2023-07-27 06:45:32 ET
Summary
- The U.S. Justice Department and EPA are investigating possible health and environmental issues from lead cables used by AT&T and Verizon.
- AT&T faces the biggest risk as it has the most lead cables in the ground, while Verizon has a smaller percentage of lead-covered cables.
- Yellow Corp may file for bankruptcy protection as customers abandon the trucking company due to a cash crunch and union dispute.
Listen below or on the go on Apple Podcasts and Spotify Justice Dept., EPA reportedly investigate telecom companies over lead cables. (00:30) Meta earnings call: Reels ramps toward $10B/year, Threads models 'lean' success. (01:32) Yellow Corp (YELL) may file for bankruptcy this week as customers cut and run - report. (03:19)
This is an abridged transcript of the podcast.
The U.S. Justice Department and the Environmental Protection Agency are probing possible health and environmental issues from lead-covered telecom cables .
According to a WSJ repor t late Wednesday, which cited a person familiar with the matter, the EPA's enforcement office has directed AT&T (NYSE: T ) and Verizon Communications (NYSE: VZ ) to provide inspections, investigations, and environmental sampling data, about their lead cables within 10 days.
The WSJ said, This is in the early stages and is probing whether the telecom companies knew of potential risks to their workers and the environment from the lead cables.
The investigations come in the wake of a WSJ report from earlier this month that said telecom operators still had lead-clad cables in their networks. According to the WSJ , AT&T ( T ) faces the biggest risk with the most cable in the ground, followed by Verizon ( VZ ). Verizon ( VZ ) has said the percentage of lead-covered cables in its existing network is small.
According to a court filing, It was disclosed last Wednesday that AT&T ( T ) h alted its plan to remove lead cables in the Lake Tahoe area and will test lead levels at locations where it has lead covered cables.
Meta Platforms (NASDAQ: META ) is up more than 7% pre-market (and spiked as much as 8.8% briefly post market Wednesday) after posting second-quarter earnings that easily beat expectations across the board on financials and on user growth.
Revenues grew 11% to $32B, some 3% better than forecasts for $31.03B, and costs and expenses rose 10%.
That led operating income to a 12% gain, to $9.39B, as operating margins remained flat at 29%. And net income rose 16%, to $7.79B.
Meanwhile, the company guided to strong third-quarter revenue of $32B-$34.5B vs. an expected $31.11B. It expects a foreign currency tailwind of about 3% based on current rates.
On the conference call CEO Mark Zuckerberg said about Threads that he’s “quite optimistic” about the company’s trajectory in that space.
He said the new app saw “unprecedented growth out the gate and more importantly, we're seeing more people coming back daily than I had expected."
He said he’s running the same playbook with Threads that he did with Facebook, Instagram, WhatsApp Stories, Reels and more.
Speaking about the year of efficiency he said, "The year of efficiency was always about two different goals, becoming an even stronger technology company and improving our financial results," Zuckerberg said.
As for artificial intelligence, he said "AI-recommended content from accounts you don't follow is now the fastest growing category of content on Facebook's Feed."
Yellow Corporation (NASDAQ: YELL ) is down more than 25% before the bell today. The trucking company could file for bankruptcy protection this week, according to a Wall Street Journal report citing unnamed sources, following a cash crunch that forced it to miss union payments.
A bankruptcy filing may put Yellow ( YELL ) at high risk of liquidation as customers have increasingly been abandoning the company.
The report said , Yellow ( YELL ) is still exploring other options as it has not decided on filing for bankruptcy.
Yellow ( YELL ) has been hemorrhaging customers as its operations were hit by the union dispute, with Teamsters Union threatening to go on strike . As a result, Yellow ( YELL ) has been limiting pick-up operations in all terminals.
Talks are ongoing with Teamsters for a new contract that would allow Yellow ( YELL ) to continue with its restructuring plan, which it said was "necessary to compete against non-union carriers."
Yellow's ( YELL ) customer exodus could drive up pricing in the trucking sector.
According to the president of SJ Consulting, "Customers will be paying a higher price because Yellow ( YELL ) had the cheapest rates."
Other headlines to look out for on Seeking Alpha:
3M’s ‘forever chemicals’ settlement faces objections from 19 states
Tesla is being investigated by California on autopilot safety issues
Weight loss drugs excluded from WHO’s 'essential' medicines list
AWS reportedly has 'thousands' of customers trying out new AI service
Wall Street's major averages on Wednesday ended with small moves while Treasury yields slid, as market participants digested the Federal Reserve's expected 25 basis point rate hike and post-decision comments from chief Jerome Powell.
Powell said that no decision had been made to hike rates at every other meeting. He followed up those remarks with a firm reiteration of the central bank's 2% inflation target and stressed that there would be no rate cuts this year.
The federal funds rate target range is now at its highest level in over two decades.
The Nasdaq ( COMP.IND ) lost ground by 0.12%. The S&P 500 ( SP500 ) slipped marginally by 0.02%. The Dow ( DJI ) eked out gains of 0.23%. The Dow achieved a significant milestone by notching its thirteenth straight day in the green to match its longest win-streak ever since January 1987.
Of the 11 S&P sectors, five ended trading in the green, led by an outsized +2% increase in Communication Services. Tech and Materials topped the losers.
Treasury yields were lower after Powell's comments. The 10-year yield ( US10Y ) was down 4 basis points to 3.87%, while the 2-year yield ( US2Y ) was down 4 basis points to 4.85%.
Turning to Wednesday's economic calendar, June new home sales came in at 697K, lower than the anticipated 725K figure.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.3%, the S&P 500 is up 0.7% and the Nasdaq is up 1.4%. Crude oil is up 0.8% at more than $79 a barrel. Bitcoin is up 1.2%.
In the world markets, the FTSE 100 is up 0.3% and the DAX is up 1%.
On today’s economic calendar, at 830am GDP Q2 and at 10am pending home sales.
For further details see:
Wall Street Breakfast Podcast: Lead Cables Probe