1. US Home Improvement Retailers See Revenue Slump
2. De Beers to Stockpile Diamonds Amid Price Crash
3. Only 14% of Voters Approve of Biden’s Economic Policies
4. Google Pays Apple 36% of Search Ad Revenue
5. Extell Sells Papaya King Development Site
6. US Government Interest Costs Surge 87%
7. Pepsi Set to Overtake Coca-Cola in Market Value
1. US Home Improvement Retailers See Revenue Slump
From 2020 to 2022, the booming US housing market spurred strong growth for home improvement retailers like Home Depot and Lowe’s. But now, 20-year-high mortgage rates have slowed home sales, and both companies are expected to post disappointing earnings this week.
Same-store sales are projected to decline for the fourth consecutive quarter, while overall revenue is set to fall for a third straight quarter. Analysts expect Lowe’s same-store sales to plunge as much as 5% — the biggest drop since 2009.
Many homeowners completed major renovations in recent years, so demand for large appliances and building materials is unlikely to rebound quickly.
Despite the downturn, both companies’ annual revenue remains well above 2019 levels, suggesting the situation isn’t dire.
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2. De Beers to Stockpile Diamonds Amid Price Crash
Luxury spending boomed during the pandemic, benefiting the diamond industry. But as the global economy reopened, demand and prices for diamonds — like many luxury goods — plummeted, leaving retailers with excess inventory.
De Beers, the world’s largest diamond producer, has decided to hold back all unsold diamonds and wait for a recovery in demand and prices.
The US and China are the biggest diamond markets, but inflation and real estate downturns have taken a toll. Lab-grown diamonds are also gaining market share.
De Beers says customers may opt out of pre-agreed purchases. Russian miner Alrosa has also suspended diamond sales for two months.
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3. Only 14% of Voters Approve of Biden’s Economic Policies
A monthly survey by the Financial Times and the University of Michigan’s business school found that only 14% of voters feel their financial situation has improved under President Biden.
Nearly 70% believe Biden’s economic policies have either harmed the economy or had no noticeable impact. Just 26% think his policies helped the US economy.
By contrast, a 2019 FT survey showed 35% of voters said Trump’s economic policies improved their personal finances — still low, but notably higher than Biden’s score.
The data underscores the challenges Biden faces in his reelection campaign.
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4. Google Pays Apple 36% of Search Ad Revenue
During Google’s ongoing antitrust trial, University of Chicago professor Kevin Murphy testified that Google pays Apple 36% of its search advertising revenue, since many users access Google via iPhones and Safari.
Both Google and Apple have fought to keep this information confidential. When Murphy disclosed the figure, Google’s legal team appeared visibly stunned.
The partnership dates back to 2002, with Google serving as Safari’s default search engine ever since.
The US Department of Justice claims this agreement is evidence of Google’s illegal monopoly power.
Google argues that disclosing such details would damage its competitive position.
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5. Extell Sells Papaya King Development Site
Real estate developer Extell Development has sold a single-story building at 1530 Third Avenue on Manhattan’s Upper East Side for $24.5 million.
The property formerly housed iconic hot dog chain Papaya King, which has closed and plans to move across the street.
The buyer, ZD Jasper Realty — a Long Island-based developer with ties to Meidichou (a crowdfunding platform) — obtained a $14.5 million acquisition loan and plans to build a 20-story residential tower.
Extell had purchased the property two years ago for $21 million. The site boasts 150 feet of street frontage on 86th Street, with a price of $490 per square foot.
Last year, Extell filed for demolition of the existing structure.
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6. US Government Interest Costs Surge 87%
The US Treasury Department reported that interest payments on government debt reached $88.9 billion in Q1 of the current fiscal year — up 87% year-over-year.
However, the October budget deficit shrank 24% from a year ago, down to $66.6 billion, thanks to unusually high tax receipts.
House Republicans want to cut spending, while Senate Democrats strongly oppose those measures.
As of the end of October, the average interest rate on US government debt was 3.05% — 87 basis points higher than a year earlier and the highest since 2010.
If Congress fails to reach a budget agreement by November 17, many federal agencies could shut down.
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7. Pepsi Set to Overtake Coca-Cola in Market Value
Analysts at Jefferies forecast Pepsi’s share price could rise 20% to $203 in 2024, potentially boosting its market cap to $279 billion — surpassing Coca-Cola’s.
Pepsi has only briefly topped Coke’s market value once since 2006.
Unlike Coca-Cola, which focuses exclusively on beverages, Pepsi also owns snack and food brands like Lay’s, Doritos, and Quaker Oats.
Analysts say Pepsi’s $60 billion investment over the past five years has improved both efficiency and production capacity.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.