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Credit Suisseanalyst Stephen Ju reiterates an Outperform rating onAlphabet IncGOOG GOOGL Googlewith a price target of 136.00.

The analyst previews Google's 1Q23 results in a Thursday note titled "YouTube Engagement Remains Steady, Adjusting for Near-Term Brand Weakness."

Ju's 2023 and 2024 adjusted EPS estimates remain unchanged as he takes steps to recalibrate his assumptions. Given its size, advertising spending on Google most reflects the state of the overall economy vs. other companies in Ju's coverage, which may have more vertical-specific exposure.

Ju's conversations with advertisers suggest that strength in specific verticals (travel in particular and entertainment/media) is offset by weakness in others (auto, real estate, financials, insurance).

At this point, the analyst does not have reasons to believe that his estimates for online advertising for 2023 should increase as budget growth expectations seem bracketed to a 0-5% range, consistent with the feedback he had gathered heading into the 4Q22 earnings cycle and vs. ~5-7% back in Sep/Oct 2022.

In the near term, his checks are pointing to an in-line to slightly better result for Search in 1Q23. The analyst notes that Performance Max went into general release in 4Q21, so he started to lap some benefits.

His 2023 FXN growth projections for Search and Other stands at ~3.4% (2.3% reported) and YouTube at 4.0% (2.0% reported).

Feedback for YouTube remains soft, given higher brand exposure. Ju also updates engagement and time spent data, and the time series continues to suggest that YouTube has effectively triaged the potential challenge from the proliferation of TikTok.

The re-rating reflects ongoing monetization improvements in Search through product,AI updates, greater-than-expected revenue contribution from non-Search businesses (YouTube, Cloud, and Play), optionality and shareholder value creation from new monetization initiatives like Maps, Discover, and commercialization of Other Bets.

Price Action:GOOG shares closed lower by 0.57% at $101.29 on Thursday.

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World

Trump warns Hamas – and claims Israel has agreed to 60-day ceasefire in Gaza

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Trump warns Hamas - and claims Israel has agreed to 60-day ceasefire in Gaza

Analysis: Many unanswered questions remain

In the long Gaza war, this is a significant moment.

For the people of Gaza, for the hostages and their families – this could be the moment it ends. But we have been here before, so many times.

The key question – will Hamas accept what Israel has agreed to: a 60-day ceasefire?

At the weekend, a source at the heart of the negotiations told me: “Both Hamas and Israel are refusing to budge from their position – Hamas wants the ceasefire to last until a permanent agreement is reached. Israel is opposed to this. At this point only President Trump can break this deadlock.”

The source added: “Unless Trump pushes, we are in a stalemate.”

The problem is that the announcement made now by Donald Trump – which is his social-media-summarised version of whatever Israel has actually agreed to – may just amount to Israel’s already-established position.

We don’t know the details and conditions attached to Israel’s proposals.

Would Israeli troops withdraw from Gaza? Totally? Or partially? How many Palestinian prisoners would they agree to release from Israel’s jails? And why only 60 days? Why not a total ceasefire? What are they asking of Hamas in return? We just don’t know the answers to any of these questions, except one.

We do know why Israel wants a 60-day ceasefire, not a permanent one. It’s all about domestic politics.

If Israeli Prime Minister Benjamin Netanyahu was to agree now to a permanent ceasefire, the extreme right-wingers in his coalition would collapse his government.

Itamar Ben-Gvir and Bezalel Smotrich have both been clear about their desire for the war to continue. They hold the balance of power in Mr Netanyahu’s coalition.

If Mr Netanyahu instead agrees to just 60 days – which domestically he can sell as just a pause – then that may placate the extreme right-wingers for a few weeks until the Israeli parliament, the Knesset, is adjourned for the summer.

It is also no coincidence that the US president has called for Mr Netanyahu’s corruption trial to be scrapped.

Without the prospect of jail, Mr Netanyahu might be more willing to quit the war safe in the knowledge that focus will not shift immediately to his own political and legal vulnerability.

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UK

The PM faced down his party on welfare and lost. I suspect things may only get worse

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The PM faced down his party on welfare and lost. I suspect things may only get worse

So much for an end to chaos and sticking plaster politics.

Yesterday, Sir Keir Starmer abandoned his flagship welfare reforms at the eleventh hour – hectic scenes in the House of Commons that left onlookers aghast.

Facing possible defeat on his welfare bill, the PM folded in a last-minute climbdown to save his skin.

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Welfare bill passes second reading

The decision was so rushed that some government insiders didn’t even know it was coming – as the deputy PM, deployed as a negotiator, scrambled to save the bill or how much it would cost.

“Too early to answer, it’s moved at a really fast pace,” said one.

The changes were enough to whittle back the rebellion to 49 MPs as the prime minister prevailed, but this was a pyrrhic victory.

Sir Keir lost the argument with his own backbenchers over his flagship welfare reforms, as they roundly rejected his proposed cuts to disability benefits for existing claimants or future ones, without a proper review of the entire personal independence payment (PIP) system first.

PM wins key welfare vote – follow latest

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Welfare bill blows ‘black hole’ in chancellor’s accounts

That in turn has blown a hole in the public finances, as billions of planned welfare savings are shelved.

Chancellor Rachel Reeves now faces the prospect of having to find £5bn.

As for the politics, the prime minister has – to use a war analogy – spilled an awful lot of blood for little reward.

He has faced down his MPs and he has lost.

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‘Lessons to learn’, says Kendall

They will be emboldened from this and – as some of those close to him admit – will find it even harder to govern.

After the vote, in central lobby, MPs were already saying that the government should regard this as a reset moment for relations between No 10 and the party.

The prime minister always said during the election that he would put country first and party second – and yet, less than a year into office, he finds himself pinned back by his party and blocked from making what he sees are necessary reforms.

I suspect it will only get worse. When I asked two of the rebel MPs how they expected the government to cover off the losses in welfare savings, Rachael Maskell, a leading rebel, suggested the government introduce welfare taxes.

Meanwhile, Work and Pensions Select Committee chair Debbie Abrahams told me “fiscal rules are not natural laws” – suggesting the chancellor could perhaps borrow more to fund public spending.

Read more:
How did your MP vote?
Welfare cuts branded ‘Dickensian’

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Should the govt slash the welfare budget?

These of course are both things that Ms Reeves has ruled out.

But the lesson MPs will take from this climbdown is that – if they push hard in enough and in big enough numbers – the government will give ground.

The fallout for now is that any serious cuts to welfare – something the PM says is absolutely necessary – are stalled for the time being, with the Stephen Timms review into PIP not reporting back until November 2026.

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Tearful MP urges govt to reconsider

Had the government done this differently and reviewed the system before trying to impose the cuts – a process only done ahead of the Spring Statement in order to help the chancellor fix her fiscal black hole – they may have had more success.

Those close to the PM say he wants to deliver on the mandate the country gave him in last year’s election, and point out that Sir Keir Starmer is often underestimated – first as party leader and now as prime minister.

But on this occasion, he underestimated his own MPs.

His job was already difficult enough – and after this it will be even harder still.

If he can’t govern his party, he can’t deliver change he promised.

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Politics

US sanctions crypto wallet tied to ransomware, infostealer host

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US sanctions crypto wallet tied to ransomware, infostealer host

US sanctions crypto wallet tied to ransomware, infostealer host

The US Treasury has sanctioned a crypto wallet containing $350,000 tied to the alleged cybercrime hosting service Aeza Group.

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