Stifel Bits

May 3, 2023

The Appetizer

“You asked me the same question last year, Eric. Do you get a promotion every year? No, right? So every year you work is a failure? Yes or no? No. Every year you work, you work towards something, towards a goal … it’s not a failure. It’s steps to success.”

  • Milwaukee Bucks star Giannis Antetokounmpo when asked if the season was a failure after being eliminated in NBA playoffs.”

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

  • 2,000 years old: The age of an ancient Roman bust that was purchased for only $34.99 at a Texas Goodwill. It is now headed back to Germany to be properly preserved..
  • 1:59 2/5 minutes: The fastest Kentucky Derby time in history. With the derby this Saturday, will a new horse beat Secretariat’s record?
  • $72 billion: The net total decline of deposits at First Republic Bank in the first quarter of 2023.
  • 46%: The percentage of U.S. voters in a Wall Street Journal poll that would support a TikTok ban.
  • $2.5 million: The price that Hollywood’s Rob McElhenney and Ryan Reynolds paid in 2020 to purchase English soccer club Wrexham AFC, the world’s third-oldest professional soccer club. The team just got promoted to the fourth division of the English soccer pyramid.

Dig In
What Is Nearshoring?

Have you heard this one before? COVID disrupted lots of things – and global trade is one of the biggest. Now, after decades of offshoring production and services, pandemic disruptions and shifting geopolitics have businesses rethinking their supply lines. So as we gather margarita ingredients for Cinco de Mayo, we’ve got nearshoring on our minds.

Nearshoring involves bringing supply chains and manufacturing closer to home, potentially lowering companies’ shipping costs and mitigating risks associated with long supply chains and growing global competition. As friendly neighbors, Canada and Mexico already top our list of trading partners, and they may stand to benefit from the new trend even more.

To the north, Canada boasts a strong auto sector, and they hope to create a mining and electric vehicle industry that’s integrated with the U.S.

To the south, Mexico offers a comparatively cheap labor force and benefits from free trade partnerships with the U.S. and Canada. Companies have noticed: Demand for industrial space is on the rise, and the Mexican government reported that more than 400 companies expressed interest in shifting production to Mexico.

While there are still hurdles to overcome, we may see North American trade grow even stronger.

Weekly Specials

Talk about peace and quiet: A remote Scottish island is up for sale. The 25-acre isle off Scotland’s southern coast currently offers no amenities and a six-mile trek to the nearest town, but the scenery is beautiful. Bidding starts at £150,000 ($190,000). Tempting, but buyers are lining up.

A couple weeks ago, a pale blue spiral briefly appeared in the sky near Anchorage, Alaska. So was it aliens? A portal to another dimension? Nope, just SpaceX. As one of the company’s rockets dumped excess fuel, the vapor caught some sunlight as it turned to ice and provided a swirly display for Northern Lights watchers below.

Watch out Vegas, London is about to take your crown. Las Vegas currently offers the most hotels rooms of any city outside of China, but a hotel boom in the UK’s capital could put it on top. Industry projections show the London market could grow 18% in the next few years to total of 183,600 rooms.

So … housing shortages and empty business districts. Could office-to-housing conversions be a win-win for cities around the country? Maybe. Project developers face large hurdles such as lack of natural light, hazardous material cleanup, and the need to install hundreds of kitchens and baths. That’s a lot, and may explain why conversions account for less than 1% of new multifamily projects.

Corporate Lunch

Tesla’s pricing strategy for the Model Y is electrifying – it’s now cheaper than the average car or truck in the U.S.

Nvidia has been developing a “guardrail” software to help AI large language models stop making things up. For example, no, it is not healthy to eat Tide Pods.

Louis Vuitton is the first European company to surpass $500 billion in market value. But why do they still sell their stuff on the sidewalk?

UK’s top competition regulator is putting the “block” in “blockbuster deal.” Microsoft’s plan to buy Activision Blizzard has been shut down.

Bed Bath & Beyond has thrown the (bath) towel and filed for bankruptcy, but hey, they put up a good fight.

IKEA’s latest move is a real page-turner – they’re redesigning the Billy Bookcase to keep prices low.

Spotify is hitting all the right notes – the company reported more than 500 million monthly active users with a 15% increase in premium users.

AMEX is winning over the young and trendy crowd; millennials are 30% of card volume, up from 20% pre-pandemic.

drawing of a table setting

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