Homebuilders: Foundation for a recovery
U.S. homebuilders in August added new homes at the fastest pace in 28 months. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 40 in September, the highest level since June 2006. The index had reached a record low of 8 in January 2009. A combination of limited inventory of existing homes and record low mortgage rates are drawing buyers into the market and bolstering homebuilders, including Toll Brothers. David Crowe, NAHB’s chief economist, says some homebuilders are concerned about rising materials costs, availability of buildable lots, and the fragile nature of the recovery.
Benetton: Political ads without the shock factor
Benetton Group will replace controversial ads showing world leaders kissing with a message that highlights rising levels of youth unemployment. In the new $26 million campaign, young people pose alongside the slogan “Unemployee of the Year.” The Italian company spent half that on the earlier “Unhate” ads, one of which depicts Pope Benedict XVI kissing Egypt’s top Muslim cleric, Ahmed el-Tayeb. Benetton is also earmarking $654,000 to give grants to unemployed youth for projects that improve their communities.
Lonmin: A violent strike ends
Workers at a South African platinum mine run by Lonmin agreed to end their almost six-week strike in exchange for as much as a 22 percent pay hike and a one-time bonus of $245 each. Pay grievances with the world’s No. 3 platinum producer triggered a violent strike that left at least 45 people dead, including 34 protesters shot by police on Aug. 16. Upon news of the pact, the world’s largest producer, Anglo American Platinum, reopened mines that it had idled previously as a precaution when workers there started a strike, too.
Foxconn: Doubling down in Brazil
Foxconn Technology Group, which makes Apple’s iPad and iPhone, will invest $494 million to build as many as five factories at an industrial park near São Paulo. Production is scheduled to begin in 2014 and reach full capacity with 10,000 employees in two years. The expansion will help Foxconn, which already has plants in Brazil, make devices closer to consumers in South America for Apple and other clients, including Lenovo Group and Hewlett-Packard. The Taiwanese company employs almost 1 million workers, largely in China.
Groupon: Joining the mobile-payments race
Daily deal site Groupon is introducing a payment service that charges merchants low fees for credit-card transactions. To use Groupon Payments, retailers swipe cards through a small reader, similar to the device offered by mobile-payments startup and rival Square, that connects to an app on the iPhone and iPod touch. For merchants that also run deals, Groupon charges 1.8 percent plus 15¢ per transaction for Visa, MasterCard, and Discover cards, compared with the 2.75 percent or $275 per month options offered by Square.