The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.
Part 1: 2024 Workplace Outlook and Cryptocurrency Fraud Among its Biggest Test Yet
This week, reporter Adam Zaki will publish a 2024 outlook piece on the workplace, focusing on aspects such as work environment, salary transparency, and company culture and their impact over the next 12 months for finance leaders and their teams. (1/12)
Zaki will also highlight key points from Certik's Web3 security report, which found a 50% decrease in fraud among cryptocurrency transactions in 2023. This week's SEC deadline to approve Arkshare 21 shares' spot bitcoin exchange-traded fund will be a crucial moment for cryptocurrency's ongoing struggle for legitimacy in financial markets. (1/10)
Part 2: This Week
The strong jobs report last Friday will have markets focused on two data points this week: jobless claims and the consumer price index (CPI). Both arrive on Thursday. Economists project 210,000 new people filing for unemployment insurance, within the range of the past few weeks. Investors are hoping for clearer signs that the job market is loosening so the Federal Reserve can start to cut interest rates.
“Developments show that the U.S. labor market isn’t losing steam, ultimately suggesting that economic activity will need a heavier hand to slow it down,” said Sophie Lund-Yates, lead equity analyst at British financial services firm Hargreaves Lansdown last week. “That could see interest rate cuts ... pushed further out than hoped — bad news for the market, which until recently was pricing in heavy cuts this year.”
As far as inflation data, December’s CPI numbers could be a mixed bag — 12-month core CPI inflation is projected to fall to 3.8%, but headline CPI may tick up a couple of tenths to 3.3%. If the numbers come in at these estimates, said economists at BofA Securities, Fed funds futures could still imply a cut in the Fed funds rate as early as March.
In case you’re wondering, the Federal Open Market Committee’s next meeting is scheduled for January 31. That will be followed by meetings on March 20, May 1, June 12, July 13, September 18, November 7, and December 18.
Much of the tech industry’s attention this week will be on the early January ritual called CES (formerly the Consumer Electronics Show) in Las Vegas. Products on display by the more than 4,000 exhibitors will include cars, helicopters, robots, streaming services, televisions, virtual reality headsets, and consumer appliances.
Congress returns from its holiday break this week to once again take up the issue of federal government funding. A two-tiered funding deadline looms, with the first on January 19. House Speaker Mike Johnson announced on Sunday that a deal on topline spending had been reached with the Senate and the White House. The $1.59 trillion for fiscal year 2024 breaks down to $886 billion for defense and more than $700 billion for non-defense. Clashes over the line items, of course, will be more challenging to resolve.
Banks and CFOs of companies set to go public hope the new year will open the floodgates for initial public offerings (IPO). ETF provider Renaissance Capital estimates the U.S. will see 120 to 170 IPOs in 2024, with funds raised from $20 billion to $45 billion. Those numbers would top the past two years but are nowhere near the levels of 2021.
This week, home builder Smith Douglas Homes and Israeli headset maker Silynxcom are both expected to start trading. Amer Sports, a Finland-based company that owns sports brands like Wilson, Louisville Slugger, and Atomic, is the largest transaction close to pricing, according to Renaissance. The company could raise as much as $1 billion at a valuation of up to $10B.
While Renaissance Capital is optimistic about the next 12 months, CEO Bill Smith said in an email that “buyers still expect a clear and compelling investment thesis. That means strong fundamentals, an attractive valuation, and industry tailwinds.”
Earnings this week: Fourth-quarter earnings reports start this week. Earnings releases are due from KB Home, Albertsons, PriceSmart, Acuity Brands, Infosys, WD-40, UnitedHealth, JP Morgan Chase, Bank of America, Wells Fargo, BlackRock, Delta Air Lines, Bank of New York Mellon, Tata Consultancy Services, Citigroup, and Jefferies Financial.
Finally, we won’t publish Trial Balance next week, as Monday, January 15, is Martin Luther King Day. — Vincent Ryan
Part 3: Unlocking the Power of Leading Data Indicators
CFOs can’t just rely on “lagging” indicators, or past performance indicators, which show where the company has been, but need to increasingly shift to “leading” indicators, which can show where the company is going and can be invaluable for understanding the tangible drivers of business impact.
Accordion’s Paavan Choudary and Sanjeev Parlikar explore how new data and analytics capabilities enable CFOs to organize, analyze, and action data in a way that wasn’t even possible just a few years ago. The article also outlines how CFOs can build a better data foundation and how to get better value from lagging indicators. (1/9)