Biden announces a Boeing and Air India deal for more than 200 jets (3 min read)
Air India will purchase more than 200 planes from Boeing that are valued at a list price of about $45 billion, marking the third largest sale in history for the company. Airlines do not typically pay the full list price, especially for a deal of this size, but even at a 50% discount, the sale is still valued at over $22 billion. This is a much-needed lift for Boeing as the company struggles to recover from the revenue losses and demand drops that occurred during the pandemic.
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Coca-Cola revenue rises in fourth quarter, fueled by higher prices (3 min read)
Coca-Cola reported Q4 financials that were better than analysts’ expectations. The company’s net sales rose 7% for the quarter, but it was driven by a 12% increase in overall prices. The total volume sold was flat in North America and slipped 5% in its Europe, Middle East and Africa segment. CEO James Quincey said some consumers changed their behaviors due to soaring inflation, but that will likely moderate and the reopening in China will also help boost sales this year. Shares of Coca-Cola dropped slightly on Tuesday after the quarterly release.
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Inflation rises 0.5% over last month in January, most since October (4 min read)
The Consumer Price Index (CPI) for January showed a 0.5% increase over the last month and rose 6.4% on an annual basis, continuing to trend downwards since peaking in June. However, the annual increase was higher than the economists’ estimate of 6.2%. The core CPI, which strips out food and energy, was also higher than expected. Even as inflation eases, it remains stickier than anticipated. US stocks slid following the release as investors assessed the implication the data has on future rate hikes.
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Pivot from stocks to bonds because investors are 'fighting the Fed', Morgan Stanley says (2 min read)
Despite the equity market still rallying YTD, a Morgan Stanley strategist suggests investors pivot away from stocks and allocate in bonds instead. The strategist believes that the market is blindly fighting the Fed’s commitment to tame inflation, and that the rally so far is fueled by the assumptions of ample rate cuts. History shows that markets pushed by assumptions will likely end in disappointment. There is no way to know for sure, but if the Fed raises rates above 5% and holds it throughout this year, stocks will suffer as its costlier for companies to borrow.
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End of PayPal Dominance Boosts Appeal of Fintech ETFs (3 min read)
Fintech was one of the fastest growing sectors in 2020 with companies like PayPal and Block dominating the space as their valuations quadrupled during that period. Although the sector was heavily sold-off in 2022, fintech still offers a lot of return potential for investors. However, since then, many competitions have entered this space, which increases the chance of single-stock risk. This article recommends diversification through fintech ETFs and highlights ARKF, FINX, and GFOF for broader exposure to the sector.
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Perpetual Sees Investor Benefits in Copying Vanguard ETF Model (2 min read)
Perpetual Group has applied to the SEC to create ETF shares from mutual funds, hoping to offer greater choice and flexibility to investors. Perpetual seeks to create active, transparent ETFs, a novel idea for which it may face challenges from regulators. The trend of mutual funds converting to ETFs continues due to tax efficiencies, with 40 mutual funds already having switched and more to come. Vanguard, the world's largest mutual fund shop and second-largest ETF provider, has been issuing ETFs as a share class since 2001.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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