Highlights of the week: Google decision, Kraft Heinz to split, George Armani dies

A U.S. federal court has stopped short of requiring Google to sell Chrome, but has banned exclusive pre-installation agreements for the services. Kraft Heinz will split the business into two separate divisions - North American Grocery and Global Taste Elevation - after years of weak sales. The world fashion industry was shaken by the news of the death of 91-year-old George Armani, the creator of the legendary Armani brand. The main events from September 1 to 5 are in our review.

A federal court in the District of Columbia will not force Google to sell its Chrome browser or Android operating system in an antitrust case against the company. Google will retain the option to pay Apple about $20 billion annually for its default search engine status in Safari and Siri.

However, the judge imposed restrictions on the company's business practices, Yahoo Finance reported. The search giant is prohibited from entering into exclusive agreements to pre-install Google Search, Chrome, Google Assistant or Gemini services. Google will also not be able to bundle Play Store licensing with other apps or require cross-promotion. In addition, Google must give competitors access to a portion of its search index and advertising tools.

Despite increased regulatory pressure and competition from Bing, Yandex and generative AI, search advertising will bring Alphabet, Google's parent company, $198 billion in 2024 - more than half of all revenue. After the decision was announced, Alphabet shares soared 8% in extended trading in New York, while Apple shares rose 3.5%.

On Friday, September 5, the European Union fined Google €3 billion (approximately $3.5 billion) for anti-competitive practices in the AdTech sector. The European Commission said that Google favored its online advertising services to the detriment of competitors and had been abusing its position since 2014. Google intends to file an appeal.

The decision against Google could threaten a new round of confrontation between the U.S. and the European Union, with Donald Trump on Friday threatening to launch a trade investigation to "nullify" discriminatory fines that Europe has imposed on U.S. tech companies, CNBC wrote.

What else is there to read about it?

- After the court decision in the United States, several analysts immediately raised their target prices on Alphabet shares. About how the Google case decision will affect it and Apple - in the article "The Load of Uncertainty Removed: How the Google case decision will affect it and Apple".

In August, the U.S. economy created only 22 thousand jobs (excluding agriculture) - 3.4 times less than the expected 75 thousand, according to data from the U.S. Bureau of Labor Statistics, published on Friday, September 5. The unemployment rate matched the forecast, increasing from 4.2% in July to 4.3%. According to the FedWatch tool from CME Group, traders now estimate the probability of interest rate cuts at the next Fed meeting on September 16-17 at 88%, while a week ago it was 86.4%.

The three major U.S. stock indices broke records at the beginning of trading on September 5, but turned to decline during the trading session: investors began to fear about the slowdown of the U.S. economy and a possible recession.

In an August speech in Jackson Hole, Fed Chairman Jerome Powell hinted at the regulator's willingness to ease monetary policy, citing growing risks to the labor market. But even without the latest data - the sluggish hiring of recent months is probably already enough to push the Fed toward a rate cut, Barron's wrote.

American manufacturer Kraft Heinz has announced that it is splitting its business into two independent businesses: one will focus on sauces, the other on its grocery line. As a result, two public companies will emerge: North American Grocery (Kraft Singles, Oscar Mayer and Lunchables brands) with annual revenues of about $10 billion and Global Taste Elevation (Heinz, Philadelphia and Kraft Mac & Cheese brands) with revenues of about $15 billion. The separation is expected to be completed in the second half of 2026. The company made this decision after several years of declining sales and falling capitalization: the food giant, created a decade ago, never achieved the expected growth rates, noted Reuters. Management expects that simplifying the structure will allow it to allocate resources more efficiently and accelerate growth. After the announcement of the separation of the companies on September 2, shares of Kraft Heinz fell in price by almost 7%.

"Unless both companies invest in innovation and defend themselves against the private label onslaught, the separation is unlikely to yield anything more than a temporary financial impact," said Emarketer analyst Susie Davidkhanian, confidently.

The merger of the two companies Kraft and Heinz took place in 2015 with the help of Warren Buffett's Berkshire Hathaway. He himself told CNBC that he was "disappointed" with the decision to split. According to him, the merger wasn't a brilliant idea, but neither will the separation solve the business's problems. Buffett's Berkshire Hathaway is the largest shareholder in Kraft Heinz, CNBC notes.

What else is there to read about it?

On September 3, Morgan Stanley refused from the advice to sell Kraft Heinz securities: the bank believes that the shares have reached the minimum levels and expects growth of quotations. Whether other analysts on Wall Street agree with him, was studied by Oninvest correspondent Victoria Sirota - in the material "Morgan Stanley thinks that shares of Kraft Heinz have reached the bottom. Is it worth buying them?".

Italian fashion designer George Armani passed away at the 92nd year of his life, Armani Group announced on September 4. In an official statement, the company called him "the creator, founder and tireless driving force behind the brand." Armani's health had deteriorated in recent months: in June, he missed his Mark's shows at Milan Men's Fashion Week for the first time.

Armani founded his own brand in 1975, making it one of the symbols of Italian style and elegance. His ability to combine creativity and entrepreneurial strategy made him one of the most successful fashion designers in the history of fashion, notes Reuters. Unlike many competitors, the company remained private - the designer kept tight control of the business with a turnover of more than €2.3 billion a year.

Armani's fortune is estimated at $12.1 billion according to Forbes (208th place among billionaires).

Gold prices hit an all-time high this week and, according to forecasts by JPMorgan and Goldman Sachs, could reach $4250-5000 per ounce by 2026. The main drivers of growth are expectations of Fed rate cuts and concerns about its independence. This, according to analysts, may prompt investors to leave US Treasury bonds for gold.

"A scenario in which the Fed's principle of independence is compromised would likely lead to higher inflation, lower stock and long-term bond prices, and a weakening of the dollar's status as a reserve currency," said Goldman Sachs analyst Samantha Dart. While gold is a store of value and does not depend on institutional credibility, Dart noted.

However, Morningstar warns that gold is already trading at record highs, and historical data shows that such peaks are often followed by long periods of low returns or sharp declines.

The rise in precious metals prices has also benefited gold mining companies: Newmont Mining shares have more than doubled since the beginning of the year, Pan American Silver has added about 60%, Barrick Mining - more than 75%. Their dynamics is already comparable to the favorites of the AI boom, which emphasizes the unusual market situation, Barron's noted.

After three consecutive trading sessions of decline, Tesla shares returned to growth on Wednesday, September 3: at the end of trading they added almost 2%, outperforming the Nasdaq Composite index. There was almost no news, but the interest of investors could be a belated reaction to Elon Musk's statement that the future of the company is connected not with electric cars, but with humanoid robots Optimus - they will account for up to 80% of Tesla's market value.

In addition, investors' interest was attracted by a visit to the Tesla factory by Salesforce CEO Marc Benioff, who posted a photo with Musk and the Optimus robot, calling the project "amazing." Although the robots were first unveiled back in 2021 and have yet to hit the market, Tesla plans to start selling them in 2026.

Morgan Stanley estimates that the humanoid market could exceed $5 trillion by 2050 and surpass the automotive industry in terms of turnover. The bank's analyst Adam Jonas believes Optimus could become Tesla's main growth driver and values the company's shares at $410, almost 20% above current levels.

On Friday, September 5, Tesla offered CEO Elon Musk a new compensation agreement with a potential value of about $1 trillion, an unprecedented package for U.S. companies, Bloomberg wrote. The offer is designed to incentivize Musk to remain at the helm of Tesla for years to come: to receive his full compensation he will need to meet a number of ambitious goals. Among them are the development of the nascent robotaxi business and the growth of the company's market capitalization to at least $8.5 trillion, up from about $1 trillion today. The plan is set to run for 10 years.

This article was AI-translated and verified by a human editor