This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Monday, October 25, 2021
I don't like Jack Dorsey's Jim "The Anvil" Neidhart-like beard (although I was a big Anvil fan as a kid in the '80s). It's unbecoming to a now 44-year-old tech billionaire who knows a lot about all of us through his creations of Twitter and Square.
But I tell you what I do like from the reclusive Twitter and Square CEO: his dire new warning on hyperinflation.
"Hyperinflation is going to change everything. It’s happening," Dorsey tweeted to his 5.8 million loyal subjects late Friday.
I think Dorsey is on the mark here, though it's partly self-serving as any outbreak of hyperinflation would meaningfully erode the value of the U.S. dollar and probably be bullish for crypto (which Dorsey is heavily involved in personally and via Square's Cash App).
But the reality is that hyperinflation — or an extreme rise in prices in a short period of time — is beginning to happen right now. It may not be showing up yet in the government's CPI or PPI reports, but it lurks around the bend. For instance, we are one bad snowstorm away from oil prices going north of $100 a barrel and natural gas prices going even further through the roof, experts have told me. Blame the pandemic and a lack of investment in the space, these pros say.
Meanwhile, Tide maker P&G is looking at a third round of price increases for this year due to rising prices on commodities and transportation. P&G is hardly alone. Appliance king Whirlpool is closing in on a $1 billion financial hit this year from higher commodities prices. It, too, continues to raise prices on consumers. Burrito giant Chipotle is hiking prices to offset labor inflation (but promised me they won't be cutting historically large portion sizes to reduce costs ... thank goodness).
More talk of price increases are coming as a slew of large companies will report earnings this week.
Here are some fresh inflation commentary from top execs to me on Yahoo Finance Live:
So you are damn right that Federal Reserve Chair Jerome Powell should be warning about increased inflationary pressures as he did on Friday (which spooked the market). Powell lulled everyone into thinking inflation was transitory. He was seriously misguided, and now investors could be left holding the bag.
Maybe the beard-wearing, crypto-loving hyperinflation worrywart Dorsey should be in the mix for Fed chief. I'll ask our Fed correspondent Brian Cheung later on today if Dorsey warrants consideration by the Biden administration.
Having said all of this, if you haven't talked with your financial advisor on how to protect your portfolio against a long period of super high inflation (which is here), make an appointment to do so this week. And say Jack Dorsey and Brian Sozzi inspired the outreach.
Tech stock to watch: Another avalanche of earnings will barrel down the heads of investors this week. There is the high intrigue around Facebook's earnings, out after the close today, in the wake of Snap's admission that Apple's iOS privacy changes are causing more harm than anticipated. People on the Street continue to say Facebook's stock is too cheap to ignore. Well, we are about to find out the truth. Then later in the week there are numbers out of Microsoft (growth is beginning to slow, yet oddly the stock continues to trade as if growth isn't slowing), Twitter (hard to believe the company won't echo Snap-like issues in its guidance), Ford (the new stock market darling), Caterpillar (China's economic growth slowdown has me concerned about the equipment maker's outlook), Apple (watch for chip shortage comments and a potential sequential China sales slowdown), and Amazon (stock is only up 2% year-to-date, I wouldn't be surprised to see buyers emerge in what could be a strong holiday shopping season).
But out of all these earnings reports, I think Advanced Micro Devices could be a fun one for active traders. Intel's quarter and outlook last week suggest AMD had another impressive three months of performance. And in turn, that momentum will be factored into the company's outlook. AMD CEO Lisa Su continues to fire on all cylinders. To be fair, the stock has exploded 13% in the past month ahead of earnings. So perfection is expected from AMD this week, and it's likely the chip maker will deliver.
Game time for the Yahoo Finance: As Yahoo Finance Editor-in-chief Andy Serwer wrote Saturday, today is our eighth annual All Markets Summit. I have become truly obsessed with this event as it has morphed into a festival of business and finance where top leaders converge to share their latest bold views. If you saw how I prepped for this thing you would think I was a professional athlete trying to claim a championship. Nevertheless, this year I would say the event is also a celebration of resilience. The resilience of global businesses against inflation, the resilience of workers still pounding away at home for 15 hours a day and the resilience of leaders to keep leading effectively in a world that remains supremely volatile. We're right out of the gate with our Brian Cheung interviewing SEC Chair Gary Gensler. I have three interviews on the docket: Target Chairman and CEO Brian Cornell (tis' almost crunch time for Target with the holidays around the bend); American Express Chairman and CEO Stephen Squeri (big quarter out from Amex Friday that pushed the stock to a record); and Intel CEO Pat Gelsinger (yes, the quarter shared last week was challenging as was the company's outlook). The lineup of speakers is amazing. I would pay careful attention to the following:
Andy's interview with Zoom founder Eric Yuan (he doesn't do many interviews). Zoom stock is down 17% year-to-date and the company just scrapped its splashy $15 billion acquisition of Five9
A chat between our senior health care reporter Anjalee Khemlani and Pfizer CEO Albert Bourla (who has been known to move broader markets).
Yahoo Finance Live anchor Julie Hyman sitting down with Bank of America CEO Brian Moynihan (another impressive quarter out recently from BofA).
All-in-all a fun day on tap, looking forward to talking with my colleagues in-person.
By Brian Sozzi, editor-at-large at Yahoo Finance and anchor for Yahoo Finance Live. Follow him at @BrianSozzi
Economy
8:30 a.m. ET: Chicago Fed National Activity Index, September (0.2 expected, 0.29 in August)
10:30 a.m. ET: Dallas Fed Manufacturing Activity Index, October (6.2 expected, 4.6 in September)
Earnings
Pre-market
6:10 a.m. ET: Otis Worldwide Corp. (OTIS) is expected to report adjusted earnings of 74 cents per share on revenue of $3.55 billion
7:30 a.m. ET: Kimberly-Clark Corp. (KMB) is expected to report adjusted earnings of $1.65 per share on revenue of $4.99 billion
Post-market
4:05 p.m. ET: Facebook (FB) is expected to report adjusted earnings of $3.66 per share on revenue of $29.45 billion
Politics
President Joe Biden is headed to New Jersey today in the latest stop in his efforts to rally support for his economic agenda. The itinerary includes a visit to an elementary school and a speech.
Lawmakers also return to Washington after U.S. House of Representatives Speaker Nancy Pelosi announced Sunday that Democrats are "pretty much there" on a social spending deal. She is hoping to have a vote this week on the bipartisan infrastructure bill and also reach agreement on the larger social spending package.
FTSE 100 climbs as traders look ahead to UK Budget this week {Yahoo Finance UK]
PayPal says it is not pursuing acquisition of Pinterest [Reuters]
Tesla pulls its new Full Self-Driving beta due to software 'issues' [Reuters]
Major cryptocurrency project Terraform Labs is suing the SEC [Yahoo Finance]
Wells Fargo CEO says supply chains 'will get solved' in '6-to-12 months'
America has become a massive housing construction site
Dutch Bros. gives coffee giants a run in long-term challenge to Starbucks, Dunkin'
—
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit
