Finance

Sometimes efficiency is obvious. On a production line for, say, chocolatey treats, it is a series of whirring, specialised machines busy enrobing a biscuit in caramel, covering it in chocolate, and drying, packing and stacking the product. For an office worker communicating with colleagues it probably involves email. In both cases, the process has been made more efficient by technology. Across almost all industries the story, since the industrial revolution, has been one of tech boosting efficiency. More

American offices often break records. Tech firms mark their progress with ever more outlandish designs. Manhattan blocks vie to be the tallest. This year, though, a worse kind of record has been broken. Offices have hit a 20.1% vacancy rate, according to Moody’s, which is the highest since 1979, when the rating agency began to keep track. More

China’s leaders have ambitious plans for the country’s economy, spanning one, five and even 15 years. In order to fulfil their goals, they know they will have to drum up prodigious amounts of manpower, materials and technology. But there is one vital input China’s leaders have recently struggled to procure: confidence. More

It is safe to say that neither Kamala Harris nor Donald Trump will win November’s presidential election by pledging fiscal prudence. The deficit and debt are afterthoughts for most Americans these days. And proposals from both candidates for cleaning up the country’s finances are fundamentally unserious. Mr Trump has talked about using cryptocurrency or drilling for oil in order to pay off the national debt—ideas that amount to utter nonsense. Although Ms Harris has vowed to reduce the deficit, she has declined to offer any substantive plan for doing so. More

The hotly anticipated comeback of a 1990s British legend sold out fast. Fans took to social media to complain. “Poor effort and a load of hype,” wrote one. “What a shitshow,” added another. “Anyone else loving the chaos?” asked an amused onlooker. To celebrate its 30th birthday, St. John, a restaurant that pioneered modern British cooking, brought back its menu from 1994, along with prices from 1994. As punters rushed to take advantage, tables were booked up in seconds—leaving most empty-handed. More

Microsoft’s generative artificial intelligence prospects are impressive. But the stock has more to offer investors than just the new tech. Jim Cramer said Microsoft shares could bottom Wednesday — and out of all the megacap tech stocks, this Club name is the one to buy. Microsoft closed at a record high of $467 on July 5. But then, almost immediately, it began to slide. It got no help from its July 30 earnings report and made a recent bottom in the Aug. 5 market plunge. The stock’s subsequent recovery stalled out late last month and turned lower once again. Exacerbated by Tuesday’s tech wreck, shares on Wednesday were back to where they were around on Aug. 2 at $408 each. MSFT YTD mountain Microsoft YTD Wells Fargo is more aligned with Jim, pointing out three “underappreciated levers” — search, cybersecurity, and enterprise software — that could add to Microsoft’s overall revenue growth. The analysts added the stock to their “Signature Picks” list — keeping a buy-equivalent overweight rating and a price target of $515. The Club has a price target of $500 on the stock. Microsoft’s search engine Bing could grab more share in the search market from Alphabet , Wells Fargo said in a research note Wednesday, citing last month’s antitrust case loss regarding exclusivity deals with device makers like Apple. If Google Search is no longer the iPhone’s default search engine, then more business could come to Microsoft. To be sure, search is small at Microsoft compared to Alphabet. Google Search has about 88% market share in the U.S., versus just over 7% for Bing, according to web data provider StatCounter. The numbers worldwide are even more lopsided in Google’s favor. Wells Fargo also highlighted Microsoft’s cybersecurity business. “Microsoft has quietly become the largest cybersecurity vendor on the planet, continuing to take share in adjacent areas,” the analysts wrote. Similar to others in the sector, Microsoft’s cybersecurity business can continue to rake in major corporations as clients as the threat of hacks and breaches remains elevated. Microsoft did take some heat when July’s CrowdStrike upgrade caused a major global IT outage . In 2023, Microsoft CEO Satya Nadella said the company’s cybersecurity business had surpassed $20 billion in revenue over a 12-month period. Microsoft’s customer relationship software suite, dubbed Dynamics, could see more upside as well, Wells Fargo said. The analysts see “significant cross-sell potential.” That’s because the company already has a massive customer base from its cloud computing business Azure and productivity apps included in Office. Bottom line These three underappreciated areas are encouraging, even though Microsoft’s generative AI efforts are still crucial to the Club’s investment thesis. While Azure revenue missed expectations last quarter, we still expect a pick-up in the back half of the year, given management’s bullish commentary around its outlook. Wall Street firms seem to agree with us. In addition to Wells Fargo’s bullishness, Piper Sandler added Microsoft to its high-conviction buy list on Wednesday due to these AI tailwinds. (Jim Cramer’s Charitable Trust is long MSFT, GOOGL, AAPL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Executive Chairman and CEO of Microsoft Corporation Satya Nadella speaks during the “Microsoft Build: AI Day” event in Bangkok, Thailand, May 1, 2024. 
Chalinee Thirasupa | Reuters

Microsoft’s generative artificial intelligence prospects are impressive. But the stock has more to offer investors than just the new tech. More

Ken Griffin, founder and CEO of Citadel, speaks at the Milken Global Conference 2024 at The Beverly Hilton in Beverly Hills, California, on May 6, 2024.
David Swanson | Reuters

Billionaire investor Ken Griffin’s suite of hedge funds at Citadel eked out small gains in what proved a volatile month in August as markets grappled with an emerging growth scare.
Citadel’s multistrategy Wellington fund gained about 1% in August, bringing its year-to-date return to 9.9%, according to a person familiar with the returns, who spoke anonymously because the performance numbers are private. All five strategies used in the flagship fund — commodities, equities, fixed income, credit and quantitative — were positive for the month, the person said.

The Miami-based firm’s tactical trading fund rose 1.5% last month and is up 14.5% on the year. Its equities fund, which uses a long/short strategy, edged up 0.8%, pushing its 2024 returns to 9.3%.
Citadel declined to comment. The hedge fund complex had about $63 billion in assets under management as of Aug. 1.
Volatility made a strong comeback in August as fears of a recession were rekindled by a weak July jobs report. On Aug. 5, the S&P 500 dropped 3%, its worst day since September 2022. Still, the market quickly bounced back, with the equity benchmark ending August up 2.3%. The S&P 500 is now ahead more than 15% in 2024.
Overall, the hedge fund community recently moved into a defensive mode as macroeconomic uncertainty mounted. Hedge funds on net sold global equities for a seventh straight week recently, driven by sales of communication services plus financial and consumer staples stocks, according to Goldman Sachs’ prime brokerage data. More

Investors returning from summer holidays might feel dispirited upon checking their portfolios. Stocks have had a poor start to September. America’s benchmark S&P 500 index dropped by 2% on its first day of trading. European shares followed suit on September 4th; those in Japan have fallen by even more. It is a striking change from the calm that had settled over markets before Labor Day. American share prices ended August less than a hundredth of a percentage point below an all-time high reached in July, European ones fared similarly and Japanese stocks were just a few percentage points below their peak. Adding to the good vibes, rich-world inflation had continued to cool, setting the scene for the Federal Reserve to begin cutting interest rates when its policymakers next meet on September 17th and 18th. More