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Business

Unilever names former Heinz exec Schumacher as CEO

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  • To become CEO July 1
  • Activist shareholder says met Schumacher when at Heinz
  • First outsider CEO since Paul Polman appointed in 2008
  • Unilever shares outpace FTSE 100

LONDON, Jan 30 (Reuters) – Unilever on Monday appointed Hein Schumacher to replace Alan Jope as chief executive from July in a move that was welcomed by investors including board member and activist shareholder Nelson Peltz.

Schumacher, 51, rejoined Unilever in October last year as non-executive director and is currently the chief of Dutch dairy business FrieslandCampina.

He worked at Unilever more than 20 years ago before working for retailer Royal Ahold NV and packaged food maker H.J. Heinz in the United States, Europe and Asia.

One of the biggest consumer companies in the world with more than 400 brands ranging from detergent to ice cream, Unilever said in September said that Jope planned to retire at the end of 2023.

Billionaire activist investor Nelson Peltz, who heads investor Trian Partners, said he strongly supports Schumacher “as our new CEO and look(s) forward to working closely with him to drive significant sustainable stakeholder value.”

Peltz become a Unilever board member in July after it was revealed early last year that he had built a stake in the company.

“I first met Hein when I served as a director at the H.J. Heinz Company from 2006 to 2013 and was impressed by his leadership skills and business acumen,” Peltz said.

Peltz, through his Trian Fund, holds a nearly 1.5% stake in Unilever, making him the fourth largest shareholder, according to Refinitiv Eikon data.

Unilever shares were up 0.56% versus a FTSE 100 (.FTSE) index down 0.1% as of 1032 GMT.

The move was also cheered by other investors and analysts, who have felt in recent years that Unilever needed an outsider’s touch.

“Positive that he’s an external appointment,” Jack Martin, a fund manager at Unilever shareholder Oberon Investments, said. “Good CV from what I read, hopefully provides the impetus the company requires.”

‘ESG SAVVY, PRAGMATIC’

Unilever’s shares have underperformed European consumer staples and discretionary indices during CEO Jope’s tenure, which began in January 2019.

Reuters Graphics

His failed bids for GlaxoSmithKline’s (GSK.L) consumer healthcare business last year lost him some good faith among investors, including influential British billionaire Terry Smith, owner of Fundsmith.

Smith said at the time that Jope needed to focus less on sustainbility and more on building Unilever’s core business.

“Hein is ideal for Unilever — he’s got roots at the company but at the same time he’s external,” Allan Leighton, former CEO of British food retailer Asda and ex-chair of Britain’s Royal Mail, told Reuters.

Leighton, who worked with Schumacher on the board of C&A AG, described him as “ESG savvy but in a pragmatic and commercial way.”

Tineke Frikee, a fund manager at Unilever shareholder Waverton Investment Management, said: “It is good Schumacher has plenty of industry experience outside Unilever, particularly international.”

“I note though that his background is mainly in food, rather than beauty and personal care. This may lead the market to reduce the probability of a potential food spin-off.”

Unilever’s food business includes Ben & Jerry’s ice cream, Colman’s mustard, Hellman’s mayonnaise and Knorr stock cubes.

Some investors and analysts have speculated over the past year that Unilever might spin off what they feel is a weaker food business to focus on personal goods, beauty and home care.

“Why hire a food exec, if you are planning to sell the food business?” Bernstein analyst Bruno Monteyne said, adding that selling the food business “will always be on the cards, but I doubt that it is top priority in the short term.”

But Monteyne pointed out that some investors were hoping Unilever would name someone more well-established, globally.

“Investors we spoke to in recent weeks were hopeful for a more familiar name from a successful U.S.-based FMCG (fast-moving consumer goods) turnaround.”

Unilever had been considering internal and external candidates for the role.

Sources told Reuters in October that the candidates included finance chief Graeme Pitkethly, personal care division boss Fabian Garcia and Hanneke Faber, who heads the company’s nutrition group.

Reporting by Yadarisa Shabong and Richa Naidu; editing by Matt Scuffham and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

Richa Naidu

Thomson Reuters

London-based reporter covering retail and consumer goods, analysing trends including coverage of supply chains, advertising strategies, corporate governance, sustainability, politics and regulation. Previously wrote about U.S. based retailers, major financial institutions and covered the Tokyo 2020 Olympic Games.

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Business

Wall Street totters after mixed earnings, trade halt glitch

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  • SEC investigating NYSE opening bell glitch
  • 3M slides on downbeat Q1 forecast
  • J&J falls on sales warning; GE down on weak profit view
  • Microsoft to report quarterly earnings after market close
  • Indexes: Dow up 0.18%, S&P 500 off 0.13%, Nasdaq down 0.25%

NEW YORK, Jan 24 (Reuters) – Wall Street was mixed on Tuesday as a raft of mixed earnings took some wind out of the sails of the recent rally.

The session got off to an rocky start, as a spate of NYSE-listed stocks were halted at the opening bell due to an apparent technical glitch, which caused initial price confusion and prompted an investigation by the U.S. Securities and Exchange Commission (SEC).

More than 80 stocks were affected by the glitch, which caused wide swings in opening prices in stocks, including Walmart Inc (WMT.N) and Nike Inc (NKE.N).

“It looks like NYSE got on it real early,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “Now they’re trying to determine what opening trade prices were.”

“Everyone involved in trade settlements is going to have a long day today.”

All three indexes sputtered near the starting line, with little apparent momentum in either direction.

Fourth quarter earnings season is in full swing, with 72 of the companies in the S&P 500 having reported. Of those, 65% have beaten consensus, just a hair below the 66% long-term average, according to Refinitiv.

On aggregate, analysts now expect S&P 500 earnings 2.9% below the year-ago quarter, down from the 1.6% year-on-year decline seen on Jan. 1, per Refinitiv.

“Earnings don’t make a bull or bear case for the market yet, but there’s an anxiousness among investors to be long when the Fed is done raising rates,” Sroka added. “We’re hitting a ramp in the earnings cycle, and by next week we’ll have a lot more information on the direction of the market.”

Economic data showed shallower-than-expected contraction in the manufacturing and services sector in the first weeks of the year, suggesting that the Federal Reserve’s restrictive interest rates are dampening demand.

The Dow Jones Industrial Average (.DJI) rose 60.69 points, or 0.18%, to 33,690.25, the S&P 500 (.SPX) lost 5.36 points, or 0.13%, to 4,014.45 and the Nasdaq Composite (.IXIC) dropped 28.39 points, or 0.25%, to 11,336.03.

Among the 11 major sectors of the S&P 500, industrials was down the most.

Intercontinental Exchange Inc (ICE.N), owner of the New York Stock Exchange, dropped 2.5% as SEC investigators searched for the cause of Tuesday’s opening bell confusion.

Alphabet Inc (GOOGL.O) shares dipped 1.8% after the Justice Department filed a lawsuit against Google for abusing its dominance of the digital advertising business.

Johnson & Johnson’s (JNJ.N) profit guidance came in above analyst expectations. Even so, its stock softened 0.3%.

Industrial conglomerates 3M Co (MMM.N) and General Electric Co (GE.N) both provided underwhelming forward guidance due to inflationary headwinds.

3M’s shares were off 5.1% while General Electric’s were modestly lower.

Aerospace/defense companies Lockheed Martin Corp (LMT.N) and Raytheon Technologies Corp (RTX.N) were a study in contrasts, with the former issuing a disappointing profit forecast and the latter beating estimates on solid travel demand.

Lockheed Martin and Raytheon were up 1.5% and 2.5%, respectively.

Railroad operator Union Pacific Corp missed profit estimates as labor shortages and severe weather delayed shipments. Its shares shed 2.7%.

Microsoft Corp (MSFT.O) is due to report after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored decliners.

The S&P 500 posted 27 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 69 new highs and 21 new lows.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru; Editing by Aurora Ellis

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Business

U.S. FTC probes Pepsi, Coca-Cola over price discrimination – Politico

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Jan 9 (Reuters) – Beverage giants Coca-Cola Co (KO.N) and PepsiCo Inc (PEP.O) are under preliminary investigation by the U.S. Federal Trade Commission (FTC) over potential price discrimination in the soft drink market, Politico reported on Monday citing sources.

The pricing strategies of both companies are being scrutinized under the Robinson-Patman Act, the report said.

The U.S. antitrust law prevents large franchises and chains from engaging in price discrimination against small businesses.

The FTC reached out to large retailers, including Walmart Inc (WMT.N), for at least a month seeking data and other information on how they purchase and price soft drinks, two of the sources told Politico. Walmart is currently not a target in the investigation, according to the report.

FTC, Coca-Cola, Pepsi and Walmart did not immediately respond to Reuters’ request for comments.

Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips

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Business

Musk delivers first Tesla truck, but no update on output, pricing

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  • Tesla ships first Semi to PepsiCo five years after unveiling it
  • No details on orders or capacity for electric truck
  • Semi uses existing Tesla motors, to feature new Supercharger

Dec 1 (Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk delivered the company’s first heavy-duty Semi on Thursday to PepsiCo (PEP.O) without offering updated forecasts for the truck’s pricing, production plans or how much cargo it could haul.

Musk, who appeared onstage at an event at Tesla’s Nevada plant, said the battery-powered, long-haul truck would reduce highway emissions, outperform existing diesel models on power and safety and spin-off a fast-charging technology Tesla would use in its upcoming Cybertruck pickup.

“If you’re a trucker and you want the most badass rig on the road, this is it,” Musk said, noting that it was five years since Tesla had announced it was developing the all-electric truck. Still, industry experts remain skeptical that battery electric trucks can take the strain of hauling hefty loads for hundreds of miles economically.

At Musk’s first Tesla reveal since taking over Twitter – an acquisition some investors worry has become a distraction – the company did not announce pricing for the Semi, provide details on variants of the truck it had initially projected or supply a forecast for deliveries to PepsiCo or other customers. Tesla said it would begin using the Semi to ship parts to its plant in Fremont, California.

In 2017, Tesla had said the 300-mile range version of the Semi would cost $150,000, and the 500-mile version $180,000, but Tesla’s passenger electric vehicle prices have increased sharply since then.

Robyn Denholm, chair of Tesla, recently said the automaker might produce 100 Semis this year. Musk has said Tesla would aim to produce 50,000 of the trucks in 2024.

PepsiCo, which completed its first cargo run with the Tesla truck to deliver snacks for those attending the Nevada launch event, had ordered 100 trucks in 2017.

Brewer Anheuser-Busch (ABI.BR), United Parcel Service Inc (UPS.N) and Walmart Inc (WMT.N) were among other companies that had reserved the Semi. Tesla did not provide details on orders or deliveries to customers, nor an estimate on what the total cost of ownership for future buyers would be compared to diesel alternatives.

‘NOT IMPRESSIVE’

Musk said the Semi has been doing test runs between Tesla’s Sparks, Nevada factory and its plant in Fremont, California. Tesla said it had completed a 500-mile drive on a single charge, with the Semi and cargo weighing in at 81,000 pounds in total.

Tesla did not disclose the weight of an unloaded Semi, one key specification analysts had hoped to learn and an important consideration for the efficiency of electric trucks.

Musk has spoken in the past about the prospect of fully autonomous trucks. Tesla did not provide details on how Tesla’s driver assistance systems would function in the Semi it unveiled on Thursday or future versions.

[1/5] Tesla Chief Executive Elon Musk waves near Tesla Semi electric trucks during a live-streamed unveiling in Nevada, U.S. December 1, 2022, in this still image taken from video. Tesla/Handout via REUTERS

The Semi delivery presentation ended without Musk taking questions, as he often does at Tesla events.

“Not very impressive – moving a cargo of chips (average weight per pack 52 grams) cannot in any way be said to be definitive proof of concept,” said Oliver Dixon, senior analyst at consultancy Guidehouse.

Tesla had initially set a production target for 2019 for the Semi, which was first unveiled in 2017. In the years since, rivals have begun to sell battery-powered trucks of their own.

Daimler’s (MBGn.DE) Freightliner, Volvo (VOLVb.ST), startup Nikola (NKLA.O) and Renault (RENA.PA) are among Tesla’s competitors in developing alternatives to combustion-engine trucks.

Walmart (WMT.N), for instance, has said it has been testing Freightliner’s eCascadia and Nikola’s Tre BEV trucks in California.

‘LIKE A CHEETAH’

The Semi is capable of charging at 1 megawatt and has liquid-cooling technology in the charging cable in an updated version of Tesla’s Supercharger that will be made available to the Cybertruck, Musk said. The Cybertruck is scheduled to go into production in 2023.

Trucks in Semi’s category represent just 1% of U.S. vehicle sales but 20% of overall vehicle emissions, Tesla said.

Tesla said other, future vehicles would use powertrain technology developed for the Semi without providing details. The Semi uses three electric motors developed for Tesla’s performance version of its Model S, with only one of them engaged at highway speed and two in reserve for when the truck needs to accelerate, a feature that makes the truck more energy-efficient, Musk said.

“This thing has crazy power relative to a diesel truck,” Musk said. “Basically it’s like an elephant moving like a cheetah.”

In a slide displayed as part of Musk’s presentation, Tesla showed an image of a future “robotaxi” in development with a mock-up of the future car covered under a tarp.

The presentation took place after Tesla shares closed at $194.70. The stock has fallen about 45% so far this year, losing about $500 billion in market capitalisation, down to about $615 billion.

Among factors cited by investors have been Musk’s sales of Tesla shares to finance his takeover of Twitter, signs that a slowing global economy has started to cut into demand for Tesla’s premium-priced cars, and a warning by the company that it might not meet its target to grow deliveries by 50% this year.

Reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Kenneth Maxwell

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US

Walmart Chesapeake shooting: Manager kills 6 fellow workers and himself

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CHESAPEAKE, Va., Nov 23 (Reuters) – A manager at a Walmart Inc. (WMT.N) store in Virginia entered a break room and opened fire on fellow employees before turning the gun on himself, an eyewitness said on Wednesday, leaving a total of seven dead in the latest mass shooting in the United States.

The gunman, identified as Andre Bing, 31, of Chesapeake, Virginia, said nothing as he began firing on the workers gathered ahead of their shift late Tuesday, Walmart employee Briana Tyler told ABC’s “Good Morning America.”

“I looked up and my manager just opened the door and he just opened fire,” Tyler said. “He didn’t say a word. He didn’t say anything at all.”

At least four people were injured in the shooting, Chesapeake Police Chief Mark Solesky told a news conference. He did not disclose a possible motive for the shooting, but said the suspect died of a self-inflicted gunshot wound.

Bing was armed with a single handgun and carried multiple magazines of ammunition, according to a tweet from Chesapeake, a city of about 250,000 people south of Norfolk.

Coming on the heels of the killing of five people at a Colorado Springs LGBTQ nightclub on Saturday, the latest massacre prompted a fresh round of condemnations by public officials and calls by activists for tighter gun control.

U.S. President Joe Biden on Wednesday called the shooting “yet another horrific and senseless act of violence,” vowing any federal resources needed to aid in the investigation.

“There are now even more tables across the country that will have empty seats this Thanksgiving,” he said in a statement, noting a shooting earlier this month that left three University of Virginia students dead. “We must take greater action.”

Bing worked at the company since 2010, most recently as an overnight team leader at the cavernous Walmart Supercenter just off Battlefield Boulevard in Chesapeake.

“The Battlefield Walmart just got shot up by one of my managers. He killed a couple of people. By the grace of God I made it out,” another employee, Kevin Harper, told CBS.

[1/6] FBI agents stand in the parking lot after a mass shooting at a Walmart in Chesapeake, Virginia, U.S. November 23, 2022. REUTERS/Jay Paul

Jessie Wilczewski told WAVY-TV that she hid under a table and the shooter pointed the gun at her and told her to go home.

“It didn’t even look real until you could feel the pow-pow-pow. You can feel it,” the store employee said. “I couldn’t hear it at first because I guess it was so loud. I could feel it.”

Tuesday’s bloodshed marked the latest spasm of gun violence in the United States, where an average of two mass shootings — defined as an incident killing or injuring four or more people — occur every day, according to GunViolenceArchive.org.

Virginia Governor Glenn Youngkin, who was already facing stepped-up calls for policies to address gun violence in the wake of the University of Virginia killings, ordered flags at local, state and federal buildings to be flown at half-staff.

Kimberly Shupe told WAVY-TV that her son Jalon Jones, 24, was stable after being shot in his ear and back. He told her that he arrived for his overnight shift around 10 p.m., and that in their nightly meeting his manager was acting “strange” and “then started shooting,” she told the news station

Dr. Jessica Burgess, a surgeon who treated victims at a Norfolk hospital where two people died, two were in critical condition and one was recovering, said she contacted a colleague in Colorado Springs just two days prior to offer support.

“So it’s very disheartening that I’m now in the same position with my colleagues from across the country checking in on me and my team,” Burgess said. “Sometimes there is only so much we can do when the injuries have already been done.”

It is not the first mass shooting at a Walmart, which has thousands of stores across the country.

At a Walmart in El Paso, Texas, in August 2019, 23 people were killed in a mass shooting near the U.S.-Mexico border in an act described as domestic terrorism by law enforcement. It was also the deadliest attack on the Hispanic community in modern times. Patrick Wood Crusius, then 21, from Allen, Texas, was arrested in the shooting and he left behind a manifesto with white nationalist and anti-immigrant themes.

“The devastating news of last night’s shooting at our Chesapeake, VA store at the hands of one of our associates has hit our Walmart family hard,” Walmart Chief Executive Officer Doug McMillon wrote in a LinkedIn post on Wednesday.

Reporting by Rich McKay, Susan Heavey, Bharat Govind Gautam, Abinaya Vijayaraghavan and Shubham Kalia; Additional reporting by Juby Babu; Editing by Gerry Doyle, Nick Macfie, Gareth Jones and Mark Porter

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Sports

No alcohol sales permitted at Qatar’s World Cup stadium sites

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DOHA Nov 18 (Reuters) – Alcoholic beer will not be sold at Qatar’s World Cup stadiums, world soccer governing body FIFA said on Friday, a last minute reversal which raised questions among some supporters about the host country’s ability to deliver on promises to fans.

The announcement comes two days before Sunday’s kickoff of the World Cup, the first to be held in a conservative Muslim country with strict controls on alcohol, the consumption of which is banned in public.

“Following discussions between host country authorities and FIFA, a decision has been made to focus the sale of alcoholic beverages on the FIFA Fan Festival, other fan destinations and licensed venues, removing sales points of beer from Qatar’s FIFA World Cup 2022 stadium perimeters,” a FIFA spokesperson said in a statement.

England’s Football Supporters’ Association said the decision raises concerns about Qatar’s ability to fulfil its promises to visiting fans on “accommodation, transport or cultural issues.”

For years, Qatar’s tournament organisers have said that alcohol would be widely accessible to fans at the tournament.

“Some fans like a beer at the match, and some don’t, but the real issue is the last-minute U-turn which speaks to a wider problem — the total lack of communication and clarity from the organising committee towards supporters,” the association said in a statement on Twitter.

Qatar, the smallest country to host a World Cup, is bracing for the expected arrival of 1.2 million fans during the month long tournament, more than a third of the Gulf Arab state’s 3 million population.

Budweiser, a major World Cup sponsor, owned by beer maker AB InBev, was to exclusively sell alcoholic beer within the ticketed perimeter surrounding each of the eight stadiums three hours before and one hour after each game.

“Some of the planned stadium activations cannot move forward due to circumstances beyond our control,” AB InBev said in a statement.

Someone at the company had summed the situation up in a pithier fashion. “Well, this is awkward…” read a post on Budweiser’s official Twitter account. The comment, subsequently deleted, was broadcast as a screengrab by the BBC.

Budweiser has been a World Cup sponsor since 1985, the year before the event was held in Mexico. For 2022, it has launched its biggest ever campaign, with activities for Budweiser and other brands in more than 70 markets and at 1.2 million bars, restaurants and retail outlets.

The World Cup typically boosts beer consumption and the Belgium-based maker of brands such as Stella Artois and Corona clearly want to profit from the millions of dollars it pays to be a sponsor.

[1/3] Soccer Football – FIFA World Cup Qatar 2022 – Abdullah bin Khalifa Stadium, Doha, Qatar – November 18, 2022 Budweiser tents are pictured outside the stadium ahead of the FIFA World Cup Qatar 2022 REUTERS/Hannah Mckay

However, it has said those profits will come less from consumption at the event’s location but from fans watching on television.

“Tournament organisers appreciate AB InBev’s understanding and continuous support to our joint commitment to cater for everyone during the FIFA World Cup,” the statement said.

LONG-TERM NEGOTIATIONS

The stadium reversal comes after long-term negotiations between FIFA president Gianni Infantino, Budweiser, and executives from Qatar’s Supreme Committee for Delivery and Legacy (SC), which is organising the World Cup, a source with knowledge of the negotiations told Reuters on condition of anonymity.

The SC did not respond to Reuters’ request for comment and FIFA did not confirm Infantino’s involvement.

“A larger number of fans are attending from across the Middle East and South Asia, where alcohol doesn’t play such a large role in the culture,” the source said.

“The thinking was that, for many fans, the presence of alcohol would not create an enjoyable experience.”

Alcohol will continue to flow freely inside stadium VIP suites, which FIFA’s website advertises as offering a selection of beers, Champagne, sommelier-selected wines, and premium spirits.

Budweiser will sell its non-alcoholic beer throughout the stadium precincts for $8.25 per half-litre, the statement said.

Questions have swirled around the role alcohol would play at this year’s World Cup since Qatar won hosting rights in 2010. While not a “dry” state like neighbouring Saudi Arabia, consuming alcohol in public places is illegal in Qatar.

Visitors cannot bring alcohol into Qatar, even from the airport’s duty free section, and most cannot buy alcohol at the country’s only liquor store. Alcohol is sold in bars at some hotels, where beer costs around $15 per half-litre.

Budweiser will still sell alcoholic beer at the main FIFA Fan Fest in central Doha, the source said, where it is offered for about $14 per half-litre. Alcohol will also be sold in some other fan zones whereas others are alcohol-free.

“Fans can decide where they want to go without feeling uncomfortable. At stadiums, this was previously not the case,” the source said.

Reporting by Andrew Mills in Doha with contributions from Philip Blenkinsop in Brussels and Manasi Pathak in Doha; Writing by Andrew Mills; Editing by Jan Harvey and Christian Radnedge

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Business

Buffett’s Berkshire discloses $4.1 bln TSMC stake

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Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion of stock in Taiwan Semiconductor Manufacturing (2330.TW), , a rare significant foray into the technology sector by billionaire Warren Buffett’s conglomerate.

The news sent shares in TSMC up more than 6% in Taiwan on Tuesday, as it boosted investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low last month due to a sharp slowdown in global chip demand.

In a Monday regulatory filing describing its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares of TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). It exited an investment in Store Capital Corp (STOR.N), a real estate company that agreed in September to be taken private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggy back on what Berkshire buys. Larger investments are normally Buffett’s.

While Berkshire does not normally make big technology bets, it often prefers companies it perceives to have competitive advantages, often through their size.

TSMC, which makes chips for the likes of Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% jump in quarterly profit last month, but struck a more cautious note than usual on upcoming demand.

“I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.

“Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

Its more than six-year wager during the last decade in IBM Corp (IBM.N) did not pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views more as a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion equity portfolio.

Berkshire disclosed the TSMC stake about 2-1/2 months after it began reducing a decade-old, multi-billion dollar stake in BYD Co (002594.SZ), China’s largest electric car company.

In the third quarter, Berkshire added to its stakes in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (CE.N), Paramount Global (PARA.O) and RH (RH.N).

It also sold shares of Activision Blizzard Inc (ATVI.O), Bank of New York Mellon Corp (BK.N), General Motors Co (GM.N), Kroger Co (KR.N) and US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as the BNSF railroad, the Geico auto insurer, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

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Business

U.S. grocer Kroger in talks to merge with rival Albertsons -sources

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Oct 13 (Reuters) – U.S. grocery company Kroger Co (KR.N) is in talks to merge with smaller rival Albertsons Companies Inc (ACI.N) in a tie-up that would create a supermarket titan, people familiar with the matter said.

The merger of the nation’s No. 1 and 2 standalone grocers, if reached, could provide the retailers with a leg up in negotiations with consumer-product makers such as Procter & Gamble (PG.N) and Unilever (ULVR.L) at a time of steep price hikes.

A deal could be announced as soon as this week if the talks do not fall apart, said the sources, who requested anonymity as the discussions are confidential.

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Major consumer products companies across the world have announced plans to boost prices at a faster pace as they seek to curb the impact of soaring raw materials costs on their margins.

Some critics noted that a supermarket merger would lessen competition among U.S. grocery chains and potentially lead to higher prices for American shoppers. A deal would create a combined company with a market valuation of about $47 billion, representing one of the biggest mergers in recent years in the retail space.

Neither Kroger nor Albertsons immediately responded to requests for comment. The news was first reported by Bloomberg.

Consultant Burt Flickinger, who holds shares of both Kroger and Albertsons, said a merger would give the two supermarket operators more buying power, making it easier for them to compete with Walmart Inc (WMT.N).

Groceries constitute roughly 55% of Walmart’s annual sales. Walmart traditionally has used its clout to demand the lowest possible prices from packaged-food and beverage companies, leaving rivals at a disadvantage in their own negotiations with suppliers.

Roughly 25% of all dollars spent on groceries in the United States are spent at Walmart, according to data provided by Euromonitor. Kroger and Albertsons have roughly 8% and 5% of the U.S. grocery market, respectively, according to Euromonitor.

COMPETING POWER

The specter of Amazon may have contributed to the merger talks as well. Michael Pachter, an analyst at Wedbush Securities, estimated the online retailer has taken about $4 billion in market share from Kroger and Albertsons in the past two years — small relative to an $800 billion grocery market but a threat nonetheless. “Amazon scares the bejeezus out of the conventional retailers,” he said.

The Seattle-based technology company is betting that the cashierless and contactless payment systems it is adding to stores, including at its subsidiary Whole Foods Market, will win it customers in the long run.

Shares of Albertsons were up 11% on Thursday afternoon, while Kroger’s stock slipped 1.4%. Shares of British online supermarket and technology group Ocado Group Plc (OCDO.L) were up over 10% in late London trade. Kroger is Ocado’s biggest client.

Kroger houses supermarket chains such as Fred Meyer, Ralphs and King Soopers. Boise, Idaho-based Albertsons includes the Safeway banner.

The razor-thin margins of standalone U.S. supermarket chains have been squeezed from soaring costs and supply-chain disruptions after a boom at the height of the pandemic.

Sarah Miller, executive director of the American Economic Liberties Project, an anti-monopoly nonprofit, said the deal would “squeeze consumers already struggling to afford food.”

“This merger is a cut and dried case of monopoly power, and enforcers should block it,” Miller said.

A deal could be reached as soon as this week, Bloomberg reported, adding that no final decision has been taken and talks could still be delayed or falter.

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Reporting by Anirban Sen and Abigail Summerville in New York; Additional reporting by Siddarth Cavale, Jessica DiNapoli and Arriana McLymore in New York, Jeffrey Dastin in San Francisco and Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila, Matthew Lewis and Nick Zieminski

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Business

Stocks struggle as China rate cut sends oil tumbling

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FILE PHOTO – People pass by an electronic screen showing Japan’s Nikkei share price index inside a conference hall in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato

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  • https://tmsnrt.rs/2zpUAr4
  • Nikkei edges up, S&P 500 futures dip
  • PBOC cuts key rates, China data badly miss forecasts
  • Eyes on Fed minutes, earnings

LONDON, Aug 15 (Reuters) – Global shares struggled to advance on Monday while investors digested news of an unexpected cut in Chinese interest rates as data pointed to faltering growth in the world’s second largest economy, sending oil prices nearly 2% lower.

Weaker U.S. stock index futures also weighed on sentiment, while a steadier dollar knocked gold.

The MSCI all country index (.MIWD00000PUS) was barely firmer, a month-long advance having whittled away the benchmark’s decline for the year to about 13%.

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China’s central bank cut key lending rates to revive demand as data showed the economy unexpectedly slowing in July, with factory and retail activity squeezed by Beijing’s zero-COVID policy and a property crisis. read more

Until now, investors have been grappling with how much further central banks in the United States and Europe would hike rates when they meet next month.

Hopes of smaller rate hikes on signs that U.S. inflation may be peaking helped Wall Street clock up its fourth straight week of gains by Friday.

The gains on Wall Street and steady growth figures for Japan helped the Nikkei (.N225) share average in Tokyo jump to its highest in more than seven months.

“China, I think, is a different situation than the rest of the world. They’ve got a self imposed recession that they’ve created from the zero COVID policy,” said Patrick Armstrong, chief investment officer at investment house Plurimi Group.

“I do think it’s going to be Fed driven if there is another leg down in markets. Quantitative tightening, I think, will begin in earnest in September and that’s going to withdraw liquidity from the market,” Armstrong said.

Markets are still implying around a 50% chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75% by the end of the year.

The Fed will publish minutes on Wednesday from its last rate-setting meeting, but investor hopes of them showing the central bank beginning to pivot on rate hikes could be dashed.

“I don’t think (Fed Chair) Powell is going to say that, I don’t think the minutes are going to indicate that,” Armstrong said.

In Europe, the STOXX share index of 600 leading companies was up 0.13% at 441.43 points, still down around 10% for the year.

Fed Rate Futures and Stocks

U.S. FUTURES EASE

S&P 500 futures and Nasdaq futures were both down around 0.5% after last week’s gains.

Earnings from major retailers, including Walmart (WMT.N) and Target (TGT.N), will be scrutinised for signs of flagging consumer demand.

The cut in Chinese interest rates failed to stop Chinese blue chips (.CSI300) easing 0.13%, while the yuan and bond yields also slipped. read more

Geopolitical risks remain high with a delegation of U.S. lawmakers in Taiwan for a two-day trip. read more

The bond market still seems to doubt the Fed can manufacture a soft landing, with the yield curve remaining deeply inverted. Two-year yields at 3.27% are well above those for 10-year notes which were trading at 2.86%.

Those yields have underpinned the U.S. dollar, though it did slip 0.8% against a basket of currencies last week as risk sentiment improved.

But on Monday the dollar regained some poise, with the euro down 0.2% against the greenback at $1.02345 after bouncing 0.8% last week. Against the yen, the dollar steadied at 133.51 after losing 1% last week.

“Our sense remains that the dollar rally will resume before too long,” argued Jonas Goltermann, a senior economist at Capital Economics.

Gold was down 0.8% at $1,786, losing nearly all of its 1% gains last week.

Oil prices eased as China’s disappointing data added to worries about global demand for fuel.

The head of the world’s top exporter, Saudi Aramco, said it was ready to ramp up output while production at several offshore U.S. Gulf of Mexico platforms is resuming after a brief outage last week.

Brent slipped 1.8% to $96.35, while U.S. crude fell 1.9% to $90.34 per barrel.

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Reporting by Wayne Cole; Editing by Sam Holmes, Raju Gopalakrishnan and Ed Osmond

Our Standards: The Thomson Reuters Trust Principles.

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Indexes drop after Walmart profit warning; Nasdaq down 2%

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid

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  • Walmart cuts profit forecast; news hits retailers
  • McDonald’s up as sales, profit top estimates
  • Coca-Cola up on forecast raise
  • Indexes down: Dow 0.8%, S&P 500 1.3%, Nasdaq 2%

NEW YORK, July 26 (Reuters) – U.S. stocks were sharply lower on Tuesday afternoon, with Nasdaq down more than 2%, as a profit warning by Walmart dragged down retail shares and fueled fears about consumer spending.

Walmart (WMT.N) shares fell 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories. read more

Shares of Target Corp (TGT.N) declined 3.8% and Amazon.com Inc (AMZN.O) dropped 5.1%. read more

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Also, Amazon said it would raise fees for delivery and streaming service Prime in Europe by up to 43% a year. read more

Amazon was among the biggest drags on the Nasdaq and S&P 500, while consumer discretionary (.SPLRCD) fell more than 3% and led declines among S&P 500 sectors.

“The majority of companies that reported today beat earnings, and that’s been the case. But of course there have been some warnings, and that’s what the market is focusing on,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Walmart basically pulled the plug, and most retailers are lower across the board.”

Meanwhile, Coca-Cola Co (KO.N) gained 1.9% after the company raised its full-year revenue forecast. McDonald’s Corp (MCD.N) rose 3% after beating quarterly expectations. read more

A busy week for earnings includes reports from Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) after the bell. Microsoft was down 3.4% and Alphabet was down 2.9%.

The Dow Jones Industrial Average (.DJI) fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 (.SPX) lost 52.28 points, or 1.32%, to 3,914.56 and the Nasdaq Composite (.IXIC) dropped 239.38 points, or 2.03%, to 11,543.29.

The Federal Reserve started a two-day meeting and on Wednesday, it is expected to announce a 0.75 percentage point interest rate hike to fight inflation. read more Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.

Earnings from S&P 500 companies are expected to have risen 6.2% for the second quarter from the year-ago period, according to Refinitiv data.

Among the week’s heavy slate of economic news, data Tuesday showed U.S. consumer confidence dropped to nearly a 1-1/2-year low in July, pointing to slower economic growth at the start of the third quarter. read more

Advance second-quarter GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.

Declining issues outnumbered advancing ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 32 new highs and 123 new lows.

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Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Anil D’Silva and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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