—— Americans Need $2.5mn to be Considered Wealthy; Walmart Sold $3.6bn JD Shares Amid China Tech Slump; Ford to Scrap New Electric SUV to Save CapX; US Payrolls Revised Down by 818,000; Oaktree to Buy Two Businesses of B.Riley; Dollar Depreciates to Lowest Level in 2024; Uber Bonds Receive Investment-Grade Rating
1. Americans Need $2.5mn to be Considered Wealthy
Home prices are up, stocks are up, and so is the amount Americans believe they need to feel rich.
According to an annual survey released Wednesday, Americans now think a net worth of $2.5 million is required to be considered wealthy in 2024. This marks a 14% increase from last year when the Charles Schwab Modern Wealth survey found that $2.2 million was seen as the threshold for wealth.
Rob Williams, managing director of financial planning at Charles Schwab, explained, “The concept of wealth encompasses both numbers and emotions. The jump from $2.2 million to $2.5 million reflects both sides — the rising cost of living and, likely, most Americans’ emotionally driven perceptions of what it takes to be wealthy.”
In the survey, older respondents tend to have a higher threshold for what they consider wealth. Baby boomers believe it takes $2.8 million to be wealthy, while millennials set the bar at $2.2 million. Overall, just over one in five Americans said they are “on track” to becoming wealthy, and 10% reported that they already consider themselves wealthy.
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2. Walmart Sold $3.6bn JD Shares Amid China Tech Slump
Walmart Inc. has raised approximately $3.6 billion by selling its stake in Chinese e-commerce company JD.com Inc., effectively ending an eight-year partnership that seems to be yielding diminishing returns amid a challenging environment for Chinese tech firms.
The U.S. retailer sold 144.5 million shares at $24.95 each, according to sources who requested anonymity due to the private nature of the information. This price represents an 11% discount to Tuesday’s closing price in the U.S. and is near the lower end of the indicative range of $24.85 to $25.85, according to Bloomberg calculations.
Following the sale, JD.com’s shares listed in Hong Kong dropped by as much as 12% on Wednesday, contributing to a broader selloff in Chinese e-commerce and tech stocks. Walmart is adjusting its strategy in China, where its long-time e-commerce partner, along with traditional competitors like Alibaba Group Holding Ltd. and PDD Holdings Inc., is facing significant challenges.
Walmart has developed a robust e-commerce and delivery network in China for both Sam’s Club and its hypermarket operations, and is now focusing on its own offerings, according to a source familiar with the matter. The deal comes at a time when a property crisis, market volatility, and uncertain job prospects are negatively impacting Chinese consumer spending.
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3. Ford to Scrap New Electric SUV to Save CapX
Ford Motor Co. is once again adjusting its electrification strategy, canceling plans for a fully electric sport utility vehicle—a move that could cost the company around $1.9 billion.
In addition to dropping the all-electric three-row SUV, which had already faced delays, Ford will further delay the release of a next-generation electric pickup and reduce its spending on electric vehicles (EVs) to 30% of its annual capital expenditures, down from the previous 40%. The automaker also announced on Wednesday a revision of its battery-sourcing strategy, aiming to better compete with more affordable Chinese competitors.
These actions represent a continued retreat by CEO Jim Farley, who initially accelerated Ford’s transition to EVs when he assumed leadership nearly four years ago.
The company has incurred substantial costs in ramping up production, only to see industry-wide sales growth begin to slow, prompting Ford to forecast a loss of up to $5.5 billion for its EV division this year.
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4. US Payrolls Revised Down by 818,000
US job growth in the year leading up to March was likely much weaker than previously reported, adding pressure on the Federal Reserve to consider cutting interest rates next month.
The Bureau of Labor Statistics’ preliminary benchmark revision indicates that the number of workers on payrolls will likely be adjusted down by 818,000 over the 12-month period ending in March—roughly 68,000 fewer jobs added each month. This marks the largest downward revision since 2009.
These revisions imply that the labor market began to slow down much earlier than initially believed. Concerns about the labor market’s health only emerged earlier this month following the release of the July jobs report, which highlighted a sluggish pace of hiring and a fourth consecutive month of rising unemployment.
However, other indicators, such as jobless claims and job vacancies, have pointed to a more gradual slowdown.
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5. Oaktree to Buy Two Businesses of B.Riley
Oaktree Capital is in exclusive negotiations to acquire a majority stake in two businesses owned by B. Riley Financial Inc., according to sources familiar with the situation. Following the news, B. Riley’s shares surged by as much as 65%.
Oaktree is reportedly looking to purchase a 51% to 55% stake in B. Riley’s appraisal and valuation services division, as well as its retail, wholesale, and industrial solutions unit—previously known as Great American Group. The deal is expected to value these units at around $380 million, according to one of the sources who spoke on condition of anonymity.
The transaction could be announced as early as next week, although the deal is not yet finalized, and the terms could change or the negotiations could fall through at the last minute.
In February, Los Angeles-based B. Riley revealed that it had hired Moelis & Co. to explore strategic alternatives for these two businesses. “Our review of strategic alternatives for Great American Group is advancing, and we look forward to providing additional updates when appropriate,” B. Riley said in an Aug. 12 statement. B. Riley acquired the Great American Group in 2014.
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6. Dollar Depreciates to Lowest Level in 2024
The US dollar reached its lowest point since the beginning of the year on Tuesday, as investors prepared for the possibility that the Federal Reserve might begin lowering interest rates. This decline follows the fading of the August sell-off that had unsettled markets.
This month, the dollar has dropped by 2.2% against a basket of other major currencies, returning to a level last seen on the first trading day of January. The decline is largely driven by expectations that the US central bank will reduce interest rates next month.
At the same time, the S&P 500 stock index has nearly recovered from its early August losses, which were triggered by a weak US jobs report and concerns about a potential recession. As the markets have calmed and economic data has shown more resilience, investors have been drawn back to riskier assets.
Athanasios Vamvakidis, head of G10 foreign exchange strategy at Bank of America, commented that the market is anticipating a “soft landing” and future Fed rate cuts, which are seen as negative for the dollar.
Investors are now closely watching a forthcoming speech by Federal Reserve Chair Jay Powell at the Jackson Hole symposium on Friday, where he is expected to provide insights on the future direction of US interest rates.
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7. Uber Bonds Receive Investment-Grade Rating
Fitch Ratings assigned Uber Technologies Inc. an investment-grade credit rating on Tuesday, highlighting the company’s strong performance in the ride-share and food delivery markets, along with its strategic expansion into new services and a conservative financial approach.
Uber’s primary bonds were rated BBB, placing them two notches above speculative grade, according to Fitch’s statement. This upgrade allows Uber’s debt to qualify for investment-grade status. This rating follows a recent upgrade from S&P Global Ratings on August 16, which raised Uber’s main bonds to BBB-, the lowest level of investment grade, up from BB+, the highest junk grade.
Achieving an investment-grade credit rating is a key goal for Uber, as it can lead to lower borrowing costs by making the company’s debt more attractive to a broader range of investors who seek high-grade securities.
Fitch’s decision is based on Uber’s dominant position in the ride-share market, the growth of its food delivery business, and its foray into new areas like grocery delivery. These factors are expected to solidify Uber’s standing as the “provider of choice” for mobility services, setting it apart from competitors.
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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。