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London (CNN Business)What will dominate this holiday shopping season: Huge demand, as shoppers use pent-up savings to splurge, or supply chain problems leading to empty shelves and presents on back order?
Apple’s latest earnings report is amping up fears that production and shipping complications will steal the spotlight.What’s happening: The most valuable US company said after markets closed that chip shortages and manufacturing disruptions tied to Covid-19 slashed $6 billion off its revenue last quarter.
Apple (AAPL) still posted quarterly sales of $83.4 billion. But that’s slightly lower than Wall Street expected. Shares are down 3.5% in premarket trading.
Amazon (AMZN) also missed analyst projections for sales and profit. Its stock is down 4.5% in premarket trading.Read More”Disruption to the global supply chains and inflation in the cost of materials such as steel and services such as trucking have also raised our cost of operations,” said Brian Olsavsky, Amazon’s chief financial officer.Big picture: Even the largest companies in America can’t dodge the impact of clogged ports, missing parts and higher costs. That could hang over the final quarter of the year, which is crucial for retailers.Amazon CEO Andy Jassy warned that the company’s consumer business expects to incur several billion dollars of additional costs in the current period. Apple expects its supply chain costs to keep growing, too.”We estimate the impact from supply constraints will be larger during the December quarter,” Luca Maestri, the chief financial officer, said.This week, the National Retail Federation said it thinks holiday spending will break records this year, growing between 8.5% and 10.5% compared to 2020.”There is considerable momentum heading into the holiday shopping season,” NRF President Matthew Shay said. “Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger.”Retailers, he added, “are making significant investments in their supply chains and spending heavily to ensure they have products on their shelves to meet this time of exceptional consumer demand.”But those extra investments could crimp profits, overshadowing the spending spree.Down to timing: Executives are reminding customers not to procrastinate this year or they may not find what they’re looking for. They’re dangling earlier promotions and sales to front-load shopping where possible.”There will be racks in retail that are more empty than you’d like when you go Christmas shopping,” Puma CEO Bjorn Gulden said on a call with reporters this week.
Facebook is changing its corporate name to Meta
Facebook (FB) hasn’t been able to keep its name out of the news as it battles a swarm of controversies over its handling of hate speech, disinformation, crime and child safety after a whistleblower leaked hundreds of internal documents.So it’s changing its name. Naturally.The latest: Founder and CEO Mark Zuckerberg said Thursday that Facebook’s new corporate name will be Meta, demoting its namesake service to a subsidiary, alongside Instagram and WhatsApp.
Facebook changes its company name to MetaThe move is intended to highlight the social media giant’s pivot to the “metaverse” as it builds out online social experiences that leverage augmented and virtual reality.”Today we’re seen as a social media company, but in our DNA, we are a company that builds technology to connect people,” Zuckerberg said. “And the metaverse is the next frontier just like social networking was when we got started.”They mean business: The company is changing its stock ticker. It plans to begin trading under “MVRS” on Dec. 1.And the company is backing up the shift in strategy with real money. It said earlier this week it will take a $10 billion hit to operating profit this year in order to ramp up investment in metaverse products.Investors are tentatively on board. Shares closed 1.5% higher on Thursday and are up another 1% in premarket trading Friday. (Stock in Meta Materials, an unrelated company based in Nova Scotia, also jumped.)But the corporate pivot doesn’t resolve the public relations crisis plaguing Facebook/Meta, which is generating momentum for regulators to intervene.
Want to buy a home? Don’t wait, this expert says
The red-hot housing market has many would-be homeowners wondering if they should wait for prices to come down before buying a property.But Barbara Corcoran, founder of the Corcoran Group real estate firm and star of “Shark Tank,” doesn’t think that’s the best move.”I don’t think it is wise to wait,” Corcoran said Thursday at CNN Business’ “Foreseeable Future” event. “Of course, if you can’t find a house, you have to wait. But to make it part of your plan to wait until house prices come down, I don’t envision that happening over the next few years. At least not for the next year.”Home sales have cooled a bit recently from earlier in 2021, but prices continue to climb as supply remains constrained.Yet holding out could cost more, according to Corcoran. If US home price appreciation maintains a pace similar to the past year, she noted, homebuyers are going to pay another 12% to 14% for the same house in 2022. Goldman Sachs recently forecast home prices would increase by another 16% by the end of next year.That said: Don’t call it a bubble!”We don’t really have a bubble,” Corcoran said. “What we have is an unusual market that’s just gone bonkers based on individual demand of the people who want to live there.”
Up next
Chevron (CVX), ExxonMobil (XOM), Colgate-Palmolive (CL), Newell Brands (NWL), Phillips 66 (PSX) and Royal Caribbean (RCL) report results before US markets open.
Also today: The Federal Reserve’s preferred measure of inflation arrives at 8:30 a.m. ET, along with US personal income data for September.Coming next week: World leaders gather in Glasgow for COP26 climate talks. Will companies be compelled to do more to curb emissions or boost disclosures?
Source: edition.cnn.com