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Cisco Buys Splunk
In a $28 billion all-cash deal, Cisco (CSCO) is acquiring Splunk (SPLK). Splunk helps companies monitor and reduce cybersecurity risks. They also help companies resolve hack-related technical issues quickly. Cisco has acquired four other cybersecurity firms this year as they grow their footprint in the high-demand cybersecurity industry. Cybersecurity products complement Cisco’s software business lines […]
Sep 22, 2023
The Fed Says Higher For Longer, And The Market Agrees
Jerome Powell and the Fed have been pounding the “higher for longer” table to prepare the markets for a sustained period of high interest rates. Powell did not waiver from the stance at yesterday’s post-FOMC press conference. Until the last few months, the Fed Funds futures market didn’t agree with the Fed’s higher-for-longer mantra. However, […]
Sep 21, 2023
Housing Starts Plummet As Homebuilder Confidence Wanes
Higher mortgage rates are resulting in a shortage of inventory of used homes and a surge in new homebuilding. Recent data shows a third of all homes for sale are new homes. That is almost three times the average ratio. While homebuilders have been taking advantage of the low inventory situation by offering home buyers […]
Sep 20, 2023
Soft Landing Headlines – Optimism Often Precedes Recessions
Nick Timiraos of the Wall Street Journal published an article entitled Why A Soft Landing Could Prove Elusive. His lead sentence and the graph below speak volumes about the accuracy of headlines about soft landings. He starts: “On the eve of recessions in 1990, 2001, and 2007, many Wall Street economists proclaimed the U.S. was […]
Sep 19, 2023
Airline Stocks Are Grounded
The travel and leisure sector is one of the hottest industries driving job growth. Since the pandemic, the travel and leisure industry added one million jobs, equating to 6% growth, about double the labor market’s growth over the same period. While the industry has greatly benefited from the resumption of regular travel and leisure activities, […]
Sep 18, 2023
The ECB Unexpectedly Raises Rates But Pauses
“Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to target.” And with that statement, the European Central Bank (ECB) appears to have halted its rate hiking cycle. […]
Sep 15, 2023
The UAW Is Set To Strike
Ford, GM, and Stellantis (Chrysler), aka the “Big 3,” are in around-the-clock negotiations with the UAW as they approach a deadline at midnight tonight. Without an agreement by midnight, the UAW will order its members to strike. At risk, potentially 100,000 fewer cars would be produced per week, and nearly 150k workers would be temporarily […]
Sep 14, 2023
TSLA Stock Jumps By A Ford On Morgan Stanley Commentary
Tesla (TSLA) shares jumped 10% on Monday, gaining over $50 billion in market cap in one day. For perspective, Ford has a market cap of $48 billion. Fueling investor optimism was a Morgan Stanley research report upgrading Tesla’s share price to $400. Such is a nearly 50% increase over where TSLA shares currently trade. In […]
Sep 13, 2023
Fed GDP Nowcasts Are All Over The Map
Three Fed branches put out economic forecasts of economic activity throughout the current quarter. These Fed GDP forecasts are called Nowcasts because the Fed branches use current economic data points and not estimates of future data to quantify how GDP is running. The Fed GDP NowCasts tend to be volatile as data and data revisions […]
Sep 12, 2023
Bank Losses Mount Pressuring The Fed To Tread Lightly
The FDIC graph shows that banks are sitting on over $500 billion of losses on their investment securities. This doesn’t include bank loans and other assets with significant unrealized losses. The graph may look scary, but thanks to a rule passed during the financial crisis, it may not be. In 2008, banks were taking tremendous […]
Sep 11, 2023
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