questions over the data software company’s valuation. CrowdStrike (CRWD US) shares jumped 5.1% in premarket after it boosted its revenue forecast for the full year. Square’s (SQ US) shares are 0.4% higher premarket. Corporate name change to Block Inc. indicates “a symbolic rebirth,” according to Barclays as it shows a broader set of possibilities than those of a pure payments company. Okta’s (OKTA US) shares advanced in postmarket trading. 3Q results show the cybersecurity company is well- positioned to deliver growth, even if some analysts say its guidance looks conservative and that its growth was not as strong as in prior quarters. The Omicron variant also hurt risk appetite, making the safe-haven bonds more attractive to investors, pushing yields down - although yields picked up again in early European trading. Volatility in equity markets as measured by the Vix hit its highest since February on Wednesday, before easing on Thursday, but remained well above this year’s average and almost twice as high as a month ago. Investors are braced for volatility to continue through December, stirred by tightening central-bank policies to fight inflation just as the omicron variant complicates the outlook for the pandemic recovery. The recent market turmoil may offer investors a chance to position for a trend reversal in reopening and commodity trades, according to JPMorgan Chase & Co. "Investors will need to maintain their calm during a period of uncertainty until the scientific data give a clearer picture of which scenario we face," said Mark Haefele, chief investment officer at UBS Global Wealth Management in Zurich. “This, in turn, will help shape the reaction of central bankers." Also weighing on stock markets, and flattening the U.S. yield curve, were remarks by Federal Reserve Chair Jerome Powell, who said that he would consider a faster end to the Fed's bond-buying programme, which could open the door to earlier interest rate hikes. In his second day of testimony in Congress on Wednesday, Powell reiterated that the U.S. central bank needs to be ready to respond to the possibility that inflation does not recede in the second half of next year. read more "In this past what we’ve seen is central banks using COVID as an excuse to remain dovish, and what we're seeing is central banks turn hawkish despite rising concerns around COVID, so it is a bit of a shift in communication," said Mohammed Kazmi, portfolio manager at UBP.  That said, the market is now so oversold, this is where we usually see aggressive dip-buying. In Europe, tech companies were the worst performers after Apple warned its component suppliers of slowing demand for its iPhone 13, the news dragged index heavyweight ASML Holding NV more than 4%. Meanwhile, travel shares were among the worst performers as the omicron variant continued to pop upin countries around the world, including the U.S., Norway, Ireland and South Korea. The Euro Stoxx 50 dropped as much as 1.7% while the Stoxx 600 Index fell 1.5%, extending declines to trade at a session low, with all sectors in the red and led lower by technology and travel stocks. The Stoxx 600 Technology Index slumped as much as 3.9%, the most in two months. Vifor Pharma surged by a record 18% following a report that Australia’s CSL is in advanced talks to acquire Swiss drugmaker. Here are some of the biggest European movers today: Vifor Pharma shares rise as much as 18% on a report that Australia’s CSL is in advanced talks to acquire the Swiss-based drug maker and developer while working with BofA on a A$4 billion funding package. Argenx jumps as much as 9.5% after Kepler Cheuvreux upgrades the stock to buy, saying the biotech company is on the brink of launching its first commercial product. Duerr gains as much as 7.2%, most since Aug. 10, after Deutsche Bank upgrades to buy and sets aa Street-high PT of EU60 for the German engineering company, citing the digitalization of the industry. Daily Mail & General Trust rises as much as 3.9% after Rothermere Continuation raised its bid for all DMGT’s Class A shares by 5.9% to 270p a share in cash. Klarabo surges as much as 54% as shares start trading on Nasdaq Stockholm after the Swedish property company raised SEK750m in an IPO. Eurofins Scientific declines for a fourth session, falling as much as 3.2%, as Goldman Sachs downgrades the company to neutral from buy “following strong outperformance YTD.” Deliveroo drops as much as 6.4% after an offering of 17.6m shares by CEO Will Shu and CFO Adam Miller at a price of 278p a share, representing a 4.2% discount to the last close. M&S falls as much as 3.4% after UBS cut its rating to neutral from buy, citing limited upside to its new price target as well as “little room for meaningful upgrades.” Earlier in the session, Asian stocks erased an earlier loss to trade slightly up, as traders continued to assess the potential impact of the omicron virus strain and the Federal Reserve’s efforts to keep inflation in check.  The MSCI Asia Pacific Index rose 0.2% after falling 0.4% in the morning. South Korea led regional gains, helped by large-cap chipmakers, while Japan was among the worst performers after the government dropped a plan for a blanket halt to all new incoming flight reservations. Asia’s equity benchmark is still down about 4% so far this year after rebounding in the past two sessions from a one-year low reached earlier this week. Despite the region’s underperformance against the U.S. and Europe, cheap valuations and foreign-investor positioning have prompted brokerages including Credit Suisse Group AG and Nomura Securities Co. Ltd. to turn bullish on Asia’s prospects next year. “Equity markets continue to play omicron tennis and traders looking for short-term direction should just wait for the next virus headline and then act accordingly,” said Jeffrey Halley, a senior market analyst at Oanda Corp. “Volatility, and not market direction, will be the winner this week.” Chinese technology shares including Alibaba Group Holding slid after Beijing was said to be planning to close a loophole used by the sector to go public abroad, fueling concern over existing overseas listings. Japanese equities declined, following U.S. peers lower after the first American case of the omicron coronavirus variant was confirmed. Electronics makers and telecoms were the biggest drags on the Topix, which fell 0.5%. SoftBank Group and TDK were the largest contributors to a 0.7% loss in the Nikkei 225.  The S&P 500 posted its worst two-day selloff since October 2020 after the first U.S. case of the new strain was reported. Federal Reserve Chair Jerome Powell reiterated that officials should consider a quicker reduction of monetary stimulus amid elevated inflation. “Truth is, there’s probably a lot of people who are wanting to buy stocks at some point,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “But, with omicron still an unknown, people are responding sensitively to news development, and that’s keeping them from buying.” India’s benchmark equity index climbed for a second day, led by software exporters, on an improving economic outlook and as investors grabbed some beaten-down stocks after recent declines. The S&P BSE Sensex Index rose 1.4% to close at 58,461.29 in Mumbai, the biggest advance since Nov. 1. Its two-day gains increased to 2.5%, the most since Aug. 31. The NSE Nifty 50 Index also surged by a similar magnitude. All of the 19 sector sub-indexes compiled by BSE Ltd. were up, led by a gauge of utilities companies. “India underperformed the global markets in recent weeks. Investors are now going for value buying in stocks at lower levels,” said A. K. Prabhakar, head of research at IDBI Capital Market Services. The Sensex gained in three of the past four sessions after plunging 2.9% on Friday, the biggest drop since April. The rally, however, is in contrast to most global peers which are witnessing volatility on worries over the spread of the omicron variant. High frequency indicators in India, such as tax collection and manufacturing activities, have shown robust growth in recent months, while the country’s economy expanded 8.4% in the quarter ended in September, according to an official data release on Tuesday. Mortgage lender HDFC contributed the most to the Sensex’s gain, increasing 3.9%. Out of 30 shares in the index, 27 rose and three fell. In rates, trading has been relatively quiet as bunds and gilts bull steepen a touch with risk offered, while cash TSYs bear flatten, cheapening ~5bps across the curve.Treasuries retraced part of yesterday’s rally that sent the benchmark 30-year rate to the lowest since early January. A large buyer of 5-year U.S. Treasury options targets the yield dropping around 17bps. 5s10s, 5s30s spreads flattened by ~1bp and ~2bp to multimonth lows; 10-year yields around 1.43%, cheaper by more than 3bp on the day while bunds and gilt yields are richer by ~1bp. Front-end and belly of the curve underperform vs long-end, while bunds and gilts outperform Treasuries. With little economic data slated, speeches by several Fed officials are main focal points. Peripheral spreads tighten with 10y Spain outperforming after well received auctions, albeit with a small size on offer. U.S. economic data slate includes November Challenger job cuts (7:30am) and initial jobless claims (8:30am) In FX, the Bloomberg Dollar Spot Index fell to a day low in the European session and the greenback traded mixed versus its Group-of-10 peers as most crosses consolidated in recent ranges. Two-week implied volatility in the major currencies trades in the green Thursday as it now captures the next policy decisions by the world’s major central banks. Euro- dollar on the tenor rises by as much as 138 basis points to touch 8.22%, highest in a year; the relative premium, however, remains below parity as realized has risen to levels unseen since August 2020. The pound rose along with some other risk- sensitive currencies following the British currency’s three-day slump against the dollar. Long-end gilts underperformed, leading to some steepening of the curve. The yen fell for the first day in three while the Swiss franc fell a second day. The Hungarian forint rose to almost a three-week high after the central bank in Budapest raised the one-week deposit rate by 20 basis points to 3.10%. Economists in a Bloomberg survey were evenly split in predicting a 10 or 20 basis point increase. The Turkish lira resumed its slump after President Recep Tayyip Erdogan abruptly replaced his finance minister amid deepening rifts in the administration over aggressive interest-rate cuts that have undermined the currency and fueled inflation. Poland’s central bank Governor Adam Glapinski sent the zloty to a three-week high against the euro on Thursday with his changed rhetoric on inflation, which he no longer sees as transitory after prices surged at the fastest pace in more than two decades. Currency market volatility also rose, with euro-dollar one-month volatility gauges below Monday's one-year peak but still at elevate levels . "Liquidity in some areas of the market is still quite poor as people grapple with this news and as we head towards year-end, a lot of it is really liquidity driven, which is leading to some volatility," said UBP's Kazmi. "Even in the most liquid market of the U.S. treasury market we've seen some fairly large moves on very little newsflow at times." In commodities, crude futures extend Asia’s gains. WTI adds 2.2% near $67, Brent near $70.50 ahead of today’s OPEC+ meeting. Spot gold finds support near Tuesday’s, recovering somewhat to trade near $1,774/oz. Base metals are mixed: LME aluminum drops as much as 1.1%, nickel, zinc and tin hold in the green Looking at the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Market Snapshot S&P 500 futures up 0.7% to 4,540.25 STOXX Europe 600 down 1.0% to 466.37 MXAP up 0.2% to 192.07 MXAPJ up 0.7% to 629.36 Nikkei down 0.7% to 27,753.37 Topix down 0.5% to 1,926.37 Hang Seng Index up 0.5% to 23,788.93 Shanghai Composite little changed at 3,573.84 Sensex up 1.3% to 58,436.52 Australia S&P/ASX 200 down 0.1% to 7,225.18 Kospi up 1.6% to 2,945.27 Brent Futures up 2.4% to $70.53/bbl Gold spot down 0.6% to $1,771.73 U.S. Dollar Index little changed at 96.03 German 10Y yield little changed at -0.35% Euro little changed at $1.1320 Top Overnight News from Bloomberg Federal Reserve Bank of Cleveland President Loretta Mester said she’s “very open” to scaling back the Fed’s asset purchases at a faster pace so it can raise interest rates a couple of times next year if needed A United Nations gauge of global food prices rose 1.2% last month, threatening to make it more expensive for households to put a meal on the table. It’s more evidence of inflation soaring in the world’s largest economies and may make it even harder for the poorest nations to import food, worsening a hunger crisis Germany is poised to clamp down on people who aren’t vaccinated against Covid-19 and drastically curtail social contacts to ease pressure on increasingly stretched hospitals Some investors buffeted by concerns about tighter monetary policy are turning their sights to China’s battered junk bonds, given they offer some of the biggest yield buffers anywhere in global credit markets Pfizer Inc. says data on how well its Covid-19 vaccine protects against the omicron variant should be available within two to three weeks, an executive said GlaxoSmithKline Plc said its Covid-19 antibody treatment looks to be effective against the new omicron variant in early testing A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded tentatively following the declines on Wall St where all major indices extended on losses and selling was exacerbated on confirmation of the first Omicron case in the US, while the Asia-Pac region also contended with its own pandemic concerns. ASX 200 (-0.2%) was subdued amid heavy losses in the tech sector and with a surge of infections in Victoria state, although downside in the index was cushioned amid inline Retail Sales and Trade Balance, as well as M&A optimism after Woolworths made a non-binding indicative proposal for Australian Pharmaceutical Industries. Nikkei 225 (-0.7%) weakened after the government instructed airlines to halt inbound flight bookings for a month due to fears of the new variant and with auto names also pressured by declines in monthly sales amid the chip supply crunch. KOSPI (+1.6%) showed resilience amid expectations for lawmakers to pass a record budget today and recouped opening losses despite the record increase in daily infections and confirmation of its first Omicron cases, while the index also shrugged off the highest CPI reading in a decade which effectively supports the case for further rate increases by the BoK. Hang Seng (+0.6%) and Shanghai Comp. (-0.1%) were choppy following another liquidity drain by the PBoC and with tech pressured in Hong Kong as Alibaba shares extended on declines after recently slipping to a 4-year low in its US listing. Beijing regulatory tightening also provided a headwind as initial reports suggested China is to crack down on loopholes used by tech firms for foreign IPOs, although this was later refuted by China, and the CBIRC is planning stricter regulations on major shareholders of banks and insurance companies, as well as confirmed it will better regulate connected transactions of banks. Finally, 10yr JGBs were higher as prices tracked gains in global counterparts and amid the risk aversion in Japan, although prices are off intraday highs after hitting resistance during a brief incursion to the 152.00 level and despite the marginally improved metrics from 10yr JGB auction. Top Asian News Asia Stocks Swing as Investors Weigh Omicron Impact, Fed Views Apple Tells Suppliers IPhone Demand Slowing as Holidays Near Moody’s Cuts China Property Sales View on Financing Difficulties Faith in Singapore Leaders Hit by Record Covid Wave, Poll Shows Bourses across Europe have held onto losses seen at the cash open (Euro Stoxx 50 -1.4%; Stoxx -1.2%), as the region plays catchup to the downside seen on Wall Street – seemingly sparked by a concoction of hawkish Fed rhetoric and the discovery of the Omicron variant in the US. Nonetheless, US equity futures are firmer across the board but to varying degrees – with the cyclical RTY (+1.1%) and the NQ (+0.3%) the current laggard. European futures ahead of the cash open saw some mild fleeting impetus on reports GlaxoSmithKline's (-0.3%) COVID treatment Sotrovimab retains its activity against Omicron variant, and the UK MHRA simultaneously approved the use of Sotrovimab – but caveated that it is too early to know whether Omicron has any impact on effectiveness. Conversely, brief risk-off crept into the market following commentary from a South African Scientist who warned the country is seeing an exponential rise in new COVID cases with a predominance of Omicron variant across the country – with the variant causing the fastest ever community transmission - but expects fewer active cases and hospitalisations this wave. Back to Europe, Euro indices see broad-based losses whilst the downside in the FTSE 100 (-0.7%) is less severe amid support from its heavyweight Oil & Gas sector – the outperforming sector in the region. Delving deeper, sectors see no overarching theme nor bias – Food & Beverages, Autos and Banks are towards the top of the bunch, whilst Tech, Telecoms, and Travel &Leisure. Tech is predominantly weighed on by reports that Apple (-2% pre-market) reportedly told iPhone component suppliers that demand slowed down. As such ASML (-5.0%), STMicroelectronics (-4.4%) and Infineon (-3.6%) reside among the biggest losers in the Stoxx 600. Deliveroo (-5.3%) is softer following an offering of almost 18mln at a discount to yesterday's close. In terms of market commentary, Morgan Stanley believes that inflation will remain high over the next few months, in turn supporting commodities, financials and some cyclical sectors. The bank identifies beneficiaries including EDF (-1.5%), Engie (-1.2%), SSE (-0.2%), Legrand (-1.3%), Tesco (-0.5%), BT (-0.8%), Michelin (-1.6%) and Sika (-0.9%). Top European News Shell Kicks Off First Wave of Buybacks From Permian Sale Omicron Threatens to Prolong Pain in Bid to Vaccinate the World Apple, Suppliers Drop Premarket After Report Demand Slowed Valeo, Gestamp Gain After Barclays Raises to Overweight In FX, currency markets are still in a state of flux, or limbo bar a few exceptions, and the Greenback is gyrating against major peers awaiting the next major event that could provide clearer direction and a more decisive range break. Thursday’s agenda offers some scope on that front via US initial jobless claims and a host of Fed speakers, but in truth NFP tomorrow is probably more likely to be influential even though chair Powell has effectively given the green light to fast-track tapering from December. In the interim, the index continues to keep a relatively short leash around 96.000, and is holding within 96.138-95.895 confines so far today. JPY/CHF - Although risk considerations look supportive for the Yen, on paper, UST-JGB/Fed-BoJ differentials coupled with technical impulses are keeping Usd/Jpy buoyant on the 113.00 handle, with additional demand said to have come from Japanese exporters overnight. However, the headline pair may run into offers/resistance circa 113.50 and any breach could be capped by decent option expiry interest spanning 113.60-75 (1.5 bn). Similarly, the Franc has slipped back below 0.9200 on yield and Swiss/US Central Bank policy stances plus near term outlooks, and hardly helped by a slowdown in retail sales. GBP/CAD/NZD - All firmer vs their US counterpart, though again well within recent admittedly wide ranges, and the Pound perhaps more attuned to Eur/Gbp fluctuations as the cross retreats to retest 0.8500 and Cable rebounds to have another look at 1.3300 where a fairly big option expiry resides (850 mn). Indeed, Sterling has largely shrugged off the latest BoE Monthly Decision Maker Panel release that in truth did not deliver any clues on what is set to be another knife-edge MPC gathering in December. Elsewhere, the Loonie is straddling 1.2800 with eyes on WTI crude ahead of Canadian jobs data on Friday and the Kiwi is hovering above 0.6800 after weaker NZ Q3 terms of trade were offset to some extent by favourable Aud/Nzd headwinds. AUD/EUR - Both narrowly mixed against US Dollar, with the Aussie pivoting 0.7100 in wake of roughly in line trade and retail sales data overnight, but wary about the latest virus outbreak in the state of Victoria, while the Euro is sitting somewhat uncomfortably on the 1.1300 handle amidst softer EGB yields and heightened uncertainty about what the ECB might or might not do in December on the QE guidance front. In commodities, WTI and Brent front-month futures are firmer intraday as traders gear up for the JMMC and OPEC+ confabs at 12:00GMT and 13:00GMT, respectively. The jury is still split on what the final decision could be, but the case for OPEC+ to pause the planned monthly relaxation of output curbs by 400k BPD has been strengthening against the backdrop of Omicron coupled with the coordinated SPR releases (an updating Rolling Headline is available on the Newsquawk headline feed). As expected, OPEC sources have been testing the waters in the run-up, whilst yesterday's JTC/OPEC meetings largely surrounded the successor to the Secretary-General position. Oil market price action will likely be centred around OPEC+ today in the absence of any macro shocks. WTI Jan resides around USD 66.50/bbl (vs low USD 65.41/bbl) whilst Brent Feb briefly topped USD 70/bbl (vs low USD 68.73/bbl). Elsewhere, spot gold has eased further from the USD 1,800/oz after failing to sustain a break above the 50, 100 and 200 DMAs which have all converged to USD 1,791/oz today. LME copper is on the backfoot amid the cautious risk sentiment, with the red metal back under USD 9,500/t but off overnight lows. US Event Calendar 7:30am: Nov. Challenger Job Cuts -77.0% YoY, prior -71.7% 8:30am: Nov. Initial Jobless Claims, est. 240,000, prior 199,000; 8:30am: Nov. Continuing Claims, est. 2m, prior 2.05m 9:45am: Nov. Langer Consumer Comfort, prior 52.2 DB's Jim Reid concludes the overnight wrap With investors remaining on tenterhooks to find out some definitive information on the Omicron variant, yesterday saw markets continue to see-saw for a 4th day running. Following one of the biggest sell-offs of the year on Friday, we then had a partial bounceback on Monday, another bout of fears on Tuesday (not helped by the prospect of faster tapering), and yesterday saw another rally back before risk sentiment turned sharply later in the day as an initial case of the Omicron variant was discovered in the US. You can get some idea of this by the fact that Europe’s STOXX 600 (+1.71%) posted its best daily performance since May, whereas the S&P 500 moved from an intraday high where it had been up +1.88%, before shedding all those gains and more to close -1.18% lower. In fact, that decline means the S&P has now lost over -3% in the last two sessions, marking its worst 2-day performance in over a year, and this heightened volatility saw the VIX index close back above 30 for the first time since early February. In terms of developments about Omicron, we’re still in a waiting game for some concrete stats, but there was positive news early on from the World Health Organization’s chief scientist, who said that they think vaccines “will still protect against severe disease as they have against the other variants”. On the other hand, there was further negative news out of South Africa, as the country reported 8,561 infections over the previous day, with a positivity rate of 16.5%. That’s up from 4,373 cases the day before, and 2,273 the day before that, so all eyes will be on whether this trend continues, and also on what that means for hospitalisation and death rates over the days ahead. Against this backdrop, calls for fresh restrictions mounted across a range of countries, particularly on the travel side. In the US, it’s been reported already by the Washington Post that President Biden could today announce stricter testing requirements for arriving travellers. Meanwhile, France is moving to require non-EU arrivals to show a negative test before arrival, irrespective of their vaccination status. The EU Commission further said that member states should conduct daily reviews of essential travel restrictions, and Commission President von der Leyen also said that the EU should discuss the topic of mandatory vaccinations. There was also a Bloomberg report that German Chancellor Merkel would recommend mandatory vaccinations from February 2022, according to a Chancellery paper that they’d obtained. That came as Slovakia sought to incentivise vaccination uptake among older citizens, with the cabinet backing a €500 hospitality voucher for residents over 60 who’ve been vaccinated. As on Tuesday, the other main headlines yesterday were provided by Fed Chair Powell, who re-emphasised his more hawkish rhetoric around inflation before the House Financial Services Committee. Notably he said that “We’ve seen inflation be more persistent. We’ve seen the factors that are causing higher inflation to be more persistent”, though yields on 2yr Treasuries (-1.4bps) already had the shift in stance priced in. New York Fed President Williams echoed that view in an interview, noting it would be germane to discuss and decide whether it was appropriate to accelerate the pace of tapering at the December FOMC. 10yr yields (-4.1bps) continued their decline, predominantly driven by the turn in sentiment following the negative Omicron headlines. That latest round of curve flattening left the 2s10s slope at its flattest level since early January around the time of the Georgia Senate race that ushered in the prospect of much larger fiscal stimulus. In terms of markets elsewhere, strong data releases helped to support risk appetite earlier in yesterday’s session, with investors also looking forward to tomorrow’s US jobs report for November that will be an important one ahead of the Fed’s decision in less than a couple of weeks’ time. The ISM manufacturing release for November saw the headline number come in roughly as expected at 61.1 (vs. 61.2 expected), and also included a rise in both the new orders (61.5) and the employment (53.3) components relative to last month. Separately, the ADP’s report of private payrolls for November likewise came in around expectations, with a +534k gain (vs. +526k expected). Staying on the US, one thing to keep an eye out over the next 24 hours will be any news on a government shutdown, with funding currently set to run out by the weekend as it stands. The headlines yesterday weren’t promising for those hoping for an uneventful, tidy resolution, as Politico indicated that some Congressional Republicans would not agree to an expedited process to fund the government should certain vaccine mandates remain in place. An expedited process is necessary to avoid a government shutdown at the end of the week, so one to watch. After the incredibly divergent equity performances in the US and Europe, we’ve seen a much more mixed performance in Asia overnight, with the KOSPI (+1.09%), Hang Seng (+0.23%), and CSI (+0.23%) all advancing, whereas the Shanghai Composite (-0.05%) and the Nikkei (-0.60%) are trading lower. In terms of the latest on Omicron, authorities in South Korea confirmed five cases, which came as the country also reported that CPI in November rose to its fastest since December 2011, at +3.7% (vs +3.1% expected). Separately in China, 53 local Covid-19 cases were reported in Inner Mongolia, whilst Harbin province reported 3 local cases. Looking forward, futures are indicating a positive start in the US with those on the S&P 500 (+0.64%) pointing higher. Back in Europe, sovereign bonds lost ground yesterday, and yields on 10yr bunds (+0.5bps), OATs (+1.1bps) and BTPs (+4.2bps) continued to move higher. Interestingly, there was a continued widening in peripheral spreads, with the gap between both Italian and Spanish 10yr yields over bunds reaching their biggest level in over a year, at 135bps and 77bps, respectively. Another factor to keep an eye on in Europe is another round of increases in natural gas prices, with futures up +3.42% to their highest level since mid-October yesterday. Lastly on the data front, the main other story was the release of the manufacturing PMIs from around the world. We’d already had the flash readings from a number of the key economies, so they weren’t too surprising, but the Euro Area came in at 58.4 (vs. flash 58.6), Germany came in at 57.4 (vs. flash 57.6), and the UK came in at 58.1 (vs. flash 58.2). One country that saw a decent upward revision was France, with the final number at 55.9 (vs. flash 54.6), which marks an end to 5 successive monthly declines in the French manufacturing PMI. One other release were German retail sales for October, which unexpectedly fell -0.3% (vs. +0.9% expected). To the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Tyler Durden Thu, 12/02/2021 - 07:57.....»»

Category: dealsSource: nytDec 2nd, 2021

Apple Slides After Warning Suppliers iPhone 13 Demand Slowing

Apple Slides After Warning Suppliers iPhone 13 Demand Slowing A couple of months ago, we reported that Apple had slashed its lofty production forecasts for the next generation of iPhones as the supply chain crunch came for the world's most valuable consumer-tech behemoth. And on Thursday, Apple shares tumbled in premarket trading following news reports that demand for the iPhone 13 was starting to wane. After confronting the global supply crunch creating headaches for the dozen or so contractors responsible for actually building the iPhones, Apple is now facing something even more insidious: a paucity of demand for the next generation of phones. Bloomberg reports that Apple has told its suppliers - whom just weeks ago it was whipping to accelerate production by any means necessary - that demand for the latest line of new phones has weakened. They characterized it as a sign that consumers are giving up on the hard-to-find product. The company has told its component suppliers that demand for the iPhone 13 lineup has weakened, people familiar with the matter said, signaling that some consumers have decided against trying to get the hard-to-find item. As we have reported, Apple has already cut its iPhone 13 production goal for this year by as many as 10MM units, down from a target of 90MM, due ostensibly to a lack of parts. The company's hope is to make up much of this shortfall next year, when supply is expected to improve. Unfortunately Apple is now informing its vendors that those orders may not materialize. For better or worse, Apple is still on track for a record holiday season, with analysts projecting a sales increase of 6% to $117.9 billion in the final three months of the calendar year. However, it likely won’t be the blockbuster quarter that Apple and Wall Street analysts like Dan Ives had originally envisioned. Shortages and delivery delays have already frustrated millions of consumers. Apple shares tumbled more than 1% in premarket trade. The iPhone is Apple's flagship product, accounting for about half of its $365.8 billion in revenue during the last fiscal year. So, the decision to skip the latest iPhone and wait until next year (consumers typically upgrade on two-year cycles) isn't too surprising. The new iPhone lineup, which starts at $799 for the standard model and $999 for the Pro, is considered a modest update from the iPhone 12, which had a whole new design. For Apple's suppliers, this probably sounds like good news. Last month, Apple’s main iPhone assembler, Hon Hai Precision Industry Co., (better known as Foxconn) predicted that its business will shrink in Q4 from a year earlier, a ruction caused by declines in demand for consumer electronics and computing as the company continues to struggle with chip shortages. Bigger changes are expected for the 2022 model, giving some shoppers a reason to wait. And with inflation and the omicron variant bringing fresh concerns to pandemic-weary shoppers, many may forgo expensive gift purchases, especially if the omicron hysteria inspires people to hold off on in-person holiday gatherings. Tyler Durden Thu, 12/02/2021 - 08:11.....»»

Category: dealsSource: nytDec 2nd, 2021