Markets
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Straits Times
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BMV IPC
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Dow Jones
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DAX 30
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BSE SENSEX
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FTSE 100
7,630.63
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JSE Top 40
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Last Week’s Highlights
Amazon’s cloud stabilizes
Amazon.com announced that its cloud business is stabilizing thanks to new deals, although it warns that consumers are cautious about spending ahead of the holiday season. The company anticipates revenue growth in the holiday quarter, but is below Wall Street expectations, despite solid third-quarter results driven by marketing campaigns and faster deliveries. Amazon seeks to maintain its leadership as a cloud services provider and online retailer, competing with Google and Microsoft through AI investments and services. The company faces challenges, including budget constraints and regulatory demands. Stabilizing its cloud computing division is critical, and Amazon is exploring opportunities in generative AI to drive revenue.
Chevron’s lower quarterly profit
In the third quarter, Chevron surprised Wall Street by beating earnings estimates, but this news was marred by a 5% drop in its stock price before trading hours. This was due to a significant decline in its profit compared to the previous year, due to falling oil prices and rising costs that affected earnings at the company’s refineries and chemical divisions. While the results are solid from a historical perspective, they are well below prior-year levels. The company reported a profit of $6.5 billion, compared with $11.2 billion for the same period last year, and its shares fell 5.4% to $146.40 in midday trading. Temporary challenges, such as oil inventories in shipments, weighed on these results. Chevron also warned of possible disruptions to its production due to events such as the closure of its field in Israel and problems at a project in Kazakhstan. Exxon and TotalEnergies also experienced profit declines due to falling oil prices and refining margins.
Coming Up This Week
Ford’s warning about the EV market
Ford Motor has withdrawn its 2023 earnings projections due to uncertainty related to the pending ratification of its agreement with the United Auto Workers (UAW) union and expressed concern about growing pressure in the electric vehicle (EV) market. This news led to a 4% drop in the company’s shares after regular trading hours. The agreement with the union included a significant wage increase for workers, which will increase labor costs per vehicle. Ford will also delay some of its investment in EV and battery production capacity due to downward pressure on prices. The company faces challenges in the profitability of its electric vehicles and is seeking a balance between price, margin, and demand. General Motors also withdrew its 2023 earnings projections and adjusted its EV market expectations. In the third quarter, Ford reported a loss in its EV unit, highlighting challenges in profitability and consumers’ unwillingness to pay premiums for EVs compared to combustion and hybrid vehicles. Despite an increase in profit in the third quarter, Ford faces significant challenges in its EV business and is re-evaluating its strategy in this sector.
X platform has new premium subscriptions
Elon Musk’s social networking platform X, formerly known as Twitter, has introduced two new subscription plans, most notably the Premium+ tier for approximately $16 per month, which offers users an ad-free experience, including all of the platform’s features and tools. However, this option will initially be available only to those accessing through a web browser. In addition, the platform has a basic subscription level of $3 per month, which does not remove advertising. X also has plans to incorporate video and audio calling for some users, seeking to expand its utility and become a comprehensive application. These moves represent Elon Musk’s efforts to monetize the social media platform, which he acquired for $44 billion in October 2022.
