Feb 14, 2024
US consumer prices jumped at the start of the year, stalling recent disinflation progress and likely delaying any Federal Reserve interest-rate cuts. The consumer price index, a broad-based measure of the prices for goods and services across the economy, increased 0.3% for January. The figures reflected increases in the price of food, car insurance and medical care, while shelter costs contributed to more than two-thirds of the overall increase.
The report was a reality check as the results make it nearly certain that the Fed will need more data before initiating a rate cutting cycle. Even though the Fed will certainly view this as another reason to wait until May or June, the direction of trend will likely still be lower over time.
Arm Holdings (ARM) was already one of the world's most expensive stocks for its size heading into its earnings last week but after three days of manic buying, it’s now in a league of its own. The stock is priced at 38 times revenue projected over the next 12 months, after jumping more than 90% since the chip designer gave a bullish sales forecast. The magnitude of the rally in Arm’s shares has captivated traders, who have watched the stock add the equivalent of PayPal’s market value in the past three days.
What’s interesting about Arm is that Softbank owns ~91% of the shares and only ~5% of the shares outstanding are available for trading. The IPO lockup expires on March 12th which should lead to even more volatility over the coming weeks. When limited supply meets high demand, market anomalies like these usually occur.
Jeff Bezos unloaded another 12 million Amazon shares early this week, bringing his total stock sold since last Wednesday to more than $4 billion. Amazon disclosed on February 2nd that Bezos plans to sell as many as 50 million shares of Amazon over the next 12 months. The recent sales mean he’s about halfway there.
Investors sometimes look at stock sales by executives or board members, even those done through trading plans, as signs that the insider is making a valuation call. When it comes to Bezos’ selling patterns, however, they have not been strong predictors of future performance. Bezos could be shoring up his personal balance or even raising cash to invest in his space venture, Blue Origin, but pattern is certainly something to watch.
Disclosures:
As of writing, AMZN is a holding in Titan Flagship.
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