Daily Brief - 2 Feb 2024

Meta and Amazon soar after smashing expectations

Meta Platforms Inc. and Amazon.com Inc. saw their value soar by $270 billion thanks to cost-cutting measures and impressive quarterly profits. Meta announced a whopping $50 billion stock buyback and its first-ever quarterly dividend, after reducing its workforce by 22%. Amazon, which began its largest job cuts in 2022, affecting 35,000 employees, continued with cutbacks in early 2024. Both companies enjoyed revenue growth from their core businesses: digital advertising for Meta and e-commerce for Amazon, leading to a significant share price increase. Meta's CEO, Mark Zuckerberg, praised the benefits of running a leaner company, while Amazon's CEO, Andy Jassy, highlighted cost reductions in serving customer orders.

Apple faces tough times in China as sales dip and rivals rise

Apple's sales in China have fallen by 13% last quarter, the biggest drop since the 2018 holiday season. This decline is overshadowing their otherwise good earnings. Tough competition comes from local company Huawei, which launched a new smartphone popular as an iPhone alternative. Apple even started giving rare discounts on its latest iPhones to attract more buyers. Despite these challenges, Apple's CEO Tim Cook remains hopeful about China's market. However, analysts suggest that expectations for Apple's performance in China should be lowered once more.

Inside Julius Baer’s failed gamble on Signa real estate empire

Julius Baer Group faced a significant setback after a failed investment in the Signa real estate empire led to a massive $700 million writedown. The Swiss bank initially set aside a smaller amount for potential losses but had to write off the entire investment and dismiss CEO Philipp Rickenbacher as the situation worsened. An internal investigation revealed that the bank's risk management failed to properly assess the complexity of the loans to Signa. Julius Baer has decided to exit the private credit business entirely following these revelations. Despite these challenges, the bank's shares saw a slight recovery after the announcement. The bank now focuses on restructuring its risk control mechanisms and seeks a new CEO to navigate through the reputational damage and strategic shift.