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Wednesday, December 20, 2023

FedEx tumbles after sober results, broader market slips

 Shares of FedEx sank 12% on Wednesday following dismal results and an outlook that prompted a slew of price-target cuts from Wall Street analysts and contributed to a late-day broad market selloff.

FedEx is seen as a bellwether for worldwide economic trade. Investors on Wednesday said specific problems at the global delivery giant disappointed Wall Street, particularly its Express delivery business. The overall market initially shook off the news, but fell late in the day to push the S&P 500 down.

"The Fed's tightening regime was always going to have a lagging factor and we've seen plenty of companies tightening their belts over the past year in order to be leaner and meaner heading into any downturn," said Danni Hewson, head of financial analysis at AJ Bell.

Quarterly operating income for the air-based Express unit fell 60%, hit by volatile macroeconomic conditions, muted retailer restocking and reduced demand from its largest customer, the U.S. Postal Service (USPS). The U.S. Post Office has been diverting more packages from higher-margin air services to ground services.

The drop in Express earnings surprised analysts, who had anticipated cost-cutting initiatives announced earlier in the year would offset some of the decline in business from USPS.

"FedEx's quarterly results are a step back," Deutsche Bank analyst Amit Malhotra said.

The stock lost $33.75 a share at $246.25, while shares of rival UPS fell 2.9%.

The broader S&P 500 index lost 1.5% after a steady run that left it just shy of an all-time record built on falling interest rates. In September 2022, a FedEx warning sparked a selloff in equities that lasted several weeks, but the market has been more optimistic of late.

The U.S. Federal Reserve and other world central banks have hiked rates sharply over the past year-plus to combat inflation, but some, including the Fed, have recently pivoted, and are now suggesting rate cuts will be in the offing before long.

California Lawmakers Create First Retail Theft Committee Amid Surging Crime

by Travis Gillmore via The Epoch Times,

While videos of smash-and-grab robberies in California circulating on social media are attracting attention worldwide, lawmakers say finding solutions to stop the crimes is challenging.

Though acknowledging action is needed, some say viral clips are distorting reality and suggest that retail theft crimes are difficult to count.

“What is happening in our communities is unacceptable and we must act with urgency,” Assemblyman Rick Chavez Zbur (D-Hollywood) said in a Dec. 18 press release.

“But we must also look at the facts and find the solutions that will actually work.”

Complicating understanding is a lack of consistent reporting across the retail industry, according to experts.

The California State Assembly's Select Committee on Retail Theft holds its first meeting in Sacramento, Calif., on Dec. 19, 2023. (Travis Gillmore/The Epoch Times)

Seeking to address the issue, the California Assembly's newly formed Select Committee on Retail Theft met for the first time Dec. 19.

“The retailers are screaming for help,” committee member Assemblyman Juan Alanis (R-Modesto) told The Epoch Times after the meeting.

“Everyone has their own ideas, and hopefully by the end of these hearings, we can identify some solutions.”

Established by Assembly Speaker Robert Rivas (D-Hollister) in October, the 11-member panel—chaired by Mr. Zbur and consisting of nine Democrats and two Republicans—is tasked with identifying solutions to what lawmakers describe as an “ongoing crisis.”

“The Select Committee was formed to do just that—to listen to the experts and those in our communities who are impacted, to discern the facts, and to understand the best path forward,” Mr. Zbur said.

Encompassing shoplifting, and commercial burglary and robbery—where violence or threats were used to intimidate employees—retail crime is significantly impacting the Bay Area, Central Valley, and Los Angeles County, according to a Dec. 12 committee press release.

“This is impacting our constituents,” committee member Assemblywoman Cottie Petrie-Norris (D-Laguna Beach) said during the hearing.

“They’re feeling the brunt of this in higher costs … and feeling unsafe in public spaces.”

With larger counties experiencing higher levels of theft—Magnus Lofstrom, policy director and senior fellow for the Public Policy Institute of California, told the panel that commercial burglaries and robberies are on the rise in 21 and 25 of the 58 counties across the state, respectively.

Highlighting the challenge of obtaining solid data, he noted that changes in reporting, with some businesses no longer calling police for some thefts, are impacting statistics.

“As with any data, there are important limitations … to incidents reported,” Mr. Lofstrom said.

Rachel Michelin, president and CEO of the California Retailers Association, notified the committee that some stores are told by law enforcement not to call unless a threat of violence occurs.

A business in Sacramento was warned that if misdemeanor theft reports continued, the store would be cited with a public nuisance complaint, further leading to “skewed data,” she said.

CVS items among nearly 14,000 products recovered from retail theft ring investigation in Glendale, Calif., on Aug. 31, 2023. (Courtesy of California Highway Patrol)

Retailers are asking lawmakers to address changes in state law that occurred with the passage of the 2014 ballot initiative—Proposition 47—designed to lessen prison populations by reducing some felony drug and theft crimes to misdemeanors.

Of particular concern are what are known as aggregation of thefts—where values of stolen items can be combined to reach the $950 felony threshold—and petty theft with a prior charge that allows the filing of felony charges for repeat offenders.

Both were eliminated by Prop. 47 and would require another ballot initiative to reestablish.

Some prosecutors in California argue that existing laws, including Prop. 47, are limiting prosecutors’ options and allowing many crimes to go unpunished.

“Even if you can charge them with a felony, the jails are so crowded they won’t serve any time,” Ivy B. Fitzpatrick, managing district attorney for Riverside County, told the commission.

“With no real consequences for repeat offenders, we’re seeing a rise in retail theft crimes.”

One person charged with 54 burglary offenses served a total of seven months in county jail, she said.

Fewer sentencing options for prosecutors have also reduced the number of individuals participating in drug treatment diversion programs—down 67 percent since Prop. 47 passed while homelessness statewide spiked 42 percent—Ms. Fitzpatrick told commissioners.

Law enforcement officials said the issue is negatively impacting communities across California, as repeat offenders are exacerbating the problem.

“When we see the same people committing the same crime … it suggests the system is broken,” Alexander Gammelgard, Grass Valley Police chief and president of the California Police Chiefs Association, said during the hearing.

A close-up view of chains securing a freezer full of food in a Walgreens store in San Francisco on July 18, 2023. (Lear Zhou/The Epoch Times)

Balancing recent legal reform efforts with the need to address the retail theft problem is a complex process, according to the assembly speaker.

“It’s important that we preserve our successful criminal justice reforms,” Mr. Rivas said during the hearing. “But at the same time, we need to ensure that we are delivering solutions to businesses and consumers.”

The new Chair of the Assembly Public Safety Committee, Assemblyman Kevin McCarty (D-Sacramento), said he recognizes the nature of the problem and is looking for creative fixes.

“Inaction is unacceptable,” he said during the meeting.

While experts told the panel Prop. 47 was playing a role in the rise in criminal activity, Mr. Zbur, the panel’s chair, expressed reluctance to single out the voter initiative.

“I’m circumspect on pulling Prop. 47,” Mr. Zbur said during the hearing. “We should be thinking about smart solutions and out-of-the-box thinking.”

The four-hour-long hearing designed to gather information included about a half hour of public comment, with more than a dozen individuals voicing their opinions.

The committee plans to hold meetings in San Francisco and Los Angeles in 2024, on dates yet to be determined, to give stakeholders an opportunity to provide input, according to Mr. Zbur.

https://www.zerohedge.com/political/inaction-unacceptable-california-lawmakers-create-first-retail-theft-committee-amid

Tesla drivers have the highest accident rate, study says

 A new analysis of auto accidents and incidents used insurance data to determine which car brands have the worst drivers and found that Tesla drivers have the highest accident rates.

The analysis used QuoteWizard by LendingTree insurance quote data and broke down which auto brands have drivers who were responsible for more accidents, DUIs and other vehicular incidents. 

It found that Tesla drivers had the highest accident rate with 23.54 accidents per 1,000 drivers from Nov. 14, 2022, through Nov. 14, 2023.

The only other auto brands whose drivers had more than 20 accidents per 1,000 drivers in the analysis were Ram (22.76) and Subaru (20.9). Just three brands had fewer than 10 accidents per 1,000 drivers in that period: Pontiac (8.41), Mercury (8.96) and Saturn (9.13).

In terms of overall driving incidents — including accidents, DUIs, speeding and citations — Ram drivers had the most and were involved in 32.90 incidents per 1,000 drivers, followed by Tesla (31.13) and Subaru (30.09) as the only brands above 30.

TickerSecurityLastChangeChange %
TSLATESLA INC.247.78-9.44-3.67%
STLASTELLANTIS NV22.93-0.41-1.78%

Ram drivers were the worst in 23 states per the report and recorded 64.44 incidents per 1,000 drivers in Massachusetts. Tesla drivers were the worst in 11 states, which made the Elon Musk-led company the only other auto brand in the double digits.

The best drivers according to the report were those driving Mercury vehicles, as they had just 15.82 incidents per 1,000 drivers nationally — less than half of the Ram drivers’ total. Rounding out the top three brands for best drivers were Pontiac (16.24) and Saturn (16.84).

By a significant margin, BMW drivers were found to have the highest DUI rate with 3.13 per 1,000 drivers. The next closest was Ram drivers, with nearly half that amount (1.72).

On the other end of the spectrum, nine car brands had drivers with DUI rates below 1.00 and the lowest were Mitsubishi (0.89), Volvo (0.92), Mercury (0.93) and Kia (0.93) in the period analyzed.

https://www.foxbusiness.com/markets/tesla-drivers-have-highest-accident-rate-study-says

'Longeveron: More Positive Clinical Data and Imaging Biomarker Results in Alzheimer's Study'

 

  • New clinical data showed that Lomecel-B™ improved cognitive function in multiple measures in a dose-response fashion
  • Caregiver ratings documented improved quality of life in Lomecel-B™ treated patients
  • MRI Biomarker study data showed that Lomecel-B™ countered loss of brain volume in multiple areas associated with Alzheimer’s disease, reduced brain neuroinflammation and improved cerebral blood flow
  • Overall results confirmed the drug product’s therapeutic potential in the treatment of mild Alzheimer’s disease and support further development

Apple’s 2024 Will Be About Moving Beyond the iPhone

 

The iPhone will take a back seat to Apple’s wearables business in 2024, with the Vision Prowatch and AirPods getting more attention. Also: The company goes to war against iMessage on Android; Google loses to Epic Games in its fight over app store policies; visionOS is fast approaching; and the first iOS 17.3 beta test brings security updates for thwarting thieves.

https://www.bloomberg.com/news/newsletters/2023-12-17/apple-2024-plans-new-low-end-airpods-vision-pro-larger-iphone-16-oled-ipad-lq9jhed4

Houthi Attacks in the Red Sea Add $22 Billion to Valuations of Shipping Companies

  • Attacks are forcing international shipping to go around Africa
  • Longer voyages mean fewer vessels available for charter

 

Houthi assaults on merchant ships as they sail through the Red Sea are driving up the shares of firms transporting everything from manufactured goods to oil and commodities.

The combined market capitalization of the world’s largest publicly traded shipping companies has jumped by about $22 billion since Dec. 12, when the assaults really ramped up.

https://www.bloomberg.com/news/articles/2023-12-20/houthi-red-sea-attacks-add-22-billion-to-valuations-of-shipping-companies

Google To 'Limit' Answers To Election Queries On Bard AI Tool & Generative Search

 by Savannah Fortis via CoinTelegraph.com,

Google released a blog post on Dec 19 explaining its plans to implement restrictions on specific election-related queries that its artificial intelligence (AI) bot Bard and its Search Generative Experience can answer. 

It said this restriction will be enforced by early 2024, in the run-up to the presidential election in the United States.

The post pointed out that 2024 will see many other important elections around the globe alongside the U.S. presidential election.

It said it will “work with an increased focus on the role artificial intelligence (AI) might play.”

One of the primary priorities Google named was to help users identify AI-generated content. In September, it was among the first Big Tech companies to develop AI to mandate AI disclosures in political campaign ads.

YouTube, owned by Google, also updated its policies in November 2023, requiring creators to disclose generative AI use or risk suspension of their accounts. 

In the same vein, Google said a new SynthID tool is now in beta stage from Google’s DeepMind, which directly embeds a digital watermark into AI-generated images and audio.

Meta, the parent company of Facebook and Instagram, banned the use of generative AI ad-creation tools for political advertisers in November.

AI’s influence on elections has been a pressing theme as the U.S. elections draw closer.

One study pointed out the potential impact on voter sentiment that AI usage on social media can present.

A study out of Europe revealed that Microsoft’s Bing AI chatbot, which has been rebranded to Copilot, gives misleading or inaccurate information about elections in around 30% of answers it gives.

The study clarified that the false information has not influenced the outcome of elections, though it could contribute to public confusion and misinformation.

“As generative AI becomes more widespread, this could affect one of the cornerstones of democracy: the access to reliable and transparent public information.”

Additionally, the study found that the safeguards built into the AI chatbot were “unevenly” distributed and caused it to provide evasive answers 40% of the time.

https://www.zerohedge.com/technology/google-limit-answers-election-queries-bard-ai-tool-generative-search