The economic mood and other investing stories you may have missed this week
This week was hardly bullish. Here’s what investors witnessed:
- Oil prices gave back most of their OPEC+ production cut gains.
- The Philadelphia Fed manufacturing index reached a new low for this economic cycle and missed consensus estimates. Other indicators from the Conference Board’s Leading Economic Index also fell.
- Initial jobless claims surprised to the upside for the fourth straight week.
- Weak earnings and more caution emerged from freight operators JB Hunt and Union Pacific as well as from auto retailer AutoNation. Netflix and Taiwan Semiconductor, a key Apple supplier, issued guidance warnings too.
- There were more layoffs at Meta and Clorox, with reports of planned job cuts at Disney.
- Tesla reported a quarterly gross margin miss on recent price cuts.
The bottom line is that there is an ongoing negative shift in economic data, likely as interest rate hikes take further hold in the economy. That’s a red flag.
Oddly enough, though, investors don’t appear to be picking up on it judging by the resilience in the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average.
“The latest data is another piece of evidence suggesting there’ll be a U.S. recession soon, which fits with our own view at DB Research that expects one later in the year,” Deutsche Bank strategist Jim Reid wrote in a client note.
Good words of wisdom right now.
3 things you may have missed
1. The mood among AmEx cardholders: I caught up with American Express CEO Stephen Squeri, and he struck an upbeat tone on demand trends.
“The economy is definitely bifurcated, and I think at the lower end of the economy, you are seeing some stress, but we just don’t have that,” Squeri said, adding he is seeing strong demand for travel this spring and summer. The travel call-out is in line with what we have heard this earnings season from Delta and United Airlines.
2. Elon Musk goes storm-watching: One interesting highlight from Tesla’s earnings call was when Elon Musk said he doesn’t see the economy improving until 2024. The CEO predicted “economic stormy weather” for another year before “things start getting sunny around spring next year.”
Musk joins the likes of JPMorgan CEO Jamie Dimon in using weather to describe the economic outlook.
3. About that cost of credit: In a Yahoo Finance Live exclusive, Cleveland Fed President Loretta Mester told Jenn Schonberger that there is only one direction for interest rates in the near term: higher.
“I do think that, given how stubborn inflation is and given the still-strong labor market, I do think that rates are going to have to move up to above that 5% level,” Mester said.
C-Suite Quote of the Week
“We’re not seeing a lot of trade down [among consumers],” Procter & Gamble (PG) CEO Jon Moeller told Yahoo Finance Live. “We’re seeing, if anything, more careful usage of the product that they have bought. So they might use a half a sheet of a Bounty paper towel as opposed to a whole sheet. But generally, again, just looking at the numbers, the consumer is holding up extremely well.”
Chart of the Week
For those investors ignoring the potential impending debt ceiling risk, here’s a helpful reminder from the macroeconomic team at Goldman Sachs on how markets priced the 2011 debt ceiling debate:
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email email@example.com
'That One Deal Made Me A Millionaire': Former Airline Pilot Ryan Tseko Reveals His Investing Strategy That Anyone Can Follow – Yahoo Finance
For years, the wealthiest investors and institutions have enjoyed exclusive access to lucrative investment opportunities, leaving retail investors with limited choices.
Hedge funds like William Harnisch’s Peconic Partners and Michael Burry’s Scion Asset Management produced total returns of 191.5% and 159.79%, respectively, over the past three years. The minimum investment required to participate in funds like these often ranges from $500,000 to $1 million.
Retail investors, on the other hand, have typically been confined to index funds like the Fidelity 500 Index Fund or Vanguard 500 Index Fund Admiral, which track the S&P 500. While the 44% returns these funds have generated over the past three years are considered impressive by most standards, they pale in comparison to those investment funds reserved for the elite.
Former airline pilot Ryan Tseko, who is now executive vice president of Cardone Capital, understands firsthand the transformative power of gaining access to the same assets as the wealthiest investors.
From Airline Pilot To Real Estate Millionaire
Tseko fulfilled his childhood dream of becoming a commercial pilot when he was 21 years old, landing a job at United Airlines’ United Express and moving his way up to becoming lead captain at Jet Aviation flying the Gulfstream G550.
Tseko told Benzinga, “I loved being a pilot, but it’s not the high-paying job many people think it is. It didn’t take long for me to realize that it would be nearly impossible to build wealth just by saving and investing in the company’s 401(k) plan.”
Motivated to take control of his financial future, Tseko turned to real estate as a means of generating passive income and securing his financial freedom.
Working diligently alongside his career as a pilot, Tseko successfully built a small real estate portfolio using the income he earned. “I wanted to be doing bigger deals, but the single-family and one- to four-unit properties were all I could afford.”
Tseko soon discovered that scaling and managing the portfolio while maintaining a full-time job posed significant challenges. “I would just be getting back home from a long trip then have to go pick up rent checks and deal with maintenance issues,” he said.
Seeking inspiration, he began following renowned real estate investor Grant Cardone, whose investments aligned with his aspirations.
“I saw what Grant was doing, and knew I needed to invest in the same deals that he was,” Tseko said. With some persistence, he managed to land an opportunity to invest in a deal with Cardone.
“As soon as Grant said I could invest with him, I called my real estate broker and told him to sell the whole portfolio. I ended up with about $400,000 after taxes and put it all into Grant’s deal. About 36 months later he sold the property and cut me a check for $1.1 million. That one deal made me a millionaire.”
Witnessing firsthand the life-changing impact of investing in the right opportunities, Tseko teamed up with Cardone to help make these assets available to other people in similar situations.
The timing couldn’t have been better. The Jumpstart Our Business Startups (JOBS) Act of 2017 had recently passed, making it possible for Cardone Capital to accept investments from non-accredited investors through Regulation A+ offerings.
“People deserve to be able to invest in these assets,” Tseko said. “All of us start out as non-accredited investors. The thing that gets us to become accredited is typically the investments we make with our money. To me, it seemed completely backward. These large institutional-quality real estate deals have only been available to the ultra-high net worth and institutions.”
Cardone Capital has deployed more than $130 million raised through its Regulation A+ offerings into multiple class A properties.
Follow Ryan Tseko on Instagram for more on real estate and aviation.
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This article ‘That One Deal Made Me A Millionaire’: Former Airline Pilot Ryan Tseko Reveals His Investing Strategy That Anyone Can Follow originally appeared on Benzinga.com
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The family office for Mark Zuckerberg and Jack Dorsey backs French rival to Microsoft Excel – CNBC
French business planning software startup Pigment has raised $88 million in a funding round led by ICONIQ, the private investment fund that manages the money of tech billionaires such as Mark Zuckerberg and Jack Dorsey.
Pigment is best known for its business planning and forecasting platform that’s designed to be more user-friendly than Microsoft’s spreadsheet software Excel.
related investing news
The company, co-founded and helmed by dual CEOs Eleonore Crespo and Romain Niccoli, told CNBC it planned to use the funding to expand its reach in the U.S. and artificial intelligence.
Venture capital firms Felix Capital, Meritech, IVP, and FirstMark also participated in the funding round.
Pigment counts the likes of Klarna, Miro and Tommy Hilfiger owner PVH as its customers.
The company’s tools are mainly used by finance teams to plan and make financial and business decisions. As well as Microsoft, Pigment also views enterprise software tools from giants like Google, SAP and Oracle as rivals.
Crespo said that, in 2022, Pigment grew its revenues by 600% and its total user base increased tenfold — and insisted it was well positioned to compete with behemoth incumbent Microsoft.
“We not only have users in the finance team but outside of finance, and that’s super interesting for investors to hear that we are not a finance platform but a business database that can serve any business leader out there from HR to sales to marketing, to R&D [research and development],” she said.
“We are here to sell [to] any business leader. And not only that, but they have heard from their portfolio companies that we managed to serve the most forward-looking companies out there.”
Pigment also plans to use the latest influx of money to invest in the development of AI products.
It introduced a new service called Pigment AI last month, on the heels of heightened buzz surrounding AI and products like ChatGPT, which lets clients query data, identify patterns and automate analysis and reporting.
Crespo said there are no plans to increase headcount substantially and Pigment was instead looking to grow in a more sustainable way, given the pressure from investors on businesses to achieve profitability in favor of breakneck growth.
Saudi Arabia’s Public Investment Fund just reshaped pro golf. It’s not stopping there
Saudi Arabia’s mountain of cash has upended the world of professional golf. But that is only a small sliver of the money it is sinking into a number of prominent businesses elsewhere around the globe as the kingdom moves to diversify away from a dependence on oil income – and as the petro-kingdom tries to achieve its political goals.
The Saudi Public Investment Fund is a government-controlled fund that has $650 billion in assets under management, according to its most recent filing. It is aiming to top $1 trillion within a few years. A state-owned investment fund like the PIF is not unique. It is ranked only the seventh-largest in the world, according to the Sovereign Wealth Fund Institute.
While some of those are pension funds for a country’s citizens or public employees, others, like the PIF, operate the way a private sector investment firm might, trying to make money through a diversified portfolio of investments.
But what makes Saudi Arabia’s fund different from those private investment firms is that since the country faces widespread condemnation for its human rights record, its investments in sports and other entertainment companies can be seen as an attempt to polish that tarnished reputation.
The PIF’s creation of LIV Golf a year ago, reportedly at a cost of $2 billion, attracted many of the sport’s top players away from the US-based PGA Tour and Europe-based DP World Tour by offering big dollar prize money. It led to a year-long legal battle that banned LIV golfers from the established tours and brought some unwanted attention to Saudi’s human rights record. Critics of LIV Golf accused the Saudis of backing the new tour as a form of “sportswashing” its reputation.
But the legal battles, acrimony and competition for the best golfers between LIV and the PGA and DP World Tour suddenly ended Tuesday with the announcement that the three would form a combined for-profit company. The PIF plans to make undisclosed additional investments into the entity.
Soccer, video games and other investments
The chairman of the new golf series will be the chairman of state-owned petroleum company Saudi Aramco, Yasir Al-Rumayyan, who also controls English soccer team Newcastle United and is himself a governor of the PIF.
The Saudis have also been throwing big dollars at some of the world’s best known soccer players, wooing legends such as Cristiano Ronaldo and Karim Benzema to play in Saudi Pro League.
The investment in sports is not a vanity play, according to Al-Rumayyan.
“It all makes financial sense to us. We don’t like to subsidize things,” he said on an interview on CNBC Tuesday announcing the deal with the PGA.
But whether the Saudis’ investments are driven by a desire for profits or good publicity, what’s clear is that pro sports are not the only place where the Saudis are flexing their financial might.
For example, it has a total of $7.5 billion in investments in several leading video game companies, according to its most recent filing, giving it a 9% stake in Electronic Arts
(EA), a 7% stake in Take-Two Interactive and nearly a 5% stake in Activision Blizzard
(ATVI). It also owns more than 5% of Live Nation
(LYV), the concert promoter and owner of Ticketmaster, and significant stakes worth hundreds of millions each in cruiser operator Carnival Corp
(UBER) and Zoom
Its biggest US investment is in upstart electric vehicle maker Lucid
(LCDX). The PIF owns 60% of Lucid
(LCDX)’s stock, worth $7.6 billion as of Tuesday’s close. Lucid
(LCDX) recently announced the PIF would invest another $1.8 billion in the company to help fund its operations.
In 2018 when Elon Musk was thinking about taking Tesla
(TSLA) private, he sought funding from the PIF, which already had a stake in Tesla
(TSLA) at that time. It no longer lists Tesla
(TSLA) as one of its holdings. But last year it helped Musk with his $44 billion purchase of Twitter by agreeing to roll over its existing $1.9 billion investment in the social media platform to the new Musk-controlled company.
Not all of the PIF investments have been publicly disclosed. For example it’s not clear exactly how much it invested to start up LIV Golf. And the Washington Post has reported that it invested $2 billion into a private equity firm created by Jared Kushner, Donald Trump’s son-in-law, soon after Kushner left his position in the White House in January of 2021. CNN has not been able to confirm that report, but what is known is that LIV Golf tournaments have been held on Trump Organization properties.
Saudi Arabia and human rights criticisms
Many of these investments, including the creation of LIV Golf, have sparked controversy.
The PIF is chaired by Mohammed bin Salman, the Crown Prince of Saudi Arabia. Bin Salman is the man a US intelligence report names as responsible for approving the operation that led to the 2018 murder of journalist Jamal Khashoggi. Bin Salman has denied involvement in Khashoggi’s killing.
In addition, the US State Department says the Kingdom’s dismal human rights record includes free speech restrictions, torture, political prisoners and enforced disappearances.
And families of some of the victims of the Sept. 11 terrorist attack decried the news of the LIV-PGA agreement Tuesday. Some have accused the Saudi government of complicity with those attacks. Fifteen of the 19 al Qaeda terrorists who hijacked four planes were Saudi nationals, but the Saudi government has denied any involvement in the attacks. The 9/11 Commission established by Congress said in 2004 that it had found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” al Qaeda.
– CNN’s Coy Wire, Jack Bantock and Steve Almasy contributed to this report
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