The US inflation revision was not much. 10-yr yields are now at 4.13%. Inflation was roughly the same at the end of last year. So, the next data point to focus on is Tuesday’s CPI. Will it drop to 2.9% from 3.4%, as expected?
Barclays will give some bankers a $0 bonus. Dealmaking slowed, so the shrinking bonus pool is getting allocated to the performers, probably signaling to low performers where the door is.
The ECB is telling lenders in the EZ that they may have higher capital requirements if their risk mgmt. of comm’l real estate problems isn’t up to snuff. The watchdog is about to set the financial strength bar, and they know that comm’l real estate is in the gutter, so they can’t ignore it. Banks have been reluctant to reassess their loans and do a full look-through of credit problems. Given a chart on who’s most likely going to be on the hook, we’re talking the French banks being Fried.
BBG is out with a story about P/E licking their chops to pay for NFL teams. They’ve increased so much in value that some owners’ families can’t keep passing down the teams to younger generations. They estimate 6-8 teams could sell at least minority stakes if the league approves letting the barbarians into the gated community. But question for a Friday—from someone from Chicago—does the mascot resemble a mobster a used car salesman?
Predictions from some mgmt teams years ago about tech replacing humans at banks is here. Former CEO of Citi previously predicted 30% of banking jobs could disappear within 5 years. That was back in 2017. Fast forward to 4Q23 earnings season and it’s starting. 20k chopped from Citi (out of 200k). DB cutting another 3.5k (after cutting 10k) of 100k. Soc Gen talked about several thousands. I was at a client yesterday who remarked how a certain bank didn’t require much in documentation to get things done…so perhaps the cost-cutting will find its way back to regulators in the future.
Pepsi missed on revenues but beat on earnings and increased its dividend by 7%, the co’s 52nd consecutive increase. Take that, Ozempic. Affirm is down but beat on both top and bottom lines. Pinterest is down on a beat, but because of a soft forecast. Cloudflare trounced the rest, up 27% after its beat and upped guidance. Tech is the winner.
Good luck to the 49’ers. And to those trying to get a piece of the $10mm of stuff Temu is going to give away. Perhaps more interesting is that you can bet on Taylor Swift….and whether she will cry or not, among other things. This isn’t your Father’s Superbowl, folks. The lure of taxes has driven acceptance of gambling here in the US and abroad. You’ll have to suffer through another Ben Affleck commercial, but the entirety of the game should be fun.
