Issue #26

Digital payments surge in Britain, LVMH leads luxury market downturn, CrowdStrike promises it won’t fail again, and more.

News from July 18 - July 25, 2024

Digital Payments Surge In Britain

In 2023, one in three Britons used phone-based contactless payments each month, while cash use declined. Digital wallet usage rose to 42%, up from 30% the previous year, fueled by the enhanced security and higher spending limits of services like Apple Pay and Google Pay.

Meanwhile, cash represented only 12% of all payments, a decrease from 14% in 2022. Although digital payments are increasing, cash remains essential, particularly during IT outages, highlighting the need for a robust digital payment infrastructure.

Regulators are examining the impact of digital wallets on competition and consumer protection.

Source

LVMH Leads Luxury Market Downturn

LVMH led a drop in luxury stocks after reporting weaker Q2 sales, with shares falling 5%. This decline influenced other brands like Hermès and Prada, which also saw their stocks drop. 

While LVMH's champagne sales remained above 2019 levels, cognac sales fell in China but were balanced by growth in the US. Richemont, another luxury group, had flat sales, with growth in the US and Europe offsetting a decline in China. 

Analysts attribute LVMH’s profit dip to currency issues and retail spending, reflecting broader industry troubles.

Source

NASA Awards SpaceX $1 Billion To Destroy ISS

NASA has awarded SpaceX a $1 billion contract to develop a "US Deorbit Vehicle" designed to destroy the International Space Station (ISS) by pulling it down into the Earth's atmosphere by 2030. 

Dana Weigel, ISS program manager: “We'll leave the crew on board as long as possible, so they're available to help maintain the station and keep it healthy.” 

NASA plans to enhance SpaceX's Dragon spacecraft for the mission, with potential remains landing in the South Pacific Ocean. Ken Bowersox, NASA VP of space operations: “I think there's going to be very little left.”

Source

Bulletin Board

• Eurozone Business Activity Stops. The Eurozone economy has slowed sharply due to weaker-than-expected growth in services and deeper manufacturing declines. The Composite index, which measures overall business activity, fell to 50.1, much lower than the expected 51.1. This index level is just above the threshold separating growth from contraction. The survey highlighted that while manufacturing dropped to 45.6, the services sector also fell to 51.9, indicating business activity nearly halted this month. Source
• Paris Olympics Hype Dead. The number of unsold Paris Olympics tickets has reached over 271,000 due to low demand, raising concerns about empty seats at events. Despite being sold at their original price plus fees, these tickets are clogging the resale market. A Reddit user shared their frustration, saying, “I’m feeling bummed that I might be stuck with (good!) tickets. At this point, it’s a sunk cost.” Source 
• Pork Demand Declines During Peak Grilling Season. Pork demand in the U.S. is falling during the usually busy summer grilling season, mainly due to high prices. Retail pork chop prices are near record highs, causing consumers to cut back—a phenomenon known as demand destruction. Additionally, ongoing food inflation across all categories is stretching consumers' budgets and heavily influencing their buying choices. Source
• CrowdStrike Promises It Won’t Fail Again. CrowdStrike has pledged to implement new safeguards following a global IT outage caused by a faulty software update, affecting 8.5 million Windows devices. The cyber security company plans to enhance internal testing and adopt a staggered update deployment to prevent widespread disruptions. The incident, deemed potentially the largest IT outage in history, raised concerns about interconnected IT systems. CrowdStrike's CEO, George Kurtz, was summoned by a US subcommittee to explain the error and the company's mitigation strategies. Source
• US Tech Stocks Crumble. US tech stocks plummeted after disappointing earnings from Tesla and Alphabet. The Nasdaq Composite fell 2.7%, with Alphabet dropping 4.5% due to lower-than-expected YouTube ad revenue. Tesla sank over 10% after missing profit forecasts. This deepens the recent tech sector slump, as investors shift focus from big tech to smaller companies. Tesla's delayed robotaxi project added to concerns. All "Magnificent Seven" stocks, including Nvidia and Meta, declined. Analysts noted the fragile risk sentiment amid weakening economic indicators and expectations for Federal Reserve rate cuts. 

Disclaimer: This blog offers insights into international business and global events for informational purposes only. It is not intended as investment or business advice. WeavePay is not liable for any decisions made based on the content provided.

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