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    Britain does a bad job at keeping globally relevant tech firms, former Arm CEO says

    Warren East, who led Arm between 1994 and 2013, said there have been criticisms that lackluster growth and poor rates of GDP per head in the U.K. are a source of national “embarrassment.”
    He added that too often tech firms in Britain move their operations overseas or list elsewhere abroad.
    “I think we have a lot to offer in terms of U.K.-based innovative technology,” East said, adding: “We tend not to be able to realise as many global businesses as that promise would suggest.”

    Warren East, former CEO of Rolls Royce and Arm, speaking at a tech event in London on June 13, 2022.
    Luke MacGregor | Bloomberg via Getty Images

    CAMBRIDGE, England — The U.K. is doing a bad job of commercializing technology businesses globally and needs a mindset shift from the investor community to win on the world stage, a former CEO of British chip design firm Arm said Tuesday.
    In a keynote speech at Cambridge Tech Week, Warren East, who led Arm between 1994 and 2013, said that there have been criticisms that lackluster growth and poor rates of GDP per head in the U.K. are a source of national “embarrassment.”

    He added that too often firms that achieve scale in Britain have a tendency to change locations from the U.K. or list abroad in countries such as the U.S., due to difficulties with achieving global relevance from the country.
    “I think we have a lot to offer in terms of U.K.-based innovative technology,” East told the audience at Cambridge Tech Week. However, he added: “We tend not to be able to realise as many global businesses as that promise would suggest.”
    East was also previously the CEO of U.K. aviation engineering giant Rolls-Royce. He is currently a non-executive director on the board of Tokamak Energy.
    East said that Britain “needs to get commercialization right,” adding that too much innovation gets created in the U.K. but is then exported elsewhere around the world.

    There is “sadly a common story of all the wonderful stuff that gets made in Britain and then gets commercialized and exploited elsewhere,” East said. He added that he doesn’t have a “silver bullet” solution on how to fix the issue, but suggested that the U.K. needs to encourage more “risk appetite” to support high-growth tech firms.

    “We’re often told that the problem isn’t the startup bit, it’s the scale up bit,” East said, explaining that there are far deeper pools of capital presence in the U.S. “Investor risk appetite in the U.S. is higher than it is in the U.K.,” he said
    East noted that there have been pushes among the British entrepreneurial community and VCs for a change to capital market rules that will allow more investments from pension funds into startups and “stimulate risk appetite” in the U.K.
    “Fortunately I think we can expect more of that over the coming years,” East told attendees of the Cambridge event. However, he added: “Businesses can’t guarantee that’s going to happen, and can’t wait for the rules to change.”
    Last year, Arm, whose chip architectures can be found in most of the world’s smartphone processors, listed on the Nasdaq in the U.S. in a major blow to U.K. officials and the London Stock Exchange’s ambitions to hold more tech debuts in Britain.
    The company remains majority-owned by Japanese tech giant SoftBank. More

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    Goldman Sachs to post $400 million hit to third-quarter results as it unwinds consumer business

    Goldman Sachs will post a roughly $400 million pretax hit to third-quarter results as the bank continues to unwind its ill-fated consumer business.
    CEO David Solomon said Monday at a conference that by unloading Goldman’s GM Card business, as well as a separate portfolio of loans, the bank would post a hit to revenues next month.
    Solomon also said trading revenue for the quarter was headed for a 10% decline because of a tough year-over-year comparison and difficult trading conditions in August for fixed-income markets.

    David Solomon, CEO of Goldman Sachs, during an interview for an episode of “The David Rubenstein Show: Peer-to-Peer Conversations” in New York on Aug. 6, 2024.
    Jeenah Moon | Bloomberg | Getty Images

    Goldman Sachs will post a roughly $400 million pretax hit to third-quarter results as the bank continues to unwind its ill-fated consumer business.
    CEO David Solomon said Monday at a conference that by unloading Goldman’s GM Card business, as well as a separate portfolio of loans, the bank would post a hit to revenues when it reports results next month.

    It is the latest turbulence related to Solomon’s push into consumer retail. In late 2022, Goldman began to pivot away from its nascent consumer operations, beginning a series of write-downs related to selling chunks of the business. Goldman’s credit card business, in particular its Apple Card, allowed rapid growth in retail lending, but also led to losses and friction with regulators.
    Goldman is instead focusing on asset and wealth management to help drive growth. The bank was in talks to sell the GM Card platform to Barclays, The Wall Street Journal reported in April.
    Solomon also said Monday that trading revenue for the quarter was headed for a 10% decline because of a tough year-over-year comparison and difficult trading conditions in August for fixed-income markets.

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    DirecTV customers will likely miss ‘Monday Night Football’ NFL game as carriage fight with Disney continues

    Millions of DirecTV customers lost Disney networks, including pay-TV networks like ESPN and FX, last week amid a battle over contract bundling and fees.
    The blackout left customers without access to the U.S. Open and the debut of college football this season — and now could mean they won’t be able to see the NFL’s opening “Monday Night Football” game
    Disney and DirecTV are not likely to reach a deal in time for “Monday Night Football” according to people familiar with the matter.

    A general view of the ESPN Monday Night Countdown booth prior to the game between the Jacksonville Jaguars and the Cincinnati Bengals at EverBank Stadium on December 04, 2023 in Jacksonville, Florida. 
    Mike Carlson | Getty Images

    Millions of DirecTV customers will likely be unable to watch the NFL’s opening “Monday Night Football” game on ESPN as the company has yet to reach a deal with network parent Disney as of Monday evening.
    Disney’s TV networks went dark on Sept. 1 for DirecTV’s customers amid a carriage battle over fees and bundling. Those networks include pay-TV channels ESPN and FX, as well as broadcast network ABC in some markets.

    Disney and DirecTV are not likely to reach a deal in time for “Monday Night Football” according to people familiar with the matter. However, negotiations are still ongoing and things could change, they added, with a deal possibly coming as early as tomorrow.
    The satellite and streaming company called Disney anti-consumer as DirecTV is pushing for an option in which it could create genre-specific bundles, such as kids, entertainment and news, which Disney opposes.
    As a result of the fight, DirecTV customers were unable to see the U.S. Open and the first full weekend of the college football season.
    Live sports continue to attract big audiences and, in turn, high media rights deals, which in turn have created some of the most expensive networks on TV. ESPN is said to reap some of the highest fees paid by pay-TV companies to carry the network and its sister channels, CNBC previously reported.
    Meanwhile, sports have long been considered the glue holding the traditional pay-TV bundle together as customers flee for streaming services. There have been 4 million pay-TV customer losses this year to date, according to a recent MoffettNathanson report.

    DirecTV’s carriage fight comes as its latest ad campaign has highlighted its streaming options to woo consumers.
    “The Walt Disney Co. is once again refusing any accountability to consumers, distribution partners, and now the American judicial system,” said Rob Thun, DirecTV’s chief content officer, in a release last week.
    Last month, a U.S. judge temporarily blocked sports streaming service Venu — a joint venture between Disney, Fox Corp. and Warner Bros. Discovery — from launching in time for the NFL season. The lawsuit was started by internet TV bundle provider Fubo TV and supported by DirecTV and EchoStar’s Dish.
    The lawsuit argued there were antitrust concerns related to Venu. The companies also argued Venu would be detrimental to their businesses as it would offer a sports-only bundle. Pay-TV distributors have argued they are losing customers at a fast clip due to high programming costs that have caused the price the bundle to soar when streaming was initially a more inexpensive option.
    DirecTV alerted customers on Friday to competitor alternatives for watching ESPN and also said it would provide a $30 credit to customers.
    On Saturday, DirecTV said it filed a complaint with the Federal Communications Commission, stating that Disney failed to negotiate in good faith.
    DirecTV has said that Disney has “insisted that DirecTV agree to a ‘clean slate’ provision and a covenant not to sue, both of which are intended to prevent DirecTV from taking legal action regarding Disney’s anticompetitive demands, which would include filing good faith complaints at the Commission.”
    Disney has said that it is “open to offering DirecTV flexibility and terms which we’ve extended to other distributors,” and added that it “will not enter into an agreement that undervalues our portfolio of television channels and programs.”
    “We never want to black out. It’s not good for either side. It’s not good for the customer, of course. We did everything we could,” ESPN chairman Jimmy Pitaro said on CNBC last week.
    Disney later added that more than 90% of DirecTV households watched its channels every month last year, and has the highest performing content on the platform, citing Nielsen. The company also said it has proposed a variety of packages to DirecTV and is also asking for rates that are in line with other distribution partners.
    The NFL in particular is often the reason carriage disputes have been resolved. The most recent example happened only last year.
    Last September, cable giant Charter Communications and Disney went through a similar battle that ultimately lasted 10 days. However, Charter and Disney reached a deal hours ahead of “Monday Night Football” that allowed customers to tune in that night.
    Last year Charter had argued the pay-TV business model was broken, noting that programmers like Disney had siphoned much of their content for their streaming services. In response, Charter pushed for its customers to receive access to Disney’s ad-supported streaming apps, Disney+ and ESPN+, at no additional cost.
    ESPN’s Pitaro referenced those negotiations that took place with Charter a year ago in his remarks last week.
    “While we know that deal was very hard to get done … I give Charter a ton of credit because they walked into the room and they had very specific ideas. They had a vision that they wanted to execute against,” Pitaro said on CNBC.
    The dispute between DirecTV and Disney has led to mudslinging between the two companies reminiscent of most carriage fights.
    In this case, ESPN reporter Adam Schefter called out on social media platform X the Monday matchup on ESPN between the New York Jets and San Francisco 49ers, noting what other platforms DirecTV subscribers could sign up for to catch the game.
    DirecTV also expressed its displeasure.
    “Disney is in the business of creating alternate realities, but this is the real world where we believe you earn your way and must answer for your own actions,” DirecTV’s Thun said in a release. “They want to continue to chase maximum profits and dominant control at the expense of consumers – making it harder for them to select the shows and sports they want at a reasonable price.” More

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    Can anything spark Europe’s economy back to life?

    Europe has at last realised it has a problem with economic growth. Duh. Can it now find a solution? A report published on September 9th by Mario Draghi, a former president of the European Central Bank and prime minister of Italy, and the continent’s unofficial chief technocrat, is an attempt to do just that. Over almost 400 pages, Mr Draghi outlines a plan to overhaul Europe’s economy. Ursula von der Leyen, the recently re-elected head of the European Commission, is keen to act on his advice. Even Elon Musk, owner of Tesla and X, as well as a frequent opponent of the EU, has applauded his “critique”. More

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    Big Lots files for bankruptcy protection, sells to private equity firm as it promises to keep offering ‘extreme bargains’

    Big Lots filed for bankruptcy protection, citing stubborn inflation, high interest rates and a slowdown in consumer spending on home goods such as furniture and decor.
    Private equity firm Nexus Capital Management has agreed to buy Big Lots for $760 million, consisting of $2.5 million in cash plus its remaining debt.
    The home goods sector has been under pressure over the last two years after demand surged during the Covid-19 pandemic.

    A Big Lots store in Los Angeles, Sept. 7, 2024. Discount home goods retailer Big Lots Inc. filed for Chapter 11 bankruptcy protection on Sept. 9, 2024, indicating it plans to close nearly 300 stores and continue operating.
    Eric Thayer | Bloomberg | Getty Images

    Discount home goods retailer Big Lots filed for bankruptcy protection on Monday after high interest rates and a sluggish housing market slowed demand for its low-priced furniture and decor. 
    As part of its Chapter 11 filing, Big Lots agreed to sell its business to private equity firm Nexus Capital Management for about $760 million, consisting of $2.5 million in cash plus its remaining debt and liabilities, court records show. 

    The company, which runs more than 1,300 stores across 48 states, is one of the country’s largest closeout retailers and specializes in offering bargain-basement pricing on all things home. It brought in about $4.7 billion in revenue in fiscal 2023, but sales have consistently fallen after pandemic-era demand for home furnishings dropped.
    In a press release and court filings, Big Lots said it will operate its business normally but has started the process of closing nearly 300 stores so it can fix its balance sheet and reduce costs.
    “The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise to be the leader in extreme value,” CEO Bruce Thorn said in a news release. “As we move through this process, we remain committed to offering extreme bargains, enabling easy shopping in our stores and online, and providing an outstanding customer experience.” 
    Evan Glucoft, managing director at Nexus, said the firm is “confident” that Big Lots’ “greatest days are ahead.” 
    “We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America’s leading extreme value retailer,” said Glucoft. 

    Big Lots has been teetering near the edge for months after high interest rates and a sluggish housing market slowed consumer demand for new furniture, decor and other home supplies. While discount retailers tend to do well in rough economic cycles, Big Lots primarily caters to lower- and middle-income consumers, who have curbed discretionary spending at a higher rate than their more affluent counterparts. 
    “The company has been adversely affected by recent macroeconomic factors such as high inflation and interest rates that are beyond its control,” Big Lots said in a news release. “The prevailing economic trends have been particularly challenging to Big Lots, as its core customers curbed their discretionary spending on the home and seasonal product categories that represent a significant portion of the company’s revenue.” 
    Beyond macroeconomic conditions, Big Lots also operates in a highly competitive space and has struggled to differentiate itself from other discounters that offer home goods or specialize in the category, such as Wayfair, Walmart and TJX Cos.’ Home Goods.
    “Big Lots is not always good value for money. Many of the items it sells are not high end and are not drastically expensive, but equivalents can often be found much cheaper at other stores, including Walmart,” Neil Saunders, managing director of GlobalData, said in a note.
    “The other issue [is] the assortment is very jumbled and muddled, which is partly a function of the way the business operates,” Saunders added. “However, there is far too much choice and not nearly enough treasure for consumers to be enticed by. This creates an unsatisfactory shopping experience, especially compared to other players operating in the discount space, such as off-price retailers.”
    As part of the bankruptcy process, Big Lots will hold a court-supervised auction for its business. It could go to a different buyer if they make a bid that’s higher than Nexus’ offer. 
    It’s working with law firm Davis Polk & Wardwell, investment bank Guggenheim Securities and advisory firm AlixPartners. A&G Real Estate Partners has been tapped as Big Lots’ real estate advisor, while Nexus will be represented by law firm Kirkland & Ellis. More

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    Huawei’s trifold phone gets 2.7 million pre-orders ahead of Apple’s iPhone 16 launch

    Huawei has received more than 2.7 million pre-orders for its new, trifold smartphone, its website showed on Monday.
    The Chinese company began pre-orders for its Mate XT midday on Saturday.
    That was more than two days ahead of Apple’s planned iPhone 16 launch in the early morning Tuesday Beijing time.

    Huawei is planning to release a three-fold smartphone on Sept. 10, just hours after Apple’s scheduled new iPhone launch.
    Cfoto | Future Publishing | Getty Images

    BEIJING — Huawei has received more than 2.7 million pre-orders for its trifold smartphone, its website showed on Monday.
    The Chinese company began pre-orders for its Mate XT midday on Saturday. That was more than two days ahead of Apple’s planned iPhone 16 launch early morning Tuesday Beijing time.

    Huawei had previously announced it would launch a new product at 2:30 p.m. on Tuesday. The company has yet to share a price for the Mate XT. The device is set to officially begin sales on Sept. 20.
    Apple fell out of the list of top five smartphone vendors in China in the second quarter, according to Canalys. It was the first time that domestic players held all five spots, the firm said.

    Huawei ranked fourth by market share with 10.6 million smartphones shipped, according to Canalys.
    The firm only shared shipments for the top five vendors. Apple shipped 10 million phones in the first quarter.
    Huawei already sells folding and flip phones, as do its Chinese competitors. Apple has yet to expand into those categories. More

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    Jumbo 50 basis points Fed rate cut should not raise alarm, analyst says

    The U.S. Federal Reserve can afford to make a jumbo 50 basis points rate cut next week without spooking markets, according to one analyst.
    Michael Yoshikami, CEO of Destination Wealth Management, said Monday that a deeper cut would demonstrate that the central bank is ready to act without signalling deeper concerns.
    Policymakers are widely expected to lower rates when they meet on Sept. 17-18, but the extent of the move remains unclear.

    Federal Reserve Chairman Jerome Powell.
    Andrew Harnik | Getty Images

    The U.S. Federal Reserve can afford to make a jumbo 50 basis point rate cut next week without spooking markets, an analyst has suggested, as opinion on the central bank’s forthcoming meeting remains hotly divided.
    Michael Yoshikami, CEO of Destination Wealth Management, said Monday that a bigger cut would demonstrate that the central bank is ready to act without signaling deeper concerns of a broader downturn.

    “I would not be surprised if they jumped all the way to 50 basis points,” Yoshikami told CNBC’s “Squawk Box Europe.”
    “That would be considered, on one hand, a very positive sign the Fed is doing what is needed to support jobs growth,” he said. “I think the Fed at this point is ready to get out ahead of this.”
    His comment follow similar remarks Friday from Nobel Prize-winning economist Joseph Stiglitz, who said the Fed should deliver a half-point interest rate cut at its next meeting, contending that it went “too far, too fast” with its previous policy tightening.

    Policymakers are widely expected to lower rates when they meet on Sept. 17-18, but the extent of the move remains unclear. A disappointing jobs print on Friday stoked fears of a slowing labor market and briefly tipped market expectations toward a larger cut, before shifting back.
    Traders are now pricing in around a 75% chance of a 25 bps rate reduction in September, while 25% are pricing in a 50 bps lowering, according to the CME Group’s FedWatch Tool. A basis point is 0.01 percentage point.

    Yoshikami acknowledged that a larger cut could reinforce fears that a “recessionary ball” is coming, but he insisted that such views were overblown, noting that both unemployment and interest rates remain low by historical levels and company earnings have been strong.
    He said the recent market sell-off, which saw the S&P 500 notch its worst week since March 2023, was based on “massive profits” accrued last month. August saw all the major indexes post gains despite a volatile start to the month, while September is traditionally a weaker trading period.

    Thanos Papasavvas, founder and chief investment officer of ABP Invest, also acknowledged a “rise in concern” around a potential economic downturn.
    The research firm recently adjusted its probability of a U.S. recession to a “relatively contained” 30% from a “mild” 25% in June. However, Papasavvas said that the underlying components of the economy — manufacturing and unemployment rates — were “still resilient.”
    “We’re not particularly concerned that we’re heading into a U.S. recession,” Papasavvas said Monday on “Squawk Box Europe.”
    The perspectives stand in stark contrast to other market watchers, such as economist George Lagarias, who told CNBC last week that a bumper rate cut could be “very dangerous.”
    “I don’t see the urgency for the 50 [basis point] cut,” Forvis Mazars’ chief economist told CNBC’s “Squawk Box Europe.”
    “The 50 [basis point] cut might send a wrong message to markets and the economy. It might send a message of urgency and, you know, that could be a self-fulfilling prophecy,” Lagarias added. More

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    Nelson Peltz steps down as chair of Wendy’s board, starting a new era for burger chain

    Nelson Peltz is stepping down as chair of Wendy’s and assuming the title of chairman emeritus.
    Peltz’s Trian Fund Management has a 10% stake in Wendy’s, making it the burger chain’s second-largest shareholder.
    The board shakeup could allow Wendy’s to move to a new era under CEO Kirk Tanner after Peltz’s 17 years as chair.

    Nelson Peltz speaking at the 2019 Delivering Alpha conference in New York on Sept. 19, 2019.
    Adam Jeffery | CNBC

    Nelson Peltz is stepping down as chair of Wendy’s, ending a 17-year reign at the fast-food chain.
    Wendy’s said Friday that the change is effective immediately.

    Peltz’s exit comes as low-income consumers eat out less, causing Wendy’s sales to slump. Shares of the burger chain have fallen more than 12% this year, dragging its market value down to $3.45 billion. Earlier this year, PepsiCo veteran Kirk Tanner stepped in as CEO and laid out plans to invest millions of dollars into updates to its mobile app and advertising to boost the business.
    “In our view, [Peltz’s departure] opens the door for a new chapter under new Chairman Art Winkleblack & new CEO Kirk Tanner,” T.D. Cowen analyst Andrew Charles wrote in a note to clients on Monday. Still, he maintained a “hold” rating for the stock, citing its lack of diversification compared to other restaurant peers.
    Peltz will assume the title of chairman emeritus. He is stepping down to devote more time to his other board commitments and Trian Partners’ future activities, according to Wendy’s.
    Peltz’s Trian Fund Management has a 10% stake in Wendy’s, making it the company’s second-largest shareholder behind Vanguard. Trian first invested in Wendy’s in 2005, when the fund was initially created. With Peltz’s departure, the firm holds two board seats at the fast-food company.
    Trian said it was exploring a takeover of Wendy’s in 2022, but later decided against it.
    Winkleblack, who previously served as CFO at H.J. Heinz, is now non-executive chair of Wendy’s board. Winkleblack has been a director since 2016. More