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| Hey Insiders, Happy Friday! In today's Inside Business newsletter, we look at how fewer work hours in the U.S. impacts job market trends. Plus, Ford's Q2 report, Volkswagen's self-driving car tests, and big deals that happened this week. Remember to send us your suggestions for future newsletter topics. Shriram
p/Shriram | |
| 1 | | In Q2, Ford Motor Company saw a 9.9% increase in sales compared to the previous year, primarily due to strong sales of its F-Series trucks. The company sold 531,662 vehicles in Q2, marking a notable growth from 483,688 units sold in the same period last year. More: - During the second quarter, sales of Ford's F-Series trucks increased by 34%, with the all-electric F-150's sales tripling.
- Compared to 2022, Ford's total truck sales grew by 23% in the year's first half.
- Sales of Ford's electric vehicles (EVs) fell by 2.8%r to 14,843 units, mainly because there weren't enough Mustang Mach-Es available.
- In the second quarter, Ford sold 2.8% more electric vehicles than it did conventional internal combustion engines, which accounted for almost 91% of sales and 6.5% more than hybrid vehicles.
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What the numbers say: Job losses in sectors such as retail, transportation, warehousing, and construction are likely to be particularly severe as hours worked in these industries have fallen below pre-pandemic levels, warn economists at Macquarie Group Limited. According to Julia Pollak, ZipRecruiter's chief economist, average weekly hours have declined in three of the past four months, reaching a low range of 34.3-34.6 hours. Relevance: Decreasing average weekly hours can indicate weakening job markets and possible layoffs. Sectors operating below pre-pandemic hours worked may face higher risks of job cuts. More info: Although specific industries like leisure and hospitality see decreased hours worked, they are still actively hiring, hinting that hours worked may not be a reliable leading indicator. A Bloomberg economist stated, "This suggests that while employers are still interested in hiring, they may adjust production and hours performed in anticipation of a weakening economy." | | | |
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| 3 | | U.S. borrowing costs hit a 16-year peak due to substantial job numbers, increasing the likelihood of more rate hikes by the Federal Reserve. Surpassing expectations and marking the most significant increase over a year, the U.S. added 497,000 private sector jobs in the previous month. More: - The S&P 500 and Nasdaq Composite fell more than 1% but recovered to close 0.8% lower, signaling a fall on Wall Street.
- Known as "Wall Street's fear gauge," the Vix volatility index increased to 17.1 as investors fretted about persistently rising borrowing prices.
- The European Stoxx 600 index experienced an adverse reaction, as demonstrated by its closing decrease of 2.3%, the most significant one-day drop since March, and increases in the rates on two-year German debt to 3.36% and two-year U.K. Gilts to 5.56%, the highest levels since 2008.
- The Fed is likely to resume rate hikes after a pause in June, as officials suggest that further increases in the benchmark interest rate would be appropriate.
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| 4 | | Big Deal Round-Up: The M&A market heated up at the start of July with Amazon's purchase offer to iRobot Corp. and Bausch + Lomb expanding its footprint in the eye-care portfolio with a $106.5M deal with J&J. Plus, FIS has sold an $18.5B stake in Worldpay to GTCR. Other highlights this week include: M&A Private Equity - FIS has sold a majority stake in its Worldpay payments arm to a buyout group led by GTCR for a valuation of $18.5B, which includes a significant $8.4B bank financing package.
Partnerships - HBO content will remain available on Sky's platform in New Zealand according to a new multi-year arrangement that Sky NZ and Warner Bros. Discovery announced.
- Silex Technology has partnered with French electronic distributor, Matlog, to sell and distribute their Wi-Fi modules to customers in France.
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| A message from our sponsor, Klue. |  | | Competitors are killing your efficiency We spoke with over 300 revenue leaders to understand how they’re navigating difficult market conditions. One of the most interesting pieces of data: 91% said that their deals were more competitive than last year. Deals and renewals are heating up. There are more people chasing less pie. That’s a major obstacle to what leaders also said were their top three priorities: - Hitting revenue targets
- Retaining customers
- Improving sales performance
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| 5 | | At the end of this month, Volkswagen plans to test self-driving electric vehicles in Austin, Texas. By the end of 2023, the business hopes to have roughly 10 ID Buzz electric vans with Mobileye-developed autonomous driving systems operating in a few critical urban areas under the supervision of human safety drivers and outfitted with lidar, radar, and camera systems. More: - Over the next three years, Volkswagen plans to expand its testing and fleet operations to at least four more American cities.
- With closer cooperation with Mobileye and investments in its ride-sharing service, MOIA, the business is overhauling its self-driving approach.
- Volkswagen does not intend to launch its ride-sharing service in the U.S., but it will make autonomous ID Buzz vans and fleet management tools available to other delivery or ride-sharing companies.
- Ford and Volkswagen both invested in the self-driving firm Argo AI; however, Volkswagen opted to shut down the business in October 2022.
Zoom Out: - In March, to enhance its BlueCruise hands-free highway driving system, Ford created a new subsidiary called Latitude AI, consisting of approximately 550 former Argo AI employees.
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| 6 | | Alibaba and Huawei have unveiled their latest AI innovations in China: Alibaba introduced an AI image generator called Tongyi Wanxiang, while Huawei showcased the third version of its Panggu AI model at its developer conference. Following the success of OpenAI's ChatGPT, Chinese tech businesses are actively creating AI products. More: - According to McKinsey, generative AI might boost the global economy by $7.3T annually.
- The DALL-E and Midjourney models from OpenAI and Midjourney Inc. will face off against Alibaba's picture generator.
- Alibaba Cloud also released a developer-focused AI tool called ModelScopeGPT.
- The Pangu 3.0 model from Huawei is geared toward industrial usage, including safety checks, government services, and weather forecasting.
Zoom Out: - In March, Alibaba Cloud recently underwent a significant restructuring and introduced a ChatGPT-esque text generator called Tongyi Qianwen.
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- Sweetgreen Inc.'s shares jumped 15% after Bank of America upgraded the firm from neutral to buy and raised its price objective to $17 from $9, signaling confidence in its expansion when workers resume their jobs.
- Broadcom CEO Charlie Kawwas announced on Thursday that the company would provide a $1B investment for an EU-backed initiative aiming to foster the development of Spain's semiconductor industry.
- Despite the fact that less than 1% of U.S. natural gas use comes from kitchen stoves, gas delivery corporations have been effective in utilizing political clout to thwart any efforts to restrict the use of gas stoves.
- The FDA has given its approval to Leqembi, developed by Eisai and U.S. biotech Biogen, making it the first drug for Alzheimer's that can slow down the disease's progression and allow for wider access for millions of American patients.
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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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