The Federal Reserve announced that the largest U.S. banks can withstand a severe recession while lending to consumers and corporations. A Boeing 787 Dreamliner mechanic reported "substandard practices," facing retaliation. The SEC is cracking down on companies overstating AI use. Volkswagen plans a $5 billion investment in Rivian. Amazon's market cap surpassed $2 trillion. Qatar Airways is in talks to buy 20% of Virgin Australia. Bosch considers bidding for Whirlpool. All this and more on this edition of World Street.
Banks A-OK
The Federal Reserve announced Wednesday that the largest banks operating in the U.S. could endure a severe recession scenario while continuing to lend to consumers and corporations.
All 31 banks in this year's regulatory test surpassed the threshold of absorbing losses while maintaining above the minimum required capital levels, according to the Fed's statement.
Dreamliner Drama
A subcontractor mechanic who worked on Boeing Co.'s 787 Dreamliner claims he faced retaliation after raising concerns about the work he observed on the plane.
According to a statement from his attorneys, Richard Cuevas reported "substandard manufacturing and maintenance practices" on the 787's forward pressure bulkhead, a critical component for maintaining cabin pressure.
SEC Smackdown
A series of recent U.S. enforcement actions likely marks the start of a broader crackdown on companies exaggerating their use of artificial intelligence to investors.
Since March, the Securities and Exchange Commission (SEC) has accused three companies of "AI washing," or misrepresenting their use of machine learning and related tools. These actions follow multiple warnings from SEC Chair Gary Gensler and the agency’s top enforcement attorney about misleading statements regarding the technology.
Investment Ignition
Volkswagen Group plans to invest up to $5 billion in electric vehicle startup Rivian, starting with an initial $1 billion investment. An additional $4 billion is expected by 2026, with $1 billion planned for both 2025 and 2026, and another $2 billion in 2026 for a joint venture to develop electrical architecture and software technology.
Rivian's shares soared more than 50% in after-hours trading following the announcement.
Amazon Ascends
Amazon's market capitalization surpassed $2 trillion for the first time, joining the ranks of tech giants like Apple and Microsoft. The surge in megacap tech stocks has been fueled by investor excitement around generative AI.
Amazon’s stock has risen 26 percent this year, outpacing the Nasdaq’s 18 percent rise. Additionally, CNBC reported that Amazon is planning to launch a discount store to compete with Temu and Shein.
Qatar Quest
Qatar Airways is in discussions to acquire approximately 20 percent of Virgin Australia Airlines Pty. Negotiations between Qatar Airways and Virgin Australia’s owner, Bain Capital, may take some time to finalize and could still fall through, reported Bloomberg, citing sources.
Any investment by Qatar Airways would need approval from the Australian government. This deal would provide the Gulf carrier access to a market where its expansion plans were thwarted by the government last year
Hong Kong Haul
Chinese tourists will soon be permitted significantly more duty-free shopping in Hong Kong, as Beijing plans to increase the purchasing limit by up to sixfold to stimulate the city’s sluggish retail sector, according to a newspaper report.
The Chinese government is expected to announce the measure soon, raising the duty-free shopping quota from the current cap of 5,000 yuan to just under 30,000 yuan ($4,128), according to Ming Pao, which cited unnamed sources.
Appliance Alliance
German engineering group Robert Bosch is considering a bid for U.S. appliances manufacturer Whirlpool. Bosch has been consulting with potential advisers about the possibility of making an offer for Whirlpool, which has a market capitalization of approximately $4.8 billion, reported Reuters citing sources.
However, the sources emphasized that it is not certain an offer will be made and requested anonymity due to the confidential nature of the discussions.
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