March 18, 2024
Markets and inflation
U.S. markets were mixed. The S&P 500 was at 5,117.09, down 0.13% for the week, the Dow was nearly flat at 38,714.77, the Nasdaq fell 0.70%, and the Russell 2000 dropped 2.08%. The FTSE 100 rose 0.88%, the Nikkei 225 gained 2.97%, WTI crude moved to $81.25, and the 10-year Treasury yield was around 4.3%.
February payrolls rose by 275,000, above expectations of 198,000, while unemployment increased to 3.9% from 3.7%. Inflation was stickier than expected, with overall CPI up 3.2% year over year versus the 3.1% estimate. For recruiting, this is the kind of macro setup worth practicing because strong jobs and sticky inflation make the rate-cut story less clean.
Crypto and regulation
Bitcoin traded around $72,000 after spot Bitcoin ETFs were approved in January. Total crypto market capitalization was about $2.6 trillion at the start of March, and Ethereum had risen almost 70%. Coinbase also benefited from the rally while continuing to push for clearer regulation after suing the SEC.
Nigeria showed a different side of crypto policy. High inflation and currency depreciation drove some residents toward stablecoins, but authorities detained two Binance employees, restricted Binance's website, and pushed the exchange away from naira services. That is a useful reminder that crypto is both a capital markets product and a currency-risk workaround in some countries.
Boeing, exports, and tech
Boeing faced another difficult stretch after a 787 Dreamliner incident in which the aircraft suddenly plunged and injured passengers. That followed the Alaska Airlines 737 Max incident tied to missing bolts, flight-control concerns on a United Airlines 737 Max, de-icing equipment concerns, and missing assembly-line documentation. The FAA required Boeing to submit a plan by May, and the stock fell 3% on one Monday and 4.5% the next day.
China's factory exports rose 7% in January and February, helped by industrial policies such as low-interest loans, cheap land, and cheaper energy. The U.S. and EU were considering tighter tariffs and trade restrictions, and Europe's carbon border adjustment mechanism could add pressure because of China's coal reliance.
The House voted 352 to 65 for a bill that could ban TikTok or force a sale over data privacy concerns. Reddit prepared for an IPO targeting up to $748 million at a $6.4 billion valuation. Revenue had grown from $12 million to more than $800 million annually under Steve Huffman, while headcount rose from 80 to 2,000.
Consumer note
Lego increased consumer sales 4% in a weak toy market, while Mattel sales were flat and Hasbro revenue declined. The company opened 147 stores in 2023 and planned 100 more, with China a focus. My read is that Lego is a cleaner consumer story than the headline toy market suggests because product breadth and retail execution are offsetting category weakness.