In the midst of summer, people gather and often think about the past including the foods they ate. When they talk about the food they will often say a brand name which everyone refers to as the food group, for example Cool Whip for a topping on pies. For the food companies when this happens, it tends to mean steady income streams leading to profits for decades.

In an article by Julie Creswell and Lauren Hirsch of the New York Times News Service, it recent years something is changing as consumers are changing. People are still eating and spending, but they have either cut back on the brand names or trading down to the less expensive private labels. Others have gone to what they consider healthier among the many stressors.

As growth in the packaged food industry stalls, its stocks have lagged. While the broad S&P 500 index is up 40% over the past 2 years, the packaged food industry stocks have flatlined.

If there is no growth, what can food packaged companies do? re-engineer themselves. Italian candy company Ferrero is buying WK Kellogg for $3.1 billion. Kraft Heinz a $26 billion company is considering breaking up into smaller companies.

Kelly Haws, a professor of marketing at Vanderbilt University, said the big brands are going to have to really fight hard to figure out how to stay relevant. The value of some of the brands has decreased dramatically and they may have to reinvent themselves.

An example is Kraft, in 2012 it spun out its snack business and called it Mondelez. In 2015, Kraft merged with Heinz to become the 3rd largest food country in the US. A decade later, the stock has lost 60 % of its value and the last 3 years revenue has been falling. The company had many things going for it, legendary investor Warren Buffett owned it, they brought in Brazil’s 3G who were very good at cost cutting. At the end of the decade, 3G sold its holdings and no longer has a board seat and they have their 3rd CEO Carlos Abrams-Rivera. The focus is now on new products for the changing consumer preferences.

Linking to dividend paying stocks, while we all do generic things such as eat, where and how we spend our money changes over time. What was once a license to print money, is a bit harder now and as everyday consumers you can see these things. If you invest in packaged good companies, are you buying the same amount? when you look at what others are buying, is it consistent or are they changing? If you are changing, then you can do your homework to see if others are changing and perhaps that investment will need to seek alternatives.

There are more questions than answers, till the next time – to raising questions.

For very good reasons, government imposes regulations on industry and similar to everyone who deals with regulations – sometimes it is a pain, sometimes it is understandable. Every government says we want some regulations but there is a difference in opinion on how much should the government impose? When the regulations hurt your competition, companies believe the regulations are good, when it affects them not so much.

In an article by Dawn Chmieleski and David Shepardson of Reuters, reported the Federal Communications Commission (FCC) approved the merger between Paramount Global and Skydance Media. The deal is for $8.4 billion includes prominent names in entertainment, including the CBS broadcast TV network, Paramount Pictures and the Nickelodeon cable channel.

The FCC agreed to transfer broadcast licenses for 28-owned-and-operated CBS TV stations to the new owners. The FCC waited till SkyDance paid US President Trump $16 million over a 60 minutes interview.

The FCC chair Brendan Carr said the agency’s review of the proposed merger was not connected to the civil service or it is coincidental of the timing. However, Mr. Carr welcomed Skydance’s commitment to eliminate invidious forms of DEI discrimination.

Skydance CEO David Ellison is poised to become Chairman and CEO of the new Paramount. Jeff Shell, former CEO of Comcast’s NBCUniversal is to become President. If the Ellison name is newsworthy, if you connected it to Larry Ellison of Oracle Corporation, he provided some of the financing for the deal. David Ellison says he will have a studio in the cloud or a fully digital cloud-based production. The company will be using AI to generate content faster and cheaper.

Linking to dividend paying stocks, in deal such as this, Paramount has some great assets but has not performed well and needed an overhaul. Skydance expects to use technology and cost cutting to turn the company around, but did it really need to cut DEI and settle a lawsuit with the President before it received approval? The FCC is supposed to be relatively independent of the Presidency but is that the case? Skydance executives made a decision that everything was connected, and they had to march to the drummer. Sometimes, life falls into the grey area.

There are more questions than answers, till the next time – to raising questions.

In geopolitics, countries form partnerships and then countries do their own thing. Often times following economics or follow the mtoney is a key to understanding what will happen in the future. China and Russia border each other and trade happens between their countries.

In an article by Keith Bradsher of the New York Times News Service, trade between the 2 countries exceeded $240 billion in 2024, up 2/3’s since Russia invaded Ukraine in February 2022. China is the biggest buyer of Russian oil, timber, coal and natural gas.

Much of the trade flows through Manzhouli, China, the main border crossing between Russia and China. The trade means trainloads of Siberian lumber, truckloads of Russian canola and oil and natural gas pipelines run through the city. Manzhouli is located beside Mongolia and north of Beijing, in China it is one of the smaller cities of 250,000 people.

The flow underscores Russia’s diminished economic position. It is now functionally an economic satellite of China, dependent on Beijing for manufactured goods while selling raw materials that China could, if it wanted to, buy elsewhere.

Almost 6% of the entire Russian economy now consists of exports to China. Russia depends on China for clothing, electronics, cars. China’s northbound exports have risen 71% since the start of the Ukraine war.

China produces 32% of the world’s manufactured goods. Russia’s share of global manufacturing is 1.33%.

China used to buy more raw materials from other countries but has cut back, finding alternatives is for any consumer – both individual and country.

The biggest stress in the trade relationship involves cars. Back in 2021, Chinese cars were not very popular in Russia. But after the invasion of Ukraine, Western automakers withdrew from the country, Chinese automakers slashed prices and now have 60% of the market according to GlobalData Automobile, a research firm.

Linking to dividend paying stocks, alternatives is the key and people always have some sort of choice, why they keep with the company is the question the investor has to ask. Every industry has some alternative, most make little sense until technology and time changes the economic equation, then people move that way. What are the alternatives for your investments?

There are more questions than answers, till the next time – to raising questions.

If you think about luxury items, the biggest company in the world is LVMH headquarter in Paris, France. In theory, as long as a luxury brands continues to stand for all the things that make it a luxury, adding a price increase should be relatively easy.

In an article by Tassilo Hummel and Mimosa Spencer of Reuters, LVMH CEO Bernard Arnault plans to open a second factory in Texas, while the luxury group is anticipating a good outcome between talks between Europe and the US (it came in at 15%). The second factory is expected to open by 2027, the first plant also in Texas was opened in 2019.

The company reported lower-than-expected quarterly sales with its core fashion and leather division losing further ground as the group struggles to shake off consumer fatigue.

One of the key markets for luxury goods is China, LVMH opened a new store in Shanghai in the shape of ship (interesting architecture design) and sales have been good.

After years of aggressive price hikes, LVMH billion-dollar legacy brands are facing increasingly stiff competition from more affordable mass-market brands such as Coach and Ralph Lauren as well as innovative smaller labels such as Prada’s Miu Miu.

LVMH sales for the second quarter to the end of June were $31.28 billion falling short of a consensus forecast for a 3% decline. Sales at the group’s fashion and leather division, accounting for the bulk of the profits, were down 9%, below expectations for a 6% drop.

Linking to dividend paying stocks, every industry has to protect its margins and even though it seems some industries have it easier than others, they have their ups and downs. With luxury brands, the companies have to maintain the image and the reasons why the brands are luxury so people are both repeat customers and aspirational for new customers. As an investor, the simple question is do you like the brand? If not, find alternatives.

There are more questions than answers, till the next time – to raising questions.

We all know the baby boom generation is getting older and when an individual gets older the body does not heal as fast as when it was younger. To help with healing drugs are used, those prescription drugs can be billion dollar sellers which makes pharma companies potentially attractive as a stock holding.

In an article by Danilo Masoni of Reuters, global health care stocks have not been this cheap in decades, which incites the fund companies to begin to buy, but the shares have not jump, highlighting the uncertainty over drug pricing policies since President Trump returned to the White House.

Global pharma companies’ earnings outlooks is being obscured by concerns over revived most-favored-nation drug pricing rules in the lucrative US market and potential 200% tariffs on pharma imports into the US.

During COVID 19 years, money flowed into pharma stocks, but since then the sector is cheap and unloved.

At 15.9 times forward earnings, health care trades 11% below its long-term average and 20% below global equities, its steepest discount in 16 years.

Stephanie Aliaga, global market strategist at JPMorgan Asset Management in New York, said there is a good reason for the discount, US policy risks.

On the positive side, innovation is accelerating, pipelines are maturing and M&A is showing signs of picking up- yet stock prices are unmoved.

Is this a value trap or buying opportunity?

Historically, health care has traded at a modest premium to world stocks, thanks to its defensive profile and steady earnings.

Eddie Yoon, health care sector leader and portfolio manager at Fidelity in Boston, said Being cheap is not necessarily a reason to buy. You need a catalyst.

Linking to dividend paying stocks, what is the catalyst? sometimes the catalyst is the dividend yield, a profitable stock at a lower price paying a dividend and because the stock price is low, the yield goes up. At some point, the price should go up, but in the meantime getting a good yield is a wonderful thing.

There are more questions than answers, till the next time – to raising questions.

When you invest in stocks, part of how the stock will perform is based on expectations. The company offers guidance or what it should do and then reports on how well it did or actuals. If it did better than expected, the market says YEA! and the price tends to go up, if it did not then the price tends to go down as allocation happens – shifting from one stock to another.

In a report from Mattel, the large toymaker which has it headquarters and design staff in the US but essentially makes most of its toys in China. It is a bell weather stock on President Trump’s tariffs. How does the company adjust to tariffs? Do it bring manufacturing to the US? Mattel sells to the giant retailers, what are they doing about tariffs?

Mattel reported weak Barbie sales in North America (President Trump said a girl can have 3 or 4 dolls not 30) and cautious inventory planning by retailers amid global trade uncertainties weighed on demand.

Mattle expects a 1% growth rather than a 2-3% growth. It is still making profits, just less, its prior estimate was $1.66 to $1.72 but changed the estimate to $1.54 to $1.66.

Mattel’s finance chief Paul Ruh said retailers such as Walmart, Target and Amazon were limiting building up inventory going into the key holiday season to minimize exposure to higher tariff rates.

Mattel had fewer new product launches for Barbie and worldwide gross bills for dolls fell 19%, while the infant, toddler and preschool category dropped 25%.

Mattle had net sales of $1.02 billion for the quarter just less than the $1.05 billion which was expected.

Linking to dividend paying stocks, sometimes companies can do everything right from their perspective and still not perform to expectations, but that is why they have plans to do something which they can control. As an investor, you have to determine if what the company’s plans are is something you want to be on the ride with them. Sometimes the answer is yes, sometimes it is no for it depends on the company.

There are more questions than answers, till the next time – to raising questions.

In many industries the hardest job of senior management is to raise prices. People know many things about every industry, where the fixed costs are? what variable costs are possible? but sometimes government policies make it easier.

In an article by Peter Eavis of the News York Times News Service, American steelmakers are raising prices, forcing new costs onto domestic manufacturers.

Two big US producers Cleveland-Cliffs and Steel Dynamics reported they have charged more for their products in the 2nd quarter than they did in the 1st quarter.

About 1/5 of the steel sold in the US is imported. Tariffs went from 25% to 50%, which made imported steel more expensive. And as imports have declined, US producers have more power to opportunistically increase their prices, buyers say.

In the 2nd quarter, the average price of Steel Dynamics’ steel was $1,134 a ton, up from $998. Cleveland-Cliffs price went from $980 to $1,015 a ton or an increase of 16%.

Thomas McCartin, a senior economist with the pricing and purchasing service at S&P Global Market Intelligence, stated these are profit-maximizing firms, the domestic mills are going to try to get as much as they can.

According to the American Iron and Steel Institute, the top exporters of steel to the US are Canada, Brazil, South Korea and Mexico.

American-made steel is the most expensive in the world, and some analysts say domestic producers have gained a tight grip on US trade policy that allows them to charge more.

Linking to dividend paying stocks, tariffs increase prices. It tends to be a lagging indicator, but over time tariffs increase prices and companies that seemingly are immune from tariffs will use them to increase prices. Increasing prices over things being relative equal means greater revenues, the equation is simple, the execution is the most watched element by investors. Does the company have the ability to raise prices to increase revenues or will alternatives be found?

There are more questions than answers, till the next time – to raising questions.

President Trump has decided that the world the US has dominated for generations will not be dominated anymore. Ever since WW II, because the war did not affect the properties inside the US, the country has played the role of leadership. The Marshall Plan helped rebuild Europe, the outsourcing of jobs built up Southeast Asia and as China grew it drew raw materials from around the world. There was also relative peace in the globe as raw materials flowed from where they were found to countries that used them. In President Trump’s second term he decided that should change which is why he put a tariff on every country. Under Newton’s physics law of for every action there is an equal reaction. If a country pulls back, then another one steps in.

In an article by Somini Sengupta of the New York Times News Service, the auto companies have been global giants for years. There was truth in a statement made by a GM VP – what is good for GM is good for America. Part of the global dominance was auto companies had factories in many countries around the world, but times are changing.

In Brazil, home to 200 million people and the world’s 6th largest car market, the Chinese car companies are turning to Brazil to make cars. Chinese auto companies make and export more cars of all types than any other country in the world. Chinese companies dominate the global manufacture of battery-powered vehicles of the future. They also control the supply chain for virtually everything that goes into those cars.

In Sao Paulo, Great Wall Motors has moved into a factory that used to make Mercedes Benz vehicles. Great Wall specializes in affordable electric vehicles.

The Chinese has set up factories in Hungary, Indonesia, Russia, Thailand and Turkey.

In Brazil, BYD took over a factory that Ford used to manufacture vehicles for over 100 years. The street where the factory is in Camacari, is called Henry Ford Avenue.

Chery, has teamed up with a Brazilian company, Caoa, to produce cars in central Goias state.

Marcia Lima, head of the Brazil automaker association, noted so far, the new Chinese company are mainly assembling cars with components imported from China. That does not advance the Brazilian auto industry.

Linking to dividend paying stocks, President Trump can believe that tariffs are designed to open borders, but someone has to have the correct item at a point where sellers meet buyers. It might be wishful thinking because the competition has walked into an opportunity. If made in your home country is important to your domestic consumers, why does that change when you cross a border? Politics is about many interest groups; business is about the monetary transactions, when you are investing pay attention to the money, the politics sometimes will help, sometimes not so much.

There are more questions than answers, till the next time – to raising questions.