1. U.S. Blue-Chip Stocks See Significant Pullback
2. Meta Removes 63,000 Extortion Accounts
3. Million-Dollar Mansions Sell Against the Market Trend
4. LVMH Leads Sell-Off in Luxury Stocks
5. IBM AI Revenue Breaks $2 Billion
6. Trump Fundraiser Tickets Reach $500,000
7. Blackstone REIT Cuts Dividends Significantly
1. U.S. Blue-Chip Stocks See Significant Pullback
This week, several mega-tech companies released disappointing earnings reports, signaling that the AI-driven stock surge may have reached its peak.
Today, the S&P 500 Index recorded its largest single-day drop since the March 2023 regional bank crisis. The Nasdaq 100 Index plummeted 3%, with Google, which announced an increase in spending, seeing its stock fall by 5%. Tesla’s stock also dropped by 10%, as its profits fell short of expectations.
There will be several major companies releasing earnings soon, but Google and Tesla have not set a good precedent.
The risk concentration in U.S. stocks is currently too high—if a few tech companies perform poorly, it can drag down multiple indices.
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2. Meta Removes 63,000 Extortion Accounts
Today, Meta Platforms announced it had shut down 63,000 Instagram accounts in Nigeria, which were linked to sexual extortion schemes.
According to statistics, from the end of 2021 to the present, dozens of minors have tragically taken their own lives due to the harassment and extortion they faced.
One 17-year-old basketball star took his life after being extorted. The FBI tracked down two young offenders in Nigeria, who were extradited to the U.S. in April and confessed to their crimes.
In addition, Meta removed thousands of Facebook accounts, pages, and chat groups involved in extortion schemes.
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3. Million-Dollar Mansions Sell Against the Market Trend
According to the National Association of Realtors (NAR), mansions priced over $1 million were the only category of homes to see an increase in sales in June.
With the 30-year mortgage rate hovering around 6.9%, homebuyers requiring loans face significantly higher additional costs. However, the wealthy buyers of luxury homes often do not need loans.
Lisa Morris, a luxury real estate agent at Douglas Elliman, mentioned she has not heard the word “loan” in a long time, as nearly all her clients purchase homes with all-cash transactions.
The largest luxury home builder in the U.S., Toll Brothers, exceeded sales expectations in Q2 and saw its stock hit new highs.
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4. LVMH Leads Sell-Off in Luxury Stocks
Today, LVMH, the leader in the luxury goods industry, reported that its revenue for the quarter ending in June only grew 1% to €20.98 billion, below Wall Street’s 3% expectation. As a result, stocks in the entire luxury sector were sold off.
Hermès and Brunello Cucinelli dropped 2.1% and 1.9%, respectively. Jewelry giant Richemont and Prada declined by 1.7% and 5.5%. Kering, the parent company of Gucci, fell by 4.5%.
In the second quarter, LVMH saw a 14% drop in sales in most of Asia, excluding Japan, as demand in China decreased.
LVMH believes the Chinese market’s consumption capacity is better than expected and that growth rates will be higher in the second half of the year.
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5. IBM AI Revenue Breaks $2 Billion
IBM’s latest earnings report revealed that its AI consulting and software subscriptions exceeded $2 billion since mid-2023, with consulting revenue accounting for three-quarters of the total. CEO Arvind Krishna expects the software revenue share to continue increasing.
Q2 revenue rose 2% to $15.8 billion, with software segment revenue increasing 7% to $6.7 billion, surpassing analysts’ expectations.
In recent years, IBM has been transitioning from a traditional hardware company to a high-growth software and services company.
IBM’s stock rose 4%, with a year-to-date gain of nearly 13%.
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6. Trump Fundraiser Tickets Reach $500,000
Trump plans to attend a fundraising event on August 2 in the Hamptons to replenish his campaign funds.
The event will be hosted by Howard Lutnick, CEO of Cantor Fitzgerald. Tickets to attend cost $25,000, while those wishing to meet Trump in person must pay $50,000. Those who want to speak at the event need to pay $500,000.
Trump will also attend another fundraiser in Aspen on August 10, where ticket prices will also be as high as $500,000.
This Saturday, Trump will participate in a conference gathering cryptocurrency moguls.
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7. Blackstone REIT Cuts Dividends Significantly
Today, U.S. real estate giant Blackstone announced it is forced to reduce its dividend by 24% due to an increasing number of debt defaults and overdue repayments.
The board of Blackstone Mortgage Trust (BXMT) agreed to repurchase $150 million in shares to boost its stock price.
BXMT’s stock plummeted 6.1% before the market opened, bringing its year-to-date loss to 7.7%.
Commercial real estate valuations continue to decline, putting significant pressure on REITs, particularly those focused on office buildings.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.