—— U.S. inflation hits a 40-year high in May; DocuSign reports triple loss and shares plummeted; GM bucked the trend and cut Bolt trolley prices; Long Island City apartment sold for a record $4.8 million; luxury home sales in the 50 largest U.S. cities cooled rapidly; cosmetics giant Revlon to declare bankruptcy.
1. U.S. inflation hits new high
According to the latest data released today by the U.S. Department of Labor, the U.S. CPI rose 8.6% in June from a year ago and 1% from April, setting a new 40-year record again. With inflation rising instead of falling, the Fed may need to hit the brakes harder, but it also increases the risk of a recession.
The industry thought inflation had peaked last month, the latest data dashed that expectation.
Among the commodity categories in the CPI statistics, accommodation, food, and gasoline were the biggest drivers of gains. Excluding volatile food and energy, the core CPI rose 6% from a year ago, still beating expectations.
Prices of daily necessities continued to rise by more than 10% in May, while energy prices rose 34.6% from a year ago. Grocery prices rose 11.9% year over year, the largest increase since 1979.
Prices for used cars have fallen overall over the past few months, but prices in May rose again by 1.8% compared to the previous month, and prices for new cars also rose by 1%.
US CPI rises again in May, and prices for new cars also rose by 1%
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2. DocuSign reports triple loss
DocuSign Inc.’s fiscal first-quarter report on Thursday showed that the company’s revenue rose to $589 million from $469 million, slightly beating analysts’ expectations, but its loss widened to $27.4 million from $8.4 million. Shares of the company tumbled 23% after hours on the back of unsatisfactory revenue performance.
DocuSign CEO Daniel Springer (Daniel Springer) said that the company faced macroeconomic headwinds that other companies in the industry could not avoid, and the growth rate really failed to meet expectations. However, Daniel believes that in today’s changing market environment, investment in cloud services and digitalization has become more and more important.
In fiscal 2023, CFO Cynthia Gaylor said the company will reduce its cost budget and slow hiring in light of the broader environment.
The job market has cooled as more tech companies announce they will cut back on hiring
Source: WSJ – DocuSign Earnings Disappoint, Sending Down Shares
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3. GM cuts Bolt trolley prices
In a surprising move this month, General Motors decided to cut the price of its Chevrolet Bolt Hatchback and Bolt EV by $6,000 in a market that is in short supply.
Previously, the company recalled 142,000 of the affected Bolt models due to the risk of the batteries catching fire. Affected by this, the production of the Bolt model was also forced to terminate for about 9 months and only resumed in April.
Last year, Ford’s Mustang Mach-E trolley surpassed GM and became the second best-selling trolley after Tesla, much to GM CEO (Mary Barra). In this regard, GM hopes to regain more market share by cutting prices.
Before the price cut, the Bolt EUV was priced at $33,500. The Hatchback and EUV models have a full-charge range of 247 and 259 miles, respectively, higher than similarly priced competitors.
The competition for second place, though, is fierce — Ford is pitching the new F-150 Lightning electric pickup, and GM will fight back with the GMC Hummer.
GM wants to make new, pricier models as it cuts prices
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4. LIC condo sells for record $4.8 million
A condo in Long Island City, New York, sold for $4.8 million, surpassing the previous record of $3.45 million set in 2020 for a condo in Queens, according to Douglas Elliman listing agent Kirsten Jordan.
Couple Stephen and Julie Fox are the sellers of this top-floor three-bedroom apartment in Arris Lofts. The couple put the apartment on the market in January for $4.995 million, agents revealed. They bought the apartment for $2.4 million and converted the original two-bedroom into a three-bedroom.
The agent did not disclose the identity of the buyer but said the buyer had previously lived in the same apartment building.
The penthouse occupies a total of 2,640 square feet and comes with 2,640 square feet of outdoor space with direct views of the Empire State Building. The roof also has a stove, irrigation system, kitchen, and wet bar.
The seller and his wife, both working in finance, chose to sell the penthouse as they needed to move back to their hometown in suburban Philadelphia with their two children.
Arris Lofts penthouse sets record for highest sale in Queens
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5. Luxury home sales in 50 U.S. cities is cooling
According to the latest report released today by Redfin Corp., sales of high-end housing in the first quarter of this year fell 17.8% compared with last year’s statistics, led by the decline in Long Island, New York.
The report counts the top 5% of housing prices in the 50 largest metropolitan areas in the United States, with high-end housing prices in Long Island City, New York leading to a decline of 45.3%. The area is about an hour’s drive from New York City and is a very popular suburb for high-net-worth individuals.
Redfin real estate agent Elena Fleck said that now that the stock market is pulling back and interest rates are higher, fewer people are able to buy luxury homes. The good news is that the market is gradually returning to normal and the competition to buy a home is less intense.
Many Americans considering swapping their big for a small are hesitant to lose out on the previously locked-in low interest rates
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6. Chanel shareholders collect billions
In recent years, global luxury sales have surged, and the Wertheimers Family, the shareholders of the famous luxury brand Chanel, will receive a $2.5 billion dividend in 2021, which is also the highest dividend in Chanel’s history.
The Wertheimers family’s net worth has surged 37 percent this year to $90 billion, benefiting from rising luxury prices and bestsellers. Two family brothers, Alain, 73, and Gerard, 71, hold equal shares.
By the end of 2021, the Chanel Classic Small Handbag will retail for $8,200, a 60% increase from two years ago. Some of Chanel’s products are so popular that retailers are asking each customer to limit their purchases to one, with many shoppers lining up in front of stores as early as 5 a.m.
The purchasing power of consumers has surged in the past two years
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7. Cosmetics giant Revlon to declare bankruptcy
Recently, news company Reorg reported that well-known American cosmetics giant Revlon is preparing to file for bankruptcy. As soon as the news came out, the company’s stock price plummeted by 53% today, and the price plunge caused trading to be suspended many times.
Revlon will submit application documents as soon as next week, Reorg said.
Estee Lauder Cos. and other small cosmetics companies have attracted a large number of consumers through social media, while the Revlon brand has gradually been eliminated from the market.
Revlon has more than 15 cosmetic brands available in more than 150 countries. Previously, the company had avoided defaulting on its debts many times by negotiating with creditors. However, after the epidemic, the demand for cosmetics was not as great as before, and Revlon’s operational problems were also infinitely magnified.
In 1996, Revlon entered the Chinese market, “Revlon” comes from Li Bai’s “Qing Ping Diao” poem
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.