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The Morning Ledger: Walmart’s Break From Synchrony Marks New Era |
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Synchrony Financial is the biggest issuer of store credit cards in the U.S., and Walmart recently accounted for 19%, or roughly $10 billion, of its retail-card balances. PHOTO: NYSE
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Good day. Walmart Inc. scrapped a nearly two-decade-long credit-card partnership with Synchrony Financial in July, switching instead to Capital One Financial Corp. The breakup was the latest reminder of how the once-pervasive business of store credit cards is changing, forcing issuers such as Synchrony and Citigroup Inc. to rewrite their playbooks, The Wall Street Journal reports.
Better deal: Walmart expected to get more revenue from the deal in previous years, but loan losses—which stood at roughly 9% of outstanding balances on Walmart’s cards—cut into the amount the retailer was receiving. Synchrony is the biggest issuer of store credit cards in the U.S. As of June, Walmart accounted for roughly $10 billion, or 19%, of Synchrony’s retail card balances.
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End of an era: Store cards are fading from prominence as many traditional mall retailers, such as J.C. Penney Co. and Macy’s Inc., lose popularity. Sears Holdings Corp., which recently filed for bankruptcy protection, was one of the first department stores to roll out its own credit card decades ago.
New reality: Synchrony is continuing to build partnerships with online merchants and is expected to announce soon that it will issue cards for ride-sharing service Lyft Inc., according to a person familiar with the matter. The bank is also continuing to expand medical loans for procedures such as dental work and fertility treatments, and this year it began issuing general-purpose credit cards after a long hiatus.
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U.S. durable goods orders data for September is due out at 8:30 a.m. ET. Economists expect a 1.7% decline, versus a 4.4% revised reading for the prior month.
U.S. pending home sales, due out at 10 a.m. ET, are expected to be flat for September, compared with a 1.8% decline the prior month.
Comcast Corp., Twitter Inc., Hershey Co., Alphabet Inc., Intel Corp. and Amazon.com Inc. are among the companies scheduled to report earnings today.
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The S&P 500 and Dow Jones Industrial Average on Wednesday erased all of their 2018 gains as worries about global economic growth and corporate earnings weighed on investor appetite for stocks.
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Major markets slumped in Asia on Thursday: Japan’s Nikkei 225 fell the most, dropping 3.7% to a roughly six-month low. South Korea’s Kospi retreated 1.6%, bringing its decline to roughly 21% since Jan. 29, its highest this year.
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U.S. oil prices recouped recent losses as signs of stronger domestic demand for fuel injected some confidence into energy markets.
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Gold prices climbed 0.6% to $1,238 an ounce, as investors sought havens.
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Tesla's Model 3 production line. PHOTO: BRIAN MOLYNEAUX FOR THE WALL STREET JOURNAL
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Tesla Inc. reported a profit for the third quarter following the sustained increase of Model 3 production over the summer, beating Wall Street expectations and giving embattled Chief Executive Elon Musk renewed credibility.
Ford Motor Co.’s third-quarter net income fell 37% amid sharply lower results in China and Europe, trouble spots that are complicating Chief Executive Jim Hackett’s turnaround plans.
WPP PLC shares tumbled as much as 20% in early London trading on Thursday after the advertising company cut its guidance, underscoring the challenges facing new Chief Executive Mark Read.
Anheuser-Busch InBev SA slashed its dividend Thursday as it reported weaker profit and lower volumes in several key markets, underscoring the Budweiser maker’s struggle with declining beer consumption.
Nokia Corp. said Thursday that it will cut jobs globally, as it announced a fresh round of cost cuts to save €700 million ($799 million) a year and focus more on its fifth-generation networks business, reports Bloomberg.
Microsoft Corp.’s cloud service is decelerating but the company is making up for it through an offshoot of the business that mixes in its software sales, a key strategy for competing with market leader Amazon.com Inc.
United Parcel Service Inc. is counting on a big boost in shipping capacity to avoid logjams in its network during the peak holiday shipping season, and the delivery giant is raising prices to help offset those investments.
Boeing Co. reported forecasting-beating profit for the third quarter and raised its revenue and profit outlook for the year as its business booms amid strong demand for commercial jets and new defense projects.
AT&T Inc.’s new show-business assets outshone its larger telecommunications divisions in the latest quarter, boosting earnings despite a record slump in satellite-TV subscriptions.
Venture-capital firms have invested $3.5 billion in food and grocery delivery services such as DoorDash Inc. so far this year, wagering that appetites for food brought to homes and workplaces will keep growing.
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New York’s attorney general filed a lawsuit against Exxon Mobil that claims the company didn’t properly assign costs. PHOTO: MARK HUMPHREY/ASSOCIATED PRESS
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The state of New York is suing Exxon Mobil Corp., alleging the company misled shareholders by playing down the possible risks of climate-change regulations to its business.
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Two top executives of Wells Fargo & Co. went on leave from the bank after the U.S. Office of the Comptroller of the Currency cited them in regulatory warnings, people familiar with the matter said.
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Apple Inc. Chief Executive Tim Cook issued the tech giant’s strongest call yet for U.S.-wide data-protection regulation, saying individuals’ personal information has been “weaponized.”
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A jury in New York found an Adidas AG executive and two others guilty on fraud charges stemming from payments they steered to the families of top-ranked high-school basketball players, a verdict that could have implications on efforts to root out alleged corruption in college sports.
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The U.S. Securities and Exchange Commission won’t release a study of the impact of brief delays in stock trading on market quality and pricing that investors have been expecting for two years.
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An initiative to list state oil giant Saudi Aramco has been put on hold. Above, an oil tank at the company’s Ras Tanura oil refinery and terminal in May. PHOTO: AHMED JADALLAH/REUTERS
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Saudi Arabia and other oil-dependent economies have no choice but to diversify their economies as the challenges they face will deepen even if oil prices remain elevated, a report by a top energy body said Wednesday.
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Sales of new homes in the U.S. slumped 5.5%, declining for the fourth-consecutive month and inventories swelled to the highest level in years, suggesting the housing market is falling deeper into a weak stretch.
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Businesses said they were still optimistic about the economy’s growth trajectory but indicated concerns that tariffs would continue to push up costs, according to a U.S. Federal Reserve report released Wednesday.
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Twilio Inc., the San Francisco-based cloud communications platform, named Khozema Shipchandler as chief financial officer, effective Nov. 12. He Succeeds Lee Kirkpatrick, who is leaving the company as previously announced.
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Mr. Shipchandler most recently served as chief commercial officer at General Electric Co., and had previously held a variety of roles at the industrial giant including chief financial officer and executive vice president of corporate development at GE Digital. Compensation details were not immediately available.
Lloyds Banking Group PLC, the U.K. lender, said Chief Financial Officer George Culmer plans to retire from the company in the third quarter of 2019. Mr. Culmer joined the bank in 2012. A search for a successor has commenced, Lloyds said in a statement.
Kadmon Holdings Inc., the New York biopharmaceutical company, said CFO and Principal Accounting Officer Konstantin Poukalov will step down immediately. Controller Kyle Carver will become the company's new principal accounting officer and Kadmon will search for a new CFO, the company said in a statement. Mr. Carver has served as controller since June, and was previously director of accounting since December 2016.
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