1 Fed warns social media stock valuations are ‘stretched’
(BBC) The US Federal Reserve has warned of "stretched valuations" in
social media and biotechnology firms as part of chair Janet Yellen's
semi-annual report in front of Congress. The warning sent US indexes down, with
shares of social media firms such as Yelp plunging. In prepared remarks, Ms
Yellen also said that she thought the US economy continued to improve. However,
she warned of weakness in the housing market and slow wage growth.
In a separate monetary policy report, the Fed wrote:
"Valuation metrics in some sectors do appear substantially stretched -
particularly those for smaller firms in the social media and biotechnology
industries, despite a notable downturn in equity prices for such firms early in
the year." That sent all three major US indexes into the red after they
had been trading slightly higher during the morning.
In terms of the US economy overall, Ms Yellen said
that she saw "continuing slack" in the US jobs market and warned of
long-term unemployment that remained at historic highs. She also said that
gains in the housing market had been disappointing, and that despite
better-than-expected jobs growth as of late, wages remained stagnant.
2 BMW recalls 1.6m cars (The Guardian) BMW is
expanding a recall of its most popular models to fix an airbag problem that is
hitting much of the global auto industry. The German carmaker says it will
recall 1.6m 3 Series cars from model years 2000 to 2006 across the world,
including 574,000 in the US. The company said that it is a precaution because
other manufacturers using similar systems have reported problems.
Airbag inflators in systems made by Takata can
rupture. If that happens, the bags might not work properly, and shards could
fly out and cause injury. The problem is responsible for millions of recalled
vehicles during the past few years made by manufacturers such as Chrysler,
Ford, Honda, Mazda, Nissan and Toyota. The recalls have mostly been of vehicles
in states with hot and humid weather.
BMW said it has no reports of problems in its
vehicles. Dealers will replace the passenger-side front airbags. In June, the
US National Highway Traffic Safety Administration began investigating airbags
made by Takata, a Tokyo-based supplier of seat belts, airbags, steering wheels
and other auto parts.
3 India economy looks stronger (Anant Vijay Kala
& Rajesh Roy in The Wall Street Journal) India's merchandise exports
expanded by more than 10% for the second month in a row in June, the latest
sign that India's economy may be rebounding. June exports rose 10.2% from the
year-earlier month, to $26.48 billion, after climbing 12.4% in May and 5.3% in
April, the trade ministry said. Imports rose 8.3% to $38.24 billion, following
an 11.4% decline in May.
The trade deficit stood at $11.76 billion in June,
compared with $11.23 billion in May and $11.28 billion in June 2013. "The
whole gamut of data announced lately points to one thing, which is that an
economic recovery is already under way and the pace will strengthen going
forward," said Sujit Kumar, an economist at Union Bank of India.
"What has mainly anchored India's exports is a recovery in India's main
trading partner nations such as the US, some African and even South Asian
economies."
Data over the past week showed India's industrial
output jumped to a 19-month high while consumer inflation dropped to its lowest
level in more than two years. India has been struggling over the past two
fiscal years with low growth and high inflation.
In one bad sign for the Indian economy, the latest
trade figures showed gold imports jumped 65% in June, to $3.1 billion, reviving
worries that India's current-account deficit could widen again. Expectations
that the government may roll back some of the measures it took last year to
clamp down on gold imports could widen the current-account gap.
4 When fashion meets tech (Lorraine Sanders in San
Francisco Chronicle) It was once novel to talk about the intersection of
fashion and technology, but today it's surprising we ever thought it might be
otherwise. Fashion is also changing technology, and the San Francisco Bay Area
is at the center of this revolution in the way we discover, share and consume
fashion (among other products).
Some of the world's biggest technology companies are
now bringing in fashion veterans like former Yves Saint Laurent CEO Paul Deneve
and Burberry CEO Angela Ahrendts (Apple), partnering with designers like Diane
von Furstenberg (Google), and betting on acquisitions, including a 3-D
virtual-fitting technology company (eBay), to secure long-lasting style cred
among a wider audience.
But much of the innovation is coming from
next-generation startups. They're providing novel ways to buy, swap or borrow
clothing (Poshmark, Style Lend); reinventing fit methodology (True & Co.,
ThirdLove); and disrupting traditional seasonal clothing cycles to give buyers
more input (Betabrand, Everlane).
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