The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed's Treasury position was essentially unchanged for the week-ended January 25th while the Fed's Government agency/Mortgage-backed securities position was $15.2 billion lower over the last week. The housing market remains inflated in our view due the Fed's ZIRP policy in 2020 and 2021. Many suburban housing markets that saw residential properties trade at $200/SQFT … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

Russia Ukraine – What Is The Endgame?

Russia Ukraine – What Is The Endgame?

What does the U.S. hope to achieve in the Russia Ukraine conflict? What is the endgame? Russia Ukraine is a regional border war that has been off/on again for years. If you game theory this conflict out, the risk of tactical nuke deployment is real. I know, I know, Ukraine are the good guys and … Continue reading Russia Ukraine – What Is The Endgame?

Weak Earnings & Buybacks

Weak Earnings & Buybacks

Get ready for an uptick in share repurchase plan announcements. This earnings season as Technology companies issue weak guidance you can be sure that many of those companies will announce new share repurchase agreements to support stock prices. Share repurchase agreements are a waste of capital in my view. CEOs should invest in their businesses … Continue reading Weak Earnings & Buybacks

Microsoft Made Our Case For Us

Microsoft Made Our Case For Us

Tonight after the close Microsoft (MSFT) made our case for us, specifically that the uncertain macro environment is causing corporate buyers to take a cautious approach to spending. We told you that management teams would feature the word "cautious" during the December '22 earnings calls and Microsoft CEO Satya Nadella did just that in the … Continue reading Microsoft Made Our Case For Us

Google Firings: Why CEO Personalities Matter

Google Firings: Why CEO Personalities Matter

Companies are a reflection of the personalities of their founders and CEO. Is anyone surprised by the fact that Google terminated employees without notification other than automated user account deactivations? Google is a Quant-centric company founded by two Quants (Larry Page and Sergey Brin) and led by a hand-picked, data-driven, quant-centric CEO (Sundar Pichai). You … Continue reading Google Firings: Why CEO Personalities Matter

Technology Stocks Are Not Yet In The Clear

Technology Stocks Are Not Yet In The Clear

The NASDAQ Composite has had a nice little run, up more than 9% year-to-date. However, I would exercise caution ahead of Tech earnings and the Fed's January 31st / February 1st FOMC meeting. We have written on numerous occasions that we expect management teams to take a conservative approach to 2023 Revenue and EPS guidance. … Continue reading Technology Stocks Are Not Yet In The Clear

A Salesforce Sale?

A Salesforce Sale?

Back in December I wrote that Oracle (ORCL) should acquire Salesforce (CRM). Activist investor Elliott Management may force a CRM sale, Oracle is the natural acquirer in our view. Salesforce has not had an operator at the helm capable of driving operating margin expansion since Keith Block left his co-CEO post in February 2020. Salesforce … Continue reading A Salesforce Sale?

Google LaMDA: Step Aside ChatGPT

Google LaMDA: Step Aside ChatGPT

The public will see a demo version of Google's conversational AI platform - LaMDA - this year. My view is that Google LaMDA ("Language Model for Dialogue Applications"), will blow OpenAI's ChatGPT out of the water. Google is the AI King. The company indexes more content and invests more capital in Advanced AI than any … Continue reading Google LaMDA: Step Aside ChatGPT