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Today in the Market (2/13/2024)

Good Morning! On Tuesday, U.S. equities had a significant decline, dropping from their previous peak levels. This occurred when investors processed the January inflation data that revealed higher-than-expected prices, which were decreasing at a slower rate than predicted.

The S&P 500 and the Dow Jones almost closed down by the same amount of 1.37% & 1.35%, respectively, while the Nasdaq fell by 1.80%.

THEY CONTINUE

Paramount Global (PARA) plans to lay off a significant number of workers in the aftermath of an unprecedented Super Bowl, which attracted over 123 million viewers to CBS Sports. About 800 people, approximately 3% of Paramount’s staff, will be affected by the job layoffs, according to individuals familiar with the subject.

The CEO shared some insight. Paramount CEO Bob Bakish reaffirmed in a memo to staff that layoffs are essential for the business to regain profitability, asserting: “I am confident this is the right decision for our future. These adjustments will help enable us to build on our momentum and execute our strategic vision for the year ahead.”

Interesting times for Paramount. Paramount has announced layoffs amidst circulating speculations of mergers and acquisitions. According to reports, Byron Allen has made a substantial bid of $14.3 billion to acquire all of the company’s remaining shares. On top of that, Skydance Media, RedBird Capital, Apollo Global Management, and Warner Bros. Discovery (WBD), have all shown their interest in a potential agreement.

GOING FLAT

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Both Coca-Cola (KO) and PepsiCo (PEP) are seeing a decline in sales volume in North America. The previous quarter saw a 1% decline in volume growth for the region, which the Coca-Cola Company offset by an increase in pricing of 8%. However, there was a 9% increase in pricing, offset by a 6% decline in beverage volume for PepsiCo.

So what is the reason? According to Coca-Cola CFO John Murphy, many buyers, namely those with lower and moderate incomes, are experiencing financial strain as their weekly expenses increase. Individuals are now opting for beverages in various packaging sizes and price ranges, as they are actively seeking options that provide more value and cost-effectiveness.

What other insights did the companies provide? Coca-Cola anticipates a 6% to 7% increase in its organic sales for the year 2024, excluding any acquisitions or divestitures. On the other hand, PepsiCo, which has a substantial snacking enterprise with its Frito-Lay segment, anticipates a 4% increase in organic sales.

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