Trend Analysis
Capital Markets
U.S.-China relations may be at one of their lowest points in decades, but that isn’t stopping the world’s two largest economies from collaborating in financial markets. Chinese hotel chain Atour Holdings Ltd. is reportedly looking to list in the U.S. and is planning to open its order book for investors. That’s good news as the U.S. economy faces more Fed tightening and mixed quarterly earnings reports.
Some Chinese firms in Hong Kong are also cooperating with U.S. audits, a requirement to keep them listed on U.S. exchanges. This had been a contentious issue for Beijing, which wanted its companies’ books kept off limits. Public Company Accounting Oversight Board officers have completed a first round of audits, on-site, at several Chinese concept stock companies. Hong Kong shares rose on the news.
It isn’t just Chinese companies looking for a market rebound. In early October, the still and sparkling water brand, Liquid Death, raised $70 million in its Series D funding round led by Science Ventures at a $700 million valuation. CEO Mike Cessario, in a recent Yahoo Finance interview, said that “an IPO path is something we're definitely going to seriously explore”, though he made no commitment to that funding path or provided a specific timeline for a decision.
Instacart, after delaying its own IPO, is paying this year’s employee bonuses in cash. That may go a long way towards employee retention in an environment where lucrative stock grants have lost their luster.
Technology and Media
The streaming wars are ramping up as the field becomes increasingly competitive. Netflix, in a risky move to add advertising for a lower priced tier of membership, announced a $7 per month plan that excludes some content and show downloads. Despite the competition from similarly priced offerings, Netflix remains a streaming leader and Barry Diller, chairman of IAC thinks they will remain in the top position. He did add on CNBC’s Squawk Box that the advertising model may add confusion to their market differentiator as a pure pay service.
Amazon, with its own streaming offering, is expanding options for its Prime subscribers. The company is building out a larger music catalog in response to customer demand. They face competition not only from industry stalwarts like Netflix for series and movie content, Spotify and Apple on the music front, but also new content entrants including Walmart that is adding Paramount+ to its Walmart+ service. Overall growth rates are expected to slow for Amazon, so these new and expanded services may be key to retention going forward.
Not to be completely left out of the media landscape, movie theaters are hoping to attract viewers to the big screens with major releases in 2023, including more Marvel and DC Comics films. Domestic box office receipts have been hit hard by the Covid pandemic. Morgan Stanley estimates that this year’s revenues will come in about a third below 2019 totals with modest, yet slowing growth over the next two years.
Workplace Trends
Another tried and true method for keeping employees happy is creating a positive workplace culture. According to Gallup’s “State of the Global Workplace: 2022 report” the global economy loses trillions of dollars to low employee engagement. Trends in engagement and wellbeing are stable, but at low levels. Work stress remains elevated. South Asia and Europe were highlighted as experiencing declines in worker satisfaction. The U.S. and Canada, however, remain top of the list of countries in which to find a new job, according to the survey.
In the U.S., employers are increasingly encouraging employees to return to the office as covid concerns decline. This is giving workers the chance to reset their relationships with managers, another go at first impressions post-pandemic.
And as in-person team reunions become more common, motivating them to innovate and take risks becomes increasingly important. Managers need to create an environment where there is a willingness to experiment as well as measure progress. Culture is key.