—— BlackRock Expands at Hudson Yards Headquarter; US Labor Market Cools More Than Forecast; Delta Could Lose $500mn From CrowdStrike Outage; KKR to Receive $500mn From Selling Assets; Fed Could Cut Rates As Soon As September; McDonald 5 Dollar Meal Attracts More Customers; Meta Second Quarter Revenue Beats Forecast
1. BlackRock Expands at Hudson Yards Headquarter
BlackRock Inc. is expanding its presence at Related Cos.’ 50 Hudson Yards, as demand for prime office spaces in Manhattan’s trophy towers increases.
The investment giant is adding more than 50,000 square feet (4,600 square meters) to its headquarters, according to a person familiar with the matter who requested anonymity due to the private nature of the information. A spokesperson for BlackRock declined to comment.
The tower at 50 Hudson Yards, which opened in late 2022, is nearly fully occupied with tenants such as Meta Platforms Inc. and Truist Financial Corp. It is part of the Hudson Yards development, which includes multiple office skyscrapers, an Equinox Hotel, retail stores, restaurants, and luxury housing.
BlackRock was one of the anchor tenants for the tower, having agreed to relocate its headquarters to the building well before its completion.
In addition, Oxford Properties and its parent company, the pension fund Ontario Municipal Employees Retirement System (OMERS), will also be moving into the tower from their previous location at 450 Park Ave. The new office space for Oxford Properties is about 14% larger, according to a spokesperson.
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2. US Labor Market Cools More Than Forecast
A broad gauge of US labor cost growth, closely monitored by the Federal Reserve, cooled in the second quarter more than expected, reinforcing a trend of gradually easing inflationary pressures.
The employment cost index, which tracks wages and benefits, increased by 0.9% in the April-to-June period. This follows the most significant rise in a year at the start of 2024, according to figures from the Bureau of Labor Statistics released on Wednesday. Economists surveyed by Bloomberg had predicted a 1% increase.
These figures support recent data indicating that the labor market is moderating towards its pre-pandemic trend. Other indicators also show cooling wage growth, a slower hiring pace, and rising unemployment.
Fed Chair Jerome Powell testified to Congress earlier this month, stating that the job market is no longer an inflationary force. He is likely to reiterate this assessment at the conclusion of the central bank’s meeting later on Wednesday. While policymakers are expected to keep interest rates steady, Powell might suggest a potential rate cut in September, considering the recent softness in the labor market and a broader easing in price pressures.
Following the report, stock futures and Treasuries extended their gains.
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3. Delta Could Lose $500mn From CrowdStrike Outage
Delta Air Lines Inc. is anticipating a $500 million negative impact from the technology breakdown earlier this month, which resulted in thousands of canceled flights and damaged the airline’s reputation.
In a statement to Bloomberg on Wednesday, the company disclosed this financial assessment and announced it has hired the law firm of prominent attorney David Boies. CNBC previously reported that Delta intends to seek damages for the disruption, based on comments from Chief Executive Officer Ed Bastian.
This $500 million figure aligns with Wall Street’s expectations and underscores the severe cost of the outage that disrupted Delta’s operations for several days, left passengers stranded, and led to a federal investigation of the airline. Citigroup analysts have already reduced their estimates for Delta’s earnings before interest and taxes for the current quarter by approximately $500 million.
The disruption originated from an errant software update by CrowdStrike Holdings Inc., which caused widespread outages of Microsoft Corp. systems and affected multiple industries globally. While many airlines quickly recovered, Delta’s cancellations continued into the middle of the following week.
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4. KKR to Receive $500mn From Selling Assets
KKR & Co. executives expressed optimism about the continuation of deal-making improvements for private equity in the second half of the year as markets reopen.
“The macro, inflation, and rates backdrop has improved, markets are open — and the deal market is back,” Co-Chief Executive Officer Scott Nuttall said during a call with analysts on Wednesday after reporting the firm’s second-quarter results.
Nuttall mentioned that KKR expects around $500 million in revenue from asset sales in the third quarter, from deals that have either been announced or are expected to close. Of this figure, KKR anticipates that 60% will come from carried interest and 40% from investment income.
In the second quarter, KKR generated approximately $600 million from asset sales, after previously forecasting at least $500 million in a June press release, according to Nuttall.
Additionally, KKR’s first middle-market private equity strategy, Ascendant, raised $4.1 billion as of June 30 and is oversubscribed, reaching its $4.6 billion hard cap, as noted by Craig Larson, KKR’s head of investor relations, on the call.
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5. Fed Could Cut Rates As Soon As September
Federal Reserve Chair Jerome Powell indicated that an interest-rate cut could be possible as soon as September, following the US central bank’s decision to maintain its benchmark rate at its highest level in over two decades.
“The question will be whether the totality of the data, the evolving outlook, and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market,” Powell stated during a press conference on Wednesday. “If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September.”
Policymakers also made notable adjustments to the language in their post-meeting statement, suggesting they are closer to lowering borrowing costs. Specifically, the committee now states it is “attentive to the risks to both sides of its dual mandate,” moving away from its previous focus solely on inflation risks.
These remarks came after the Federal Open Market Committee (FOMC) chose to keep the federal funds rate within a range of 5.25% to 5.5%, a level sustained since last July.
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6. McDonald 5 Dollar Meal Attracts More Customers
McDonald’s $5 meal deal has led to a significant increase in diner traffic and is successfully attracting customers from competitors, according to a company memo to franchisees.
The promotion, which began on June 25, resulted in an “incremental lift” of nearly 3% in guest counts. More diners took advantage of the deal than expected, with lower-income households showing the most interest, the memo, viewed by Bloomberg News, revealed.
“Our same-store traffic share is growing, as more of our fans choose us over the competition,” stated National Field President Myra Doria and Chief Marketing Officer Tariq Hassan in the memo.
Despite this positive impact, McDonald’s shares slipped 0.2% at 3:20 p.m. in New York trading, while shares of competitor Wendy’s Co. declined further following the news of the bundle’s performance.
The $5 meal deal, which includes a McChicken or McDouble, four chicken nuggets, small fries, and a drink, is a crucial component of McDonald’s strategy to reclaim its position as an affordable dining option as consumers reduce their spending on burger outings.
In the US, McDonald’s traffic declined in the second quarter compared to the previous year, leading to the first drop in same-store sales since 2020. The company anticipates ongoing consumer weakness.
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7. Meta Second Quarter Revenue Beats Forecast
Meta Platforms Inc. reported second-quarter sales that surpassed expectations, indicating that the company’s significant investments in artificial intelligence are enhancing its ability to deliver more targeted and personalized advertisements.
Shares of Meta rose in late trading following the announcement.
For the quarter ended June 30, Meta, the parent company of Facebook and Instagram, reported sales of $39.1 billion, exceeding analysts’ estimates of $38.34 billion, according to Bloomberg data.
Meta has been leveraging AI to improve the targeting and efficiency of advertisements, bolstering its most profitable business segment. For the current quarter, the company projects sales between $38.5 billion and $41 billion, compared to the average analyst projection of $39.2 billion.
In addition to boosting ad efficiency, Meta has been investing heavily in data centers and computing power as CEO Mark Zuckerberg aims to secure a leading position in the AI industry. The company adjusted its full-year capital expenditure forecast, now projecting a range of $37 billion to $40 billion, raising the low end of the range by $2 billion.
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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。