Big Tech and the Feds

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The long-term growth lines of major tech companies are suddenly lower than expected. That might be a good thing. Big Tech’s profits have weathered the pandemic largely intact. The fact that some companies’ results are ticking up now could be a positive sign for the Federal Reserve, which is trying to create a slowdown in the country as it battles inflation that has not been seen in four decades.

The big question for investors, and perhaps the Fed, is whether Apple, Alphabet, Amazon and other tech giants have fallen far enough short of corporate America as a whole.

Google’s parent company, Microsoft, and Alphabet have embarked on a seemingly desperate cycle. Quarterly reports For America’s biggest tech companies yesterday. Meta will release its results this afternoon, with Apple and Amazon wrapping up big tech earnings announcements tomorrow.

  • Microsoft’s profits, though below expectations, still rose. Sales of signature software such as Office grew by 13 percent. Cloud services are up 40 percent. LinkedIn, the professional social network bought by Microsoft in 2016, grew 26 percent from a year earlier.

  • Alphabet sales grew 13 percent. In another good sign for the economy, the jump was driven by better-than-expected sales in Google’s main search engine business, while results were mixed elsewhere. A jump in costs and an exit from its Russia-related businesses led to a 14 percent drop in profits.

The results were positive enough for investors. Alphabet shares rose nearly 5 percent to $110 on the earnings news. Microsoft shares jumped $10, or nearly 4 percent, to $262. Executives at both companies said they saw evidence of a weak economy. “We’re not immune to what’s happening in the macro,” Microsoft CEO Satya Nadella said on a call with analysts. Alphabet’s chief financial officer, Ruth Porat, told analysts that some advertisers’ spending pullback reflects “uncertainty for a number of reasons.”

Few are betting that the earnings reports will change the Fed’s course. Policymakers are meeting this week, and are widely expected to keep raising interest rates. David Kelly, chief strategist at JPMorgan Asset Management, wrote that central banks “may feel they need to look more determined to fight inflation, even if they recognize the recent slowdown in the pace of the economy.” Management, in a note to customers earlier this week.

Kraken, a crypto exchange, is under investigation for possible sanctions violations. The Treasury Department is investigating whether Kraken illegally allowed users in Iran and elsewhere to buy and sell digital tokens. The shares of Coinbase, a large crypto exchange, fell yesterday after the report that the SEC is investigating whether to allow trading in unregistered securities. Kathy Wood’s Arch Fund reportedly dumped shares of Coinbase for the first time this year yesterday.

Antitrust legislation aimed at Big Tech may be off the table for now. Senate Majority Leader Chuck Schumer told donors at a Capitol Hill fundraiser yesterday that the American Innovation and Choice Online Act, which he has promised to vote on this summer, lacks the support it needs to reach the Senate floor. Bloomberg reported. Bipartisan backers of the legislation have been pressing Schumer to act quickly ahead of midterm elections that could change the balance of power in Congress.

One America News, once a reliable Trump campaigner, is struggling to survive. The network is being canceled by major carriers and has faced a wave of defamation over outlandish stories about the 2020 election. OAN’s latest blow comes from Verizon, which this week will stop carrying the network on its Fios TV service. Now it’s only available to a few thousand people who subscribe to regional cable providers.

Florida’s largest utility has secretly funded a website attacking its critics. Florida Power & Light bankrolled and took over The Capitolist, a news site targeting the Florida Legislature, through intermediaries from an Alabama consulting firm, according to an investigation by the Miami Herald. The site says it’s independent, but advocates for rate hikes and legal aid in efforts led by top utility executives.

BlackRock, the world’s largest asset manager, has reduced its support for shareholders on environmental and social issues this year, with less than 43 percent supporting only 24 percent of proposals during a proxy period that ended in June. The firm, which has long led the activist investment movement, cited new regulatory guidance that this year’s proposals were “unsupported” and opened the door to broader policy proposals.

The company has criticized the overly “prescriptive” decisions. In a May note, BlackRock noted that Russia’s war on Ukraine is undermining global energy supplies and changing its calculus. “Many climate-related stakeholders have sought to determine the pace of the company’s energy transition plans despite continued consumer demand for the company’s energy transition plans,” wrote Sandy Boss, the firm’s head of global investment management. She recalled that the shareholders generally supported less environmental and social proposals and voted for 27 percent of the proposals, down from 36 percent in the previous representation period.

Opposition to ESG is on the rise. The push for environmental, social and governance investment has been dubbed by critics as “active capitalism” and is being fired up by major investors like Tesla’s Elon Musk, high-profile investors like Bill Ackman and Republican politicians. Former Vice President Mike Pence, a potential 2024 hopeful, said in a speech yesterday that big government and big business were pushing a “dangerous activist agenda” together.

ESG proponents say critics may have a point. Andrew Behar, CEO of shareholder advocacy group Seed Like You, agrees that many perceived ESG investments don’t reflect true sustainability — directing more capital to the idea and more funds failing to deliver on their promises. Behar argues that more corporate disclosures — which anti-ESG groups oppose — can help ensure green investing actually works. Critics overlook a key financial incentive for investors: recognizing and mitigating environmental issues in all company operations, including addressing climate change and transitioning to sustainable models. “We don’t have an ESG problem,” Behar told Dealbook. “We have a name problem.”

– 43-year-old Charleston AC. Songwriter Fontaine Weyman on changing her coffee habit. Many Americans are dating. Rapid inflation in their adult life on various goods and services.

Instagram responded yesterday to criticism from some of its most famous users, including Kylie Jenner, with new features similar to those of its main rival, TikTok, the fast-growing video app owned by Chinese company ByteDance.

Instagram CEO Adam Mosseri says he’s experimenting with various changes., And he knew that users were not happy. “It’s not great yet,” he said of some of the adjustments they made in a video post. Instagram emphasized its commitment to photos, the app’s original focus, but said, “I’ll be honest, I believe more and more of Instagram will be video.”

Reels, a short video production, is one of Meta’s top six investment priorities.According to an internal memo released last month by Chris Cox, chief product officer of the company that owns Facebook and Instagram. Cox has doubled the amount of time users spend on reels year-over-year, and says Meta is prioritizing promotion in reels “as soon as possible.” Last week, Instagram announced that almost all videos in the app will be posted as Reels.

The changes will come as the meta moves into a new phase. Founder and CEO Mark Zuckerberg has cut costs, revamped his leadership team and made it clear that underperforming employees will be let go, writes The Times’ Mike Issac. “Frankly, there are probably a lot of people in the company who shouldn’t be here,” Zuckerberg said on a call late last month. Profits at Meta have fallen and revenue has slowed in recent months, as the company spends heavily on augmented and virtual reality projects and the economic slowdown has hurt its advertising business.

High-profile complaints about the Instagram update have started in recent days.Kylie Jenner, the beautiful musician with 361 million Instagram followers, shared an image on the page: “Reinvent Instagram. (Stop trying to be nice, I want to see cute photos of my friends.) Greetings, everyone.

Jenner’s half-sister and seventh most-followed Instagram user, Kim Kardashian, echoed the post later, saying, “Please, beautiful. Chrissy Teigen, a model and author with 39 million followers, responded to Mosseri yesterday. Twitter“Adam lol we don’t want to make videos.”

Companies have reason to listen to social media stars, writes The Times’ Kali Huang. In the year In 2018, after Snapchat updated its interface, Gen He tweeted.: “Is there anyone who doesn’t open Snapchat anymore? Or is it just me…” In just one week, the app’s parent company, Snap, lost $1.3 billion in market value.

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