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A Disney Sale: The FTC and Potential Acquirers.
A key reason why I wrote yesterday that a Disney (DIS) sale would not be announced until the end of 2024 or in 2025 is that Disney has to be thinking about the Biden Administration's FTC head Lina Khan blocking a potential deal, whether it be for pieces of Disney such as ABC, or for … Continue reading A Disney Sale: The FTC and Potential Acquirers.
Disney’s New CFO Is an M&A Guy
Disney (ticker: DIS) CEO Bob Iger will sell the company before he walks away. Iger will not appoint another successor after his 2020 appointment of Bob Chapek as CEO failed. Today, PepsiCo (ticker: PEP) CFO Hugh Johnston was named Disney CFO (read more HERE). View Mr. Johnston's experience HERE. My view is that Disney will … Continue reading Disney’s New CFO Is an M&A Guy
Powell’s Attempt To Talk Down Inflation Will Fail
Powell may be forced to lower rates while inflation remains elevated. Price inflation as measured by CPI won't get down to the Fed's 2% target without unemployment rising if history tells us anything (See below chart: Unemployment Rate = Red, CPI = Green). Source: click here to enlarge chart. Core CPI will likely remain above … Continue reading Powell’s Attempt To Talk Down Inflation Will Fail
Don’t Get Too Comfortable With The Pullback In the 10-Year Treasury Yield. It Is Going Higher.
10-year Treasury yields dropped last week from 4.93% on Halloween to 4.58% today as Treasury slowed its pace of new issues and as jobs data was revised downward. However, at some point Treasury is going to rollover a bunch of short-term debt to finance Government operations (as well as longer maturity issues that are due … Continue reading Don’t Get Too Comfortable With The Pullback In the 10-Year Treasury Yield. It Is Going Higher.
Weekly Update: Bank Term Funding Program
This week's BTFP activity was muted. The Bank Term Funding Program (BTFP, bail out/QE) had approximately $109.1 billion in outstanding loans as of Wednesday this week, flat with $109.1 billion a week ago. The “other credit extensions” line item of $46.8 billion includes the FDIC loans made to regional banks. This figure is down from $48.3 billion … Continue reading Weekly Update: Bank Term Funding Program
The Fed’s Balance Sheet Reduction (QT) Update
The Fed is likely done hiking its Fed Funds rate. However, the Fed ramped up its QT effort, purging its Balance Sheet of $40 billion of Treasuries this week, the most since it reduced its Treasury holdings by $43 billion the week-ended August 16th 2023. Treasuries: The Fed’s Treasury security holdings declined by $40.0 billion for … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Apple: Now vs. Then
My, how things have changed with Apple's valuation. We compared AAPL today versus 2015 from a Revenue growth and valuation standpoint. Apple grew Revenues 33% in the June 2015 quarter (see table below for details). Today, Apple's topline is shrinking. Fed Funds was essentially at zero and the 10 year Treasury yielded half what it … Continue reading Apple: Now vs. Then
We Still Don’t Like PAYC.
PAYC shares are sharply off today, yet trade at 20x calendar year 2023 cash from operations, which we estimate at $450 million. That is a steep multiple for a company that is growing its topline at 10-15% and is likely to see growth further slow in 2024. In addition, I am not a fan of … Continue reading We Still Don’t Like PAYC.
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