Market Beats | Tesla, Eight Automakers Recall Millions in China Over Door-Handle Flaws; OpenAI Releases iMessage Control via ChatGPT on Mac; Samsung Electronics to Return Record $80bn to Shareholders; Japanese Inflation Accelerates in July; Ray Dalio Urges Investors to Hold Gold to Hedge US Debt Risks; Apollo Targeted in Social Engineering Cyber Attack; Former Bank of America Banker Accused by SEC of $18.5 Million Insider-Trading Tip

—— Tesla, Eight Automakers Recall Millions in China Over Door-Handle Flaws; OpenAI Releases iMessage Control via ChatGPT on Mac; Samsung Electronics to Return Record $80bn to Shareholders; Japanese Inflation Accelerates in July; Ray Dalio Urges Investors to Hold Gold to Hedge US Debt Risks; Apollo Targeted in Social Engineering Cyber Attack; Former Bank of America Banker Accused by SEC of $18.5 Million Insider-Trading Tip

1. Tesla, Eight Automakers Recall Millions in China Over Door-Handle Flaws

Tesla Inc. and at least eight other carmakers are recalling millions of cars in China over safety concerns with their door handles, a major step to address flaws that have led to vehicle entrapment and multiple fatalities.

More than 4 million vehicles are affected as part of the broad crackdown, one of the most sweeping recalls ever in the world’s biggest auto market. Tesla accounts for the largest share, with just under 3 million vehicles included in the action announced Friday. The Tesla vehicles have electrically controlled handles that can stop working in some crashes, which “could hinder occupants from quickly opening the doors to escape and impede rescue efforts by those outside the vehicle, posing a safety hazard,” according to a statement from China’s State Administration for Market Regulation. As part of the recall, the carmaker will update software to automatically lower the windows after an accident and will affix warning labels showing where the emergency door releases are located.

Vehicles designed with flush, electric handles have been involved in a series of incidents in which occupants have been trapped inside their cars after the vehicles lost power, including after a crash. In several instances, occupants of Tesla vehicles survived the initial impact of a high speed crash only to die or sustain serious injury from subsequent fires after being unable to exit.

Bloomberg News has reported extensively on the modern door systems, uncovering at least 15 deaths in a dozen incidents in which occupants or rescuers were unable to open the doors of a Tesla that had crashed and caught fire.

Bloomberg also reported late last year that Chief Executive Officer Elon Musk insisted on electric doors even after potential safety concerns were raised internally.

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2. OpenAI Releases iMessage Control via ChatGPT on Mac

OpenAI rolled out support on Thursday for controlling Apple Inc.’s iMessage service via ChatGPT, a move with the potential to raise privacy concerns for the iPhone maker.

The new feature, available for ChatGPT on the Mac, allows the OpenAI system to take actions such as reading, writing and sending text messages. It also can search through messages and get summaries and other information about conversations from the Apple Messages app.

Apple has positioned itself as a staunch privacy advocate, and it’s protective about the contents of users’ messages. An OpenAI tool that could upload Apple customer data to that company’s network is likely to spark questions. The move comes at a time of broader tension between the two companies. Apple sued OpenAI last month, accusing the AI provider of stealing information about upcoming products.

In response to questions about the new feature, OpenAI stressed that it requires a user’s consent and doesn’t create an index of all someone’s messages. The plug-in also runs locally on the Mac and uses existing operating system tools, such as AppleScript and Accessibility, to work with the Messages app, OpenAI said.

There are several opt-in menus in both the ChatGPT app and Apple’s own operating system about the tie-in. When a user first sets up the integration, a permissions screen appears in ChatGPT that says the computer’s on-device message history will be accessed by the app.

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3. Samsung Electronics to Return Record $80bn to Shareholders

Samsung Electronics will return a record $80bn to shareholders through dividends and buybacks as the South Korean chipmaker faces pressure to distribute more of its bumper AI-driven profits.

The company said on Friday it would return Won90tn to Won110tn ($65bn to $80bn) to shareholders this year, depending on business performance, investment needs and cash flow. The programme, its largest ever, is about five times its 2020 payout, the previous record.

Samsung plans to buy back Won15tn of its shares from Monday until November 21 and pay about Won30tn in cash dividends in the third quarter.

It will decide on the remaining payouts for the fourth quarter next January, with options including cash dividends, further buybacks and share cancellations.

“This record-setting level of shareholder returns is intended to ensure that the benefits of the company’s growth are delivered to shareholders in a tangible way,” Samsung said, adding that it had balanced the payouts against its need to maintain growth.

Samsung’s move is part of a three-year commitment since 2024 to return half of its free cash flow to shareholders. It comes after its rival SK Hynix said this week it planned to repurchase Won40tn ($29bn) of shares and return more than half of its free cash flow generated between 2025 and 2027 to shareholders.

Investors hope the distributions from the world’s two largest makers of memory chips will help calm concerns over the durability of AI spending.

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4. Japanese Inflation Accelerates in July

Walmart Inc.’s quarterly sales fell short of expectations, a rare miss that’s likely to stoke concern about the leading big-box retailer decelerating alongside a slow-growing US economy.

Sales at US stores open at least a year, excluding fuel, rose 2.6% in the second quarter, shy of the lowest analyst estimate compiled by Bloomberg. That rate of growth — hindered primarily by pricing pressure in its pharmacy business — is the slowest in more than six years.

Walmart shares fell as much as 8.7% shortly after the open of regular trading Thursday in New York, the biggest intraday drop since July 2022. The stock had risen 2.6% this year through Wednesday’s close. The results suggest it’s getting more challenging for the world’s largest retailer to maintain a faster growth rate as expectations from investors have risen. The earnings report also may foment anxiety about uneven economic signals and deteriorating consumer sentiment. Walmart flagged that its pharmacy business weighed on US sales due to federal negotiations that have led to lower drug prices. Shoppers spent less per trip during the quarter that ended in July compared with a year ago, though the number of transactions stayed at similar levels. E-commerce sales rose.

Despite difficulties in the latest period, Walmart raised its full-year guidance for sales and adjusted operating income. The company began receiving tariff refunds in the second quarter, which management will continue putting toward lowering prices.

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5. Ray Dalio Urges Investors to Hold Gold to Hedge US Debt Risks

Billionaire Ray Dalio said investors should reduce their bond holdings and put as much as 15% of their money in gold to hedge against the risk of a US debt crisis that he warns could be just three years away.

In a LinkedIn post Friday, the Bridgewater Associates founder said investors should diversify across assets and countries with strong finances. Underweighting bonds and holding about 10% to 15% of a portfolio in gold and “a bit” of Bitcoin could both reduce risk and boost returns, said Dalio, who has long warned about the dangers of mounting government debt.

His comments come at a time when long-term Treasury yields have risen to multiyear highs and Japan, America’s largest foreign creditor, has sold US bonds to support the yen. To stem the bond rout, Treasury Secretary Scott Bessent this week announced plans to boost buybacks of long-dated debt, a surprise move that so far has provided little more than short-term support.

The latest developments are consistent with the debt-cycle framework Dalio outlined in his book “How Countries Go Broke: The Big Cycle,” he wrote. Rising debt-service costs eventually collide with insufficient investor demand, he said, forcing governments to accept higher interest rates or central banks to print money to buy debt, weakening currencies and fueling inflation along the way.

Dalio estimates US government revenue at about $5.5 trillion this year against $7.5 trillion in spending, leaving a $2 trillion shortfall. Interest costs alone will be around $1 trillion this year, while about $10 trillion of debt needs to be refinanced.

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6. Apollo Targeted in Social Engineering Cyber Attack

Apollo said it suffered a cyber attack last month in which hackers appeared to have gained unauthorised access to personal data on its systems, making it the latest Wall Street group to be targeted in a wave of attacks.

The alternative asset manager said an investigation had determined there had been unauthorised access to information on “certain cloud platforms” between July 6 and July 10 and that it had notified law enforcement of the breach.

Apollo said in a letter posted to the California attorney-general’s website on Friday that it had found the information included names, dates of birth, home addresses and social security numbers.

It blamed a “social engineering incident”, referring to a situation where attackers trick people in order to unlock secure systems, such as with phishing emails or deceptive phone calls. Apollo did not disclose details of the incident.

The letter from Apollo disclosed in California, which was addressed to an unknown person affected by the cyber breach and dated Friday, said there was no evidence of personal information being “publicly posted or used for identity theft or fraud at this time”.

Earlier this month, several hedge funds, including Steve Cohen’s Point72, Ken Griffin’s Citadel and Millennium Management, were revealed to have been targeted in cyber attacks.

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7. Former Bank of America Banker Accused by SEC of $18.5 Million Insider-Trading Tip

Former senior Bank of America Corp. investment banker Jason Satsky was accused by the US Securities and Exchange Commission of providing an insider-trading tip to a friend who allegedly made $18.5 million in illegal profits.

Satsky, who was previously Bank of America’s head of energy and power infrastructure banking, was sued Friday by the SEC along with the friend, Gavin Wolfe. According to the SEC, Satsky tipped Wolfe off on an acquisition offer for South Jersey Industries Inc. during a November 2021 basketball game.

Between November and December 2021, Wolfe bought at least $53 million in stock and the pair continued to converse, the SEC said.

The SEC suit doesn’t name Bank of America as Satsky’s then-employer, but Bloomberg has previously reported that federal prosecutors were probing trades around the deal.

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