how are you? (July 17-23)
Amazon’s leap into healthcare
In theory, it’s possible to spend a day patronizing only Amazon-owned companies. Buy groceries at Whole Foods, listen to books about Audible on your commute, check your Goodreads account, and of course go to Amazon.com. Today, e-commerce giants are giving new impetus to healthcare. Amazon announced Thursday that it had reached a $ 3.9 billion deal to purchase One Medical, a network of primary care clinics, as part of its quest to become a major player in the industry. The deal is the first acquisition under Andy Jassy, who took over as CEO a year ago after Jeff Bezos resigned. Although Jasie’s approach to the role was very different from that of his predecessor, he did not deviate significantly from Bezos in this decision. One Medical is not the first healthcare company purchased by Amazon. In 2018, we acquired the online pharmacy PillPack.
Significant rate hikes in Europe
What surprised many was that the European Central Bank raised three interest rates by 0.5 percentage points instead of the original forecast, making a decisive move to curb rapid inflation. Bank officials intend to “advance” interest rate hikes, looking at the worsening economic outlook and deepening energy crisis caused by fears of Russia’s natural gas cut in response to Western sanctions. Said. The ECB has higher interest rates than some other central banks because factors driving inflation in Europe, such as global supply chain disruptions and rising energy prices due to the Ukrainian war, are far beyond the control of policy makers. It is taking time to raise the price. These problems also contribute to the depreciation of the euro, exacerbating inflation. While some observers say officials are still moving too slowly, others are afraid that central banks can become too aggressive and the European economy could stagnate.
It may be worse
It was another tough quarter for Netflix, but streaming giants are reassuring shareholders. The numbers weren’t too bad. The company lost about 1 million subscribers between April and June, well below the 2 million forecast in its first quarter earnings report for April. In the words of Netflix Co-CEO Reed Hastings, “there are few bad results.” Revenues increased 9% to $ 7.9 billion, but Hastings said, “We’ve lost a million subscribers and it’s hard to call it a success.” Netflix said it believes it can add these subscribers this quarter, while remaining bullish on its new business strategy, including the future of streaming and deploying a low-cost ad layer in 2023. increase.
What’s next? (July 24-30)
Tech Giants Report Card
The largest tech companies, Meta, Apple, Amazon, Alphabet and Microsoft, will announce their financial results for the second quarter of this week. Financial reports from Snap and Twitter last weekend didn’t predict anything good as sales growth slowed and quarterly losses surprised investors. This earnings season is particularly interesting as the economy is slowing and investors are looking for signs of the imminent recession in corporate earnings reports. These reports can be particularly disastrous for the tech sector, especially for companies that rely on online advertising. The Nasdaq Index remains sluggish in the bear market, and this year was already a tough year for technology.
Fed’s next move
At its July meeting, the Federal Reserve Board proposed two possibilities: a significant rate hike and a larger rate hike. Officials were talking about a three-quarter point increase, saying they could make a bigger move if certain indicators still indicate a hot economy. The signals have been mixed for the last few weeks. An important indicator of long-term inflation expectations has eased — a good sign for the Fed — but retail sales have been surprisingly strong — a bad sign for the Fed. Next, Friday’s data showed a slowdown in business activity in the United States. While the 0.75 point rise last month was already the largest in almost 30 years, some central banks are wary of raising interest rates by more than three-quarters, but the results are different, so policymakers are on which path. It’s not clear what to do.
A shrinking economy?
According to conventional knowledge, the negative growth of the US economy for the second consecutive quarter means that it is in recession. And that could be the result of this week’s data on gross domestic product in the second quarter. The economy shrank 0.4% in the first quarter, or 1.4% on an annual basis. This is the weakest quarter since the pandemic began. Growth was slowed by widening trade deficits and slowing inventory growth. However, consumer spending remained active last quarter, as did corporate investment, suggesting a strong economy. Despite some contradictory signals, some companies could declare a recession even if GDP falls again. However, most economists claim that the United States has not yet met the standards, and semi-official arbitrators of the economy, namely employees of the National Bureau of Economic Research’s Business Cycle Date Committee, are usually final. Wait a few months before making a call.
what else?
Meta has improved the Facebook app to behave like TikTok. YouTube said it would begin to regulate abortion content more tightly. Rivian, an up-and-coming electric vehicle manufacturer, is trying to meet Amazon’s demand for 100,000 electric vans by 2025.
