Bloomberg

(Bloomberg) — Stocks rallied and bond yields tumbled after Jerome Powell said the Fed will offer less “clear guidance” on rate moves and that it will likely be appropriate to slow rate hikes at some point.

The Federal Reserve’s boss said the central bank is moving “expeditiously” when it comes to dealing with price pressures and reassured it has the tools to do the job. Powell also noted that another unusually large boost in rates would depend on data after officials raised rates by 75 basis points for the second straight month.

Expectations for the pace of Fed rate increases eased back — with swap markets showing around 58 basis points of tightening priced in for the next meeting in September and the expected peak for the cycle dropping to around 3.3% — with that kind of level seen toward the end of this year or early in 2023.

Fresh economic data reduced the odds the US will report two straight quarters of a contracting economy and avert what is commonly regarded as a recession. Economists at Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc. boosted their estimates for second-quarter gross domestic product after government reports showed firmer durable-goods shipments, a narrower trade deficit and gains in inventories last month.

The Nasdaq 100 soared 4% as Alphabet Inc., Microsoft Corp. and Texas Instruments Inc. posted solid revenue growth and expressed optimism about the coming months. Their results set the tone for a week that will include earnings from behemoths Meta Platforms Inc., Apple Inc. and Amazon.com Inc. Chipmakers surged on news the US Senate passed legislation that includes $52 billion in grants and incentives for semiconductor manufacturing.

Here are some key events to watch this week:

• Apple, Amazon earnings, Thursday
• US GDP, Thursday
• Euro-area CPI, Friday
• US PCE deflator, personal income, University of Michigan consumer sentiment, Friday

Musk, Tesla and Twitter are this week’s theme of the MLIV Pulse survey. Also share your views on the S&P 500’s biggest stocks. Click here to get involved anonymously.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 2.2% as of 2:58 p.m. New York time
• The Nasdaq 100 rose 3.9%
• The Dow Jones Industrial Average rose 1.2%
• The MSCI World index rose 1.7%

Currencies

• The Bloomberg Dollar Spot Index fell 0.6%
• The euro rose 0.8% to $1.0199
• The British pound rose 1.1% to $1.2165
• The Japanese yen rose 0.4% to 136.42 per dollar

Bonds

• The yield on 10-year Treasuries declined eight basis points to 2.73%
• Germany’s 10-year yield advanced two basis points to 0.95%
• Britain’s 10-year yield advanced four basis points to 1.96%

Commodities

• West Texas Intermediate crude rose 2.9% to $97.74 a barrel
• Gold futures rose 1% to $1,752.80 an ounce

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The US Federal Trade Commission sued to block Meta Platforms Inc. from acquiring virtual reality company Within Unlimited, saying the transaction would allow the social network to dominate the burgeoning virtual reality space.

The FTC said the acquisition of Within, which develops apps for VR devices, including the popular fitness app Supernatural, would “tend to create a monopoly,” according to the complaint, which was filed in federal court in San Francisco Wednesday.

Meta has made a number of acquisitions, most of them small, to bolster its offering in virtual and augmented reality. Chief Executive Officer Mark Zuckerberg believes that in the future, the company will popularize a metaverse — a more immersive version of the internet, where people can populate an alternative virtual world to go shopping, go to work and see friends. 

Meta, which announced its plan to buy Within in October, is the world’s top VR headset maker with its Oculus product controlling about 80 percent of the market, according to research firm IDC. 

Virtual reality is a small but growing slice of the consumer technology industry. Meta has identified the space as its next big bet, requiring big investment. The company’s Reality Labs division reported an operating loss of $10.2 billion in 2021, and Zuckerberg has said that investments in virtual and augmented reality will lead to “significant” losses early on.

“Mr. Zuckerberg has made clear that his aspiration for the VR space is control of the entire ecosystem,” the FTC said in the complaint. “The proposed acquisition of Within would be one more step along that path toward dominance.”

The FTC has also sued Meta over its 2012 acquisition of photo-sharing app Instagram and the 2014 WhatsApp transaction, arguing the company sought to buy up nascent competitors to keep them from challenging Facebook, its social networking product. That lawsuit, filed in 2020, remains ongoing. Meta argues that the transactions were lawful.

“The FTC’s case is based on ideology and speculation, not evidence,” said Meta spokesperson Christopher Sgro. “The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible.”

The antitrust agency has faced significant criticism from Congress and antitrust advocates for allowing the biggest tech companies to acquire startups that might grow into rivals. In a 2021 report, the FTC found the five tech giants — Alphabet Inc., Apple Inc., Amazon.com Inc., Microsoft Corp. and Meta — acquired hundreds of smaller firms over the previous decade, often using loopholes in antitrust law to avoid notifying antitrust regulators about the deals. 

Meta reports second-quarter earnings after the market close on Wednesday. Analysts expect a 29.6% decline in earnings per share on flat revenue compared with a year earlier due to a slowdown in advertising spending that’s left technology giants competing for fewer marketing dollars.

The FTC voted 3-2 along party lines to bring the case, with the agency’s two Republican commissioners opposed. The FTC asked the court to temporarily halt the transaction, which Facebook said it plans to close on July 31. The agency also sought an injunction blocking the deal on antitrust grounds.

The case is FTC v. Meta Platforms Inc., 22-cv-4325, US District Court for the Northern District of California (San Francisco).

(Updates with additional details from seventh paragraph)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Quebec technology firm CGI Inc. sees a “pretty perfect” environment for acquisitions after a selloff in the sector made the price of potential targets more reasonable, company executives said. 

The Montreal-based IT and business consulting company expects to meet a target of making C$1 billion ($776 million) in deals this year, Chief Executive Officer George Schindler said on a conference call with analysts Wednesday. 

“Valuations are coming down, and quite frankly there is a bit less competition given that the cost of capital is increasing,” he said. The S&P 500 Information Technology sector index has fallen 21% so far this year. CGI is down less than 4%. 

The timing for acquisitions, a major part of CGI’s growth strategy, “is starting to be pretty perfect,” Chief Financial Officer Francois Boulanger added. “We are putting even more people on this and we’re seeing good opportunity for the future.”

Management can count on C$2.3 billion of cash with access to more if needed, Boulanger said. 

EPS Growth

CGI said revenue grew 8% to C$3.26 billion ($2.5 billion) in the fiscal third quarter ended June 30, as it sees strong demand for its services. About a third of revenue came from government customers; another 24% was from financial services clients. 

The company slightly beat analysts’ estimates by earning C$1.54 a share on an adjusted basis, up 13% from last year. 

CGI executives also said they remain confident even as the global economy encounters headwinds. “It’s not changing businesses’ resolve around where they want to go with IT,” Schindler said. But bookings — a measure of contract wins, extensions and renewals — were down by C$224 million to C$3.41 billion year-over-year.

Consultants and professionals increased by more than 10,500 to 88,500 worldwide over the year. “The hiring of new talent at all experience levels remains at a record high,” said Schindler. 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The Senate on Wednesday passed legislation that includes $52 billion in grants and incentives for US semiconductor manufacturing, an industry that has steadily lost ground to foreign competitors in recent years. 

The 64 to 33 vote comes after more than a year of debate and marks a major legislative victory for President Joe Biden, whose agenda has largely stalled in the Senate, where 60 votes are required to pass most legislation.

The bill is expected to pass the House later this week and then move to Biden’s desk for his signature.  

Wall Street is likely to welcome the help. The Philadelphia Stock Exchange Semiconductor Index fell 30% this year through Tuesday, positioning the gauge for its worst annual performance since 2008. All 30 stocks in the index were down for 2022 as of Tuesday’s close.

In addition to the semiconductor funding, the legislation includes money for research and workforce training and 5G wireless technology.

The measure has been presented as both a way to reinvigorate the US industrial base and fortify the country’s national security interests against future supply chain disruptions overseas, where the vast majority of advanced semiconductors are currently produced. 

“Our grandchildren will be holding good-paying jobs in industries we can’t even imagine because of what we do today,” Senate Majority Leader Chuck Schumer said before the final vote on the measure, which he described as being “a long time coming.”

Senate Republican leader Mitch McConnell said the bill was about “national security,” adding that he wished it had cost less. The nonpartisan Congressional Budget Office estimates the legislation would increase US budget deficits by $79 billion over a decade.

Speaker Nancy Pelosi has voiced support. Representative Michael McCaul, a Texas Republican whose state stands to benefit from the legislation, sponsored the chips funding and has been urging his colleagues to support the measure. House Minority Leader Kevin McCarthy, however, told reporters Tuesday evening that he would vote no.

Among the key provisions in the package:

• $39 billion in financial assistance to build domestic semiconductor facilities
• $11 billion to fund chips research and workforce development
• $2 billion for defense-related chips manufacturing
• Restrictions on use of funds for stock buybacks, foreign investment
• A 25% investment tax credit for the manufacture of semiconductors and tools to create semiconductors
• $500 million for an international secure communications program
• $200 million for semiconductor industry worker training
• $1.5 billion for public wireless supply-chain innovation
• Changes and authorizes funding for programs in the National Space and Aeronautics Administration, National Institute of Standards and Technology, National Science Foundation
• Authorizes new programs under Energy Department

The measure’s path to passage has taken multiple twists and turns over the past 18 months as lawmakers wrestled with both political and policy priorities, trying to come up with a proposal that would pass both chambers. 

It was originally introduced in the Senate last year by Schumer and Senator Todd Young, an Indiana Republican, under the title “The Endless Frontier Act” and focused on revamping the National Science Foundation and bolstering US competitiveness with China. 

A bipartisan group of senators — led by Democrats Mark Warner of Virginia and Mark Kelly of Arizona and Republicans John Cornyn of Texas and Tom Cotton of Arkansas — then succeeded in adding the $52 billion in emergency appropriations for the semiconductor industry, allocating funding for a measure that had previously been enacted as part of the 2021 defense bill.

At several junctures the legislation seemed all but dead, even as chip companies including Intel Corp. warned that delays threatened plans for expanding domestic manufacturing. 

Chip fabrication facilities, or fabs, take as many as two to three years to become fully operational, which is one of the reasons why proponents were pushing to pass the legislation as soon as possible.

Senator Maria Cantwell, a Washington Democrat and chair of the Commerce Committee, which had jurisdiction over the legislation, said “if we don’t start building here, we’re not going to catch up” on developing new chip technology for the future.

Opposition to the bill in the Senate united socialist Bernie Sanders, a Vermont independent, with free market conservatives like Republican Pat Toomey of Pennsylvania.

“If we truly want to beat China, we can’t emulate Beijing’s semi-socialist economic model,” Toomey said in a statement. “The best way to encourage investment, spur economic growth, and enhance American competitiveness is to create policies that benefit all industries, businesses, and workers alike.”

Sanders said on the Senate floor that US industrial policy should “not mean the government providing massive amounts of corporate welfare to profitable corporations without getting anything in return.”

Senate’s Bipartisan Chips Bill Would Add $79 Billion to Deficit

In the House, McCarthy and other Republicans oppose the legislation, with some criticizing it for not being tough enough on China. Representative Jim Banks of Indiana, the chairman of the Republican Study Committee, called it a “fake China bill” in a tweet.

Young, speaking on Bloomberg Television, said he believed Biden could sign the bill into law as soon as the weekend. “I expect that will happen,” Young said.

The US still leads the world in chip design, but has largely outsourced manufacturing to overseas firms like Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. The US share of semiconductor manufacturing has fallen to 12% from 37% since 1990 and the country currently produces none of the most advanced chips, which are made largely in Taiwan.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — With recession fears mounting—and inflation, the war in Ukraine and the lingering pandemic taking a toll—many tech companies are rethinking their staffing needs, with some of them instituting hiring freezes, rescinding offers and making rounds of layoffs.

On Tuesday, Shopify Inc. announced that it cut 10% of its workforce, joining dozens of others in pulling back on jobs.  Here’s a look at the companies tapping the brakes.

Alphabet Inc., Google’s parent company, has been decelerating its recruiting efforts. Chief Executive Officer Sundar Pichai told employees this month that—although the business added 10,000 Googlers in the second quarter—it will be slowing the pace of hiring for the rest of the year and prioritizing engineering and technical talent. “Like all companies, we’re not immune to economic headwinds,” he said. The hiring pause is part of that slowdown, Google said, “to enable teams to prioritize their roles and hiring plans for the rest of the year.” It had nearly 164,000 employees at the end of March.

Amazon.com Inc. said in April that it was overstaffed after ramping up during the pandemic and needed to cut back. “As the variant subsided in the second half of the quarter and employees returned from leave, we quickly transitioned from being understaffed to being overstaffed, resulting in lower productivity,” Chief Financial Officer Brian Olsavsky said. Amazon is subleasing some warehouse space and has paused development of facilities meant for office workers, saying it needs more time to figure out how much space employees will require for hybrid work. The company had 1.6 million workers as of March, making it the biggest employer in the tech world.

Apple Inc. is planning to slow hiring and spending at some divisions next year to cope with a potential economic slump, according to people familiar with the matter. But it’s not a companywide policy, and the iPhone maker is still moving forward with an aggressive product-release schedule. Apple had 154,000 employees in September, when its last fiscal year ended.

Carvana Co., an online used car retailer, laid off 2,500 people in May, about 12% of its workforce. In an unusual move, the executive team will forego salaries for the rest of the year to pay severance to those who were let go, according to a filing with the Securities and Exchange Commission. The company had more than 21,000 full-time and part-time employees at the end of last year.

Coinbase Global Inc., a cryptocurrency exchange, told employees it was cutting 18% of staff in June to prepare for an economic downturn. It also rescinded job offers. “We appear to be entering a recession after a 10+ year economic boom,” CEO Brian Armstrong said in a blog post. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment,” he said. The company ended the quarter with about 5,000 employees. 

Compass Inc., a real estate brokerage platform, is eliminating 450 positions, about 10% of its staff, according to a filing last month. The company had nearly 5,000 employees at the end of 2021.

Gemini Trust Co., a cryptocurrency exchange founded by Bitcoin billionaires Cameron and Tyler Winklevoss, announced a 10% staff reduction in June. TechCrunch reported that the company laid off another 7% on July 18 and said a leaked plan showed it was seeking to cut a total of 15%, bringing it from 950 employees to 800 employees.

GoPuff, a grocery delivery app, is laying off 10% of its workforce and closing dozens of warehouses. The cuts will affect about 1,500 staff members—a mix of corporate and warehouse employees.

Lyft Inc. told employees it was reining in hiring in May after its stock dropped precipitously. The company went further on July 20, announcing plans to shutter its car-rental business and cut about 60 jobs. Lyft had about 4,500 employees in 2021. Archrival Uber Technologies Inc., meanwhile, has been more upbeat. CEO Dara Khosrowshahi told Bloomberg in June that his company was “recession resistant” and had no plans for layoffs.

Meta Platforms Inc., the parent of Facebook, slashed plans to hire engineers by at least 30%. CEO Mark Zuckerberg told employees that he’s anticipating one of the worst downturns in recent history. The company had more than 77,800 employees at the end of March.

Microsoft Corp. told workers in May that it was slowing down hiring in the Windows, Office and Teams groups as it braces for economic volatility. The company had 181,000 employees in 2021. More recently, the software maker cut some jobs—less than 1% of its total—as part of a reorganization. On July 20, the company said it began eliminating many job openings—a freeze that will last indefinitely.

Netflix Inc., the streaming giant, has had several rounds of highly publicized layoffs since it reported the loss of 200,000 subscribers in the first quarter. In April, it began scaling back some marketing initiatives, then cut 150 employees in May and 300 in June. Last quarter, it reported $70 million in expenses from severance and shed an additional 970,000 subscribers. Netflix had 11,300 employees in 2021.

Niantic Inc., maker of the Pokemon Go video game, fired 8% of its team in June. It was an effort to streamline operations and position the company to weather economic storms, CEO John Hanke told staff in an email. Niantic had around 800 employees at the end of last year.

OpenSea, an NFT marketplace, laid off 20% of its staff on July 14. CEO Devin Finzer tweeted, “We have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn.” 

Peloton Interactive Inc. announced plans to cut about 2,800 jobs globally, roughly 20% of its corporate roles, as part of a surprise shake-up in February that saw its CEO John Foley and several executive team members step down. In 2021, the company reported having nearly 9,000 employees.

Redfin Corp., another real estate brokerage, cut 8% of its staff in June. “We don’t have enough work for our agents and support staff,” CEO Glenn Kelman wrote in a blog post, saying that May demand was 17% below projections and that he expected the company to grow more slowly during a housing downturn. Redfin had about 6,500 employees at the end of last year.

Robinhood Markets Inc., the online brokerage, terminated 9% of its workforce in April. It had about 3,800 employees at the end of last year and racked up more than $2 billion of losses since going public last July.

Rivian Automotive Inc. is planning to cut hundreds of non-manufacturing jobs and teams with duplicate functions. The Southern California electric-vehicle maker, which has more than 14,000 employees, could make an overall reduction of around 5%. In a memo to employees, CEO RJ Scaringe said, “We will always be focused on growth; however, Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably.” 

Salesforce Inc., the cloud computing platform, has been slowing hiring and reducing travel expenses, according to a leaked memo reported in May by Insider.

Shutterfly, a maker of personalized photo items, laid off 100 staffers in June, CEO Hilary Schneider told Bloomberg. The company, which has 7,000 employees, is making hiring adjustments to weather the economic uncertainty. “Clearly we’re going through a period of economic choppiness on a global level,”  she said. “When you look at the supply chain, it certainly is driving inflation and impacting consumer confidence.”

Shopify, an e-commerce platform, is laying off 1,000 employees, CEO Tobi Lutke said in a letter to employees. The affected jobs included recruiting, support and sales. The company is offering 16 weeks of severance, career coaching, a laptop and internet allowance, home-office furniture and a free Shopify account for those who want to launch their own storefront.

Spotify Technology SA, the audio service, is cutting employee growth by about 25% to adjust for macroeconomic factors, CEO Daniel Ek said in a note to staff in June. The company has more than 6,500 employees, according to its website.

Stitch Fix, an online personalized styling service, said in June that it was pursuing a 15% reduction in salaried positions—about 4% of its workforce—with the majority coming from non-technology corporate jobs and styling leadership roles. It’s coping with higher expenses and weaker demand. According to its website, the company has 8,900 employees.

Tesla Inc., the electric-vehicle maker, cut 200 autopilot workers as it closed a facility in San Mateo, California, in June. CEO Elon Musk said earlier that layoffs would be necessary in an increasingly shaky economic environment. In an interview with Bloomberg, he said that about 10% of salaried employees would lose their jobs over the next three months, though the overall headcount could be higher in a year. The company had 100,000 employees globally at the end of last year.

Tonal Systems Inc., the home fitness startup backed by sports celebrities Steph Curry and Serena Williams, laid off 35% of its 750 employees on July 13, according to CNBC. 

Twitter Inc. initiated a hiring freeze and began rescinding job offers in May, amid uncertainty surrounding Elon Musk’s acquisition of the company, according to an internal memo obtained by Bloomberg. More recently, it said it would be paring back office space, but without job cuts. The company had 7,500 employees in 2021. 

Unity Software Inc., which makes a video-game engine, surprised employees in June when it sent pink slips to 200 of its 5,900 workers, amounting to 4% of its workforce. Its CEO had assured staff there would be no layoffs, according to Kotaku.

Vimeo, a video sharing platform, cut 6% of the company in July. CEO Anjali Sud said in a blog post that it had slowed hiring since the beginning of the year. “The reality is that the challenging economic conditions around us have impacted our business. We must assume that these conditions will remain challenged for the foreseeable future, and that we aren’t immune. So while we’ve intentionally taken action across other expense areas first, it’s become clear that we also have to look at our largest area of investment, our team,” Sud said.

Wayfair Inc., the online furniture retailer, initiated a 90-day hiring freeze in May. The company had 18,000 employees as of March.

Whoop Inc., a fitness wearable startup, laid off 15% on July 22 and now has about 550 employees, according to a company statement reported by the Boston Globe.

(Updates with Shopify and other entries.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Elliott Investment Management is holding discussions with PayPal Holdings Inc. over an agreement that would see the activist investor have a hand in determining the future direction of the company, according to people familiar with the matter. 

Talks between Elliott and PayPal are amicable and could result in the activist investor getting representation on the board, the people said, asking not to be identified because the matter is private. An agreement could be announced in the coming days, they said. The talks are ongoing and could still fall apart, they added. 

Representatives for PayPal and Elliott declined to comment. 

PayPal has been cutting staff and closing offices as it looks to cut expenses. Elliott, which has amassed a sizable investment in PayPal, wants the company to accelerate those efforts, Bloomberg News has reported. Elliott may ultimately become a top-five investor in the company, the people had said. 

PayPal rose more than 11% in trading Wednesday after reports of Elliott’s investment. The stock was trading at $85.79 as of 12:30 p.m. in New York, giving the company a market value of about $99 billion. 

The company is set to report quarterly results on August 2. 

PayPal has been facing supply chain disruptions and once-in-a-generation levels of inflation that have hindered e-commerce, while more consumers have been returning to in-store shopping. All the while, EBay Inc., PayPal’s former parent company, has been rapidly moving payments away from its platform.

That’s forced PayPal’s Chief Executive Officer Dan Schulman to rejigger plans for the year as he seeks to improve operating leverage — or the ability to grow revenue faster than expenses.

PayPal has warned it will incur an additional $100 million in restructuring charges this year, though job cuts will ultimately help the firm save about $260 million a year in employee-related costs. 

Florida-based Elliott, led by billionaire Paul Singer, has agitated at some of the world’s largest and most prominent companies, including Toshiba Corp., GSK Plc, AT&T Inc. in recent years. 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Crypto exchange FTX US is expanding its no-fee stock trading service to all US users, including non-crypto investors, in a move to expand its customer base and increase assets under custody.  

“Our beta users were from a pool of existing FTX US crypto users,” Brett Harrison, president of FTX US, said in an interview. “It will be very interesting when we open it to all to see how many FTX US users start to trade stocks, and to what it extent we will be able to bring new users.”

The company also plans to add options trading, although no specific timeline was provided, he said. Last week, Robinhood Markets Inc. launched options trading in cash accounts for eligible customers, calling it one of the most requested features from advanced users. 

The competition between retail-focused stock trading platforms has heated up, even as the pandemic-driven meme stock movement waned and broader markets cooled. Stocktwits, a social media platform, also entered equities trading this month. 

“If we can perfect this product during this period of slow trading volume for retail, if and when the volume picks up again, we’d be able to capitalize that opportunity,” Harrison said. As part of the full launch, users will now be able to trade stocks on the mobile app. 

A key difference for FTX US’s equity trading offering is it doesn’t accept payment-for-order-flow, a controversial process in which wholesale firms pay for the right to execute orders coming from the brokerage’s retail investors. The practice has become a focus for the US Securities and Exchange Commission and other critics.

Harrison declined to comment when asked about a potential partnership between FTX and Robinhood. Sam Bankman-Fried, the co-founder of FTX who has disclosed a 7.6% stake in Robinhood, earlier said he’s “excited about Robinhood’s business prospects and potential ways we could partner with them.” 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Jaguar Land Rover expects deliveries to recover as semiconductor shortages ease and the British automaker ramps up production of its luxury SUVs and sports cars.

The prediction follows a quarterly loss before tax of £524 million ($632 million), compared with a shortfall of £110 million a year earlier, parent Tata Motors Ltd. said Wednesday. JLR’s quarterly revenue fell 11% from a year earlier because of an aging model offering, inflation and adverse currency movements, the company said. 

“Visibility on chip availability has improved quite significantly compared to what it was in the early part of May and June when China lockdowns were happening,” Tata’s Chief Financial Officer P.B. Balaji said on a media call. JLR expects to deliver 90,000 JLR cars in the current quarter, he said, an increase of 14% from the prior three months, . 

Automakers globally are seeing signs of the supply crunch on semiconductors easing. Earlier on Wednesday, Mercedes-Benz AG raised its outlook for carmaking returns, saying demand will likely outrun supply for the rest of the year.  

Sales of JLR vehicles slumped 37% to 78,825 units for the June quarter due to chip shortfalls and lockdowns in China, while demand for models like the the new Range Rover, Range Rover Sport and Defender remains strong. 

The company is targeting a return of 5% on earnings before interest and taxes and £1 billion in free cash flow in the year through March 2023.

‘Progressively Improve’

Tata reported a loss of 50 billion rupees ($625.8 million) for the three months through June, missing an average analyst estimate of a 13 billion rupees loss. 

“We expect the supply side, including that of critical electronic components to progressively improve,” Shailesh Chandra, managing director for Tata Motors’ Passenger Vehicles segment, said in the filing. 

Tata Passenger Electric Mobility, a unit of Tata Motors, is planning to complete the acquisition of Ford Motor Co.’s plant in India by the end of financial year, Balaji said. Tata Motors’ electric vehicles that have no gasoline variants may be produced in the factory. 

With the prices of commodities such as steel stabilizing, Tata Motors won’t be increasing the prices of its vehicles to the same extent it did in the past two years, Balaji said. 

(Updates with Tata Motors CFO comments starting in third paragraph)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Startup OpenGov is acquiring Cartegraph Systems LLC, a software provider for public agencies, in a deal that could benefit from the efforts of local governments to modernize their technology.  

The combined company has a valuation of about $1.25 billion, according to people familiar with the matter who asked not to be identified because the information was private. 

OpenGov, which gives cities tools to manage budgets and resources, was valued at $750 million in 2021, according to data provider Pitchbook. 

The acquisition signals a growing interest in cities upgrading their systems. There’s also an influx of capital rushing into municipalities from the federal infrastructure bill signed by President Joe Biden last year. 

“We are bringing together two incredible, mission-driven teams to meet the needs of the public sector, now and for the future,” OpenGov Chief Executive Officer Zac Bookman said in a statement.

OpenGov is using equity to finance the deal, Bookman added in an interview. The San Jose, California-based company is backed by Cox Enterprises Inc., Andreessen Horowitz and Emerson Collective, the firm started by Laurene Powell Jobs. Marc Andreessen, the co-founder of the venture capital firm, sits on OpenGov’s board, as does former Cisco Systems Inc. CEO John Chambers. Joe Lonsdale, one of the entrepreneurs who started Palantir Technologies Inc. is also one of OpenGov’s co-founders and his venture capital firm 8VC is a backer. 

More than 1,100 state and local agencies, including Minneapolis and Pittsburgh, use OpenGov’s software, according to the company’s website. Its software is used for data portals, budgeting and citizen services such as permit applications and utility payments. Cartegraph, based in Dubuque, Iowa, manages operations and analytics for cities, utilities, parks and schools. It’s backed by private equity firm Pamlico Capital.

The two companies began working together about a year and a half ago. Bookman said he has been interested in Cartegraph since he first met CEO Josh Mallamud three years ago. 

Cybersecurity threats, as well as old mainframe systems becoming obsolete, have been pushing municipalities toward cloud-based solutions. 

“There are folks out there using clipboards and Excel to manage these decisions,” Mallamud said. “They can’t keep up. We refer to local governments as heroes. They deserve modern cloud software.”

Cartegraph will sit as a largely independent division within OpenGov and plans to ramp up its research and development with the added resources. No cuts to the team are planned through the year and the group will continue to report to Mallamud, Bookman said.

The investment bank William Blair & Co. represented Cartegraph in the deal, while OpenGov’s financial adviser was Shea & Co.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Alphabet Inc.’s Google said it will expand in Chicago by acquiring an underused government-owned building from the state of Illinois in a deal that may help the city’s downtown recover from the economic losses brought on by the pandemic.

The company will buy the James R. Thompson Center, a 17-story building that occupies a full city block in the central Loop district and was designed in the early 1980s by architect Helmut Jahn. The deal is valued at $105 million, before renovations to the building, Google said Wednesday in a blog on its website. 

Google already has 1,800 employees in the city’s booming Fulton Market area across the Chicago River, and has been expanding in Chicago since it opened a two-person office nearby in 2000. The company said once renovations are complete in 2026, it plans to have employees in the Thompson Center.

“The naysayers said that Chicago could never establish itself as a tech hub, that we could never attract top tech companies or become a leader in the world of innovation and start ups,” Illinois Governor J.B. Pritzker said during a press conference to announce the sale. “In true Illinois fashion, we’ve exceeded expectations.” He added, “This is setting down a new marker in the center of the Loop on La Salle Street here that’s just a tremendous economic growth marker for the city.”

The state will get $30 million in cash and title to a different property a few blocks away, at 111 South La Salle Street, valued at $75 million, according to the government. The deal is part of the state’s efforts to consolidate its downtown office space, generate tax revenue for the city and to help spur the central business district’s recovery. 

Google’s expansion plans follow recently announced plans by Boeing Co. and Ken Griffin’s Citadel to move their headquarters out of the city.

“By establishing a presence in Chicago’s central business district, we will be getting in on the ground floor of a broader revitalization of the Loop,” Karen Sauder, Google’s Chicago site lead and president of global clients and agency solutions, said in the blog. 

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.