Stifel Bits

February 22, 2023

The Appetizer

“I don’t think you want a management structure that’s just managers managing managers, managing managers, managing managers, managing the people who are doing the work.”

  • Meta CEO Mark Zuckerberg reportedly said during an internal question and answer session in late January, according to Command Line.

Now, on to the numbers. Drum roll, please …

  • 113.1 million: The amount of viewers who tuned in to the Super Bowl, making it the third most-watched TV program ever.
  • $777: The average monthly payment for a new car, nearly doubling from late 2019.
  • $92 million: How much Taylor Swift earned in 2022, making her the highest-paid female entertainer in the world last year.
  • $935,000: The selling price of a Harley-Davidson motorcycle built in 1908, the most expensive motorcycle ever sold at auction.
  • 9 years and 209 days: The age of the oldest living mouse in human care, according to the Guinness World Records.
  • 15.7%: The percentage of engagement rings sold in the U.S. made out of laboratory diamonds in December 2022, up 7.9% from a year earlier.
  • 94 feet: The distance of a putt an Auburn college student made during a college basketball game timeout to win a new car.

Dig In
A Look at Consumer Savings

If the pandemic was good for one thing, it was people’s bank accounts. Government stimulus and fewer opportunities to spend money caused the savings rate to nearly double. In fact, Americans saved 16.8% of their disposable income in 2020, compared to 8.8% in 2019. By the end of 2021, households collectively stowed away an extra $2.7 trillion. Wow!

While the extra savings helped consumers weather high inflation and stave off a recession in 2022, the high prices have taken a toll. Goldman Sachs estimates Americans have spent 35% of their extra reserves already, and 65% could be depleted by the end of the year. Additionally, 401(k) administrators report an uptick in hardship withdrawals. Yikes!

Remember: Timing the market is a challenge. A decline in your portfolio can be painful. It may even tempt you to pull money out of the market to avoid further losses. By the time you realize a rebound is underway, the best time to get back into the market may have already passed.

The good news is that inflation continues to ease, so consumers hopefully shouldn’t have to dip as far into savings in 2023. Further, rising interest rates are a good thing for savers. Ultimately, we see a reasonable chance for a soft landing, with consumers and their remaining $900 billion in excess savings playing a key role.

Weekly Specials

Despite a 31-point comeback by Team Ruff to force overtime, Team Fluff held off their opponent to take home the Lombarky Trophy in the 2023 Puppy Bowl. The event raises awareness for rescue organizations and promotes pet adoptions. In the game’s 19-year history, host network Animal Planet says every Puppy Bowl participant found forever homes afterward.

Injured quarterback Patrick Mahomes willed the Kansas City Chiefs to a late comeback against the Philadelphia Eagles to win Super Bowl LVII. This year’s game attracted 113.1 million viewers to become the third most-watched TV show in history. During Rihanna’ halftime show, average viewership spiked to 118.7 million, which was second only to the 121 million that tuned in for Katy Perry in 2015.

It’s almost baseball season again, as pitchers and catchers reported for spring training last week. For even casual fans, Major League Baseball will look different this season as new rules go into effect. In addition making last year’s extra-inning “ghost runner” permanent, MLB will add a pitch clock, use larger bases, and ban the infield shift.

Consumers received good news this week as January’s inflation eased to 6.4% from 6.5% in December. Unfortunately, that’s still well above the Federal Reserve (Fed)’s 2% target. Persistent pricing pressures, coupled with 3% retail spending growth in January, may mean the Fed will need to keep interest rates higher for longer to tame inflation.

The military has certainly gotten its live-fire practice in recently, as it shot down four flying objects in the span of a few days. We know the first object was a balloon. But the other three? Not quite as sure. Maybe they’re linked to private companies, recreation, or scientific research? We’re anxious for more information!

With spring around the corner, the homebuying season is about to kick off. Higher mortgage rates and low inventory continue to push down affordability, but potential buyers should see a better-ish market with homes sitting on the market longer with less competition from investors and fewer bidding wars.

Corporate Lunch

Legendary singer/producer Pharrell Williams is Louis Vuitton’s next men’s creative director. His first collection is dropping in June during Men’s Fashion Week in Paris. Remember when his song “Happy” took over the world in 2013? Good times.

Walmart will shut down three of its tech hubs in Texas, Oregon, and California, hoping to relocate or allow remote work for the impacted employees.

Air India may have gotten a nice tax refund this year, because it just ordered 470 planes from Airbus and Boeing. The deal stands to be the largest jet purchase in commercial aviation history.

Pepsi is bringing back the limited edition Peeps flavor that sold for hundreds of dollars on the resale market in 2021.

Ford is pausing production and shipments of its all-electric F-150 Lightning (best name for an EV) after a defective battery caused one to catch on fire.

Goldman Sachs has given up on creating a direct-to-consumer credit card after pivoting its strategy.

Tesla has committed to opening 7,500 chargers across the U.S. to other electric vehicles by end of 2024.

And Tom Brady is still retired …

drawing of a table setting

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