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- Japan Slips into Recession
Good Morning! 👋
It is almost Friday! Here’s what’s moving the markets today:
👉 Recession in Japan
👉 Cisco announces job cuts
👉 SpaceX relocates from Delaware
JAPAN: Recession Is Here
Japan's economy unexpectedly contracted due to weak domestic consumption, slipping into recession and falling behind Germany as the world's third-largest economy. In the last quarter of 2023, the GDP shrank by an annualized 0.4%, following a 3.3% decrease in the previous quarter, which led to two consecutive quarters of contraction.
Source: France 24
The decline was primarily due to weak domestic demand, with consumer spending across major categories turning negative. In contrast, only exports contributed positively. Consumer spending, vital for half of Japan's economy, fell by 0.9% in the fourth quarter amidst rising costs for essential items. Japan has a heavy reliance on imports, which has made things worse. Their local currency has dropped 6.6% against the dollar since the start of the year.
🎯 GRIT TAKE: Despite the economic challenges, Japanese investors… Upgrade to GRIT VIP to read the full GRIT Take!
CISCO: Announces Job Cuts
Cisco Systems announced it will cut 5% of its workforce, over 4,000 jobs, and reduced its annual revenue forecast due to economic challenges. This led to a more than 5% drop in its shares in after-hours trading. The company adjusted its revenue projection to between $51.5 billion and $52.5 billion from the initially expected $53.8 billion to $55 billion. Analysts predict sustained low demand for Cisco's products as telecom clients cut spending. To counteract this, Cisco is turning to artificial intelligence and a partnership with Nvidia, aiming to incorporate Cisco's ethernet technology into Nvidia's data center and AI solutions.
Source: The Street
Cisco anticipates third-quarter revenue to be between $12.1 billion and $12.3 billion, below the $13.1 billion market expectation. Amidst planning for layoffs and restructuring to focus on growth areas, Cisco expects to incur an $800 million charge related to these changes. Despite these challenges, Cisco reported a second-quarter adjusted profit of 87 cents per share and revenue of $12.79 billion, both above expectations.
SPACEX: Relocates From Delaware
SpaceX has officially filed to relocate its incorporation from Delaware to Texas, according to the Texas Secretary of State's office filings. This move is among Elon Musk's responses to a Delaware court ruling that aimed to cancel his $56 billion Tesla pay package from 2018. Musk's other venture, Neuralink, is also transitioning its incorporation from Delaware to Nevada.
Source: CNBC
After the court decision, Musk has been vocal about his preference for moving his businesses out of Delaware, urging other companies to do the same. He confirmed that Tesla would seek shareholder approval to move its incorporation to Texas as well. Musk intends to appeal the court's decision, which currently affects his options but not his previously acquired shares.
Headlines You Need To Know: 🎙
Retail sales tumbled in January
Stellantis’ profit slide due to strikes
Boston faces a $1 billion tax deficit
Berkshire trims massive stake in Apple
Expert believes you should still buy bonds
The $750 Million Barbershop Idea
Once upon a time, two visionary entrepreneurs, Songe LaRon and Dave Salvant, shared a moment of frustration in a bustling New York City barbershop. Waiting endlessly for their turn, they realized the inefficiency plaguing the traditional barbershop experience. This moment of annoyance sparked an innovative idea that would revolutionize the industry. They envisioned a platform that could seamlessly manage appointments, payments, and customer relationships for barbershops. With their backgrounds in law and finance, they were initially outsiders to the tech world.
Source: Afrotech
Yet, their determination knew no bounds. They delved into the tech scene, learned quickly, and in 2015, Squire was born. Starting as a simple solution to streamline barbershop operations, Squire rapidly evolved into a comprehensive platform, addressing every facet of barbershop management. Their relentless pursuit of innovation, coupled with a deep understanding of their customers' needs, propelled Squire to become a $750 million software behemoth, transforming not just a single barbershop but an entire industry worldwide.
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📊 The Year of Temu
Source: Statista
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