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Your Quiver | Tuesday, April 4, 2023

CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.

It’s Not Over Until It’s Over

That was the message in Jamie Dimon’s annual letter, warning of repercussions from the banking crisis for “years to come."


US job openings fell below 10mm for the first time since 2021. So, the labor market is cooling—but from a very hot level still. The number of available positions declined to 9.9mm from 10.6mm a month earlier. The estimate was 10.5mm, so this was a big miss. Hence, equities are up (at least started up) and bonds are down, as investors take this reading to mean that the economy is slowing down—and the Fed will have to take notice.

EZ Reversal

Eurozone equities increased as investors weighed the outlook for economic growth alongside rising bond yields, causing a reversal of the prior defensive rotation in the past few weeks. So, real estate, banks, automakers, and insurance outperformed while defensive utilities, healthcare and food/bev lagged.

Asia Mixed

Japan led the gains in a broad-based rally. South Korea’s Kospi and Australia’s ASX were also higher. China/HK were lower. Southeast Asia mostly lower, with Singapore an outperformer. Taiwan and India closed for a holiday.

Members Only

Finland is part of the NATO alliance today, a move spurred by Russia’s invasion of Ukraine. Finland shares an 830+ mile border with Russia, the longest of any EU member, hence its concern. With 31 members, NATO members vow to treat an attack on one as an attack on all. Sweden must be a tad bit jealous today, as it applied at the same time, but Hungary and Turkey are holding up its vote. Turkey says Sweden harbors militants from the anti-Muslim Kurdistan Workers’ Party.

Hitting the Pause Button

That’s what the Bank of Australia did, pausing its rate hiking cycle at 3.6% highlighting policy lags and a “substantial” slowdown in household spending. Their benchmark Cash Rate Target is now -320bps below their Headline CPI and -330bps below their Core CPI. So, now central banks from Australia and Canada have hit the pause button. Don’t get too excited and extrapolate those moves to the US. The Fed has to get inflation under control, so barring extraordinary near-term events, we will see more tightening.

Staplers and Tape, Really?

Google is looking to reduce costs by cutting down on availability of staplers and tape. Yes, those expensive, frivolous amenities you used to take for granted, well—no more! They made the list alongside fitness classes, food and laptop replacement cycles. Going forward, Googlers will have to go to a receptionist desk to borrow a stapler or tape. It makes you wonder how much stapling and taping was really going on at that place to be the focus of a global, multi-year cost reduction program versus the ironic joke of someone in the finance department who was mad at having to choose what to put on the list for axing costs.

Moving In

Japan is taking advantage of the world’s hesitancy to rely on China for its supply chain. The country is expected to spend $7bn on fab equipment for chip-making in 2024, an 82% increase per SEMI.

That Other Thing

News today will be focused heavily on lower Manhattan activities, so be on the watch for companies who put out disappointing news today in the hopes you’re not paying attention.

A Good Deed

The Lauder family (of Estee Lauder) are pledging $200mm for Alzheimer’s drug research in honor of the matriarch Estee.

A Bad Look For Everyone

JPM charged Frank founder Javice with fraud in the sale of her college financial planning business. She said Frank had 4.24mm customers when in reality Frank had fewer than 300k. Javice countersued, arguing JPM’s rushed, poor due diligence and pressure to come up with “synthetic data” on Frank users.

Reining It In

That’s what the “merely affluent” art purchasers are doing, licking their wounds from the declines in crypto and tech in the past year. Burberry and Kering are noting that younger, aspirational buyers are not going after extravagant purchases as much. Even in the art world, you can see that only works at the high end were doing better—all other categories were on the decline.