>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Charles Schwab Has Had a Terrible Year. But the brokerage king won’t be dethroned according to Barron’s

Cover:
-Charles Schwab Has Had a Terrible Year. But the brokerage king won’t be dethroned according to Barron’s. For some advisors, the move to Charles Schwab from TD Ameritrade didn't go smoothly. The snags in the $1.3T Labor Day transition have come amid a trying year for the company. The stock is down 35%, bank deposits had fallen 28% year over year as of Sept. 30, and net new assets tumbled in July and August as some Ameritrade customers and advisors took their business elsewhere.

Interview:
-This week, Barron’s features David Samra, a portfolio manager at Artisan Partners, who considers the current market headwinds to be an opportunity to invest in consumer-focused companies with low valuations and long-term potential. Samra, based in Boston, has run the $28.2B Artisan International Value since its 2002 inception, and applies classic value-investing principles—the sort espoused by Benjamin Graham and his pupil, Warren Buffett—to non-US markets. Samra buys well-run companies trading at a significant discount to intrinsic value.

Tech Trader:
-Heading into its earnings report on Wednesday, Netflix’s shares had fallen by nearly a third over the past three months. Investors have been increasingly worried about Netflix’s future profitability and its ability to retain subscribers. Rather, Netflix delivered a surprise by materially beating profit and subscriber expectations, driving its shares up 16% the next day. For the September quarter, the company posted earnings of $3.73 a share, well ahead of the consensus of $3.49. Paid net subscriber additions came in at 8.8 million, versus Wall Street’s 6.1M estimate.

The Trader:
-While one should not dismiss the macroeconomic and geopolitical issues that are weighing on markets, overestimating their significance could also hurt an investment portfolio. Michael Antonelli, managing director and market strategist at Baird favors energy stocks, which have been getting a boost with oil trading above $90 a barrel. The Energy Select Sector ETF has been trading sideways this year but offers safe dividends. “High quality” consumer-discretionary stocks also look good and will benefit as long as the economy stays strong, he says. Retail sales rose 0.7% in September, and American Express posted yet another quarter of record revenue and profit as America’s propensity to shop continued, even if its stock fell 5.4% on Friday following the release.
-Quarter after quarter, the United States’ largest banks have proven to be resilient despite a challenging economic environment. They also passed the Federal Reserve’s stringent stress test in June, even after a spate of upheaval rocked the industry in March. Regulators have had to admit that the sector has been resilient in the face of stress, even as they prepare tougher capital rules. Earnings bear that out, with nearly three-quarters of banks beating earnings estimates, and the six largest ones—including JPMorgan Chase and Wells Fargo. The SPDR S&P Bank ETF has been trading in a narrow range since mid-March, when Silicon Valley Bank and Signature Bank collapsed and Wall Street was in a panic over what bank would go next. While that has largely subsided, stock prices haven’t recovered. Now investors are worried about what comes next for the economy—and the impact on US banks, which fell again this past week.

Features:
-With several stocks trading for under 10X projected 2023 earnings and yielding 5% or more, investors ought to take a closer look. Some of the better plays include industry leader BlackRock, as well as T. Rowe Price Group, AllianceBernstein Holding, Federated Hermes, and Affiliated Managers Group. A stronger stock market like this year’s would normally boost the stocks because it leads to more assets under management and larger fees and profits. “The stock market is up, but it has been concentrated in a handful of stocks,” says KBW analyst Michael Brown. “That hasn’t improved sentiment enough to drive flows back into these stocks.” What could go right? Flows could become less negative, and third-quarter profit reports might offer some hopeful signs. Bond investments look more attractive than in the past 15 years, which could prompt investments in fixed-income funds.
-Frontier Communications has long been an undervalued stock. It got a positive catalyst last week in the form of Jana Partners, with the activist investor calling for a sale of the internet, television, and phone provider. Frontier has been transitioning from a copper wire to a modern fiber-optic cable one. The process has been slow and requires billions of dollars of investment before generating positive returns. Higher interest rates and a stock-market rout have only raised the cost of financing that transition. Once running, however, fiber-based internet costs less to run and performs better, allowing Frontier to charge more. Frontier says that 85% of its footprint has only one or no fiber competitor, which will boost adoption.

Europe:
-Nokia announced plans to cut up to 14,000 jobs as part of a cost-saving initiative after profit tumbled 69% in the third quarter. The Finnish telecom equipment maker said its plan will address the “challenging market environment.” It’s still early in the day but the cost-cutting measures may not spare the stock from a similar fate to its Swedish rival Ericsson, whose shares tumbled 6% Tuesday after it said tough market conditions would persist into 2024. Nokia stock fell 8.5% in European trading, while its American depositary receipts fell 9.7% in early New York trading.

Emerging Markets:
-no update this week

Commodities:
-The Chinese government is planning to place further restrictions on graphite exports. Graphite is essential for the manufacturing of batteries and China is the dominant global supplier. Export controls could raise prices of the material for electric-vehicle makers such as Tesla and intensify the search for alternative sources of graphite.

Streetwise:
-Stocks haven’t looked this overpriced in 20 years, says Jack Hough, citing a Wall Street economist. He cites the 10-year Treasury yield, recently up to about 5%, compared with the “earnings yield” of the S&P 500 index, or the price/earnings ratio flipped upside down, which is also near 5%. Why take a chance on risky stocks when safe bonds seem similarly priced? BofA Securities points out that since 1945, the correlation between rising real yields and falling P/E ratios has been weak, and negative. Stick with stocks, in other words. Another point the bulls make about the S&P 500’s valuation is that it has been driven higher by recent gains for seven tech giants that carry the most sway in the index—or that did until this past week, when Tesla had an earnings mishap, falling behind Berkshire Hathaway (BRK.B). The others are Microsoft, Alphabet, Amazon.com, and Meta Platforms, which report results in the week ahead; Apple, which is up the following week; and Nvidia, which reports closer to Thanksgiving. The P/E ratio for the seven has climbed from 29 to 45 this year.

TechCrunch : Telegram is still leaking user IP addresses to contacts

Telegram is still leaking user IP addresses to contacts

The popular messaging app Telegram can leak your IP address if you simply add a hacker to your contacts and accept a phone call from them.

Denis Simonov, a security researcher, who is also known as n0a, recently highlighted the issue and wrote a simple tool to exploit it. TechCrunch verified the researcher’s findings by adding Simonov to the contacts of a newly created Telegram account. Simonov then called the account, and shortly after provided TechCrunch with the IP address of the computer where the experiment was being carried out.

Telegram boasts 700 million users all over the world, and has always marketed itself as a “secure” and “private” messaging app, even though experts have repeatedly warned that Telegram is not as secure as end-to-end encrypted app Signal, for example.

The fact that Telegram leaks your IP address to people in your contacts during a voice call has been known for years, but it’s likely that new, less technical users may not be aware.

Simonov, who works for the cybersecurity firm T.Hunter, told TechCrunch: “Telegram focuses on security and privacy, however, in order to stay safe you need to be aware of the nuances of how the messenger’s voice calls work.”

“An unprepared person can easily reveal his IP address to his interlocutor if he does not know about them,” Simonov said.

The reason Telegram leaks a user’s IP addresses during a call is that, by default, Telegram uses a peer-to-peer connection between callers “for better quality and reduced latency,” Telegram spokesperson Remi Vaughn told TechCrunch.

“The downside of this is that it necessitates that both sides know the IP address of the other (since it is a direct connection). Unlike on other messengers, calls from those who are not your contact list will be routed through Telegram’s servers to obscure that,” Vaughn said.

To avoid leaking your IP address, you have to go to Telegram’s Settings > Privacy and Security > Calls, and then select “Never” in the Peer-to-Peer menu, as shown below.

Other messaging and calling apps have been found to leak IP addresses as well. In 2017, a researcher found that WhatsApp was leaking metadata in a way that could allow hackers to find a user’s IP address. In August, 404 Media reported that hackers could reveal the IP address of someone on Skype with no interaction.

Microsoft at the time said it would fix the vulnerability. Telegram, on the other hand, clearly thinks this is just how the app should work.

TechCrunch : Humanoid robots face a major test with Amazon’s Digit pilots

Humanoid robots face a major test with Amazon’s Digit pilots
The new bipedal robot pilots could be a watershed moment for the industry

Announced amid a deluge of news at this week’s Delivering the Future event in Seattle was word that Amazon will begin testing Agility’s Digit in a move that could bring the bipedal robot to its nationwide fulfillment centers. It’s baby steps as these things go, and such early-stage deals don’t necessary mean something bigger down the road.

Take, for instance Agility’s Ford pilot, when the startup was exploring last-mile delivery as a potential way forward. Not too long after, the firm began focusing Digit’s output exclusively on warehouse and factory work.

In April of last year, Amazon named Agility one of the first five recipients of the company’s $1 billion Industrial Innovation Fund. While being included in the fund doesn’t guarantee that Amazon will utilize your technology down the road, it’s a pretty clear indicator that the retail giant is — at the very least — interested in its potential.

“The Innovation Fund is really about exploring what’s possible out there,” Amazon Robotics chief technologist Tye Brady told me in an interview this week. “It’s about understanding practical real-world examples, as well.”

The executive adds that, while Amazon Robotics has thus far exclusively traded in wheeled locomotion, legs present a good deal of possibility.

“We are interested in walking robots,” says Brady. “I find that very interesting, the ability to move on different terrains is interesting. We’re also interested in what works — and frankly what doesn’t work — about it. The humanoid form is really interesting. I don’t know if it’s a good thing or a bad thing. We’re experimentalists at heart. We’re gonna figure that out. We’re going to do a pilot and see how that works out.”

The company’s focus on wheeled AMRs (autonomous mobile robots) dates back to its 2012 purchase of Kiva Systems, whose platforms have formed the foundation for the whole of Amazon Robotics. There are currently 750,000 AMRs deployed across the company’s warehouse network. The company has launched non-AMR systems, as well, including picking arms like Sparrow, which was launched during the same event last year.

It’s difficult to overstate how profound an impact Amazon’s efforts have had on the rest of the industrial robotics space. For one thing, the company has turned up the pressure for the competition to automate in order to meet growing customer expectations of same- and next-day deliveries. For another, the decision to stop supporting Kiva customers outside the Amazon ecosystem led directly to the foundation of some of the industry’s biggest names, including Locus Robotics and 6 River Systems.

A system needs to demonstrate an increase in productivity in order for Amazon to integrate it into its growing robotics ecosystem. It’s less innovation for innovation’s sake, and more scoping out any possible advantage that will get goods to customers in less time. Including drones.

How, precisely, humanoid robots specifically and bipedal robots more generally might slot in remains to be seen. The other big hurdle there is that any new system needs to match the company’s almost unthinkable scale.

There are a number of startups vying to own the humanoid robotics crown at the moment, including 1X, Figure and Tesla. Agility’s Digit is the least human-looking of the bunch, but it’s got a ton of funding and a massive head start. The company also recently opened a new factory in Salem, Oregon, which it claims can produce up to 100,000 Digits a year once fully online.

There’s no shortage of excitement around the category, but proving things out at scale is another question entirely. Whether Digit succeeds or fails at the tasks laid out for it could have a profound impact on the trajectory of humanoid robots generally. Much like the Kiva Systems have proven a major catalyst for AMRs, if Amazon successfully rolls out Digit at scale, suddenly everyone will want to get their hands on some humanoid workers.

The biggest talking point around the form factor is the fact that humans build workspaces for other humans. That includes shelving heights, terrain, aisle width and the staircase, the bane of the ARM’s existence. From this standpoint a humanoid robot suddenly makes a lot more sense. The reality of things is that most companies operate in brownfield sites. That is to say their warehouses and factories generally aren’t built with specific automation solutions in mind. Humanoid robots slot nicely into a brownfield site.

Of course, Amazon has the resources to build any facility it wants, so it’s logical that many of its own robots are effectively working in greenfield sites. Those limitations are less of a concern for Amazon than much of the competition, but obviously if an effective system can slot into the existing workflow with minimal friction, that’s certainly ideal.

Image Credits: Amazon

Brady confirms, however, that Digit isn’t the end-all, be-all of Amazon’s plans for mobile manipulation.

“When you start to bring [sensing, compute and actuation] together in interesting combinations, really unique things start to happen,” he says. “We’re world leaders when it comes to mobile robots. And now we are very much in the business of manipulating not only packages, but also objects. And to bring them together, it’s exciting to see all of the possibilities.”

That could mean alternate ways in. For instance, Amazon knows how to build both an AMR and a robot arm. If one were to effectively mount the latter to the former, they would have a kind of mobile manipulation on their hands.

“You see with the Agility robot — you can think of that as a mobile manipulator,” says Brady. “That has interest to us. The mode of mobility has particular interest to us, because we don’t happen to have done a lot of work in bipedal robots. But absolutely, we could combine that with identification systems, manipulation systems, sortation systems. Anything and everything we’ll do to innovate for our customer and improve safety for employees. We’re getting there with the core fundamentals.”

If for any reason Digit fails to stick the landing, that certainly doesn’t mean the end of it or bipedal robots generally. Perhaps it simply doesn’t sit comfortably in Amazon’s existing work flows. Maybe the robot’s not quite ready for Amazon scale or Amazon’s not quite in a place where Digit makes sense.

Regardless, it would be smart for anyone remotely interested in bipedal robots to sit up and take notice here. The pilots could well have a profound impact on the way we think of the category, going forward.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Hamas has released two US hostages captured during its devastating assault on Israel almost two weeks ago, amid intense diplomatic efforts to ease tensions in the Middle Eastern conflict and deliver humanitarian aid to civilians. The women — named by the Israeli prime minister’s office as mother and daughter Judith Tai Raanan and Natalie Shoshana Raanan — were snatched by Hamas militants from the Nahal Oz kibbutz in southern Israel on October 7, in what was the deadliest attack on the country in its 75-year history.
-This week, Biden made his second presidential visit to a transformed Middle East. Israel, where he landed, is a traumatized nation at war, while its Arab neighbors are gripped by rage, angst and fear. The US president has been sucked into one of the world’s most intractable problems — the Israeli-Palestinian conflict, a diplomatic quagmire he sought to avoid, but which has become inescapable in the wake of Hamas’s deadly October 7 attack on southern Israel, and the Jewish state’s ferocious retaliatory offensive on Gaza.
-US House Republicans voted in a secret meeting on Friday to end populist firebrand Jim Jordan’s attempt to become Speaker, extending weeks of Capitol Hill uncertainty that will delay Congress’s ability to approve more aid for Israel and Ukraine. Republicans, who hold a narrow majority in the House, will hold another contest on Monday to select a new candidate for the speakership, their third since the ouster of Kevin McCarthy two weeks ago. Another floor vote on the nominee could happen on Tuesday.
-In its latest twice yearly Financial Stability Report, the US central bank flagged the potential for “broad adverse spillovers to global markets” in the event that the Middle East conflict and the war in Ukraine intensify or stresses emerge elsewhere.
-This weekend Apple will roll out acclaimed director Martin Scorsese’s Killers of the Flower Moon in more than 3,600 US cinemas and thousands more in 63 other markets around the world. Cook has taken a deep personal interest in the film, appearing at its premiere at the Cannes Film Festival and throwing his support behind an auteur-friendly Hollywood rollout that is more rooted in the celluloid era than the iPhone age.
-A company backed by BlackRock has abandoned plans to build a 1,300-mile pipeline across the US Midwest to collect and store carbon emissions from the corn ethanol industry following opposition from landowners and some environmental campaigners.
-A Chinese container ship is at the center of a Finnish investigation into the potential sabotage of a gas pipeline and data cable between the Nordic country and Estonia. Finnish police said on Friday evening it was focusing on Newnew Polar Bear, a Hong Kong-registered container ship, as its movements coincided with the time and place of the damage.
-Italian prime minister Giorgia Meloni has publicly ended her relationship with her partner and father of her child Andrea Giambruno after embarrassing footage of his inappropriate comments to a female colleague was broadcast on national television. “Our paths have diverged for some time and the time has come to acknowledge it,” said Meloni.
-Washington’s tightened export controls on chips may leave Chinese tech groups relying on outdated and stockpiled chips to pursue their artificial intelligence ambitions, with industry giants Alibaba and Baidu facing new hurdles for the manufacturing of their latest self-designed AI processors.

NEW YORK TIMES
-Republicans vote out Rep. Jim Jordan as speaker nominee, continuing chaos in the House. Jim Jordan’s candidacy was rejected by Republicans during a secret ballot vote, leaving the chamber paralyzed with no consensus on a way forward. The House will meet again on Monday in an effort to find a new speaker. About a dozen party members have begun making calls to explore their own bids.
-Chaos and frustration rule as republicans’ bitter speaker fight deepens. With the House GOP back to square one on electing a new speaker, tempers flared and uncertainty over how the impasse might be resolved only grew.
-Hamas has released two Americans; but 200 people are still held captive. A woman and her teenage daughter, dual citizens from Illinois, were being reunited with family on an Israeli military base, officials said.
-President Biden and aides advise Israel to avoid widening war with Hezbollah strike. US officials learned that the Israeli defense minister and other military officials supported a pre-emptive strike on Hezbollah. Prime Minister Benjamin Netanyahu has been cautious.
-US Deficit, pegged at $1.7T, effectively doubled in 2023.
The widening gap between what the government spends and what it earns comes as Congress continues to spar over the proper levels of federal spending.
-Kenneth Chesebro, a Trump-aligned Lawyer, pleads guilty in Georgia
It comes a day after another Trump lawyer made a similar deal, and both agreed to cooperate with prosecutors investigating the 2020 election case.
-Trump seeks freeze of gag order in election case during appeal. Judge Tanya S. Chutkan, who imposed the order, agreed to put it on hold for eight days as the parties filed additional papers.
-Little Punishment or change after South Korea’s Halloween calamity. Families of the 159 people crushed to death last year say the government has never acknowledged its mistakes or accepted responsibility.
-The Supreme Court temporarily sides with the White House in disinformation fight. The justices have set the stage for a major test of the role of the First Amendment in the internet era.
-The Supreme Court rejected Missouri’s effort to override federal gun laws, for now.
-The DeSantis-Haley rivalry heats up, with attacks focused on Israel. As they vie to be the race’s alternative to Donald Trump, Ron DeSantis and Nikki Haley have been trading barbs on the Israel-Hamas conflict.
-DeSantis says he would cancel student visas of Hamas sympathizers. At a GOP candidate showcase in Iowa, Gov. Ron DeSantis of Florida and his rivals repeatedly sought to one-up one another on support for Israel.
-10 Charged in $20M scheme to sell black-market HIV drugs. Prosecutors said the defendants encouraged low-income patients to sell their medication to them and then they resold the drugs to buy luxury goods.
-OpenAI is in talks for deal that would value company at $80B. The San Francisco start-up’s valuation could triple in less than six months.
-The multimillion dollar machines at the center of the U.S.-China Rivalry. The U.S. is taking unusual action to clamp down on sales of chip-making machinery to China, even as Chinese firms are racing to stockpile the equipment.

NY POST
-Rep. Jim Jordan (R-Ohio) gave up his run to become Speaker of the House of Representatives. Jordan failed to win the gavel in a third round of voting Friday, with 25 members — more than in either of the earlier ballots — voting against him. Potential replacements filled the void soon after, with Majority Whip Tom Emmer (R-Minn.) and Reps. Kevin Hern (R-Okla.) and Jack Bergman (R-Mich.) throwing their hats in the ring, in hopes of being the one to replace Rep. Kevin McCarthy (R-Calif.), who was stripped of the speakership in an Oct. 3 vote.
-The pharmaceutical companies behind Ozempic, Mounjaro and Wegovy — which have exploded in popularity with adults looking to lose weight — are testing whether the drugs are safe for children. Eli Lilly, the maker of Mounjaro, said it is planning to give the anti-diabetes meds to kids as young as six years old, according to Bloomberg News. The drug giant began recruiting children 12 and up this week for a clinical trial, according to the report.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Nirvana Insurance, Nucleus Ra

The Week’s 10 Biggest Funding Rounds: Nirvana Insurance, Nucleus RadioPharma Lead Week With No Big Rounds
There is only one way to describe this week — incredibly slow. For the first time in a while, there wasn’t a round that hit nine figures. In fact, the top round didn’t even hit $60 million. After a strong close to the summer, the fall has brought a chilling effect to big funding rounds.

1. Nirvana Insurance, $57M, insurance: What do you get when you combine insurance and AI? Apparently a pretty good-sized round. Nirvana Insurance closed a $57 million Series B led by Lightspeed Venture Partners this week at a reported valuation of more than $350 million post-money — double its last valuation. The San Francisco-based insurance startup gathers data from the sensors many commercial fleet trucks now have and feeds it through an AI platform it’s built. Nirvana can then provide estimates and handle claims quicker, while also costing less, according to the startup. Founded in 2021, the company has now raised $82 million, per Crunchbase.

2. Nucleus RadioPharma, $56M, pharmaceuticals: Rochester, Minnesota-based company Nucleus RadioPharma locked up a $56 million Series A led by Eclipse and GE Healthcare as it looks to grow its ability to manufacture and help develop radiopharmaceuticals that help fight cancer. The startup offers an array of services to those in the field, from formulation and development to regulatory documentation and manufacturing. The company plans to use the new cash to develop multiple new manufacturing facilities around the country. Founded in 2022, the company has raised $62 million, per Crunchbase.

3. (tied) Bond Vet, $50M, veterinary: Urgent and primary pet care provider Bond Vet raised a $50 million equity round from existing investors — including Warburg Pincus and Talisman Capital Partners — to help keep pets happy and healthy. The New York-based company opened its first clinic four years ago and now has more than 40 across the country. The new cash will be used for further expansion. Founded in 2019, the company has raised $245 million, per Crunchbase.

3. (tied) HqO, $50M, real estate: It’s been a bumpy time for commercial real estate as many companies have reduced their office space. Workplace startup HqO locked up a $50 million Series D to help landlords and building operators retain some of that occupancy. The Boston-based company has created what it calls the Real Estate Experience Platform that lets owners and managers gauge and understand how their tenants use their facilities. The tools allow building managers to measure tenant preferences and satisfaction with an eye toward better retention and efficiency concerning operating costs. The new round was led by Koch Industries subsidiary Koch Real Estate Investments. Founded in 2018, the new capital brings the company’s total funding to more than $200 million.

5. Nova Credit, $45M, fintech: New York-based Nova Credit, which offers cross-border and alternative data credit products, raised a $45 million Series C funding led by Canapi Ventures. The company tries to ease the complexities of moving to a different country without having to start over in your financial life. It is able to access data through credit bureaus in several countries and get approval for certain banking products, like credit cards. Founded in 2016, the company has raised $124 million, per Crunchbase.

6. (tied) Debut, $40M, beauty: San Diego-based Debut, a synthetic biology company in the fragrance industry, closed a $40 million Series B funding led by BOLD, the venture capital fund of L’Oréal. Founded in 2019, the company has raised more than $100 million, per Crunchbase.

6. (tied) Petfolk, $40M, veterinary: Charlotte, North Carolina-based Petfolk, a veterinary care company, locked up a $40 million Series B led by Movendo Capital. Founded in 2020, the company has raised $115 million, per Crunchbase.

6. (tied) Prove Identity, $40M, identity: New York-based digital identity solutions provider Prove Identity raised a $40 million round led by MassMutual Ventures and Capital One Ventures. It was reported the new funding was at a valuation of more than $1 billion. Founded in 2008, the company has raised more than $240 million, per Crunchbase.

6. (tied) Transfix, $40M, logistics: New York-based freight startup raised a $40 million Series F led by New Enterprise Associates and G Squared. Founded in 2013, the company has raised $169 million, per Crunchbase.

6. (tied) VedaBio, $40M, biotech: San Diego-based VedaBio, a biotech company focused on molecular detection, launched with more than $40 million in funding led by OMX Ventures.

Big global deals
While things were slow in the U.S., there were big global deals, including one involving an OpenAI competitor.
  • China-based Zhipu AI, a startup creating AI models, announced it has raised $342 million from backers like Alibaba and Tencent.

WSJ : How Nike Fell Behind in the Innovation Race

How Nike Fell Behind in the Innovation Race
The sneaker company faces stiffer competition in the running and lifestyle categories; ‘We need to raise our game’

Nike NKE -0.37%decrease; red down pointing triangle made a swift comeback earlier this month in the super-shoe fight when marathon runner Kelvin Kiptum set a world record while wearing a new iteration of the company’s Alphafly 3. But the sneaker maker is losing steam in other races.

Competitors such as Hoka and On are gaining a foothold among runners and with people who are looking for something comfortable to wear to work or school. Adidas and New Balance are also making headway in the market for streetwear by bringing back old models in dozens of colorways, moves similar to those from Nike’s own playbook.

Nike said sales of footwear in North America—its largest market—fell 2% in the latest quarter. Higher prices for Nike shoes weren’t enough to offset a 10% decline in sales volume, the first decline in more than a year.

Nike and other consumer-goods companies have been hurt by rising prices that are causing consumers to rethink their spending plans. Nike remains the world’s largest seller of athletic footwear and apparel, generating $48.7 billion in revenue from its namesake brand in the year ended May 31.

Still, Nike executives have said they are working to improve product marketing and assortments and also drive more meaningful connections with everyday runners.

“We are focused and mobilized to address areas where we need to raise our game,” said Chief Executive John Donahoe in late September during an earnings call with analysts.

Del Shaffer, a Realtor in Charleston, S.C., used Nike running shoes for decades but last year traded his Free RN Flyknit for a pair of Hoka Mach 4 because he wanted something softer, with more cushioning. The 44-year-old runs every day after dropping his children off at school and said he felt a huge change once he switched to Hoka because of the shoe’s materials.

“They give me that cushion, and I’m kind of looking forward to not having knee surgery when I’m older,” Shaffer said.

Sales of the Deckers Outdoor-owned Hoka reached $1.4 billion in the year ended March 31, up from $223 million in 2019, when the company first reported sales of the brand. In 2021, the company moved away from saying the shoes were made only for “ultra runners and athletes” and included “world champions” and “tastemakers.”
On Holding, owner of the On brand, reported sales of about $1.3 billion for the year ended Dec. 31, a 69% increase from a year earlier. The Swiss maker of the Cloudmonster and the Cloudflow said it plans to generate $1.9 billion in revenue for 2023 and expects to double that number by 2026.

“They are all taking share from Nike,” said footwear industry analyst Matt Powell. “If you can capture the fashion side of the business, that is really where the money is.”

Nike in a statement said that it has an innovation pipeline that spans more than 50 years and that its products “will bring the innovation, performance, style and comfort consumers will be excited about for years to come.”

Innovation slog
Some consumers and industry analysts say the pace of innovation coming from Oregon-based Nike is slowing. The company in 2017 introduced the lightweight Vaporfly sneaker, which became a lightning rod in elite running competitions amid concerns it granted wearers an unfair advantage. Its first Alphafly sneaker launched in 2020. The sneakers were perceived as groundbreaking years ago, analysts said, but they are also made for runners willing to spend more than $200 and not necessarily for people just looking for something comfortable to wear.

Nike, during the Covid-19 pandemic, also leaned into delivering new color and design variations for some of its most popular franchises, the Air Force 1, Air Jordan 1 and Dunk. Those releases have delighted some fans, but annoyed others, including sneakerheads who built businesses on hawking products with limited availability.

“Nike is really, really good at innovating but they keep innovating the wrong things,” said James Hesse, who has dedicated a chunk of his decade-old YouTube sneaker channel to finding the most comfortable casual running shoe.

From design concept to store shelves, footwear development at Nike can take about 18 months. The pandemic, and subsequent supply-chain snarls, messed with Nike’s production pipeline.

Nike is also working through inventory problems that resulted from the pandemic—initially not having enough goods to sell but later carrying too many. To help boost sales, the company has opted to return to some retail partners it had dropped just over a year ago.

Investors haven’t lost faith in the company. Shares are up 16% over the past year, compared with a roughly 13% gain in the S&P 500.

Shifting priorities
Nike boss Donahoe said last month that the company was giving priority to the everyday runner looking for something new—and reaching that customer whether at a Nike store or not.

The company released the $80 Nike Interact Run last month as a more affordable performance shoe. It is launching a new technology for running shoes that is expected to be ready for the 2024 Summer Olympics.

Still, Nike executives have said they are working to improve product marketing and assortments and also drive more meaningful connections with everyday runners.

Moving further into the mass market is a shift from the company’s reliance on limited-edition products to drive sales—and customer hype. In 2020 and 2021, new releases on Nike’s SNKRS app often would sell out quickly, but now some models remain available for weeks. The average transactions of sneaker resale platforms, such as StockX and GOAT, have declined since April 2022, according to data from Earnest Analytics.

Younger shoppers want new and unique products in order to stand out, and Nike needs to move away from doing different colors of the same sneaker if it wants their attention, said footwear analyst Powell. Nike was recognized as the top apparel and footwear brand for teens, according to a recent survey from investment bank Piper Sandler.

Some sneakerheads and resellers think Nike needs to come up with something like a new collaboration that parallels the Jordan brand’s successful run with rapper Travis Scott. A golf shoe from this collaboration released last week is already fetching $1,000 in the resale market, or about six times its retail price.

Even that can prove uncertain. The company released a new sneaker in collaboration with hip-hop superstar Drake about a month ago and those are still in stock. Resellers said that the release “bricked,” meaning that there is no profit to be made in the resale market. At the moment, a pair can be bought on StockX for less than what Nike is charging on its website.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Hamas has released two US hostages captured during its devastating assault on Israel almost two weeks ago, amid intense diplomatic efforts to ease tensions in the Middle Eastern conflict and deliver humanitarian aid to civilians. The women — named by the Israeli prime minister’s office as mother and daughter Judith Tai Raanan and Natalie Shoshana Raanan — were snatched by Hamas militants from the Nahal Oz kibbutz in southern Israel on October 7, in what was the deadliest attack on the country in its 75-year history.
-This week, Biden made his second presidential visit to a transformed Middle East. Israel, where he landed, is a traumatized nation at war, while its Arab neighbors are gripped by rage, angst and fear. The US president has been sucked into one of the world’s most intractable problems — the Israeli-Palestinian conflict, a diplomatic quagmire he sought to avoid, but which has become inescapable in the wake of Hamas’s deadly October 7 attack on southern Israel, and the Jewish state’s ferocious retaliatory offensive on Gaza.
-US House Republicans voted in a secret meeting on Friday to end populist firebrand Jim Jordan’s attempt to become Speaker, extending weeks of Capitol Hill uncertainty that will delay Congress’s ability to approve more aid for Israel and Ukraine. Republicans, who hold a narrow majority in the House, will hold another contest on Monday to select a new candidate for the speakership, their third since the ouster of Kevin McCarthy two weeks ago. Another floor vote on the nominee could happen on Tuesday.
-In its latest twice yearly Financial Stability Report, the US central bank flagged the potential for “broad adverse spillovers to global markets” in the event that the Middle East conflict and the war in Ukraine intensify or stresses emerge elsewhere.
-This weekend Apple will roll out acclaimed director Martin Scorsese’s Killers of the Flower Moon in more than 3,600 US cinemas and thousands more in 63 other markets around the world. Cook has taken a deep personal interest in the film, appearing at its premiere at the Cannes Film Festival and throwing his support behind an auteur-friendly Hollywood rollout that is more rooted in the celluloid era than the iPhone age.
-A company backed by BlackRock has abandoned plans to build a 1,300-mile pipeline across the US Midwest to collect and store carbon emissions from the corn ethanol industry following opposition from landowners and some environmental campaigners.
-A Chinese container ship is at the center of a Finnish investigation into the potential sabotage of a gas pipeline and data cable between the Nordic country and Estonia. Finnish police said on Friday evening it was focusing on Newnew Polar Bear, a Hong Kong-registered container ship, as its movements coincided with the time and place of the damage.
-Italian prime minister Giorgia Meloni has publicly ended her relationship with her partner and father of her child Andrea Giambruno after embarrassing footage of his inappropriate comments to a female colleague was broadcast on national television. “Our paths have diverged for some time and the time has come to acknowledge it,” said Meloni.
-Washington’s tightened export controls on chips may leave Chinese tech groups relying on outdated and stockpiled chips to pursue their artificial intelligence ambitions, with industry giants Alibaba and Baidu facing new hurdles for the manufacturing of their latest self-designed AI processors.

NEW YORK TIMES
-Republicans vote out Rep. Jim Jordan as speaker nominee, continuing chaos in the House. Jim Jordan’s candidacy was rejected by Republicans during a secret ballot vote, leaving the chamber paralyzed with no consensus on a way forward. The House will meet again on Monday in an effort to find a new speaker. About a dozen party members have begun making calls to explore their own bids.
-Chaos and frustration rule as republicans’ bitter speaker fight deepens. With the House GOP back to square one on electing a new speaker, tempers flared and uncertainty over how the impasse might be resolved only grew.
-Hamas has released two Americans; but 200 people are still held captive. A woman and her teenage daughter, dual citizens from Illinois, were being reunited with family on an Israeli military base, officials said.
-President Biden and aides advise Israel to avoid widening war with Hezbollah strike. US officials learned that the Israeli defense minister and other military officials supported a pre-emptive strike on Hezbollah. Prime Minister Benjamin Netanyahu has been cautious.
-US Deficit, pegged at $1.7T, effectively doubled in 2023.
The widening gap between what the government spends and what it earns comes as Congress continues to spar over the proper levels of federal spending.
-Kenneth Chesebro, a Trump-aligned Lawyer, pleads guilty in Georgia
It comes a day after another Trump lawyer made a similar deal, and both agreed to cooperate with prosecutors investigating the 2020 election case.
-Trump seeks freeze of gag order in election case during appeal. Judge Tanya S. Chutkan, who imposed the order, agreed to put it on hold for eight days as the parties filed additional papers.
-Little Punishment or change after South Korea’s Halloween calamity. Families of the 159 people crushed to death last year say the government has never acknowledged its mistakes or accepted responsibility.
-The Supreme Court temporarily sides with the White House in disinformation fight. The justices have set the stage for a major test of the role of the First Amendment in the internet era.
-The Supreme Court rejected Missouri’s effort to override federal gun laws, for now.
-The DeSantis-Haley rivalry heats up, with attacks focused on Israel. As they vie to be the race’s alternative to Donald Trump, Ron DeSantis and Nikki Haley have been trading barbs on the Israel-Hamas conflict.
-DeSantis says he would cancel student visas of Hamas sympathizers. At a GOP candidate showcase in Iowa, Gov. Ron DeSantis of Florida and his rivals repeatedly sought to one-up one another on support for Israel.
-10 Charged in $20M scheme to sell black-market HIV drugs. Prosecutors said the defendants encouraged low-income patients to sell their medication to them and then they resold the drugs to buy luxury goods.
-OpenAI is in talks for deal that would value company at $80B. The San Francisco start-up’s valuation could triple in less than six months.
-The multimillion dollar machines at the center of the U.S.-China Rivalry. The U.S. is taking unusual action to clamp down on sales of chip-making machinery to China, even as Chinese firms are racing to stockpile the equipment.

NY POST
-Rep. Jim Jordan (R-Ohio) gave up his run to become Speaker of the House of Representatives. Jordan failed to win the gavel in a third round of voting Friday, with 25 members — more than in either of the earlier ballots — voting against him. Potential replacements filled the void soon after, with Majority Whip Tom Emmer (R-Minn.) and Reps. Kevin Hern (R-Okla.) and Jack Bergman (R-Mich.) throwing their hats in the ring, in hopes of being the one to replace Rep. Kevin McCarthy (R-Calif.), who was stripped of the speakership in an Oct. 3 vote.
-The pharmaceutical companies behind Ozempic, Mounjaro and Wegovy — which have exploded in popularity with adults looking to lose weight — are testing whether the drugs are safe for children. Eli Lilly, the maker of Mounjaro, said it is planning to give the anti-diabetes meds to kids as young as six years old, according to Bloomberg News. The drug giant began recruiting children 12 and up this week for a clinical trial, according to the report.

Challenges : Qatar, Iran, Turquie... les multiples financements du Hamas

Qatar, Iran, Turquie... les multiples financements du Hamas

Depuis le début de l'offensive le 7 octobre, le financement du Hamas est passé au microscope par les Etats qui octroient une aide à la population de la bande de Gaza. Le mouvement terroriste palestinien, qui bénéficie de 30 millions de dollars mensuels du Qatar, reçoit aussi une aide de la part de l'Iran et utilise les cryptomonnaies ou les taxes pour se financer.

Placée sous sanctions par les États-Unis et l’Union européenne (UE), l’organisation terroriste palestinienne a, depuis sa création en 1987, constamment jonglé avec différentes sources de financements. Son principal bailleur est actuellement le Qatar qui lui livre 30 millions de dollars mensuels depuis 2018. Une manne qui sert principalement à payer les salaires du Hamas et des fonctionnaires de Gaza.

"L’émirat, où vivent le chef de la branche politique du Hamas (Ismaïl Haniyeh) et l’ex-patron de l’organisation (Khaled Mechaal) parraine le mouvement, observe Bertrand Besancenot, ancien ambassadeur français à Doha. Mais ce soutien économique se fait en accord avec Israël et les États-Unis, l’objectif étant notamment de limiter l’influence de l’Iran sur le Hamas."

Des bailleurs traditionnels... et les autres
Si les liens avec Téhéran se sont distendus au début de la guerre civile syrienne en 2011, ils se sont depuis très fortement raffermis. Selon le Département d’État américain, en plus de fournir des armes à la milice terroriste, le pays dirigé par Ali Khamenei verserait environ 100 millions de dollars par an au Hamas et au Djihad islamique, autre acteur palestinien qui a participé à l’opération "Déluge d’Al-Aqsa". Les deux mouvements ont également eu recours à un procédé innovant en récoltant, entre avril 2021 et juin 2023, 136 millions de dollars en cryptomonnaies. Un stratagème éventé par Israël et les États-Unis qui ont gelé plusieurs dizaines de leurs portefeuilles "cryptos" depuis l’été.

A ces bailleurs traditionnels que sont le Qatar et l’Iran, il convient de mentionner la Turquie que Washington a pointé du doigt pour avoir alloué des fonds au Hamas via l’agence turque dédiée au développement. En revanche, s’agissant de l’aide de l’UE à la Palestine (1,2 milliard de dollars sur trois ans), aucun élément ne permet à ce stade d’accréditer la thèse, avancée par certains élus, notamment à droite, que cet argent ait été détourné par le Hamas.

La manne des taxes sur les produits importés
Autre source de revenus pour le mouvement: les taxes sur les produits égyptiens importés à Gaza qui lui rapporteraient 12 millions de dollars par mois. "Pendant des années après le début du blocus, le Hamas a collecté des revenus en taxant les marchandises circulant dans un réseau sophistiqué de tunnels qui contournaient le passage égyptien vers Gaza, écrit la chercheuse Kali Robinson, auteure d'une étude sur le Hamas publiée par le très sérieux Council on Foreign Relations. Cela a apporté sur le territoire des produits de première nécessité tels que de la nourriture, des médicaments et du gaz bon marché pour la production d'électricité, ainsi que des matériaux de construction, de l'argent et des armes."

Après l’arrivée au pouvoir du président égyptien Abdel Fatah al-Sissi en 2013, l'Égypte a durci le ton envers le Hamas, émanation de son ennemi numéro un: les Frères musulmans. Puis les relations se sont légèrement détendues en 2018 puisque Le Caire a autorisé l'entrée de certaines marchandises commerciales à Gaza via son poste frontière de Salah al-Din.

Business Of Fashion : Farfetch: What Went Wrong?

Farfetch: What Went Wrong?
The London-based luxury e-commerce giant, which has lost 97 percent of its market value in the last two years, has suffered from lack of focus, writes Imran Amed.

LONDON — Back in June 2007, the same year I started writing BoF, I met an enthusiastic and passionate Portuguese entrepreneur named José Neves. We had been introduced to each other by mutual friends and began exchanging ideas on how the fashion industry could transform itself into a modern, digitally savvy sector by embracing the new technologies that were changing the way we all lived, worked and, yes, shopped. I was really impressed with José's vision. He seemed to be able to see things that most industry players would not: that the same technologies that were transforming other consumer sectors would inevitably come for fashion too.

A couple of years later, as José's vision for his new company Farfetch continued to crystallise, I sat down with him for an in-depth interview where he laid out his plan to “create a world class infrastructure supported by a top-notch team, and then put all that to the service of the world’s most interesting retailers and their web sites.”

It was a simple, powerful idea that instantly made sense to me. Some of the best fashion boutiques around the world, despite having a powerful eye for curation, were not able to fund, set up and manage their own e-commerce operations to scale their businesses beyond their local markets — and Farfetch could help with that.

This, combined with the fact that Farfetch did not take on the risk of owning inventory made it a compelling business model that attracted the interest of venture capitalists who over the years pushed Farfetch to expand and grow to realise the vision of becoming the Amazon of the fashion industry, a platform upon which the whole industry could operate its e-commerce businesses. According to Crunchbase, Farfetch went on to raise more than $1.6 billion, including an IPO in 2015 which raised $885 million.

But this week, as we waited for a ruling from the European Commission on the company’s plan to acquire a 47.5 percent stake in its rival, Yoox Net-a-Porter Group, many analysts noted that Farfetch shares have lost 97 percent of their value in the last two years, a spectacular drop. Its market capitalisation has plummeted from a pandemic high of $26 billion in February 2021 to just over $600 million today.

In August, Farfetch announced that its revenue dropped 1 percent in the second quarter of 2023 from a year earlier to $572 million and downgraded its sales outlook for the full year by $500 million, to $4.4 billion.

I’ve been thinking about how things went so wrong at Farfetch, and my thoughts kept coming back to this: the fashion industry and the financial markets no longer understand the company’s increasingly complex vision and have little faith that the company, which has never consistently made a profit, can get back on track.

In 2015, the company began a spree of acquisitions, starting with Browns (meaning that Farfetch would now be taking on inventory and operating physical stores), the intellectual property from Condé Nast’s failed e-commerce venture Style.com (a brand that the company has never used), sneaker reseller Stadium Goods in 2018 (which moved Farfetch into the resale business and further into physical retail), New Guards Group in August 2019 (meaning that Farfetch now operated brands like Off-White and Palm Angels, including design, manufacturing and even more physical retail), and in 2022, Violet Grey. (The company was Farfetch’s first move into beauty and, according to a source who spoke to The Business of Beauty, is now up for sale).

In addition to these acquisitions, Farfetch now also operates white-label platform solutions for a variety of brands and retailers, including Neiman Marcus (into which it invested $200 million as part of an unusual deal), a business in China in partnership with Richemont and Alibaba and its original business which now works more than 1400 sellers in 50 countries.

The cautionary tale here for any entrepreneur taking on huge amounts of funding is the importance of maintaining focus. Over the years, as Farfetch went on its acquisition spree, it drifted further and further away from its original vision of being a technology platform for the fashion industry. As tempting as it may be to raise more money and acquire scale (and, sometimes profitability, as was the case with New Guards Group) through acquisitions, when you start stitching together so many disparate pieces you end up with a patchwork quilt that nobody understands.