Marketbites: McDonald's Franchisees Push Back on Tighter Standards
MARKET PERFORMANCE:
Portfolio Manager Commentary:
The Dow Jones Industrial Average hovered near the flatline Friday afternoon, and headed for a weekly loss as investors evaluated a week’s worth of earnings results and concerns of disappointing profits. All major indices finished the week in the red, with the Dow falling 0.23% to snap a four-week win streak. The tech-heavy Nasdaq saw the biggest decline, falling 0.42%, while the S&P slipped 0.1%.
Earnings season continued Friday, with results from Procter & Gamble. The consumer products company gained 3.5% after beating expectations and lifting its sales forecast. As of Friday morning, 76% of S&P 500 companies reporting earnings so far have beaten analyst EPS estimates, according to FactSet.
Elsewhere, materials stocks were the underperformers, with Freeport-McMoRan falling 4.1% after posting a year-over-year decline in results. Albemarle tumbled 10% as Chile said it would nationalize its lithium industry.
Earnings continue next week with results on deck from big tech companies Amazon, Alphabet, Meta Platforms, and Microsoft.
Chart of the Day:
McDonald's for decade has relied on franchisees to open and operate restaurants. These operators, who run the bulk of McDonald's U.S. locations, are pushing back on McDonald's Corp.'s moves to tighten franchise standards and rules. As such, there is increasing tension between the burger giant and operators who run the bulk of its U.S. locations. However, a group of 10 U.S. McDonald’s franchisee leaders said in a statement shared by the chain that a majority of restaurant owners agrees with McDonald’s current direction. “We’re disappointed that a small but vocal group is pushing this counterproductive agenda,” they said.
Source: WSJ
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