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Renewed rioting sweeps British cities in wake of child murders

FAR RIGHT PROTESTORS shout behind police a cordon in Liverpool, Britain, Aug. 3, 2024. — REUTERS

LIVERPOOL, England/BELFAST — Violent disorder swept across several British cities on Saturday, injuring police and damaging property in the most widespread rioting in the country for 13 years, following the murder of three young girls in northwest England.

Riots involving hundreds of anti-immigration protesters have erupted in towns and cities after false information spread rapidly on social media that the suspect in Monday’s knife attack at a children’s dance class in Southport was a radical Muslim migrant.

Police have said the suspect, Axel Rudakubana, 17, was born in Britain but protests by anti-immigration and anti-Muslim demonstrators have continued, descending into violence, arson and looting.

Violent disorder erupted in Liverpool, Bristol, Hull and Belfast — four cities located in different corners of the United Kingdom — with scuffles breaking out and bricks and bottles thrown as anti-immigration protesters faced groups opposed to racism. Many police officers suffered injuries as they tried to keep several hundred rival protesters — largely young men who were chanting slogans — from clashing.

In Liverpool, two officers were in hospital with suspected facial fractures while another was pushed from his motorbike and assaulted in the disorder involving some 750 protesters and a similar number of rival protesters, Merseyside Police, the force overseeing the northwestern city, said.

At least two shops in Liverpool were vandalized and looted, police added.

Similar scenes were witnessed in the southwestern city of Bristol although anti-racist protesters outnumbered anti-immigration groups, with TV footage showing them facing off with police in riot gear.

In Belfast, some businesses reported damage to property while at least one was set on fire, according to police.

“I have no reason why they attacked us,” said Rahmi Akyol, standing outside the shattered glass doors of his cafe in Belfast, which he said was attacked by dozens of people with bottles and chairs.

“I’ve lived here 35 years. My kids, my wife is from here. I don’t know what to say, it’s terrible,” he said.

Across Britain, police have arrested dozens of individuals for offences ranging from violent disorder to burglary and criminal damage.

Extra police have been deployed across cities while mosques across the country have been advised to strengthen security following an attack on a mosque in Southport on Tuesday.

‘UNFORGIVABLE VIOLENCE’
Prime Minister Keir Starmer, facing his first big test since his election a month ago, has condemned the “far-right” for the wave of violence and backed police to take strong action. He discussed the disorder with senior ministers on Saturday, his office said.

The last time riots erupted in Britain was in 2011 when a much larger outbreak of violence took hold, with thousands of people taking to the streets for five nights after police shot dead a Black man in London.

On Friday night, hundreds of anti-immigration demonstrators in Sunderland threw stones at police in riot gear near a mosque, before overturning vehicles, setting a car alight and starting a fire near a police station.

“This was not a protest. This was unforgivable violence and disorder,” Mark Hall, chief police superintendent of the Sunderland area, told reporters on Saturday. — Reuters

Trump proposes alternative election debate on Fox News but Harris says no

UNITED STATES VICE PRESIDENT Kamala Harris speaks at her Presidential Campaign headquarters in Wilmington, Delaware, US, July 22, 2024. — ERIN SCHAFF/POOL VIA REUTERS

ATLANTA — Republican presidential nominee Donald Trump proposed to debate Democratic Vice President Kamala Harris on Fox News on Sept. 4, but the Harris campaign countered that Mr. Trump was trying to back out of a debate that had already been set to run on ABC.

The rules would be similar to the first debate with President Joseph R. Biden, who has since dropped his reelection bid, Mr. Trump said in a post on Truth Social late on Friday. But this time it would have a “full arena audience” and take place in the battleground state of Pennsylvania, Mr. Trump said.

Mr. Trump and Mr. Biden had agreed to a second debate on Sept. 10 on ABC News, which the former president had suggested should be moved to Fox, the most popular network with his followers.

Ms. Harris, who on Friday secured the delegate votes needed to clinch the Democratic nomination for the Nov. 5 election, said on Saturday she plans to participate in the originally planned debate.

“It’s interesting how ‘any time, any place’ becomes ‘one specific time, one specific safe space,’” she wrote on social media platform X. “I’ll be there on Sept. 10, like he agreed to. I hope to see him there.”

Ms. Harris’ spokesperson Michael Tyler said Mr. Trump was “running scared” and that her campaign was happy to discuss further debates after the Sept. 10 one that “both campaigns have already agreed to.”

On Saturday, Mr. Trump said on Truth Social that Ms. Harris is “afraid to do it” and that he will see her on Sept. 4, “or, I won’t see her at all.”

Both candidates have been crisscrossing the country aggressively, with Mr. Trump trying out fresh lines of attack against Ms. Harris, who some polls show is in a virtual dead heat with the former president.

At a rally in Atlanta on Saturday night, Mr. Trump attacked Ms. Harris’ character and the policies she has promoted as vice president, and he continued to raise questions about her racial identity.

On Thursday, Mr. Trump had falsely suggested to the country’s largest annual gathering of Black journalists that Ms. Harris had downplayed her Black heritage. Harris, who is of Indian and Jamaican heritage, has long self-identified as both Black and Asian. She attended a traditionally Black university, where she joined a prominent Black sorority.

Mr. Trump, speaking at the same stadium where Ms. Harris held a rally on Tuesday, said on Saturday that there were “19 different ways” of pronouncing Harris’ first name, while also calling her a “lunatic” with a “low IQ.” Before  Mr. Trump took the stage, his campaign displayed an article on a large screen referring to Ms. Harris as the “first Indian-American senator.”

The former president also dedicated much of his speech to attacking Georgia’s Republican governor, Brian Kemp, and the state’s Republican secretary of state, Brad Raffensperger. Both men drew Mr. Trump’s wrath for failing to overturn Mr. Trump’s election loss to Mr. Biden in Georgia in 2020.

Mr. Trump’s combative performance contrasts with the advice of some senior Republicans who have called on him to avoid attacks on Ms. Harris’ identity and friendly fire directed at conservatives.

Following Mr. Trump’s speech, the Harris campaign released a statement by Geoff Duncan, the Republican lieutenant governor of Georgia from 2019 to 2023 and a vocal Trump critic.

“If you were able to see through Donald Trump’s incoherence and vindictiveness tonight, you saw a Donald Trump who does not care about uniting this country or speaking to the voters who will decide this election,” Mr. Duncan said.

DEBATE ‘TERMINATED’?
In his Friday post on Truth Social, Mr. Trump said the ABC debate had been “terminated in that Mr. Biden will no longer be a participant” and because he himself was in litigation with ABC.

ABC on July 26 outlined qualification requirements for the debate but did not mention any candidates by name. Those requirements include proving polling support and state ballot access by Sept. 3.

Recent polls show a tight contest between Ms. Harris and Mr. Trump, who had opened a clear lead over Mr. Biden after the president’s fumbling, halting performance first debate.

ABC News had no comment about Mr. Trump’s statement, a spokesperson said. Fox News did not respond to a request for comment.

Mr. Trump’s proposal for the debate on Fox came right after the Democratic National Committee launched an advertising campaign taunting him by saying “the convicted felon is afraid to debate” and questioning whether that is due to his stance on abortion.

David Plouffe, an adviser to former President Barack Obama who recently joined the Harris campaign, posted on social media: “Now, he seems only comfortable in a cocoon, asking his happy place Fox to host a Trump rally and call it a debate. Maybe he can only handle debating someone his own age.”

Mr. Trump is 78, and Ms. Harris is 59. — Reuters

California wildfire now fourth largest in state history

THE McDougall Creek wildfire burns next to houses in the Okanagan community of West Kelowna, British Columbia, Canada, Aug. 19, 2023. — REUTERS

MORE than 6,000 firefighters in California’s Central Valley continued to battle the largest blaze in the US on Saturday, which burned its way into the history books as the state’s fourth-largest conflagration on record.

There was barely a taste of rain on Saturday from thunderstorms that brought wind and rainfall of zero to one-tenth of an inch, forecasters said.

The heat of 100 degrees Fahrenheit (38 Celsius) along with winds up to 25 mph or more in some spots, offered little relief to the firefighters trying to contain the Park Fire, scorching the wilderness terrain some 100 miles (161 km) north of Sacramento, the state capital.

“We had some thunderstorms that just brought us down-drafts, that’s a problem,” said Christopher Young, a spokesman for the California Department of Forestry and Fire Protection, or Cal Fire. “Lightning is a factor we worry about.”

Blazes from the Park Fire, started by an alleged arsonist who pushed a flaming car down a 60-foot gully near Chico, California, on July 24, has since burned more than 400,000 acres (162,200 hectares) or more than 600 square miles, an area larger than the city of Los Angeles.

The 42-year-old man arrested had not entered a plea as of Saturday, but was charged with arson and held without bail, officials said.

More than 560 homes and other structures were destroyed since the blaze started 11 days ago, feeding off of downed timber and tinder-dry grass and brush. The fire was 27% contained on Saturday, officials said.

More than 4,000 people were evacuated in the Park Fire including retiree Jim Young, 65, of Red Bluff, California, where he lived in a trailer home with his dog, a black Labrador Retriever named Sparky.

He and the dog spent the last eight days camped out with some other families in a gravel lot at a wilderness trailhead about 6 miles from his home, worrying every day if it was safe.

“We just found out we can go home,” Mr. Young told Reuters on Saturday evening. “Our property is safe. So many lost everything. But me and Sparky can go home now.”

The rough, wilderness terrain means it takes two to three hours to reach the fire lines, officials said. Some firefighters are being flown to the front lines by helicopters, with some expected to stay there for days with supplies also flown in.

The national wildfire season has had an intense start, raising the risk of stretching firefighting resources too thin. The National Interagency Fire Center has already requested help from firefighters in Australia and New Zealand, who will arrive starting Aug. 7 and deploy to Oregon and Washington. — Reuters

Carlos Yulo wins historic gold for Philippines with floor exercise title

CARLOS YULO — REUTERS

PARIS — Carlos Edriel Yulo produced a spectacular performance to win the men’s floor exercise final at the Paris Games on Saturday, earning Philippines their first-ever Olympic medal in gymnastics.

Mr. Yulo’s gold medal is also only the second-ever top prize won by the Philippines across both the Summer and Winter Games, and the first in the men’s category. Weightlifter Hidilyn Diaz struck gold in Tokyo three years ago.

“I don’t know what to say,” the 24-year-old, who just missed the podium at the Tokyo 2020 Games, said.

“We are a really small country… So to be able to get a gold medal for us is big for us, huge. I dedicate this to the Filipino people also who supported me.”

Mr. Yulo opened with a tumbling pass that featured a high-flying 2-1/2 double piked front somersault and rounded off the dynamic display with an astonishing 3-1/2 twisting forward somersault.

When he stuck his final landing, he punched the air with both fists, let out a huge roar and then saluted the hollering crowd that had leapt to their feet to applaud the virtuoso performance.

He scored 15.000 points, edging out Tokyo champion Artem Dolgopyat of Israel by just 0.034 of a point.

Top qualifier Jake Jarman of Britain settled for third, just 0.067 of a point adrift of the gold medal spot after committing small landing errors on his tumbles.

When the final score flashed on the big screen at Bercy Arena, Mr. Yulo, overcome with emotion, covered his face with his hands as he broke down in tears and collapsed to the ground.

Filipino athletes at the Paris Games have been promised a fully furnished, two-bedroom condominium in Taguig City if they win a gold medal.

Mr. Yulo said he was grateful for the reward, but that it was secondary to the world title he had just won.

“It’s just a bonus for me. And this is what really matters,” he said, clutching the medal around his neck.

“My hard work and the people who really helped me. I know my success is also their success… I’m happy that I won gold. And I also won a house,” he said, laughing.

Mr. Yulo, who trained for seven years in Japan due to a lack of opportunity back home, said he hoped his historic win would open the door for children in the Philippines to take up the sport.

“Hopefully gymnastics in the country will grow,” he said. — Reuters

Philippines, Japan militaries hold first joint exercises in South China Sea

PHILIPPINE STAR/EDD GUMBAN

 – The Philippines and Japan held their first joint military exercises in the South China Sea on Friday, the Philippine armed forces said, in the latest collaboration between countries that have pushed back against China‘s regional assertiveness.

The drills, which took place within the Philippines‘ exclusive economic zone, followed similar exercises between Manila and Washington on Wednesday.

“This activity was part of the ongoing efforts to strengthen regional and international cooperation towards realizing a free and open Indo-Pacific,” the Armed Forces of the Philippines (AFP) said in a statement.

The Philippines and Japan, both US allies, last month signed a landmark military pact allowing deployment of forces on each other’s soil.

China claims as its territory much of the South China Sea, a conduit for the bulk of northeast Asia’s trade with the rest of the world in which Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

Japan, which announced last year its biggest military build-up since World War Two in a step away from post-war pacifism, does not have any claims to the busy waterway.

But it has a separate maritime dispute with China in the East China Sea, where the neighbors have repeatedly faced off.

The latest exercise, which included two vessels from each side, included a communications exercise, tactical maneuvering, and a photographic exercise, the AFP said. – Reuters

BoI greenlights P202.97 billion investments in July

The Board of Investments (BoI) approved P202.97 billion worth of investment in July, up 24038% from the P840.9 million investments approved in the same month last year.
In a statement on Friday, the BoI said that 30 projects were greenlighted last month which are expected to generate 8,931 direct jobs.
Last month’s approval brought the first seven months’ approval to P1.15 trillion, representing an increase of 65% from P699 billion in the same period a year ago.
“Our target is clear: to hit and even surpass P1.6 trillion in approved investments this year,” said Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo.
“With the momentum we have built, we are confident in achieving and exceeding this goal, driving economic development,” he added. – Justine Irish DP Tabile

Marcos appoints Trade Usec Cristina Roque as Acting Secretary

DTI Undersecretary Cristina Roque
Department of Trade and Industry (DTI) Undersecretary for MSME (micro, small, and medium enterprises) Development Group Ma. Cristina A. Roque was appointed as the acting secretary of DTI, according to the Palace.
In a statement, the Presidential Communications Office (PCO) said that President Ferdinand R. Marcos, Jr. appointed Ms. Roque following outgoing Secretary Alfredo E. Pascual’s resignation effective Aug. 2.
“Undersecretary Roque has been instrumental in leading the MSME Development Group within DTI, executing various programs and initiatives focused on MSMEs,” the PCO said.
It added that the President sees Ms. Roque’s dedication and leadership in the MSME sector make her an excellent choice for the position. – Justine Irish DP. Tabile

DOLE, Jollibee Group join forces to provide jobs to 900 indigent youth

Helping Build a Brighter Future for the Youth. The Department of Labor and Employment (DOLE) led by Secretary Bienvenido Laguesma (standing, 9th from right) and the Jollibee Foods Corporation (JFC) led by JFC Philippines Chief Human Resources Officer Ruth Angeles (in a handshake with the Secretary) have signed a Memorandum of Agreement on the Special Program for Employment of Students (SPES) that will benefit 900 underprivileged students and out-of-school youth in the Philippines.
Helping Build a Brighter Future for the Youth. The Department of Labor and Employment (DOLE) led by Secretary Bienvenido Laguesma (standing, 9th from right) and the Jollibee Foods Corporation (JFC) led by JFC Philippines Chief Human Resources Officer Ruth Angeles (in a handshake with the Secretary) have signed a Memorandum of Agreement on the Special Program for Employment of Students (SPES) that will benefit 900 underprivileged students and out-of-school youth in the Philippines.

Jollibee Foods Corporation (JFC) has forged a partnership with the Department of Labor and Employment (DOLE) on the Special Program for Employment of Students (SPES) that will provide short-term job opportunities in the quick-service restaurant industry for 900 underprivileged students, out-of-school youth, and dependents of displaced workers in the Philippines.

DOLE Secretary Bienvenido Laguesma led the signing ceremonies for the Memorandum of Agreement (MOA) last July 4, 2024, at the DOLE office in Intramuros, Manila. DOLE will supervise the overall implementation of SPES while JFC will be tasked to process and evaluate applicants endorsed by the Public Employment Service Office (PESO) for final selection and engagement of qualified SPES beneficiaries.

DOLE Secretary Bienvenido Laguesma on the partnership with JFC: “As we embark on this partnership, the importance of our collective efforts cannot be overemphasized. Each signature on this agreement signifies not just a promise, but a commitment to provide opportunities, foster growth, and build a brighter future for our youth.”

In his message, Secretary Laguesma underscored the significance of SPES in equipping young Filipinos with the skills and knowledge necessary to thrive in the workforce: “When we invest in our youth, especially those from marginalized sectors, we provide them with the tools and the support they need to reach their full potential. Through the training and internships your company offers, beneficiaries gain hands-on experience in real-world environments, industry-specific skills, professional development, and mentorship.”

“This collaborative effort carries immense promise for both the Filipino people and the national economy. I wish to reiterate my heartfelt gratitude to JFC for joining us on this path towards progress. By working together, we can create a brighter future full of opportunities for our young generation, where businesses flourish alongside a capable and driven workforce. We firmly believe this partnership will empower countless young Filipinos to excel,” Secretary Laguesma added.

Commitment to empowering the youth

JFC has been a long-time partner of the DOLE for the SPES. Since 2015, over 800 youths have been previously employed in the Company’s commissaries and stores of brands like Chowking, Greenwich, and Red Ribbon.

With this renewed commitment to SPES this 2024, an additional 900 qualified students and out-of-school youth will be provided with short-term jobs in the participating brands and stores of JFC across regions in the Philippines.

Ruth Angeles, Chief Human Resources Officer of JFC Philippines and Global Head for Organization, Leadership, and Culture of the Jollibee Group, said that JFC is committed to expanding the SPES implementation for the Company’s brands in the Philippines.

“As your partner from the business sector, JFC is and will continue to support the government’s initiatives to decrease unemployment, manage underemployment due to job mismatch, and ensure youth employability by providing work opportunities that are honorable, meaningful, sustainable, and inclusive,” said Ruth Angeles, Chief Human Resources Officer of JFC Philippines and Global Head for Organization, Leadership, and Culture of the Jollibee Group.

Angeles added that the Company’s partnership with DOLE on SPES is aligned with JFC’s employer value proposition (EVP) and employer branding called “Choose Joy.” This EVP encapsulates the Company’s commitment to providing joyful work experiences through meaningful careers, inclusive work culture, and the opportunity to participate in the Company’s mission of serving great-tasting food, bringing the joy of eating to everyone.

Other program for underprivileged youth

On a related note, JFC—through its social development arm Jollibee Group Foundation (JGF)—has also teamed up with the Philippine Business for Education (PBEd) and the United States Agency for International Development (USAID) on Youthworks PH project, which aims to provide education and training to underprivileged youth or those not in education, employment, or training (NEET). This program hopes to help address the unemployment rate among youth in the Philippines.

 


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Apple pins hopes on AI for iPhone upgrades as China sales falter

REUTERS

Apple said its third-quarter iPhone sales were better than expected and forecast more gains on Thursday as it bets on artificial intelligence to attract buyers, even as its overall China business disappointed.

Shares of the company rose nearly 1% in extended trading, outperforming other tech stocks that were broadly lower.

Apple is expected to launch this fall what analysts have called the biggest software upgrade for the iPhone. It includes artificial intelligence features and comes at a time when rivals such as Samsung have been quicker to roll out similar services.

Apple said revenue in its fiscal fourth quarter would grow at a level similar to the 4.9% increase it posted in the April-June period, which was better than analysts’ estimates.

Sales of iPhone also improved in the third quarter, falling just 0.9% compared with the 2.2% drop analysts expected.

Chief Financial Officer Luca Maestri told Reuters in an interview that the iPhone results were better than he had expected three months ago. “The iPhone 15 family has been doing well from the very beginning and still now – we have three quarters of the year behind us. It is performing better than the previous cycle, the iPhone 14.”

Still, China – Apple’s third-largest market – remained a drag as sales there declined 6.5%. While that was an improvement from the 8.1% decline in the previous quarter, it was wider than expectations for a drop of 2.4%, according to Visible Alpha.

Mr. Maestri said China sales fell less than 3%, excluding the effects of foreign exchange and added that he feels good about Apple’s performance in that country, given any softness in its economy.

Apple has taken to discounting its iPhones in China to compete with the much cheaper alternative smartphones offered by local competitors such as Huawei. The company in May offered discounts of up to 2,300 yuan ($317) on selected models.

 

AI PUSH

Analysts expect a strong upgrade cycle for the iPhone 16 series, likely to be launched in September. The company unveiled a raft of AI products and services it calls Apple Intelligence at its developer conference in June.

To operate Apple Intelligence requires at least an iPhone 15 Pro, which may push consumers to upgrade their devices.

While some analysts said that some consumers might have purchased the top-end iPhone 15 devices to tap the upcoming Apple Intelligence features, CEO Tim Cook told investors on Thursday it was “too early to tell” if that was driving upgrades.

Apple’s AI features have arrived later than offerings by rivals including Samsung Electronics, which has introduced competing devices aimed at hosting AI chatbots. Microsoft and Alphabet’s Google are placing huge bets on AI as well.

“The company’s future success depends on two factors: keeping AI development costs low and ensuring that new AI-driven features compel price-sensitive consumers to upgrade their devices,” said Emarketer analyst Jacob Bourne.

Apple started ramping up research and development spending last year, and Cook has said it has spent more than $100 billion on R&D in the past five years.

Mr. Maestri told Reuters on Thursday that the company maintains “very good gross margins” despite the sometimes burdensome costs associated with building and running AI applications.

Apple splits its AI infrastructure costs between its own data centers and other cloud providers with whom it contracts.

On the regulatory front, Apple faces three probes in the European Union related to the Digital Markets Act, which requires large tech companies to ensure a level playing field for rivals and give users more choice. The bloc’s antitrust regulator has accused Apple’s App Store of breaching the DMA.

In the United States, the Department of Justice in March accused Apple of monopolizing the smartphone market and driving up prices.

Apple’s quarterly earnings per share were $1.40, above Wall Street estimates of $1.35, according to LSEG data.

Sales in Apple’s services segment, which includes the App Store and represents Apple Music and TV products, rose 14.1% to $24.21 billion, above analyst expectations of $24.01 billion, according to LSEG data.

Mac sales grew 2.5% to $7.01 billion, compared with estimates of $7.02 billion, according to LSEG data.

The company’s sales in the iPad segment increased by 23.7% to $7.16 billion, above analyst expectations of $6.61 billion, after Apple launched a new AI-focused iPad Pro and a larger iPad Air in May to revive demand for a product line that had languished for the past two years.

In the company’s wearables segment, which represents sales of Apple Watches and AirPods headphones, sales fell 2.3% to $8.10 billion, compared with analyst estimates of $7.79 billion, according to LSEG data.

Apple maintained its dividend at 25 cents. In the fiscal second quarter, Apple announced a $110 billion stock buyback. – Reuters

Intel to cut 15% jobs, suspend dividend in turnaround push; shares plummet

REUTERS

Intel said on Thursday it would cut more than 15% of its workforce and suspend its dividend starting in the fourth quarter as the chipmaker pursues a turnaround centered around its loss-making manufacturing business.

It also forecast third-quarter revenue below estimates, grappling with a pullback in spending on traditional data center semiconductors and a focus on AI chips, where it lags rivals.

Shares of Santa Clara, California-based Intel slumped 20% in extended trade, setting it up to lose more than $24 billion in market value. The stock had closed down 7% on Thursday, in tandem with a plunge in US chip stocks after a conservative forecast from Arm Holdings on Wednesday.

The results did not rock the broader chip industry. AI powerhouse Nvidia and smaller rival AMD ticked up after hours, underscoring how well-positioned they were to take advantage of the AI boom.

“I need less people at headquarters, more people in the field, supporting customers,” CEO Pat Gelsinger told Reuters in an interview. On the dividend suspension, he said: “Our objective is to … pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging.”

The layoffs will impact roughly 17,500 people.

Intel, which employed 116,500 people as of June 29, excluding some subsidiaries, said the majority of the job cuts would be completed by the end of 2024.

The company also announced it would cut operating expenses and reduce capital expenditure by more than $10 billion in 2025, more than it initially planned.

“A $10 billion cost reduction plan shows that management is willing to take strong and drastic measures to right the ship and fix problems. But we are all asking, ‘is it enough’ and is it a bit of a late reaction considering that CEO Gelsinger has been at the helm for over three years?” said Michael Schulman, chief investment officer of Running Point Capital.

He said eliminating the dividend may further pressure the shares in the short- to medium-term, because it would knock Intel out of any ETFs, indices, and fund strategies that only include dividend payers.

The company had cash and cash equivalents of $11.29 billion, and total current liabilities of about $32 billion, as of June 29.

Much of Wall Street’s focus has centered around the heavy investments and huge costs incurred by Intel as it builds-out its manufacturing capacity in a bid to compete against Taiwanese contract chipmaking behemoth TSMC.

Intel’s lagging position in the market for AI chips has sent its shares down more than 40% so far this year.

 

‘IS IT ENOUGH?’

As part of its cost reduction plan, Intel expects to slash capital expenses by 17% in 2025 year-on-year to $21.5 billion, calculated on the midpoint of a range the chipmaker forecast. It expects these costs to stay roughly flat in 2024.

“On one hand, Intel is witnessing the erosion of its traditional data center business as chip buyers aggressively migrate towards AI chips. On the other hand, Intel is navigating a challenging and expensive transformation to a foundry model,” said Tejas Dessai, Research Analyst, Global X.

Intel adopted extreme ultraviolet lithography tools much later than TSMC did, which caused the American chipmaker’s foundry business to lag the Taiwanese manufacturer. The company is working to rectify that. It became the first to assemble one of Dutch chipgear maker ASML’s new “High NA EUV” lithography tools in April.

These new tools are more expensive, but Intel is betting the move will help it place smaller components on chips, ultimately making their processors superior.

Analysts believe Intel’s plan to turn around the foundry business will take years to materialize and expect TSMC to maintain its lead in the coming years.

In April, Intel declared a quarterly dividend of 12.5 cents per share.

The company expects revenue to be between $12.5 billion and $13.5 billion for the quarter, compared with analysts’ average estimate of $14.35 billion, according to LSEG data. – Reuters

China needs more than ‘incremental’ consumer stimulus longer term

STOCK PHOTO | Image by Media_Breeze from Pixabay

 – China’s efforts to boost household spending are expected to help the economy hit the government’s 2024 growth target of roughly 5%, but the authorities may have to do more for consumers from next year or accept slower growth.

Trade tensions and local government debt risks leave Beijing few alternatives to revving up consumer stimulus in coming years, but vague promises of “incremental measures” look likely to fall short, analysts say.

China’s leaders signaled this week that fiscal support for the rest of the year will “focus on consumption”, aiming to boost incomes and social welfare, days after announcing plans to use 150 billion yuan ($20 billion) in government debt to finance trade-ins on consumer goods such as appliances.

This marks a departure toward boosting chronically weak domestic demand after decades of reliance on exports and infrastructure spending that helped vault China to the world’s second-biggest economy.

Still, the trade-in program, China’s first debt-funded step to directly support household consumption nationwide, amounts to just 0.12% of gross domestic product. Further consumption stimulus is “plausible next year in the face of potentially stronger external headwinds”, Citi analysts said.

The fridges-not-bridges shift is driven by growing unease with China’s trade dominance, which has pushed the United States, Europe and emerging economies from Turkey to Indonesia to raise tariffs and place other barriers on Chinese products.

In addition, the authorities are growing wary of debt-funded projects as they increase scrutiny on heavily indebted municipalities. Most of China’s fiscal stimulus still goes into investment, but returns are dwindling and the spending has saddled local governments with $13 trillion in debt.

Local governments sold 1.49 trillion yuan ($200 billion) of the special bonds used to fund stimulus in the first half of the year, just 38% of the full-year quota, making China’s fiscal stance unexpectedly tight.

“The number of really good projects that produce stable income keeps getting smaller,” an economic adviser to the government said on condition of anonymity.

China’s export outlook is likely to keep worsening, especially if Donald Trump returns to the White House, as the US former president and Republican candidate for November’s election has threatened tariffs of up to 60% on all Chinese goods.

Yue Su, principal China economist at the Economist Intelligence Unit, estimates that a 10% increase in U.S. import tariffs could cut China’s real economic growth by 0.3-0.4 percentage points next year and in 2026.

“The urgency to stimulate the domestic economy is highlighted by increased external pressures, including the potential return of Trump,” she said. “A more decisive domestic-focussed policy and fiscal expansion could mitigate some of these effects.”

 

‘POOR’ RECORD ON CONSUMER STIMULUS

China’s household spending is less than 40% of GDP, some 20 percentage points below the global average.

To revive consumption just to its pre-pandemic trendline would require 3 trillion yuan to 8 trillion yuan ($400 billion-$1 trillion) in spending, said Christopher Beddor, deputy China research director at Gavekal Dragonomics estimates, who thinks that much stimulus is unlikely.

“The government’s track record of delivering on consumer stimulus is frankly pretty poor,” he said.

Xu Hongcai, deputy director of the economic policy commission at the state-backed China Association of Policy Science, said boosting demand sufficiently might need re-allocating 5 trillion yuan from investment projects to consumers.

“In the short run, 5 trillion yuan in stimulus would be forceful,” Xu said. “But in the long run, we need to improve the proportion of income of urban and rural residents by 20 percentage points of national income.” – Reuters

Coinbase beats revenue estimates as crypto markets ride ETF euphoria

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Coinbase’s second-quarter revenue surpassed Wall Street expectations on Thursday as trading volumes roared back to life thanks to market euphoria over easing regulatory roadblocks, sending shares of the crypto exchange 3% higher after the bell.

Crypto markets have gotten a boost this year after the US Securities and Exchange Commission approved an exchange-traded fund to track the spot price of bitcoin and ether, ending an almost decade-long tussle.

“We are increasingly optimistic that the next administration, whether Democrat or Republican, will be constructive on crypto. The rhetoric has shifted,” CEO Brian Armstrong said on post-earnings conference call.

“Since we went public, we have reiterated the need for regulatory clarity.”

The SEC and Coinbase have locked horns over their divergent views on whether crypto tokens classify as securities and should be regulated similarly. The company has accused the top US markets regulator of overreach, while the SEC has alleged the largest U.S. crypto exchange is flouting its rules.

Approvals of spot bitcoin ETFs marked the entry of traditional financial heavyweights such as BlackRock BLK.N and Fidelity into digital assets, giving the sector greater credibility.

In the aftermath, the total market capitalization of the sector has swelled to roughly $2.36 trillion, according to CoinGecko, powered by gains in both bitcoin and ether, the second-biggest crypto token.

Coinbase’s total transaction revenue surged 139% to $780.9 million in the second quarter.

Revenue from Coinbase’s subscription and services unit, which houses businesses outside of trading, jumped 79% to $599 million in the quarter.

Quarterly custodial fee revenue climbed to $34.5 million, benefiting from inflows tied to spot bitcoin ETFs.

The company’s total revenue doubled to $1.45 billion, beating analysts’ estimates of $1.4 billion, according to LSEG data.

It posted a profit of 14 cents per share in the quarter, compared with a loss of 42 cents a year earlier. – Reuters