Powell is back in the spotlight today, walking the tight rope of hope and patience. Hope—yes, you’ll get rate cuts. Patience—just not now. What can you expect? If median dots stay the same, then UST will probably rise. Powell will probably hold the idea of 3 cuts this year, per BBG. Expect a lot of questions on QT, as we mentioned previously. Also, it seems that some are worried that Powell will come out hawkish, as there are more short bets against UST now.
GS wants a piece of the $5 trn market of off-the-shelf investment models. Broadridge expects the market to hit $11 trn by 2028 and grow at 20% annually. It’s basically a solution for wealth managers to outsource actual investment work, so they can take you to lunch instead. OK, and do things like tax and estate planning, but you get my point. Other heavies like BlackRock, Wilshire, Cap Group and Vanguard are already in the mix.
JPM came out swinging with a 9.5% dividend hike on the back of record annual profit. Of course, they’d probably be in the hot seat if they hadn’t given shareholders some of that moolah, right?
Intel is up, driven by its $8.5 bn win in US grants (plus up to $11 bn in loans) to finance the expansion of its domestic factories, per the NYT. The gov is also considering blacklisting Chinese chip firms linked to Huawei.
Tencent is increasing its dividend and doing a 2x+ on buybacks, even with revenue that was a bit softer than expected. Samsung was up the most in 6 mo after Nikkei Asia said NVDA may buy its high-bandwidth memory chips. JPM is saying that $100bn of capital could flow into India if investors simply eliminate their underweights.
Saudi Arabia is readying a $40bn fund to invest in AI tech, which could make it one of the largest players in that market, per the NYT, just behind SoftBank. They’d work with Andreessen Horowitz on the plan. I guess they have an existing and excited set of buyers already. MSFT, GOOG and META have been gobbling up AI companies (remember Inflection?). Heck, AAPL may outsource some of its generative AI efforts to GOOG. Definitely a golf clap for MSFT lifting out Inflection’s team versus buying the company…do antitrust regulators miss that trick?
Kering, its owner, said Gucci sales will be down -20% in 1Q24 because of slow Asia-Pacific sales. When other houses like LVMH are not seeing this sort of decline, investors get out. More than 7 bn euros left the stock. Gucci is about half of Kering’s sales and represents around 70% of op profit, so they’ve got to turn this ship around. Also, it’s got to be discouraging when all your friends are partying, per the chart below.
