Global brands set too much store in China recovery

LONDON ( Breakingviews) – China’s Covid-19 “new normal” will challenge Western multinationals’ hopes for a quick rebound in the world’s second largest economy. Big groups from Apple to General Electric suffered a hit to revenue in the first quarter as renewed lockdowns paralysed factories and distribution networks and dented retail sales. Many companies are downplaying the impact as temporary. That’s overly optimistic. Estée Lauder Chief Financial Officer Tracey Travis is probably not alone in making…

"Global brands set too much store in China recovery"

Emerging markets offer dubious investment appeal

LONDON ( Breakingviews) – U.S. stock markets are tumbling but shares from developing economies have fallen just as fast. Since the start of the year, the S&P 500 Index of big U.S. companies is down about 17%; the MSCI Emerging Markets Index has dropped 18%. This basket of stocks, containing shares in companies from Brazil to the United Arab Emirates, now looks relatively good value. Investors who bought these equities when they were cheap at…

"Emerging markets offer dubious investment appeal"

SoftBank’s Son is running out of ammunition

LONDON ( Breakingviews) – Masayoshi Son’s medicine is losing its potency. His technology holding company, SoftBank Group, is worth less than half the paper value of its net assets. In the past the Japanese billionaire has used massive buybacks to prop up a sagging share price, but high leverage makes that tricky now. Unless he considers more radical measures like a breakup, the discount valuation will persist. A broader market rout has left Son’s company…

"SoftBank’s Son is running out of ammunition"

Marcos clan’s return to Manila is awkwardly timed

HONG KONG ( Breakingviews) – The controversial Marcos clan returns to the peak of power in the Philippines at a tricky time. President-elect Ferdinand Marcos Jr, son of the late exiled autocrat accused of looting his country, inherits a $360 billion economy that grew 7.7% in the last quarter of 2021 from a year earlier. “Bongbong,” as he is known, has kept his agenda deliberately vague, but he will have trouble coasting on the infrastructure…

"Marcos clan’s return to Manila is awkwardly timed"

Cheap home loans raise Turkey’s inflation roof

(The author is a Breakingviews columnist. The opinions expressed are their own.) LONDON ( Breakingviews) – Tayyip Erdogan’s latest inflation gambit will do more harm than good. The Turkish president on Monday announced plans to curb growth in house prices after an index suggested they doubled over the last year. Construction firms will get three years of cheap credit for housing projects provided they hold prices for a year. That could help. However, Erdogan also…

"Cheap home loans raise Turkey’s inflation roof"

Adidas is failing Chinese fitness test

(The author is a Breakingviews columnist. The opinions expressed are their own.) LONDON ( Breakingviews) – Adidas is aching in China. The Yeezy trainer maker’s sales fell 3% to 5.3 billion euros in the three months ending March 31 compared to the same period last year, dragged down by a 35% fall in sales in Greater China. The issues are multi-pronged. Covid-19 lockdowns have dented demand and disrupted supply chains in the world’s second biggest…

"Adidas is failing Chinese fitness test"

Europe’s oil major discount grows ever more stark

LONDON ( Breakingviews) – Europe’s big oil companies will be wondering what they have to do. Despite Shell, BP and TotalEnergies all reporting bumper first-quarter earnings amid soaring oil prices, their valuations lag those of U.S. rivals Exxon Mobil and Chevron. The disconnect is increasingly odd. In the last three months Total and Shell, which reported  on Thursday, made the same $9 billion net income as Exxon. BP and Chevron both made around $6 billion. Refinitiv…

"Europe’s oil major discount grows ever more stark"

Fed jumps into field of financial land mines

WASHINGTON ( Breakingviews) – There’s a lot that could blow up in the Federal Reserve’s face. The U.S. central bank has little choice but to hike interest rates and shrink its balance sheet to fight inflation. But Chair Jay Powell’s moves make markets more vulnerable to shocks and could even tip the American economy into a recession. With inflation at a 40-year high, the Fed is rushing along the path to a more normal monetary…

"Fed jumps into field of financial land mines"

Airbnb dodges post-Covid comeuppance

(The author is a Breakingviews columnist. The opinions expressed are their own.) NEW YORK ( Breakingviews) – Airbnb might have more staying power than the travel industry itself. The $97 billion vacation-booking platform’s post-pandemic bounce-back looks set to make it more profitable than ever. Being asset-light makes it nimble, but Chief Executive Brian Chesky took necessary risks. Airbnb adapted to a world of lockdowns and travel restrictions, as bookings shifted away from densely packed cities…

"Airbnb dodges post-Covid comeuppance"

Robinhood’s growing pains could use some Buffett

BANGALORE ( Breakingviews) – “God is getting just” with stock-trading app Robinhood Markets, according to the vice chairman of Warren Buffett’s Berkshire Hathaway, Charlie Munger. The 98-year-old’s comments came a day after the company’s shares hit a record low. While harsh and perhaps self-serving, there’s something to Munger’s sentiment. Robinhood could use a bit of his boss’ conservative thinking. The trading platform’s stock has fallen 70% since it went public in July last year, versus…

"Robinhood’s growing pains could use some Buffett"