Economy

November 14, 2022

Are Expectations Still Too High?

Retailers and related industries like shipping have already lowered the bar ahead of the holiday shopping season. But some news from Amazon and FedEx today has investors wondering if actual results will be worse than initially forecasted. 

First, we heard from Amazon, reportedly planning to lay off 10,000 corporate and technology-related employees. While cost reductions are becoming a norm among tech giants in the current environment, many worry about the timing of these cuts.

Does Amazon expect its busiest quarter of the year to fall short of its expectations? Or are people reading too much into this?

It’s tough to tell, but with Jeff Bezos again warning consumers and small business owners to reduce their risk because of the economic recession, folks sure are worried. 😟

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FedEx also had a rough time last quarter and reduced its projections amid falling shipping volumes. But now, its freight unit is beginning to furlough some U.S. employees as current business conditions further weight on volumes.

Add all that to the fact that retailers are sitting on a ton of excess inventory…and you’ve got a lot of concerned investors as we head into the peak shopping season. 📦

Investors will be listening closely as several big-box retailers report earnings this week. We’ve got Walmart and Home Depot on Tuesday, followed by Target and Lowe’s on Wednesday. Finally, on Thursday, we’ll hear from BJ’s Wholesale Club, Ross Stores, and a few other retailers.

By the end of this week, investors should have a much clearer picture of how the current quarter is shaking out. But right now, things aren’t looking great. 🤷

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M&A

December 11, 2023

An M&A Mashup

It was another busy Monday of M&A and fundraising news, so let’s quickly recap. 👇

First up is Macy’s, which saw shares soar 20% on reports that the 165-year-old retailer is considering a buyout offer from Arkhouse Management and Brigade Capital Management. It’s unclear how the company’s board feels about the offer, but clearly, these firms have value in Macy’s real estate. Analysts speculate that the investor group may sell off real estate and spin off its e-commerce business to deliver short-term gains. However, that would come at the expense of the core retail business people know and love it for. 🏬

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Stocks

January 11, 2024

Microsoft Briefly Overtakes Apple

While most of the market focused on the spot Bitcoin ETFs beginning to trade today, the second-largest company in the world made a move on its sole competitor. 🔮

This morning, Microsoft’s market capitalization briefly crossed that of Apple’s, making it the largest company in the world. While it didn’t last, it does beg the question of which stock will lead the market going forward.

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Economy

January 9, 2024

World Bank Warns About Growth

The World Bank says the global economy is on course to record its worst half-decade of growth in about 30 years. 😬

The organization’s “Global Economic Prospects” report is now forecasting global growth to slow for the third year in a row during 2024, falling from 2.6% last year to 2.4%. Even if it rises to 2.7% in 2025, the acceleration over the last five-year period will be about 0.75 percentage points below the average rate of the 2010s.

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Economy

October 12, 2023

The War On Inflation Is Won

It wouldn’t be an inflation data day without some drama, so let’s get into what happened. 👇

First off, the headline consumer price index (CPI) rose 0.4% MoM and 3.7% YoY. That was ten bps above estimates, driven primarily by higher energy prices. As for core consumer prices, they rose 0.3% MoM and 4.1% YoY, as expected.

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Economy

September 13, 2023

Market Looks Past CPI Report

If it feels like the market is largely finished obsessing about inflation data, it’s because it essentially is. Unless there’s a significant pick up in the core inflation metrics the Fed is watching closely, the market seems set on rates staying steady at next week’s Federal Reserve meeting.

And August’s consumer price index (CPI) data did little to move the needle. 😴

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Economy

September 6, 2023

Restaurants Stocks Worried About Consumers?

Restaurants have outperformed the rest of the retail space for the last couple of years. Driving that strength was consumers getting out of their houses, shifting their discretionary spending from goods to experiences as they “revenge spent” their way back into the world. 💸

But now, as the job market weakens and student loan repayments begin, some analysts expect consumer spending to be impacted. That could hurt discretionary sectors across the board, especially if inflation remains elevated. 

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Economy

October 6, 2023

Payrolls Play Economists Again

September’s headline jobs number was better than expected, yet stocks and bonds are rallying. We thought a strong labor market was a negative, so what gives? Let’s break it down. 👇

Nonfarm payrolls increased by 336,000 in September, widely surpassing expectations of 170,000. That topped August’s number by over 100,000 and was the largest since January. Service-related industries accounted for 234,000 of the total job gains, with goods-producers adding just 29,000. 

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