NEW YORK – Two Sigma Investments, a prominent hedge fund, is set to reduce its workforce by approximately 200 employees, a move that comes after a comprehensive business review by its new co-chief executive officers, Carter Lyons and Scott Hoffman, Bloomberg News reported. The layoffs, which were announced on Thursday, account for about 10% of the firm’s staff, totaling around 2,000 individuals.

The review, led by Lyons and Hoffman, did not affect any portfolio managers. Instead, the job cuts spanned across various departments including corporate, engineering, modeling and trading, and securities units. The co-CEOs, who assumed leadership in September following the step back of founders John Overdeck and David Siegel from daily operations, aim to realign the firm’s resources more efficiently.

In a memo to staff, Lyons and Hoffman stated, “This area-specific review has revealed that our business is strong and poised for continued growth. We have also discovered opportunities to more effectively direct our resources to areas that will drive the most value.” The decision to streamline the workforce reflects the company’s strategy to optimize operations and focus on areas of potential growth.

Two Sigma, known for its data-driven and technological approach to investing, has not publicly commented on the layoffs. The company’s leadership change earlier this year marked a significant shift, as Overdeck and Siegel had been at the helm since the hedge fund’s inception.

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Investing.com – BofA analyst on Thursday said Comcast Corp (NASDAQ:CMCSA) decision to spin off its cable networks, excluding Bravo, and some digital assets into a separate company, was a “positive strategic step”.

Analyst believes the move will allow Comcast to focus on higher-growth segments by separating slower-growing cable assets. The newly formed company is expected to acquire additional cable networks to achieve scale and drive growth.

The spin-off is also expected to return capital to shareholders through dividends or share repurchases.

The new company is expected to own a portfolio of popular cable networks, including USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and Golf Channel, along with digital assets like Fandango and Rotten Tomatoes. There is just 2% of entertainment content for Peacock being spun out.

Comcast will retain ownership of its NBC broadcast network, Bravo, Telemundo, Peacock, and its film and TV studios.

“While we believe that the significant exposure to news and sports content will help support programming carriage rates, the lack of NBC content to bundle into programming contracts could prove to make rate negotiations more challenging until SpinCo is able to increase scale,” analyst said.

On the other hand, the spin-off could potentially reduce regulatory hurdles for Comcast, enabling it to pursue future cable mergers.

“Supported by its strong balance sheet and healthy FCF generation, Comcast should drive solid capital returns and at roughly 6 times is attractively valued, in our view,” analyst said.

The analyst maintains “buy” rating and have a price target of $50 for Comcast.

Investing.com — Mercedes-Benz (OTC:MBGAF) is taking steps to reduce costs by billions of euros annually in response to ongoing difficulties in the global automotive market, the Handelsblatt newspaper reported on Thursday. 

While the company has yet to provide specific details on how these savings will be achieved, a spokesperson confirmed that the measures are part of a broader effort to maintain financial stability and resilience in an uncertain economic environment.

The automaker acknowledged the challenges facing the industry, citing global economic volatility as a major factor. The only way to remain financially strong and operationally capable is by continuously improving efficiency, said a spokesperson, as per the report. 

The company reaffirmed its dedication to rigorous cost control measures, while declining to specify whether job reductions would be implemented as part of these efforts, the report said.

German media outlets Stuttgarter Zeitung and Stuttgarter Nachrichten previously reported that senior management had discussed the intensified cost-cutting measures during a conference call, but no concrete decisions or actions were revealed.

Mercedes assured employees that its job security agreement, known internally as “Zusi 2030,” remains intact. This agreement guarantees protection from layoffs for operational reasons until the end of 2029, covering the majority of the company’s workforce in Germany.

The automaker’s announcement comes after a sharp decline in profits during the third quarter. In late October, Mercedes reported that group earnings had dropped by more than 50% year-on-year, falling to €1.72 billion. 

Revenue also decreased by 6.7%, totaling €34.5 billion. At the time, CFO Harald Wilhelm expressed dissatisfaction with the results and vowed to prioritize cost control and operational efficiency.

One of the company’s key challenges lies in China, where sales of luxury models have been weaker than anticipated. This slowdown is particularly problematic as high-end vehicles form the cornerstone of CEO Ola Källenius’ strategy. 

In recent years, the focus on premium models has driven record-breaking profits for Mercedes, but a combination of China’s economic downturn and increasing competition from domestic carmakers has hurt the company’s performance.

Wealthy Chinese consumers, traditionally a vital customer base for Mercedes, have become more cautious in their spending, and the company sees little sign of improvement in the near term. 

(Reuters) – Elf Beauty said on Thursday allegations by short-seller Muddy Waters (NYSE:WAT) about the beauty company overstating its revenue and inventory numbers were “without merit”.

Muddy Waters has taken a short position in Elf, claiming that the company possibly overstated its revenue by as much as $190 million over the past three years and inflated its inventory numbers to cover for insufficient sales, the hedge fund’s CEO Carson Block said on Wednesday at a conference in London.

Shares of Elf fell as much as 16% on Wednesday following the short-seller report but pared losses to close 2.2% lower at $119. The stock has nearly quadrupled from 2023 to hit a record high in March.

“Muddy Waters’ latest report is an attempt by a noted short-seller to negatively impact Elf Beauty’s share price for its own benefit and at the expense of all other Elf Beauty shareholders, and Muddy Waters’ allegations are without merit,” Elf said in a statement.

Elf raised its forecasts for annual sales and profit earlier in November, becoming the only company performing well in a weak beauty market where legacy cosmetics brands such as Estee Lauder (NYSE:EL) and L’Oreal have been facing slowing demand.

The beauty company also said on Thursday that for competitive reasons, it had filed a request for confidentiality with U.S. Customs and Border Protection in early 2024, with respect to customs import data.

“Therefore, import data available to the public after February 6, 2024, does not include a substantial majority of our actual U.S. imports,” Elf said.

By Dave Graham and Oliver Hirt

ZURICH (Reuters) – UBS has seen weak European growth hit companies it lends to, CFO Todd Tuckner said on Thursday, with the bank facing a 2024 credit loss expense of some 150 million Swiss francs ($170 million) in its personal and corporate banking business.

Tuckner’s remarks came as he explained the economic background behind the credit loss expense, which he said UBS was expecting for the fourth quarter.

“The (macro) environment in Switzerland is OK,” he said at an event in London, adding: “But some of the eurozone economies around it really have been sluggish.”

“A lot of the Swiss corporates to whom we lend have export- import businesses and they’re affected by the economies around them … if Germany is sluggish in terms of growth then it’s not unusual to see a bit higher credit loss expense.”

“It’s exacerbated a bit by the Credit Suisse dynamic,” Tuckner added, referring to the Swiss long-term rival acquired by UBS in March last year after it collapsed.

The non-core legacy unit at UBS, which is tasked with running down Credit Suisse assets, would book a pre-tax loss of $700 million in the final quarter, Tuckner said.

UBS is in the process of integrating Credit Suisse and Tuckner said the migration of clients in Singapore would take place this weekend, with Japan and Italy by the end of the year.

The CFO said he was upbeat about the bank’s Asia-Pacific business and that a positive environment there had continued into the first part of the fourth quarter. He said he was also pleased with how investment banking was doing in the quarter.

Tuckner said debate about capital requirements for banks in Switzerland is creating uncertainty for UBS and that it would likely not have clarity on the matter by early February.

Switzerland has proposed stricter rules to avoid another bank collapse, but details are still under discussion.

The government has said it will take on board the findings of a parliamentary report on the collapse of Credit Suisse due to be published in the coming weeks. Tuckner speculated that the report might not emerge until early 2025.

($1 = 0.8840 Swiss francs)

By Victoria Waldersee

WOLFSBURG, Germany (Reuters) – Volkswagen (ETR:VOWG_p)’s union called on management to take a “big step” in a third round of negotiations over pay and factory closures on Thursday, with positions appearing still far apart days before workers threatened strikes across German sites.

Thousands of employees gathered as talks began over wages for 120,000 of Volkswagen’s roughly 300,000 staff in Germany, employed at six plants governed by a separate collective wage agreement to the rest of the workforce.

Volkswagen has demanded a 10% wage cut, arguing it needs to slash costs and boost profit to defend market share in the face of cheap competition from China and a drop in European car demand. It is also threatening to close plants in Germany for the first time in its 87-year history.

The troubles at Europe’s largest automaker have fed wider anxieties about Germany’s status as an industrial powerhouse in the run-up to a snap election in February in which Chancellor Olaf Scholz’s economic record is under scrutiny.

Unions on Wednesday proposed forgoing bonuses for two years and creating a fund to finance a temporary reduction in working hours in less productive areas of the business. They said these measures would avoid redundancies and save 1.5 billion euros ($1.6 billion).

But the proposal was contingent on management ruling out plant closures, which Volkswagen has refused to do.

“A solution before Christmas relies on the other side making a big step towards one today,” said IG Metall union negotiator Thorsten Groeger.

“If IG Metall wants, the factory lines will stand still.”

If management rejects their proposal, unions – a powerful force at Volkswagen, controlling half the seats on its supervisory board – will demand a 7% pay rise alongside no plant closures.

If their demands are not met, workers could strike from December across German sites, the first large-scale strikes at the German business – VW AG – since 2018 when over 50,000 workers took to the streets over pay.

“We welcome that worker representatives are signalling openness to measures on labour costs and overcapacity … We will go into a detailed exchange in the negotiations,” Volkswagen board member Gunnar Kilian said in a statement.

AUTOMAKERS STRUGGLING

Thousands of workers from various cities gathered in the soccer stadium in Wolfsburg, where Volkswagen is headquartered, on Thursday morning, blowing whistles, waving flags and whooping and booing. Sausages and pretzels were served in near freezing temperatures outside.

The large crowd of workers “is just a taste of what would come in December,” VW AG works council chief Daniela Cavallo said.

Company and industry data reviewed by Reuters showed that the automaker spends a higher proportion of sales on labour costs than its major rivals.

But others are also struggling.

Ford (NYSE:F) said on Wednesday it would cut around 14% of its European workforce.

Volkswagen’s preferred shares, listed in Germany’s blue-chip DAX index fell 1.4% to their lowest level since Nov. 13. The company’s common stock, majority owned by Porsche SE – the holding firm controlled by the Porsche and Piech families – declined 1% to its lowest level in over 13 years.

Unions have called on Volkswagen’s key owners to pitch in on savings, something Stifel analysts said would be negative for biggest shareholder Porsche SE.

The union proposal “seems some way off what we assume VW management hopes to achieve in the negotiations,” a note from Stifel said.

Claudia Jobe, a member of the VW works council at the Hanover plant, said management had changed its tune since she joined the company in 1991 to making unilateral decisions in the interests of shareholders, not workers.

“You’re also afraid, you’ve been at the plant for so many years and it all counts for nothing,” she said, adding that she was pessimistic on the outcome of Thursday’s talks.

“I expect we might have to go on a warning strike from December.”

($1 = 0.9494 euros)

(Fixes share RIC in first paragraph)

A look at the day ahead in U.S. and global markets from Mike Dolan

There’s not too much to worry about at the world’s most valuable company – or the artificial intelligence theme – but just conceding that triple-digit growth can’t last forever has been enough to stall Nvidia (NASDAQ:NVDA)’s share price and dampen global tech stocks.

The $3.6 trillion chip giant’s revenue forecast on Wednesday disappointed Wall Street, with its stock down more than 3% premarket – with peers Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) off about 1% in sympathy and European chipmakers down as well.

Although it beat most metrics and consensus estimates yet again, Nvidia forecast its slowest revenue growth in seven quarters and flagged supply chain constraints through next year. Its executives warned investors the company’s margins would sink several percentage points to the low-70% range until production kinks are ironed out.

But don’t shed too many tears. The AI bellwether’s latest earnings report was by most standards still extraordinary – sales in its main data center segment more than doubled and the company’s forecast revenue of $37.5 billion for fourth quarter was above average estimates of $37.09 billion.

And in many respects, the price reaction is modest. After another 20% share surge over the past two months, markets feel most of the ongoing boom is already in the price for now.

More worrying on Wednesday was U.S. retailer Target (NYSE:TGT)’s big miss on its profit and holiday-quarter sales forecast – which sent its stock plummeting more than 20% and stood in contrast to the previous day’s beat from the world’s no. 1 retailer Walmart (NYSE:WMT).

The politics of President-elect Donald Trump’s incoming administration still dominated thinking in the background – with no sign yet of his pick for Treasury Secretary – and geopolitical worries rumbled abroad.

One of the few post-election trades to keep on moving was Bitcoin – and the dominant crypto asset zoomed close to a record $98,000 overnight, up more than 40% over the past month.

Overall, the broader market was more subdued, with stock futures marginally in the red on Thursday and most European and Asian indexes lower too.

U.S. Treasury yields slipped back despite a poorly received 20-year bond auction on Wednesday – but the dollar remained firm.

Bank of Japan Governor Kazuo Ueda said on Thursday the central bank would “seriously” take into account foreign exchange rate moves in compiling its economic and price forecasts and noted there would be more information to digest before next month’s policy meeting.

Another dominant market story overseas was in India as firms of the Adani Group conglomerate lost as much as $34 billion in market value after U.S. prosecutors charged its billionaire chairman in an alleged bribery and fraud scheme.

Gautam Adani’s flagship Adani Enterprises (NS:ADEL) tumbled as much as 23% to its lowest since November 2023 for its worst one-day drop since February last year.

Key developments that should provide more direction to U.S. markets later on Thursday:

* Philadelphia Federal Reserve’s November business survey, Kansas City Fed’s November business surveys; US weekly jobless claims, US October existing home sales; Euro zone November consumer confidence; Canada October producer prices

* US corporate earnings: Intuit (NASDAQ:INTU), NetApp (NASDAQ:NTAP), Deere (NYSE:DE), Ross Stores (NASDAQ:ROST), Copart (NASDAQ:CPRT), PDD

* Chicago Federal Reserve President Austan Goolsbee, Cleveland Fed President Beth Hammack and Fed Vice Chair for Supervision Michael Barr all speak. European Central Bank chief economist Philip Lane speaks, Bank of Spain governor Jose Luis Escriva and Bank of Cyprus governor Christodoulos Patsalides all speak; Bank of England policymaker Catherine Mann speaks

* US Treasury sells $17 billion of 10-year inflation-protected securities

(By Mike Dolan,mike.dolan@thomsonreuters.comEditing by Toby Chopra)

Investing.com — Nvidia’s solid third-quarter results and guidance reinforce the positive outlook for Taiwan Semiconductor Manufacturing (NYSE:TSM), Bank of America analysts said Thursday.

“The results underscore robust structural Al demand, with limited digestion periods as adoption accelerates,” analysts led by Brad Lin noted.

They point out that Nvidia (NASDAQ:NVDA)’s consistent one-year cadence for data center GPU development was particularly beneficial for TSMC, as it supports average selling price (ASP) content growth.

“The continuous scaling of Al models strengthens TSMC’s leading-edge node demand and industry leadership. Additionally, we are pleased to learn NVIDIA’s robust GPM outlook into CY2025, which reflects the stronger value TSMC offers to clients, vs ASP hikes,” analysts continued.

AI demand remains above supply, with supply constraints continuing for Nvidia’s Hopper and Blackwell GPUs.

The demand for Blackwell is also expected to exceed supply into fiscal 2026, BofA notes, driven by significant investments in AI, a positive indicator for TSMC’s business.

The Taiwanese manufacturing giant is actively addressing Chip-on-Wafer-on-Substrate (CoWoS) constraints by expanding its monthly CoWoS capacity, planning to increase from 35-40K units in the fourth quarter of 2024 to over 80K by the same period in 2025.

“As AI models grow in complexity and require greater computing power, we believe TSMC is well-positioned to meet these demands,” Lin and his team said.

Despite transitions in product offerings, Nvidia reported that demand remains resilient with no meaningful pauses. The demand for Hopper GPU is robust and extends into the next year, potentially outperforming previous investor concerns.

Moreover, the broader AI demand environment continues to show no signs of slowing down, supported by ongoing migration and adoption. Also, the upcoming shipments of GeForce RTX in the fourth quarter are expected to have healthy channel inventory levels, which could benefit suppliers like King Yuan Electronics.

Investing.com — Citi has placed Nvidia (NASDAQ:NVDA) on a 90-day Upside Catalyst Watch ahead of CES in January 2025.

The bank anticipates key announcements from Nvidia during the event, including updates on its Blackwell product line, improvements in gross margins, and growth opportunities in AI-driven industrial and robotics applications.

Citi noted that Nvidia delivered a “beat and raise,” with October quarter revenue reaching $35 billion, beating expectations of $34 billion. The company’s guidance for the January quarter was $37.5 billion, aligning with market forecasts.

The investment bank’s analysts said Nvidia’s management addressed several critical topics during its earnings call. These included the accelerating Blackwell ramp, which is expected to contribute significantly to January-quarter sales, and the trajectory for gross margins, which are projected to trough in the April quarter before recovering to the mid-70% range in the second half of the fiscal year.

Citi highlighted Nvidia’s continued strength in AI scaling across pre-training, post-training, and inference, which is expected to fuel growing demand for compute power.

Although networking demand declined quarter-over-quarter due to supply chain issues in optics, Citi expects a rebound in the January quarter.

Citi analysts are optimistic about Nvidia’s prospects at CES. They noted, “NVIDIA CEO Jensen Huang will give the opening keynote on Jan 6th and the company is hosting a financial analyst Q&A on Jan 7th.”

The firm expects Nvidia to outline increased Blackwell sales expectations, address the anticipated margin recovery, and discuss a “demand inflection” for AI-driven robotics in warehouses, manufacturing, and humanoid applications.

Citi maintains a Buy rating on Nvidia, raising its price target to $175 from $160, reflecting the company’s consistent 35x P/E multiple and projected earnings growth.

(Reuters) -Deere & Co forecast lower-than-expected 2025 profit on Thursday, as sagging farm incomes and inflationary pressures affect demand for the company’s tractors and other agricultural equipment.

A decline in farm incomes, high interest rates and an uncertain economy have compelled farmers to reassess large expenses on agricultural machinery and forced dealers to limit inventory restocking.

U.S. farm income is expected to fall for a second consecutive year in 2024, as farmers grapple with corn and soybean prices hovering near four-year lows.

The U.S. Department of Agriculture estimates this year’s net farm income, a broad measure of profitability in the agricultural economy, to hit $140 billion, down 4.4% or $6.5 billion from a year earlier.

“Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment,” CEO John May said.

The world’s largest farm-equipment maker expects profit for fiscal year 2025 in the range of $5 billion to $5.5 billion, compared with analysts’ average estimate of $5.93 billion, according to data compiled by LSEG.

For 2025, Deere (NYSE:DE) expects net sales to fall about 10% to 15% across all its machinery segments.

Concerns around supply chains and a surge in demand led dealers to significantly increase their inventories last year, boosting sales for Deere, which primarily sells its agricultural and construction equipment through independent and franchised dealers.

However, amid the recent demand slowdown, skeptical dealers have slowed inventory restocking.

The company reported a net income of $1.25 billion, or $4.55 per share, compared with $2.37 billion, or $8.26 per share, a year earlier.

Fourth-quarter worldwide net sales and revenue fell 28% to $11.14 billion.