Hello there,
Inflation is here and it’s causing companies to lower their earnings guidance.
Why this matters: The global supply chain issues and labor shortages that the world is currently battling have led manufacturing companies (already doing their very best to fight inflation) to lower their fourth-quarter guidance. There have been minimal improvements in profits but companies are definitely feeling the pinch of higher costs. The good news, however, is that demand is balancing out cost issues. (Barron's)
PayPal isn’t acquiring Pinterest
PayPal (PYPL) has announced that it isn’t pursuing an acquisition of Pinterest (PINS) ending speculations over a potential $45 billion deal.
Why this matters: The company had indeed approached Pinterest with a potential deal but decided against pursuing an acquisition at this time. Pinterest’s shares have dropped 12% and are currently trading at $58, while PayPal jumped 6%. The Pinterest deal would have given PayPal more data on the products consumers are buying and the ability to potentially advertise or offer discounts based on that data. The story may not be over yet, there could be a possible acquisition in the future. (CNBC)
Big tech earnings this week
Big tech companies are expected to report their third-quarter earnings this week.
Why this matters: Given the record of stronger-than-expected results posted so far, the bar is high for this week’s companies. Tech giants like Facebook (FB), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL) are all reporting earnings this week. They have all been plagued with rising interest rates, chip shortages, and slow growth after the pandemic boom. It will be interesting to see how these companies are doing post-pandemic. (Yahoo Finance)
That’s it from us
See you tomorrow.