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| Hello Insiders!! Today's Business newsletter covers: - 🐟Japan to provide relief to seafood exporters hit by China's ban
- 📊 Deep Dive: U.S. August jobs report
- 🌟 Lululemon beats earnings on strong China growth
If you enjoy reading this newsletter, please share it with your friends and colleagues. Read on for today's Knowledge Hub and more! Thank you!! Shriram
p/Shriram | |
| 1 | | Concerns about the release of treated radioactive effluent from the Fukushima nuclear plant led Japanese Prime Minister Fumio Kishida to announce a $141M emergency fund to help seafood exporters affected by China's ban on Japanese seafood. Hong Kong also forbids Japanese seafood from Fukushima and nine other prefectures because of the wastewater spill, which started on Aug. 24 and is expected to last for decades. More: - The prohibition is a significant setback for the fisheries sector, with China accounting for 22.5% of global sales of Japanese seafood and Hong Kong for 20%.
- To promote fisheries and seafood processing, the Japanese government has already allotted $547M.
- Due to the prohibition, cargo held up at Chinese customs is delayed, which lowers the price of seafood like scallops and sea cucumbers.
- The emergency fund will be utilized for government seafood purchases for short-term freezing and storage and to develop new markets for Japanese seafood.
- Japan officials said, "New export markets in Taiwan, the U.S., Europe, the Middle East, and several Southeast Asian nations will be actively pursued."
Zoom Out: - On Thursday, The U.S. ambassador to Japan, Rahm Emanuel, visited Fukushima, endorsing the safety of local seafood after the radioactive wastewater release and criticizing China's seafood ban as politically motivated.
Q: What other measures could be taken to mitigate the impact of the seafood export ban? Join the conversation here. |     | |
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What the numbers say: In August, nonfarm payrolls exceeded expectations, growing by 187,000 compared to the estimated 170,000. However, the unemployment rate increased to 3.8%, the highest since February 2022, and the "real" unemployment rate surged to 7.1%, while average hourly earnings rose by 0.2% for the month and 4.3% year-on-year, just below forecasts, with healthcare, leisure and hospitality, social assistance, and construction sectors seeing significant job gains. Relevance: In contrast, labor force participation rose to 62.8%, the highest level since February 2020, signaling a slowdown in the job market despite the unexpected increase in the unemployment rate. The number of households with employed people increased by 222,000, with the private sector being the primary driver. Where to see the impact: The Fed's interest rate decisions may change due to slowing the labor market, indicating a more balanced relationship between labor supply and demand. The research could impact inflation and consumer spending trends, and market expectations currently point to a 38% possibility of a rate increase during the Fed meeting on Oct. 31-Nov. 1. | | | |
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| 3 | | Lululemon increased its full-year sales outlook to $9.51B to $9.57B and anticipated full-year profits between $12.02 and $12.17 per share after reporting an 18% increase in Q2 sales and profits. With earnings per share of $2.68 and revenue of $2.21B in Q2 versus estimates of $2.54 and $2.17B, respectively, they outperformed expectations. More: - International sales, including a remarkable 61% growth in China, surged by 52%, while North American and same-store sales saw an 11% increase during the quarter.
- Lululemon's "Power of Three x2" strategy, which includes expansion plans emphasizing men's and direct-to-consumer income, intends to double revenues to $12.5B by 2026.
- Sales in the men's category climbed by 15%, and the company added 10 additional locations in Q2, bringing its total worldwide to 672.
- Although sales to consumers directly rose by 15%, they made up 40% of total sales, down from 42% the year before.
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| 4 | | After buying Aimmune Therapeutics for $2.6B in August 2020 and making past investments totaling $473M in Aimmune, Nestlé has now sold its peanut allergy medication Palforzia to the Swiss biopharma business Stallergenes Greer. The agreement between Nestlé and Stallergenes Greer includes continuous royalties and secret milestone payments. More: - Palforzia is an oral immunotherapy that gradually increases the intake of allergenic proteins to desensitize patients to allergens.
- The U.S. FDA approved Palforzia as a treatment for peanut allergy in children between the ages of four and 17, and the European Commission followed suit in December 2020.
- Additionally, the medication may be taken by adults (18 years old and older) in conjunction with a diet free of peanuts.
- The biopharmaceutical company Stallergenes Greer specializes in the identification and management of allergies.
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| 5 | | Chris Winfrey, CEO of Charter Communications, aims to change the pay-TV package model in reaction to the growing trend of cord-cutting since Disney-owned networks, such as ESPN, have stopped airing for Spectrum TV subscribers of Charter due to cost issues. Winfrey blames the rise in streaming for the problems with the traditional pay-TV model, which has led to rising costs and prompted users to migrate to streaming services. More: - Charter is willing to pay Disney more with a shorter minimum term to save expenses and aims to provide its subscribers with free access to Disney's ad-supported streaming services (Disney+, ESPN+, Hulu).
- According to information from S&P Global Market Intelligence, Disney's networks command the highest pricing in the package, with ESPN receiving $9.42 per subscriber each month.
- Disney emphasizes investments in exclusive content for both streaming platforms and conventional TV channels as complementary goods.
- To make room for ESPN's separate streaming service, Charter is willing to promote Disney streaming apps to its broadband-only subscribers.
- The American telecommunications and mass media company recently added a sports-lite bundle option to be more flexible in how typical TV bundles are packaged and priced.
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| 6 | | Liontown Resources, an Australian lithium developer, has received board approval for Albemarle Corp's improved $4.3B bid. With restricted exclusive due diligence rights, the improved cash offer is for AU$3.00 per share, a 14.5% premium to Liontown's most recent closing price and 20% more than Albemarle's prior offer. More: - The board of Liontown intends to unanimously recommend that shareholders accept the latest offer, pending an impartial expert's completion of a report.
- Following the support, shares of Australia's Liontown Resources surged by 11.5%.
- Due to the rising demand for lithium in electric vehicle batteries, Australian lithium assets are appealing to international companies.
- Liontown has supply agreements with Ford, Tesla, and LG Chem and has two significant lithium deposits in Western Australia.
- Albemarle receives financial guidance from JPMorgan and Barrenjoey, while Liontown receives advice from Greenhill & Co. and UBS.
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- Bingling Intelligent Technology, a Chinese business with headquarters in Changzhou, is being sued by Tesla's Shanghai unit for allegedly violating trade secrets and engaging in unfair competition.
- The Greek prime minister announced that Greece is collaborating with Israel to develop AI technology for the early detection of hazardous wildfires.
- The impact of Hurricane Idalia on Florida's Big Bend region last week is expected to result in private market insured losses of $3B to $5B, according to Moody's catastrophe risk modeling section.
- Roz Brewer, a retail industry veteran, is stepping down from her position as CEO of Walgreens after more than two years, mostly because of the company's stock issues tied to decreased demand for COVID-19 vaccines and slower retail sales.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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