YOUR QUIVER | February 22, 2023
Today's Rundown
CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.
Dividends Down
One of the areas we cautioned clients about was the potential for reduced dividends and share repurchases, and Intel unfortunately is one data point making the case. Intel cut its quarterly dividend by more than 65%, just weeks after announcing $3bn in projected cost savings measures for 2023. Its stock is down almost -60% since its top in 2021.
The Technicals
It looked like investors tried to use 4000 as the magic floor for the S&P yesterday. Remember when it was near 4200 earlier this month, and pundits were claiming the end of the bear market? The Dec trough was around 3765, so we are watching that for a potential next leg down. The Russell was down hard yesterday, reflecting hedged managers reduction in positions they probably took during the Jan rally. lso, the 10yr UST yield close to 4% erased long-duration bets in a hurry. Per the UBS/BBG chart below.
Fed Minutes
Investors are expecting to hear hawkish comments in the Fed Minutes out in a few hours. Interestingly, because rates have moved up so much in anticipation, a 50bps hike (versus a 25 bps hike) is less likely.
Sorting It Out
$TGT announced an $100mm investment in 15 sorting centers to deliver online orders more quickly and cheaply. Investors will hear the co’s 4Q earnings report next Tues, although mgmt. has already lowered its holiday guidance and announced plans for a ~$3bn expense reduction over the next 3 years.
Oleato
That’s the new set of drinks that soon-to-be-former $SBUX CEO Schultz just unveiled that combines Partanna olive oil with their iced espresso, cold brew, and latte drinks. Not sure how many customers were looking to add more fat to their coffee drinks, but I guess we’ll find out.
Debt Drama
Investors should keep their eye out for debt ceiling drama just months away. Historically, per RBC, even modest drama tended to hit equities by -5 to -7%.
Supreme Confusion
If you heard any of the reactions by justices regarding the content liability case the Supreme Court is hearing, you’d hope they punt this one. At stake is Section 230 of the Comm Decency Act, which tech companies have relied on for internet free speech claims. Would bet that a number of justices probably still have AOL accounts.
Total Hack
That’s what happened when hackers retrieved logins for Asian data centers used by some of the world’s largest co’s including $BABA, $AMZN, $AAPL, $GS, $MSFT and $WMT.
Nope
That’s what $JPM told its employees about using ChatGPT. After all the hefty industry fines from using WhatsApp and other chat apps, it sounds like a reasonable restriction. Imagine employees using it to determine who gets a loan or how to explain portfolio movements…
