Good morning! Here’s what you need to know…
1. Facebook smashes it. Mark Zuckerberg’s company just reported Q2 results, beating expectations all over the board, and the numbers are mind-blowing. Income from operations was $US1.4 billion over just $US562 million this time last year. Total revenue was up 61% to more than $US3 billion (for the quarter). Monthly active users – basically the number of people using Facebook – stood at 1.32 billion, up 14% and if you needed proof of the mobile revolution, the mobile audience was 1.07 billion, up 31%. Consider this against Twitter’s problem at the moment, which is the perception that its user base has stopped growing. BI’s Jim Edwards pulled this part of the Facebook statement, with highlights added.
So not only is it big with strong revenue growth but it is well-run too.
2. There were heartbreaking scenes in The Netherlands overnight as a cargo plane arrived carrying the bodies of MH17 victims, which were then loaded into a convoy of hearses and driven to a forensics facility for identification. Here are the photos – be warned, it is grim stuff. Political pressure is building in The Netherlands for some form of action against Russian companies which are “mailboxed” in the country – and PM Mark Rutte has a range of options that could hurt Putin. More on that here.
3. To the markets and the S&P 500 closed at an all-time high amid a continuing run of earnings beats across sectors. The Dow finished down just 0.1% while the S&P was up 0.2% for a record close of 1,987.01, while the Nasdaq was up 0.4%. It follows the ASX hitting a post-GFC high in trading yesterday where it took a run at 5600, but fell away in the afternoon. Trading across Asia was generally flat apart from in Hong Kong, which was up 0.8% ahead of the release of the China Flash PMI today, one of the most important leading indicators for the regional economy. ASX futures are up 19 points on the September contract so the market will be watching to see if the physical bourse can take a tilt at the 5600 mark again. Greg McKenna has more here.
4. NZ lifts rates. The RBNZ lifted the official cash rate by 25 basis points this morning to 3.5%, and sounded a major warning in its accompanying statement that with “the exchange rate yet to adjust to weakening commodity prices, the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall”. The market’s on notice.
5. Bill Ackman’s massive Herbalife presentation. The US hedge fund manager has been crusading against Herbalife for nearly 20 months and yesterday delivered what he hoped was its “death blow”. Ackman is short Herbalife, believing it’s a pyramid scheme that regulators will shut down. And he spent $50m investigating the company, a large part of which went toward gathering the information you can see in this extraordinary 265-slide deck he showed yesterday. One theory is that Ackman might be willing to be sued by Herbalife, which would allow for discovery of documents that he could then use to strengthen his regulatory case against the company.
6. Breast cancer breakthrough. Shares in Puma Biotechnology exploded overnight after it announced a successful trial of a breast cancer drug, the company announced blocked the return of cancer in patients with a particular early-stage type of the disease, and “improved disease-free survival by 33 per cent compared with a placebo”. The stock almost tripled in value, making $US950 million in a single day for Adage Capital Management, a Boston-based hedge fund.
7. Australia’s 10 most expensive rental suburbs. Not surprisingly, there’s a lot of demand-setting-the-price hijinks going on. The honours are split evenly between NSW and WA. In WA, it’s driven by need, with Pilbara properties hovering around the $1500 mark for gross rental yield of about 8%. In NSW, it’s all lifestyle with glam suburbs averaging $1200 rent for roughly 3% yield. More here.
8. Dogs get jealous too. Scientists have established that man’s best friend really does exhibit jealous behaviours, and will even try to break up a social connection between their owner and another person or animal. This is important because researchers have been trying to establish the roots of jealousy – seeing it in dogs suggests protecting social relationships is a deep-rooted evolutionary drive, and understanding it more might shed light on motivators for human behaviour in all sorts of scenarios. If that sounds abstract, try this: jealousy is third-leading motive for murder.
9. iPhone payments are coming. The company recently struck a deal with Visa, which has 2.2 billion cardholders, and there’s a report today that suggests Apple might roll out a mobile wallet – similar to what’s on the latest Samsung Galaxy models – that would allow you to pay for items using technology in every iPhone. Currently, users need a special “sticker” that attaches to the outside of the device.
10. Inside the mind of Bill Gates. “Playing Bridge is a pretty old fashioned thing in a way that I really like,” the world’s richest man said in a Reddit AMA earlier this year. “I do the dishes every night – other people volunteer but I like the way I do it.” There’s this and 20 other insights – OK, most of them are really about leadership, not card games – here, from the world’s richest man.
Bonus item: What would you do for a Krispy Kreme? There’s a new store in Adelaide, and police have been called to it 20 times because of fights breaking out – there was even a knifepoint robbery of a customer leaving with six boxes of the tasty treats.
Have a great day. I’m on Twitter: @colgo
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