The Fortune Global 500 list is out today, and perched on top, for the fourth year in a row, is—drum roll, please—Walmart.
Truth is, with $485 billion in revenue, Walmart didn’t have any real competition for the honor. No. 2 on the list, China’s State Grid, finished $170 billion behind. And Shell and Exxon, contenders five years ago, have dropped to 7th and 10th place, respectively. Even when combined, their revenues are still less than Walmart’s.
But that doesn’t mean the giant retailer can sit on its laurels. Amazon is on an epic tear up the list, moving to 22nd this year from 44th the year before and 340th at the start of the decade. Then there’s Alibaba, which broke onto the list for the first time this year, at No. 462. Alibaba already claims that it sells more products than Walmart. But because it doesn’t take those products into inventory, the sales aren’t fully counted as revenue, leaving the Chinese competitor with reported revenues that are roughly one twentieth of Walmart’s.
In the competition between the U.S. and China, the U.S. is still well ahead, with 132 companies on the list, down two from a year earlier. China is up to 109, from 103 last year. But most of those are state-owned monopolies—like State Grid at No.2, Sinopec at No. 3, and China National Petroleum at No. 4. The companies to watch are the private ones, like Huawei (83), Alibaba and Tencent, which joined the list for the first time at 478.
• Renewed Confidence in Tech Drives Stocks to New High
The Nasdaq Composite and S&P 500 hit new record highs, driven by a renewed surge in optimism for the tech sector. The S&P’s IT sub index is now above its dot-com bubble peak after a ninth straight daily gain. But the optimism goes beyond the tech sector, with the MSCI world stock index also marking its longest winning streak in nearly two years. In completely unrelated news, Fortune’s Laura Entis observed yesterday how the VC industry is increasingly throwing money at startups that offer pets the kind of services normally reserved for humans. They say nobody rings a bell at the top of the market. They also say history never repeats itself (even if it does rhyme). Fortune
• Central Banks Relax Their Trigger Fingers
Loose central bank policy continues to be one of the factors supporting stocks. Overnight, the Bank of Japan acknowledged it needed more time to get inflation back up to 2%, implicitly extending the timeframe for its quantitative easing policy. The modest uptick in inflation across developed markets earlier this year is now fading as base effects from last year’s energy price collapse pass out of the annual comparisons. That, in turn, is exposing the still-weak underlying dynamic in global wage growth. Even in the U.K., which has had to absorb a 15% drop in its exchange rate since last June, inflation turned down last month, denting expectations of a rate rise. Mario Draghi will add his two cents’ worth to the debate after the ECB’s policy-making meeting later today. Bloomberg
• China Trade Talks Fail to Break Deadlock
Talks between the U.S. and China ended without meaningful progress on rebalancing trade between the world’s two largest economies. The lack of joint statements or news conferences after the talks emphasized the distance between the two sides on issues such as China’s steel exports and its restrictions on market access. As such, the risk of President Trump imposing punitive import tariffs on Chinese steel and aluminium appears to be rising. The shares of U.S. steel companies rose strongly on the outlook for greater protection. Fortune
• CBO Delivers Bleak Verdict on ACA Repeal
The Congressional Budget Office warned that the Republican Party’s improvised ‘repeal-now-replace-later’ approach to health care reform would leave 17 million more Americans without coverage already next year, and 32 million more uninsured by 2026. It also predicted a spike in premiums. Elsewhere, President Trump met with critical GOP senators on Wednesday over lunch to try to revive some momentum in the reform process but without any visible results. Fortune
Around the Water Cooler
• CSX’s Harrison Disses Coal Revival, Warns of Short-Term Pain
Shares in railroad operator CSX fell over 5% after CEO Hunter Harrison warned there would be more pain than expected before he can deliver the gains that investors have bet on. The measures Harrison is taking to improve efficiency are, at least in the short term, slowing down freight shipments. The company still upheld its annual forecasts and increased its buyback program, but that still wasn’t enough to satisfy expectations that have raced far ahead since Harrison joined in March. In his conference call with analysts, Harrison also poured cold water on the idea of a coal industry revival, saying he wouldn’t buy a single locomotive to haul coal and arguing that “fossil fuels are dead.” WSJ, subscription required
• Apple Dispute Hits Qualcomm
It’s not all roses in the tech sector, of course. Qualcomm reported a 40% slump in quarterly profit as its escalating patent battle with Apple took a toll on its business. Its shares fell 2.3% after the bell. Settlements with South Korea and with Blackberry also ate into earnings. IBM also fell 4.2% after its disappointing earnings on Tuesday. (German rival SAP this morning also fell short of expectations.) Fortune
• R&F Steps in to Rescue Wanda-Sunac Deal
The Chinese approach to corporate deleveraging took another bizarre turn, as developer Guangzhou R&F Properties stepped in to buy Wanda Group’s hotel assets. Wanda, under pressure from local banking regulators to cut its leverage, had announced a deal to sell the hotels and its theme park projects to another developer Sunac last week. However, Sunac’s balance sheet wasn’t strong enough to absorb the hastily-engineered deal, and the sight of it borrowing from Wanda to fund the acquisition spooked ratings agencies and regulators alike. R&F’s involvement spreads the risk around more broadly. FT, metered access
• Univision Backers Work on Plan L
Spanish-language broadcaster Univision has shelved plans for an initial public offering and is instead talking to potential suitors about alternative strategies, The Wall Street Journal reported. It cited people familiar with the matter as saying that Liberty Media’s John Malone and Greg Maffei had expressed interest in buying a significant stake in the company. Univision is owned by a handful of private equity companies that have been waiting nearly a decade for the chance to exit a pre-crisis investment without taking a loss. While it serves a growing demographic, Univision still faces the same strategic challenge from disruption as other TV companies. Its primetime audience is on course for a 10% decline this year, according to Nielsen figures cited by the WSJ. WSJ, subscription required
Summaries by Geoffrey Smith Geoffrey.firstname.lastname@example.org;