Forecasts and signals from trader Aon
British regulator launches investigation into cloud business of Amazon, Google and Microsoft
The British regulator has launched an investigation into the dominance of technology titans Amazon, Microsoft and Google in the field of cloud services. The watchdog will assess how well the market is performing and will also examine barriers to new entrants in the sector.According to Ofcom, Amazon Web Service (AWS), Microsoft Azure and Google, called "hyperscalers" because of the size of the data centers used to process and store data, share about 81 percent of revenue in the U.K. cloud market.The investigation, which will last up to 12 months, seeks to "ensure that digital communication markets work well for people and businesses in the U.K.," the regulator said in a statement. It will work closely with the Competition and Markets Authority (CMA) and intends to consult on interim findings and publish a final report within a year.If competition is found to be disturbed and that companies and consumers are affected, Ofcom can take enforcement action, recommend regulatory or policy changes to the government, or refer the matter to the CMA for further investigation.Ofcom also plans to launch a broader investigation into messaging services and devices for accessing audio-visual content, including WhatsApp, FaceTime and Zoom, to see how they affect traditional telecommunications services such as calls and messages.The use of cloud services has increased dramatically in recent years. In 2018, less than 10 percent of all global enterprise IT spending was on public cloud services, but that figure rose to 17 percent last year as more people worked from home due to the pandemic. According to Ofcom, some experts expect that amount to reach 45% of enterprise IT spending by 2026.
Ford shares fall 4% on inflation expectations
Automaker Ford Motor reported that supplier costs will rise about $1 billion more than expected in the current quarter because of inflation, and the company estimates it will have 40,000 to 45,000 vehicles in inventory without parts, delaying sales.Ford shares fell 4.42% to $14.27 at the Sept. 19 postmarket on the NYSE.The No. 2 automaker in the U.S. reiterated expectations for full-year 2022 adjusted earnings before interest and taxes of $11.5 billion to $12.5 billion.Ford said in July that its second-quarter results were driven by higher-margin vehicles, partly offset by higher commodity costs and expenses. At the time, Ford said it expected commodity costs to rise by $4 billion over the year, and added that management was "actively looking" for ways to offset rising costs.In July, Ford said it was facing continued supply chain disruptions.Over the past two years, automakers have faced a series of supply chain problems that have repeatedly delayed vehicle production, often due to a shortage of semiconductor chips.
Microsoft's deal to buy Activision may not take place
The U.K. plans to launch a thorough antitrust review (MSFT) and (ATVI). The Competition and Markets Authority has asked Microsoft to make concessions: to give competitors access to Activision Blizzard's most popular games. But the company refused.Recall that at the beginning of the year Microsoft announced plans to buy Activision Blizzard for $95 per share. Now the securities of the video game maker are trading at $76.55. That is, in theory, an increase of 25% is possible.Are the regulator's actions justified? Analysts believe that the British antitrust regulator's crackdown on Microsoft is justified. If Microsoft eats Activision, there will be less competition in three segments: gaming consoles, cloud gaming and subscription services.Especially since there's already an example. Last year, Microsoft acquired Bethesda Studios. Now this studio's releases have been canceled by its competitors. If history repeats itself with Activision, releases of its popular franchises on Sony game consoles could be canceled. Microsoft will dominate the market.How would the companies' stocks react? It's not certain that the British regulator's ban will definitely cancel the takeover, but the likelihood of a deal being derailed is increasing.For Activision stock, nothing will change globally if the deal happens or is canceled. It will have a much bigger impact on (SONY) stock, which could fall 7-9% if the purchase is approved. For Microsoft, the purchase of Activision will be seen as a positive 3-4% growth in shares. The company will get exclusive rights to game franchises, which will lead to an increase in sales of technology giant Bill Gates.
FedEx shares lost more than 16% after the withdrawal of its outlook for the year
FedEx Corp. withdrew its financial outlook for the year, issued three months ago, saying the slowdown in global demand accelerated in late August and will worsen.Shares of the issuer fell 16.58% on the NYSE postmarket Sept. 15 after reporting financial results that fell short of Wall Street targets. Slowing economic activity around the world reduced FedEx Express revenue by $500 million and FedEx Ground revenue by $300 million for the quarter, FedEx said.FedEx said it is cutting costs, including closing some offices, reducing hours and consolidating some sorting facilities.
Apple plans to use the latest chips from Taiwanese chipmaker TSMC in iPhone and Mac
Electronics and software maker Apple plans to use an updated version of Taiwan chipmaker TSMC's latest chip technology in its iPhone and Macbook next year, Nikkei Asia reported.The A17 mobile processor, which is currently under development, will be mass-produced using TSMC's N3E chip manufacturing technology. It is expected to be available in the second half of 2023. The A17 is planned to be used in a premium version of the iPhone line, which is scheduled for release next year.Shares of Apple on NASDAQ were down 5.87% to $153.84 per share in trading on September 13 and were up 0.73% to $154.96 in premarket trading on September 14.
Johnson & Johnson to spend $205 million to settle lawsuits in Australia
Johnson & Johnson has settled two class action lawsuits in Australia for A$300 million ($204.90 million) filed over the sale of defective pelvic mesh implants to Australian women. The settlement followed multiple lawsuits involving more than 11,000 plaintiffs, the pharmaceutical giant and its subsidiary Ethicon.A federal court judge had previously found that Ethicon sold implants to treat urinary incontinence and pelvic organ prolapse without warning women and surgeons of the risks, and rushed to market the products before proper testing. In March 2020, the company was ordered to pay $1.7 million to three Australian women.J&J has faced similar lawsuits over its pelvic floor products in the U.S., Canada and Europe.Shares of Johnson & Johnson on the NYSE rose 0.19% to $165.71 a share in trading on Sept. 9.
Tesla may build lithium recycling plant in Texas
Electric car maker Tesla is considering a lithium recycling plant on the Texas Gulf Coast to supply a key battery component amid growing demand for electric cars.The potential lithium hydroxide refining plant for batteries would process, purify and produce battery materials, Tesla said in a statement filed with the Texas Comptroller's Office. Tesla is also evaluating a competing site in Louisiana for the project.CEO Elon Musk previously wrote on his Twitter account that Tesla may have to enter the mining and refining industry directly as lithium prices rise.If Tesla's applications for regulatory approvals are approved, construction could begin in the fourth quarter of 2022, with commercial production starting by the end of 2024. Ensuring a steady supply of battery components is critical for Tesla as it faces increasing competition. The company also faces the challenge of significantly increasing production in the second half of the year.Tesla shares on NASDAQ traded up 1.96% to $289.26 per share on Sept. 8, and added another 0.22% to $289.9 on the postmarket.
Shell and Exxon begin sale of a major Dutch gas company
Shell and Exxon Mobil have put one of Europe's largest and oldest natural gas operations up for sale for more than $1 billion, Reuters reported, citing sources.Shell and Exxon recently began the process of selling NAM's offshore natural gas operations, which include dozens of fields and about 20 offshore platforms, as well as a network of pipelines and three processing plants.NAM began producing natural gas in 1963 after the discovery of the giant Groningen field and for decades was the main source of gas for the Netherlands and Europe.However, its production has been steadily declining since 2014, and will fall even further in the coming years after the Dutch government decided to close Groningen to limit seismic risk in the region. The field is expected to close in 2023 or 2024, but it could be extended, the government said.NAM's offshore and onshore assets up for sale produced about 2.4 million cubic meters of natural gas per day in 2021 and could increase production to 2.8 million cubic meters per day with additional investment.The asset package also includes NAM's stakes in three gas processing plants at the Den Helder terminal, which process 53% of all gas produced offshore in the Netherlands, as well as stakes in several pipeline networks.The assets are valued at $1 billion to $1.5 billion, according to sources.Exxon shares were down 0.67% to $94.95 per share on the NYSE on Sept. 6, and are up 0.47% momentarily to $95.4 on the Sept. 7 premarket.