Good Evening. Tuesday’s decline in U.S. stocks, the third straight session of losses, extended a selloff that began on Friday following a speech by Fed Chair Jay Powell in Jackson Hole.
The S&P 500 was down 1.10%, the Dow was down 0.96%, and the Nasdaq was down 1.12% as the bell rang on Wall Street.
SLOWING PC DEMAND HURTS
After making stops at rival Dell (DELL) and chipmakers like Intel (INTC), the COVID-19 PC hangover has made its way to the doors of computer behemoth HP Inc (HPQ).
Net Sales: $14.7 billion vs. $15.6 billion expected
Diluted EPS: $1.04 vs. $1.05 expected
Enrique Lores, CEO of HP, stated on Yahoo Finance Live that consumer anxiety over macroeconomic uncertainty is a major factor in the sales gap. But… as schools resumed operations and the economy worsened, PC demand decreased. According to industry analyst Gartner Inc., global shipments fell 13% between April and June, making it the weakest quarter in more than nine years. The greatest decline of any company tracked by Gartner occurred at HP, which was down over 27%.
However, HP completed its $3.3 billion acquisition of Poly, the firm that sold phone headsets and other audio and video devices under the name Plantronics Inc. The purchase represents a wager on the long-term viability of the remote work equipment market.
OFFICES IN THE... SUBURBS?
Businesses are putting a lot of money on suburban office space because they believe that remote workers who live on the outskirts of cities will return if they don’t have to spend all day stuck in traffic.
The newest investment is a big one: Workspace Property Trust of Florida and Singapore’s sovereign wealth fund teamed up to pay $1.1 billion for 53 suburban office buildings. The CEO of Workspace told the WSJ that “we believe the pandemic really accelerated the shift to suburban offices.”
However… not every suburban workplace is the same. Real estate experts are much more positive about shining, higher-end homes located in developing metro areas, like Atlanta and Dallas, than they are about the dilapidated, Dunder Mifflin-style structures that were built decades ago.
And not everyone has already given up on downtown offices. According to the NYT, NYC is moving forward with an incredibly ambitious proposal to construct 10 skyscrapers, largely for office space, near Penn Station. This would be one of the largest real estate ventures in U.S. history.