Illustration by Elias Stein
It took a while, but
has a family car, with four doors and four seats. The iconic Italian sports-car maker, famed for its black “prancing horse” logo, recently unveiled the Purosangue–Italian for thoroughbred–a crossover-sized model (think SUV), equipped with a V-12 engine capable of producing 800 horsepower.
The Purosangue will rocket the kids from zero to 60 miles per hour in about three seconds. But it’s not just about speed. The car’s aluminum frame includes hollow, thin-wall, aluminum castings to minimize weight and maximize handling. It’s still a Ferrari.
The Purosangue has a 17-cubic-foot trunk (“boot capacity,” as the company calls it), not usually a consideration of Ferrari buyers. In comparison, a BMW X1 crossover has trunk capacity of about 26 cubic feet. The Purosangue also comes with massaging front seats (kids go in the back) and an optional electrochromic glass roof that can modify its tint. Each of the four seats can be independently adjusted.
Sounds ideal for a family road trip, with one catch: A Purosangue starts at $390,000. Ferrari sold some 11,000 cars in 2021, generating more than $5 billion in sales, at roughly $450,000 per vehicle. Ferrari is in the luxury-product business, which is why its stock trades for 33 times estimated 2023 earnings–closer to
LVMH Moet Hennessy Louis Vuitton
LVMH trades for about 21 times estimated 2023 earnings; BMW, for five times. Ferrari stock was up 0.6% for the week. The
Dow Jones Industrial Average
dropped 4.8% and 4.1%, respectively.
Rattled and Rolled
U.S. indexes rose as investors awaited Tuesday’s consumer-price-index data. But stocks, oil, and
fell after the release–August inflation at 8.3%, up 0.1% over July. The result was the worst day for stocks since June 2020. Lower producer prices, an uptick in August retail, and no rail strike helped, but mortgage rates topped 6% and a
profit warning sent shares down again. On the week, the Dow industrials fell 4.13% to 30,822.42; the S&P 500 was down 4.77% to 3873.33; and the
plunged 5.48% to 11,448.40.
Inflation: Still Hot
The August CPI suggested inflation was still rising, but the rate was slowing–maybe. Once again, the data eluded the prognostications of economists, who had thought falling gasoline prices would have more effect. Core CPI, which removes volatile food and energy costs, rose at a 6.3% rate, above July’s 5.9%. The CPI reinforced the belief that the Federal Reserve will hike rates by 0.75 percentage point at its meeting this coming week.
Ukraine Plays Offense
A Ukraine lightning offensive east of Kharkiv routed Russian troops and seized major rail centers Izyum and Balakliya. Moscow said its troops were “regrouping,” though they left behind ammunition, heavy weaponry, and nearly everything else. Russia responded with Cruise missile strikes on Ukraine power plants and a dam. Russia’s Vladimir Putin met with China’s Xi Jinping in Uzbekistan. Germany took control of three Rosneft oil refineries.
Rail Strike Averted
U.S. freight railroads reached a tentative settlement with two major rail unions, avoiding a nationwide strike that would have cost billions of dollars a day. Ten of 12 rail unions had reached agreement, but the Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal, Air, Rail, and Transportation Workers hadn’t. The White House cheered the settlement.
Crypto’s Ethereum blockchain completed a major software upgrade known as the Merge, slashing energy costs by as much as 99% and making its token, Ether, into more of a yield-bearing instrument, which could attract regulatory attention. Ether then dropped nearly 9%.
Annals of Deal Making
Third Point’s Dan Loeb backed off a demand that
sell its ESPN sports network, after Disney CEO Bob Chapek said it had a plan for restoring its “growth trajectory”…
whistleblower Peiter Zatko, its former security chief, testified before the Senate Judiciary Committee that the social-media company failed to protect customer data. Shareholders voted to approve the takeover by Elon Musk, who in a third letter demanded to exit the deal…
said it would acquire cloud-based design-software developer Figma for some $20 billion in cash and stock. The stock fell.
Write to Al Root at firstname.lastname@example.org