—— Elliott Builds Up $5bn Stake in Honeywell; Wall Street Bonus Could Go Up by 35%; Hertz Losses Widen as Value of Fleet Depreciates; Netflix Paid Members Hit 282.7 million; Netflix Paid Members Hit 282.7 million; Dollar Hits 2-Year High Post Trump Election; Stock Rally Stalls as Inflation Picks Up; ValueAct Takes $1bn Stake in Meta
1. Elliott Builds Up $5bn Stake in Honeywell
Elliott Investment Management has acquired a stake exceeding $5 billion in Honeywell International Inc. and is advocating for the company to undergo a split.
The activist investment firm proposes that Honeywell divide into two independent entities: one focusing on aerospace and the other on automation. This suggestion was confirmed by a statement on Tuesday, following a report by Bloomberg News.
In a letter to Honeywell’s board, Elliott’s partner Marc Steinberg and managing partner Jesse Cohn cited “uneven execution, inconsistent financial results, and an underperforming share price” as detrimental to the company’s value creation in the past five years.
They argued that the conglomerate structure that once benefited Honeywell is now obsolete. Steinberg and Cohn believe that simplifying the company’s structure is a clear and straightforward solution to these challenges.
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2. Wall Street Bonus Could Go Up by 35%
Wall Street bonuses are projected to rise across nearly all industry sectors for the first time since 2021, signaling a significant rebound.
Professionals in investment banking, trading, and asset and wealth management are expected to see their year-end incentive pay increase by double-digit percentages, according to a report by compensation consultancy Johnson Associates Inc. released Tuesday. Debt capital markets bankers are likely to experience the largest hikes, with potential bonus increases up to 35% as transaction volumes rise and capital markets recover.
Alan Johnson, managing director of Johnson Associates, noted in an interview that this year marked a notable uplift across the financial sectors. “This was an unusual year in that almost all finance sectors were up meaningfully,” he said. While he suggested that the mood among employees would be “moderately happy” rather than euphoric, there is an overarching optimism for 2025.
This anticipated increase in bonuses comes after two years of declines, a period during which the high profits seen during the pandemic began to recede. If the current trend continues, this year could end up being the most rewarding for incentive pay since U.S. banks reported record revenues in 2021.
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3. Hertz Losses Widen as Value of Fleet Depreciates
Hertz Global Holdings Inc. saw its stock plummet after reporting a larger-than-expected loss in the third quarter, a result of its problematic venture into electric vehicles, which has significantly impacted its earnings over the past year.
The car rental company recorded an adjusted loss of 68 cents per share, surpassing the 46-cent loss predicted by analysts. A major factor was a $1 billion non-cash impairment charge taken during the quarter, primarily attributed to the depreciated residual values of its fleet over the last year. This includes a significant loss in value of Tesla Inc. electric vehicles (EVs), which the company has been attempting to sell off.
Hertz’s stock fell by as much as 12% in early trading in New York on Tuesday, marking its largest intraday drop since June 6. The stock has already fallen 68% this year through Monday’s close.
This latest report marks Hertz’s fourth consecutive quarterly loss, underscoring the difficulties faced by the company in its attempt to integrate EVs into its fleet, primarily sourced from Tesla.
New CEO Gil West has been actively addressing these challenges by selling off many of these EVs, restructuring the management team, and implementing operational improvements.
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4. Netflix Paid Members Hit 282.7 million
Netflix Inc. has reported a significant increase in viewership for its ad-supported shows, with 70 million viewers tuning in monthly, nearly double the figure from May.
Amy Reinhard, Netflix’s president of advertising, shared in a blog post that over half of the new subscribers in the countries where it is offered are choosing the ad-supported plan. This plan is currently available in 12 countries and is showing “steady progress” in each.
Despite its success, Netflix’s advertising venture remains a smaller portion of revenue compared to its peers, especially since the company had traditionally positioned itself as an alternative to ad-supported television. It was only in 2022, following a dip in customer numbers, that Netflix introduced an advertising option.
The ad-supported plan is priced lower than other subscriptions, appealing to cost-conscious consumers, which has helped drive consistent growth.
As of May, the service had 40 million monthly active users on its ad plans, contributing to a total of 282.7 million subscribers by the end of the third quarter.
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5. Dollar Hits 2-Year High Post Trump Election
The US dollar is experiencing a robust rally, gaining further momentum a week after Donald Trump’s presidential victory, which has significantly impacted other currencies and led Wall Street strategists to anticipate additional gains.
On Tuesday, the Bloomberg Dollar Spot Index reached its highest point since November 2022, which drove the euro to its lowest level in a year and pressured other major currencies, including the yen and Canadian dollar, toward significant psychological thresholds.
Helen Given, a foreign-exchange trader at Monex, noted, “We see a good chance of substantial dollar strength through next calendar year and potentially into 2026 as well.” She explained that the Trump administration’s domestic and international policies—characterized by significant spending and likely protectionist measures—substantially alter the landscape for forecasting currency movements.
In the wake of Trump’s re-election and with the House of Representatives poised to possibly join the Senate under Republican control, major financial institutions like JPMorgan Chase & Co., Goldman Sachs Group Inc., and Citigroup Inc. are aligning in their forecasts, predicting that the dollar will continue to strengthen from its current levels.
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6. Stock Rally Stalls as Inflation Picks Up
The recent surge that propelled stocks to record highs has diminished, with the stock market losing momentum while Treasury yields spike and the dollar reaches a two-year peak, all unfolding before the release of crucial inflation data.
The decline in equities occurred after the S&P 500 experienced its most substantial five-day rally in over a year. The gains that followed the election dissipated, particularly affecting small caps and banks, while results among megacaps were varied—Nvidia Corp saw an increase, but Tesla Inc faced a decrease. Concurrently, Bitcoin retracted after nearing the $90,000 mark. The dollar achieved its highest level since November 2022, and the euro fell to its lowest in a year. Treasury yields rose in anticipation of upcoming consumer price data, which is expected to indicate an increase in inflation. This potential rise in inflation could dampen expectations for a Federal Reserve rate cut.
Will Compernolle from FHN Financial commented on the situation, noting, “A hot CPI and/or strong retail spending could push two-year yields above 4.45% (from around 4.3%) if a December rate cut starts looking imprudent.”
This reflects concerns that stronger economic indicators might discourage the Federal Reserve from reducing interest rates further, influencing bond yields and overall market sentiment.
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7. ValueAct Takes $1bn Stake in Meta
ValueAct Capital Management has acquired a $1 billion stake in Meta Platforms Inc., the parent company of Facebook, according to a source familiar with the situation.
This investment is described as passive, with ValueAct currently not intending to initiate any activist actions at Meta. The source, who preferred to remain anonymous as the details are not yet public, mentioned that ValueAct might disclose this position in an upcoming filing, potentially this week, coinciding with the Nov. 14 deadline for investors to submit their 13F filings to the Securities and Exchange Commission.
ValueAct, based in San Francisco, has a history of advocating for changes at various companies, including Walt Disney Co.
CNBC was the first to report ValueAct’s investment in Meta. Under the leadership of CEO Mark Zuckerberg, Meta reported last month a 19% increase in third-quarter sales year-over-year.
The company’s growth is primarily driven by its social networks, Facebook and Instagram, alongside significant investments in AI and other advanced technologies. Over the past year, Meta’s stock has increased by 77%.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。