Weekly Market Update - 5 August 2024

Risky Bets

South Korean investors, eager for a slice of the world’s biggest commercial property market, bet big on riskier loans for office buildings. Now, they are trying to pull back from that mezzanine debt and taking a massive hit on their way out. In New York, South Korea’s IGIS Asset Management provided subordinated debt for 1551 Broadway. But the firm decided to cut its losses and sell at a hefty discount. In Los Angeles, South Korea-based Meritz Alternative Asset Management was a mezzanine lender on the Gas Company Tower, which has struggled after the owner defaulted on the building’s debt. It’s a rapid change for an investor set that piled into the US commercial real estate market amid ultra-low rates and a booming market.

Source: Bloomberg

Job Cuts

Intel plans to eliminate thousands of jobs to reduce costs and fund an ambitious effort to rebound from an earnings slump and market share losses. The workforce reduction may be announced as early as this week, according to people familiar with the company’s plans, who asked not to be identified because the information isn’t public. Intel, which is scheduled to report second-quarter earnings Thursday, has about 110,000 employees, excluding workers at units that are being spun out.

Source: Bloomberg

Waiting Game

Apple’s upcoming artificial intelligence features will arrive later than anticipated, missing the initial launch of its upcoming iPhone and iPad software overhauls. The company is planning to begin rolling out Apple Intelligence to customers as part of software updates coming by October, according to people with knowledge of the matter. That means the AI features will arrive a few weeks after the initial iOS 18 and iPadOS 18 releases planned for September. Apple Intelligence includes a range of features, including web page and voice note summaries, tools to improve writing, a revamp to Siri and integration of OpenAI’s ChatGPT.

Source: Bloomberg