Issue #34

Starmer fails to declare free swag, Gen Z fuels Amex spending, investors pile into Coke, and more. 

News from September 12 - September 19, 2024

Tupperware Declares Bankruptcy 

Tupperware Brands, famous for its plastic food containers, has filed for bankruptcy after struggling with declining sales and increased competition. The company, launched in the 1940s, initially thrived through direct sales but failed to adapt effectively to the rise of online shopping. 

Despite recent efforts to modernize by selling on platforms like Amazon and Target, Tupperware cited economic challenges, supply chain disruptions, and rising raw material costs.

With $680 million in assets and $1.2 billion in debt, the company is seeking court approval to facilitate a sale while continuing operations. Brian, Chief Restructuring Officer at Tupperware: “In stark contrast to the early days of the company, nearly everyone now knows what Tupperware is, but fewer people know where to find it.”

Source

Starmer Fails to Declare Free Swag 

Sir Keir Starmer faces backlash for failing to declare donations from Labour donor Lord Alli, including clothing for his wife and a personal shopper service. Although Starmer sought advice and later declared the gifts, his delay has drawn criticism. 

Conservatives are pushing for an investigation, particularly highlighting that Lord Alli, despite no formal government role, was given a Downing Street pass and reportedly influenced Cabinet appointments. 

Starmer: "All Members of Parliament get gifts."

Source

Gen Z Fuels Amex Spending 

American Express is tapping into Gen Z and millennial "super fans" by offering exclusive experiences like Formula 1 races and concerts, aiming to build lifelong loyalty. These younger consumers, who now make up nearly 70% of new cardholders outside the U.S., are drawn to perks such as early access to events. 

Amex's CMO Elizabeth Rutledge: "They’re really representing a strong potential lifetime value for us, given that we can be with them through all their different life cycles as their needs evolve and change."

Source

Bulletin Board

• OJ Price Hits Record High. Orange juice prices are surging, driven by a sharp decline in global orange production. Florida's orange yield has plummeted 92% over two decades due to hurricanes, pests, and rising costs. Now, Brazil, which produces 70% of the world’s orange juice, faces severe drought and a citrus greening disease, further shrinking supply. Despite strong demand, global shortages are expected, particularly outside of the U.S. and Europe. Even high prices may not offset rising costs for producers, making the future of orange juice uncertain. Source
• Hedge Funds See Outflows. Multi-manager hedge funds, led by firms like Citadel and Millennium, saw over $30 billion in outflows over the past year, their first decline since 2016. Investors have grown cautious due to rising fees from the pass-through fee model, which charges all expenses directly to investors, in addition to performance fees. Weaker returns in 2022 also dampened enthusiasm, though some top performers still delivered solid results. Despite declining interest, the sector remains influential, with firms continuing to hire and some posting strong returns in 2023. Source  
• Investors Pile Into Coke. Investors are flocking to U.S. consumer staples stocks like Coca-Cola and Colgate, seeking safety amid recession fears. This sector, including names like Procter & Gamble and Walmart, has outperformed the S&P 500 in recent weeks, as signs of a slowing U.S. economy emerge. Stocks like Coca-Cola and Colgate have seen gains of 20% and 33%, respectively. Analysts expect consumer staples to continue performing well if the Federal Reserve cuts interest rates, as investors shift from tech stocks and other riskier areas of the market to defensive options. Source 
• Indian Tourism Sees Record Growth. India's growing middle class is driving a surge in global tourism, with rising costs at domestic resorts like Goa prompting travelers to explore nearby foreign destinations such as Vietnam, Sri Lanka, and Singapore. The affordability of international trips, often comparable to domestic travel costs, is appealing to many. As a result, outbound tourism is booming, with the Indian market expected to become the fifth-largest globally by 2027. Travelers are increasingly embracing the idea of spending more on experiences abroad, with a shift in mindset toward enjoying family trips and "showing off" their travels. Source
• OpenAI Threatens Users Over Questions. OpenAI's latest AI model, "Strawberry," promises improved reasoning capabilities but has faced backlash for limiting transparency. Users attempting to explore how the model processes information have been threatened with bans, accused of "circumventing safeguards." OpenAI justifies this secrecy as both a safety measure and a way to protect its competitive advantage. Critics argue that hiding the model's reasoning hampers transparency and interpretability, making it harder for developers to understand its workings or make it safer. This shift highlights OpenAI's increasing move toward controlling its AI's inner workings. Source  

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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