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Gene Synthesis Services Market to Record a CAGR of 17.6%, Majority of Market Growth to Originate from North America – Technavio

Gene Synthesis Services Market to Record a CAGR of 17.6%, Majority of Market Growth to Originate from North America – Technavio
PR Newswire
NEW YORK, Oct. 6, 2022

NEW YORK, Oct. 6, 2022 /PRNewswire/ — The gene synthesis services market will be do…

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Gene Synthesis Services Market to Record a CAGR of 17.6%, Majority of Market Growth to Originate from North America - Technavio

PR Newswire

NEW YORK, Oct. 6, 2022 /PRNewswire/ -- The gene synthesis services market will be dominated by North America during the forecast period. The region will account for 38% of the market's growth during the forecast period. This growth is attributed to factors such as the presence of biopharmaceutical companies and vendors that offer gene synthesis services, a significant increase in investments in research, and the high focus on biomedical research by universities and research institutions. Moreover, market growth in this region will be faster than the growth of the market in other regions. The US is the key country for the gene synthesis services market in North America.

The gene synthesis services market size is expected to grow by USD 1.95 billion from 2021 to 2026. In addition, the growth momentum of the market will accelerate at a CAGR of 17.6% during the forecast period, according to Technavio. This growth can be attributed to the cost-effective and time-saving process of gene synthesis. However, the increasing complexity of the gene synthesis process can hamper the growth of the market during the next few years.

Use our report analysis and insights for effective decision-making. Download a FREE PDF Sample Report

Key Vendors and their Offerings

BBI Life Sciences Corp., Bio Basic Inc., BioCat GmbH, Biomatik, Bioneer Corp., Creative Biogene, CUSABIO TECHNOLOGY LLC, DNA TwoPointO Inc., Eurofins Scientific SE, GeneCopoeia Inc., GENEWIZ Inc., GenScript Biotech Corp., Integrated DNA Technologies Inc., Kaneka Corp., Macrogen Inc., NZYTech Lda., OriGene Technologies Inc., Synbio Technologies, Thermo Fisher Scientific Inc., Twist Bioscience HQ, among others, are the main players in the market. The key offerings of some of these vendors are listed below:

  • BBI Life Sciences Corp. - The company offers custom gene synthesis technology, which is extremely versatile and applicable to many different research areas such as genetics, regulation of gene expression, and functional research of gene and drug discovery.
  • Bio Basic Inc. - The company offers Gene synthesis services to convert any DNA sequence into its optimized synthetic gene, which is designed for all types of applications.
  • Bioneer Corp. - The company offers gene synthesis services, which provide sequence guarantee for individual synthetic genes and codon optimization to enhance protein expression and function.
  • Eurofins Scientific SE - The company offers gene synthesis and molecular biology to convert any DNA or amino acid sequence into its optimized synthetic gene, which is designed for all types of applications.
  • GENEWIZ Inc. - The company offers PriorityGENE DNA synthesis services, which frequently work with large sequences and successfully deliver cloned products on a timely basis.
Gene Synthesis Services Market End-user Outlook (Revenue, USD Billion, 2021-2026)
  • Academic - size and forecast 2021-2026
  • Commercial - size and forecast 2021-2026
Gene Synthesis Services Market Geographic Outlook (Revenue, USD Billion, 2021-2026)
  • North America - size and forecast 2021-2026
  • APAC - size and forecast 2021-2026
  • Europe - size and forecast 2021-2026
  • South America - size and forecast 2021-2026
  • Middle East and Africa - size and forecast 2021-2026

Learn about the contribution of each segment summarized in concise infographics and thorough descriptions. View a FREE PDF Sample Report

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Gene Synthesis Services Market Scope

Report Coverage

Details

Page number

120

Base year

2021

Forecast period

2022-2026

Growth momentum & CAGR

Accelerate at a CAGR of 17.6%

Market growth 2022-2026

USD 1.95 billion

Market structure

Fragmented

YoY growth (%)

16.8

Regional analysis

North America, APAC, Europe, South America, and Middle East and Africa

Performing market contribution

North America at 38%

Key consumer countries

US, China, Japan, Germany, and France

Competitive landscape

Leading companies, competitive strategies, consumer engagement scope

Key companies profiled

BBI Life Sciences Corp., Bio Basic Inc., BioCat GmbH, Biomatik, Bioneer Corp., Creative Biogene, CUSABIO TECHNOLOGY LLC, DNA TwoPointO Inc., Eurofins Scientific SE, GeneCopoeia Inc., GENEWIZ Inc., GenScript Biotech Corp., Integrated DNA Technologies Inc., Kaneka Corp., Macrogen Inc., NZYTech Lda., OriGene Technologies Inc., Synbio Technologies, Thermo Fisher Scientific Inc., and Twist Bioscience HQ

Market dynamics

Parent market analysis, market growth inducers and obstacles, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.

Customization purview

If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Browse Consumer Discretionary Market Reports

Table of Contents

1 Executive Summary

  • 1.1 Market overview 
    • Exhibit 01: Executive Summary – Chart on Market Overview
    • Exhibit 02: Executive Summary – Data Table on Market Overview
    • Exhibit 03: Executive Summary – Chart on Global Market Characteristics
    • Exhibit 04: Executive Summary – Chart on Market by Geography
    • Exhibit 05: Executive Summary – Chart on Market Segmentation by End-user
    • Exhibit 06: Executive Summary – Chart on Incremental Growth
    • Exhibit 07: Executive Summary – Data Table on Incremental Growth
    • Exhibit 08: Executive Summary – Chart on Vendor Market Positioning

2 Market Landscape

  • 2.1 Market ecosystem 
    • Exhibit 09: Parent market
    • Exhibit 10: Market Characteristics

3 Market Sizing

  • 3.1 Market definition 
    • Exhibit 11: Offerings of vendors included in the market definition
  • 3.2 Market segment analysis 
    • Exhibit 12: Market segments
  • 3.3 Market size 2021
  • 3.4 Market outlook: Forecast for 2021-2026 
    • Exhibit 13: Chart on Global - Market size and forecast 2021-2026 ($ million)
    • Exhibit 14: Data Table on Global - Market size and forecast 2021-2026 ($ million)
    • Exhibit 15: Chart on Global Market: Year-over-year growth 2021-2026 (%)
    • Exhibit 16: Data Table on Global Market: Year-over-year growth 2021-2026 (%)

4 Five Forces Analysis

  • 4.1 Five forces summary 
    • Exhibit 17: Five forces analysis - Comparison between2021 and 2026
  • 4.2 Bargaining power of buyers 
    • Exhibit 18: Chart on Bargaining power of buyers – Impact of key factors 2021 and 2026
  • 4.3 Bargaining power of suppliers 
    • Exhibit 19: Bargaining power of suppliers – Impact of key factors in 2021 and 2026
  • 4.4 Threat of new entrants 
    • Exhibit 20: Threat of new entrants – Impact of key factors in 2021 and 2026
  • 4.5 Threat of substitutes 
    • Exhibit 21: Threat of substitutes – Impact of key factors in 2021 and 2026
  • 4.6 Threat of rivalry 
    • Exhibit 22: Threat of rivalry – Impact of key factors in 2021 and 2026
  • 4.7 Market condition 
    • Exhibit 23: Chart on Market condition - Five forces 2021 and 2026

5 Market Segmentation by End-user

  • 5.1 Market segments 
    • Exhibit 24: Chart on End-user - Market share 2021-2026 (%)
    • Exhibit 25: Data Table on End-user - Market share 2021-2026 (%)
  • 5.2 Comparison by End-user 
    • Exhibit 26: Chart on Comparison by End-user
    • Exhibit 27: Data Table on Comparison by End-user
  • 5.3 Academic - Market size and forecast 2021-2026
    • Exhibit 28: Chart on Academic - Market size and forecast 2021-2026 ($ million)
    • Exhibit 29: Data Table on Academic - Market size and forecast 2021-2026 ($ million)
    • Exhibit 30: Chart on Academic - Year-over-year growth 2021-2026 (%)
    • Exhibit 31: Data Table on Academic - Year-over-year growth 2021-2026 (%)
  • 5.4 Commercial - Market size and forecast 2021-2026 
    • Exhibit 32: Chart on Commercial - Market size and forecast 2021-2026 ($ million)
    • Exhibit 33: Data Table on Commercial - Market size and forecast 2021-2026 ($ million)
    • Exhibit 34: Chart on Commercial - Year-over-year growth 2021-2026 (%)
    • Exhibit 35: Data Table on Commercial - Year-over-year growth 2021-2026 (%)
  • 5.5 Market opportunity by End-user 
    • Exhibit 36: Market opportunity by End-user ($ million)

6 Customer Landscape

  • 6.1 Customer landscape overview 
    • Exhibit 37: Analysis of price sensitivity, lifecycle, customer purchase basket, adoption rates, and purchase criteria

7 Geographic Landscape

  • 7.1 Geographic segmentation 
    • Exhibit 38: Chart on Market share by geography 2021-2026 (%)
    • Exhibit 39: Data Table on Market share by geography 2021-2026 (%)
  • 7.2 Geographic comparison 
    • Exhibit 40: Chart on Geographic comparison
    • Exhibit 41: Data Table on Geographic comparison
  • 7.3 North America - Market size and forecast 2021-2026
    • Exhibit 42: Chart on North America - Market size and forecast 2021-2026 ($ million)
    • Exhibit 43: Data Table on North America - Market size and forecast 2021-2026 ($ million)
    • Exhibit 44: Chart on North America - Year-over-year growth 2021-2026 (%)
    • Exhibit 45: Data Table on North America - Year-over-year growth 2021-2026 (%)
  • 7.4 APAC - Market size and forecast 2021-2026
    • Exhibit 46: Chart on APAC - Market size and forecast 2021-2026 ($ million)
    • Exhibit 47: Data Table on APAC - Market size and forecast 2021-2026 ($ million)
    • Exhibit 48: Chart on APAC - Year-over-year growth 2021-2026 (%)
    • Exhibit 49: Data Table on APAC - Year-over-year growth 2021-2026 (%)
  • 7.5 Europe - Market size and forecast 2021-2026
    • Exhibit 50: Chart on Europe - Market size and forecast 2021-2026 ($ million)
    • Exhibit 51: Data Table on Europe - Market size and forecast 2021-2026 ($ million)
    • Exhibit 52: Chart on Europe - Year-over-year growth 2021-2026 (%)
    • Exhibit 53: Data Table on Europe - Year-over-year growth 2021-2026 (%)
  • 7.6 South America - Market size and forecast 2021-2026
    • Exhibit 54: Chart on South America - Market size and forecast 2021-2026 ($ million)
    • Exhibit 55: Data Table on South America - Market size and forecast 2021-2026 ($ million)
    • Exhibit 56: Chart on South America - Year-over-year growth 2021-2026 (%)
    • Exhibit 57: Data Table on South America - Year-over-year growth 2021-2026 (%)
  • 7.7 Middle East and Africa - Market size and forecast 2021-2026 
    • Exhibit 58: Chart on Middle East and Africa - Market size and forecast 2021-2026 ($ million)
    • Exhibit 59: Data Table on Middle East and Africa - Market size and forecast 2021-2026 ($ million)
    • Exhibit 60: Chart on Middle East and Africa - Year-over-year growth 2021-2026 (%)
    • Exhibit 61: Data Table on Middle East and Africa - Year-over-year growth 2021-2026 (%)
  • 7.8 US - Market size and forecast 2021-2026
    • Exhibit 62: Chart on US - Market size and forecast 2021-2026 ($ million)
    • Exhibit 63: Data Table on US - Market size and forecast 2021-2026 ($ million)
    • Exhibit 64: Chart on US - Year-over-year growth 2021-2026 (%)
    • Exhibit 65: Data Table on US - Year-over-year growth 2021-2026 (%)
  • 7.9 China - Market size and forecast 2021-2026
    • Exhibit 66: Chart on China - Market size and forecast 2021-2026 ($ million)
    • Exhibit 67: Data Table on China - Market size and forecast 2021-2026 ($ million)
    • Exhibit 68: Chart on China - Year-over-year growth 2021-2026 (%)
    • Exhibit 69: Data Table on China - Year-over-year growth 2021-2026 (%)
  • 7.10 Germany - Market size and forecast 2021-2026 
    • Exhibit 70: Chart on Germany - Market size and forecast 2021-2026 ($ million)
    • Exhibit 71: Data Table on Germany - Market size and forecast 2021-2026 ($ million)
    • Exhibit 72: Chart on Germany - Year-over-year growth 2021-2026 (%)
    • Exhibit 73: Data Table on Germany - Year-over-year growth 2021-2026 (%)
  • 7.11 Japan - Market size and forecast 2021-2026
    • Exhibit 74: Chart on Japan - Market size and forecast 2021-2026 ($ million)
    • Exhibit 75: Data Table on Japan - Market size and forecast 2021-2026 ($ million)
    • Exhibit 76: Chart on Japan - Year-over-year growth 2021-2026 (%)
    • Exhibit 77: Data Table on Japan - Year-over-year growth 2021-2026 (%)
  • 7.12 France - Market size and forecast 2021-2026
    • Exhibit 78: Chart on France - Market size and forecast 2021-2026 ($ million)
    • Exhibit 79: Data Table on France - Market size and forecast 2021-2026 ($ million)
    • Exhibit 80: Chart on France - Year-over-year growth 2021-2026 (%)
    • Exhibit 81: Data Table on France - Year-over-year growth 2021-2026 (%)
  • 7.13 Market opportunity by geography 
    • Exhibit 82: Market opportunity by geography ($ million)

8 Drivers, Challenges, and Trends

  • 8.1 Market drivers
  • 8.2 Market challenges
  • 8.3 Impact of drivers and challenges 
    • Exhibit 83: Impact of drivers and challenges in 2021 and 2026
  • 8.4 Market trends

9 Vendor Landscape

  • 9.1 Overview
  • 9.2 Vendor landscape 
    • Exhibit 84: Overview on Criticality of inputs and Factors of differentiation
  • 9.3 Landscape disruption 
    • Exhibit 85: Overview on factors of disruption
  • 9.4 Industry risks 
    • Exhibit 86: Impact of key risks on business

10 Vendor Analysis

  • 10.1 Vendors covered 
    • Exhibit 87: Vendors covered
  • 10.2 Market positioning of vendors 
    • Exhibit 88: Matrix on vendor position and classification
  • 10.3 BBI Life Sciences Corp. 
    • Exhibit 89: BBI Life Sciences Corp. - Overview
    • Exhibit 90: BBI Life Sciences Corp. - Product / Service
    • Exhibit 91: BBI Life Sciences Corp. - Key offerings
  • 10.4 Bio Basic Inc. 
    • Exhibit 92: Bio Basic Inc. - Overview
    • Exhibit 93: Bio Basic Inc. - Product / Service
    • Exhibit 94: Bio Basic Inc. - Key offerings
  • 10.5 Bioneer Corp. 
    • Exhibit 95: Bioneer Corp. - Overview
    • Exhibit 96: Bioneer Corp. - Product / Service
    • Exhibit 97: Bioneer Corp. - Key offerings
  • 10.6 DNA TwoPointO Inc. 
    • Exhibit 98: DNA TwoPointO Inc. - Overview
    • Exhibit 99: DNA TwoPointO Inc. - Product / Service
    • Exhibit 100: DNA TwoPointO Inc. - Key offerings
  • 10.7 Eurofins Scientific SE 
    • Exhibit 101: Eurofins Scientific SE - Overview
    • Exhibit 102: Eurofins Scientific SE - Business segments
    • Exhibit 103: Eurofins Scientific SE - Key news
    • Exhibit 104: Eurofins Scientific SE - Key offerings
    • Exhibit 105: Eurofins Scientific SE - Segment focus
  • 10.8 GENEWIZ Inc. 
    • Exhibit 106: GENEWIZ Inc. - Overview
    • Exhibit 107: GENEWIZ Inc. - Product / Service
    • Exhibit 108: GENEWIZ Inc. - Key offerings
  • 10.9 GenScript Biotech Corp. 
    • Exhibit 109: GenScript Biotech Corp. - Overview
    • Exhibit 110: GenScript Biotech Corp. - Business segments
    • Exhibit 111: GenScript Biotech Corp. - Key news
    • Exhibit 112: GenScript Biotech Corp. - Key offerings
    • Exhibit 113: GenScript Biotech Corp. - Segment focus
  • 10.10 Integrated DNA Technologies Inc. 
    • Exhibit 114: Integrated DNA Technologies Inc. - Overview
    • Exhibit 115: Integrated DNA Technologies Inc. - Product / Service
    • Exhibit 116: Integrated DNA Technologies Inc. - Key offerings
  • 10.11 Kaneka Corp. 
    • Exhibit 117: Kaneka Corp. - Overview
    • Exhibit 118: Kaneka Corp. - Business segments
    • Exhibit 119: Kaneka Corp. - Key offerings
    • Exhibit 120: Kaneka Corp. - Segment focus
  • 10.12 Thermo Fisher Scientific Inc. 
    • Exhibit 121: Thermo Fisher Scientific Inc. - Overview
    • Exhibit 122: Thermo Fisher Scientific Inc. - Business segments
    • Exhibit 123: Thermo Fisher Scientific Inc. - Key news
    • Exhibit 124: Thermo Fisher Scientific Inc. - Key offerings
    • Exhibit 125: Thermo Fisher Scientific Inc. - Segment focus

11 Appendix

  • 11.1 Scope of the report
  • 11.2 Inclusions and exclusions checklist 
    • Exhibit 126: Inclusions checklist
    • Exhibit 127: Exclusions checklist
  • 11.3 Currency conversion rates for US$ 
    • Exhibit 128: Currency conversion rates for US$
  • 11.4 Research methodology 
    • Exhibit 129: Research methodology
    • Exhibit 130: Validation techniques employed for market sizing
    • Exhibit 131: Information sources
  • 11.5 List of abbreviations 
    • Exhibit 132: List of abbreviations
About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focus on emerging market trends and provide actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/

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The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

Authored by Mike Shedlock via MishTalk.com,

On average, the economy…

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The Fed's Big Problem, There Are Two Economies But Only One Interest Rate

Authored by Mike Shedlock via MishTalk.com,

On average, the economy looks OK. But averages are misleading. Several large groups of people are struggling. They all have one thing in common.

Case-Shiller home price index, CPI rent index, and the index of hourly earnings for production and nonsupervisory workers.

Who’s Unhappy?

Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

The last great time to buy a home was in 2012. Over the next eight years, home prices moved further and further away from wages.

When the Covid pandemic hit in 2020, we had record QE, record fiscal stimulus, mortgage rates hit record lows, and inflation hit the highest levels in 40 years.

In response, home prices soared out of sight. Worse yet, the price of rent rose at least 0.4 percent for 28 straight months.

Rent of Primary Residence vs OER

Data from the BLS, chart by Mish

Rent vs OER Chart Notes

  • OER stands for Owners’ Equivalent Rent. It is the price one would pay to rent their own house, unfurnished without rent.

  • Rent of primary residence is just what one would expect. It is measured price of rent, unfurnished, without utilities.

Mass Confusion Over OER

Contrary to widespread myth, OER is a measured price with very minor imputations that do not matter. OER is designed to track rent prices and it does. It is a measured price.

Much of the confusion comes from a misquoted BLS statement on OER, emphasis mine.

The expenditure weight in the CPI market basket for OER is based on the following question that the Consumer Expenditure Survey asks of consumers who own their primary residence: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?

Note that these responses are not used in estimating price change for the shelter categories, only the weight.

People quote that question as if that is how the BLS measures prices. It doesn’t. Prices, except for minor, irrelevant imputations, are based on actual measured rents.

No One Pays OER

The problem with OER is the weight not the measure. No one actually pays OER. Rather, people pay mortgages.

Yet, OER it is the single largest component of the CPI with a weight of 26.769 percent. Rent has a weight of 7.671 percent.

Many people conclude that the CPI is overstated because no one pays OER. The problem with this idea is home prices are at record highs and home prices are not in the CPI at all.

Homes are not in the CPI because economists consider them a capital expense not a personal expense.

But so what? Inflation matters not just consumer inflation. The Fed has made a big mess of things by ignoring obvious housing bubbles.

30-year mortgage Rates

Mortgage rates courtesy of Mortgage News Daily, annotations by Mish

When the Fed slashed interest rates to zero, mortgage rates fell below 3.0% for an extended period allowing everyone to refinance at 3.0 percent or below. Most did.

OER rose from 332 to 403 between January of 2020 and January of 2024. That’s a gain of 21.4 percent.

Rent rose from 338 to 412. That’s a gain of 21.9 percent.

Whereas the renter is struggling, the homeowner refinanced lower putting extra money in his pocket every month.

Home owners also benefitted from rising wages, rising value of their home and a stable, not rising mortgage payment.

Winners and Losers

  • The homeowners are generally doing OK. The home ownership rate is 65.7 percent.

  • The 34.3 percent who rent are generally not doing OK.

The study did not break things down by home owners vs renters, but I suspect most of the use is by renters.

According to the latest CPI report, rent was up at least 0.4 percent for the 29th straight month. Shelter, a broader category, rose 0.6 percent. Food rose 0.4 percent.

CPI data from the BLS, chart by Mish

Whereas home owners have a fixed payment, likely refinanced lower than their initial mortgage, renters faces huge increases, not every month, but once a year, big bang.

For discussion please see Another Hotter Than Expected CPI Led by Shelter, Up Another 0.6 Percent

The stress is easy to spot by demographics.

Credit Card and Auto Delinquencies Soar

Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.

Record High Credit Card Debt

Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.

For nearly all age groups, serious delinquencies are the highest since 2011 at best.

Auto Loan Delinquencies

Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.

Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.

For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

The above chart is from the Apartment List’s 2023 Millennial Homeownership Report

Those struggling with rent are more likely to Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.

The same age groups struggling with credit card and auto delinquencies.

On Average Everything is Great

Average it up as Fed and all the clueless economic and political writers do, and things look great.

This is why we have seen countless stories attempting to explain why people should be happy.

Krugman Blames Partisanship

OK, there is a fair amount of partisanship in the polls.

However, Biden isn’t struggling from partisanship alone. If that was the reason, Biden would not be polling so miserably with Democrats in general, blacks, and younger voters.

In addition to Biden’s Age and Senility, this allegedly booming economy left behind the renters and everyone under the age of 40 struggling to make ends meet.

Powell Pleads Patience

In Jerome Powell’s Interview with 60 Minutes, the Fed Chairman Tells 60 Minutes US Fiscal Path is Unsustainable

Powell: When high inflation really threatens to become persistent, we use our tools to bring down inflation. It’s very important for that young couple — and particularly for younger couples starting out who may not have great financial means, that we succeed in this effort.

60 Minutes: You’re asking the American people for patience?

Powell: Yes. And I think people have been patient and have been through a pretty difficult time. And I think now we’re coming through that time and starting to feel a little bit better about things.

Powell, Krugman, and most of the economic writers, even at the Wall Street Journal have not managed to figure out over a third of the nation is struggling.

Many Are Addicted to “Buy Now, Pay Later” Plans

Buy Now Pay Later, BNPL, plans are increasingly popular. It’s another sign of consumer credit stress.

For discussion, please see Many Are Addicted to “Buy Now, Pay Later” Plans, It’s a Big Trap

The study did not break things down by home owners vs renters, but I strongly suspect most of the BNPL use is by renters.

What About Jobs?

Jobs Soar but Full Time Employment Is Barely Changed Since May 2022

Nonfarm payrolls and employment levels from the BLS, chart by Mish.

But hey, that’s OK because on average, the economy is great. Or do we really mean, on average the stock market is great, and the average homeowner is fine?

Hello Mr. Powell

There are two economies (the homeowners/asset holders and everyone else). However, there is only one interest rate. Patience please says Powell.

Lowering rates risks risks fueling the housing bubble and the most expensive stock market in history.

Hello Mr. Powell, it’s your move.

Tyler Durden Wed, 02/21/2024 - 07:20

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Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

We already know that the Biden administration and the BLS are ignoring…

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Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

We already know that the Biden administration and the BLS are ignoring the massive layoffs happening across corporate America in favor of pushing some asinine narrative that 'Bidenomics', whatever that even means, is somehow creating jobs other than 2nd and 3rd jobs for senior citizens driving Uber when they should be retired. 

Now, it's becoming clear that 2024 could be the year when corporations continue 'cost cutting', which could mean a number of strategies, almost all of which result in less employees and less pay instead of more. 

Executives from various industries, including toy, cosmetics, and technology sectors, are cutting costs and jobs, even in profitable companies such as Mattel, PayPal, Cisco, Nike, Estée Lauder, and Levi Strauss, CNBC wrote this week.

Macy's plans to shut five stores and cut over 2,300 jobs, while airlines like JetBlue and Spirit offer buyouts, and United reduces in-flight services. This trend is driven by consumer caution and investor pressure for companies to adapt to changing demand and higher expenses, the report says.

Significant labor contracts in sectors like airlines and UPS have raised costs, challenging businesses accustomed to passing these on to consumers. Remember those celebrations people were having about UPS drivers winning their new contracts just months ago? UPS is already laying off drivers as a result.

Walmart is expanding its store network, contrasting with the broader cost-cutting movement. Major banks have already reduced their workforce significantly, anticipating economic shifts. U.S. companies announced significant job cuts in January, indicating a focus on profit optimization amid steady earnings reports without relying on substantial price or sales increases.

A full list of major companies that have laid off workers or implemented strategies to cut costs include:

  • Mattel
  • PayPal
  • Cisco
  • Nike
  • Estée Lauder
  • Levi Strauss
  • Macy’s
  • JetBlue Airways
  • Spirit Airlines
  • United Airlines
  • UPS
  • Meta (parent of Facebook and Instagram)
  • Amazon
  • Alphabet (parent of Google)
  • Microsoft
  • Warner Bros. Discovery
  • Disney
  • Paramount Global
  • Comcast (parent company of NBCUniversal)
  • Delta Air Lines
  • General Motors
  • Ford Motor
  • Stellantis
  • Chipotle
  • Wells Fargo
  • Goldman Sachs
  • Walmart
  • Target
  • Home Depot

Meta's restructuring in 2023 set a precedent for tech giants like Amazon, Alphabet, Microsoft, and Cisco to reduce their workforces. But the trend extends beyond tech, with UPS cutting 12,000 jobs and others in retail and entertainment also announcing layoffs.

Significant cost savings have been announced by major corporations, including Warner Bros. Discovery and Disney, with the latter aiming for $7.5 billion in savings.

Paramount Global and NBCUniversal have also trimmed their staffs. Cost-cutting measures have reached various sectors, including airlines adjusting services and deferring expenses, and automakers scaling back investments due to challenges in demand and EV adoption.

“You’re seeing a rebalancing happening in the labor markets, in the capital markets. And that rebalancing is still going to play out and gradually lead to a more sustainable environment of lower inflation and lower interest rates, and perhaps a little bit slower growth, said Gregory Daco, chief economist for EY.

He continued, telling CNBC: “You are in an environment where cost fatigue is very much part of the equation for consumers and business leaders. The cost of most everything is much higher than it was before the pandemic, whether it’s goods, inputs, equipment, labor, even interest rates.”

Even Chipotle is experimenting with robots to boost efficiency. These adjustments reflect a broader recalibration after the pandemic's disruptions, with companies aiming for a sustainable balance in a potentially slower economic growth environment.

Tyler Durden Wed, 02/21/2024 - 05:45

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Walmart Hits Record High After Earnings Beat, Despite Soft Guidance, Warning About “Choiceful” Consumers Spending Less

Walmart Hits Record High After Earnings Beat, Despite Soft Guidance, Warning About "Choiceful" Consumers Spending Less

Walmart shares hit…

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Walmart Hits Record High After Earnings Beat, Despite Soft Guidance, Warning About "Choiceful" Consumers Spending Less

Walmart shares hit a new all-time high after the largest bricks and mortar retailer reported earnings that beat expectations despite providing guidance that was marginally softer, as choosy shoppers nevertheless kept buying in its stores.

Here is what the company report for the final quarter of 2023:

  • Adjusted EPS $1.80 (excluding impact, net of tax, from a net gain of $0.23 on equity and other investments) vs. $1.71 y/y, beating estimate of $1.65
  • Revenue $173.39 billion, +5.7% y/y, beating estimate $170.66 billion
    • Total US comparable sales ex-gas +3.9%, estimate +3.2%
    • Walmart-only US stores comparable sales ex-gas +4%, estimate +3.12%
    • Sam's Club US comparable sales ex-gas +3.1%, estimate +2.99%
  • Change in US E-Commerce sales +17%, beating estimate +15.5%
  • Adjusted operating income $7.25 billion, beating estimate $6.79 billion

Of the metrics reported, however, the most important one is that Walmart’s same-store sales (ex fuel), rose 4% YoY for US stores (of which net sales was 3.% and eCommerce added 17%). Wall Street was expecting 3.1% so the number was clearly a beat and was driven by "strength in grocery, health and wellness, offset by softness in general merchandise", and was the result of higher transactions (+4.3%) offsetting average ticket prices, which dropped 0.3% YoY. Still, the number is a far cry from the 8.3% comp sales a year ago.

In keeping with the noted softness in general merchandise, the world’s largest retailer delivered softer guidance for the current fiscal year, as it expects consumers to be selective in their spending:

  • For full-year 2025, WMT sees
    • Net sales +3% to +4%, slower than growth from the prior year, and adjusted EPS $6.70 to $7.12, slightly disappointing vs the median consensus estimate of $7.09
    • Capital expenditures approximately 3.0% to 3.5% of net sales
  • For Q1, 2025, WMT sees sees adjusted EPS $1.48 to $1.56.

Discussing the quarter, CEO Doug McMillan said that "we crossed $100 billion in eCommerce sales and drove share gains as our customer experience metrics improved, evenduring our highest volume days leading up to the holidays"

Commenting on customer "selectivity", CFO John Rainey said that “they are being choiceful" as consumers continue to spend less per trip but have been shopping frequently, adding that the company expects some resilience to continue for the rest of the year.

There was more good news: Walmart is gaining share in nearly every category, according to Rainey, with e-commerce among the factors driving growth as the company trims losses associated with handling online orders. Furthermore, while deflation is still a possibility, the company expects it to be less likely based on what it observed during the latest quarter.

That said, while grabbing more spending with low-priced groceries and other basics, Walmart has been cautious in recent months about the health of the consumer amid persistent inflation and higher interest rates. As noted above, US consumers have been buying cheaper products and seeking value, as they pull back from discretionary products like general merchandise. That has resulted in softer sales for some retailers, including Target Corp. and Home Depot Inc. Other big-box retailers are set to report their quarterly earnings in the coming weeks.

As Bloomberg notes, the recent moderation in inflation is another challenge for Walmart and other retail operators that have passed down price increases to consumers over the past few years. This has contributed to higher dollar sales for companies, followed by an uptick in revenue during the pandemic when people bought more groceries and home goods. Such increases are slowing overall, though inflation remains stubborn in some areas like groceries and shelter.

Similar to all of its major competitors, Walmart has been beefing up automation in warehouses and stores in recent years, while remodeling locations to make them more modern. Pickup and delivery businesses continue to expand, driving share gains among upper-income households and fueling growth of the Walmart+ membership program.

Separately, Walmart said it agreed to buy smart-TV maker Vizio Holding Corp. for about $2.3 billion. The deal would accelerate the retailer’s advertising business, called Walmart Connect, and help Walmart and its advertisers engage more with customers. Walmart has been expanding Walmart Connect and other nonretail businesses that have faster growth and better margins. The deal announcement confirmed a Wall Street Journal report from last week. Vizio shares soared 15% in Tuesday premarket trading.

As for WMT, the Bentonville, after the stock gained 16% over the past year, it jumped another 5.7% on Tuesday rising to a new all time high as investors were clearly satisfied with what they saw.

Full investor presentation below (pdf link)

Tyler Durden Tue, 02/20/2024 - 10:17

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