The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.
Part 1: CFO Risks, M&A, and Miami Nightlife
Reporter Adam Zaki will cover Grant Thornton’s recent report on increasing disputes during mergers and acquisitions. Various factors, including the pandemic, have led to a dynamic M&A market affecting multiple industries. (12/13)
Zaki will also publish a Q&A with David Santos, CFO of Goat Hospitality Group (GHG). As owners of four restaurants and nightclubs in Miami, the company aims to continue growth with two new locations by year's end. Zaki and Santos discuss the significance of learning, Santos' departure from Portugal's largest hotel chain to achieve his goal of becoming a CFO in the U.S., and the effects of automation on the hospitality industry (12/14).
Senior reporter-at-large Vincent Ryan will cover recent commentary on the Securities and Exchange Commission by H. David Kotz, the controversial former inspector general of the SEC who investigated why the commission failed to detect the $19 billion Madoff fraud. (12/12)
Part 2: This Week
Inflation, interest rates, and the Federal Reserve will grab the limelight early in the week, with the consumer price index (CPI) coming on Tuesday and Wednesday’s Federal Open Market Committee meeting. Economists estimate November CPI will come in at 3% to 3.1% year-over-year, down from 3.2% the prior month. “The main factor behind [the] expectation for a soft headline print is energy prices, with gasoline prices falling sharply in November,” said U.S. economists at BofA Securities.
The CPI and the personal consumption expenditures (PCE) index have hovered above 3% for a few months. And business executives are still worried about inflation. It was the top concern in the AICPA’s fourth-quarter economic outlook survey, and economic concerns, including inflationary pressures, were the top 2024 risk cited by respondents to a Protiviti and North Carolina State Poole School of Management survey.
Yet, Fed funds futures are implying a near 50% probability of a cut to interest rates at the May 2024 FOMC meeting, and chief economists of global banks surveyed by SIFMA peg next year’s second quarter as the start of rate cuts.
The Fed will stick to the current Fed funds range on Wednesday. The questions are as follows: 1) Will Fed Chair Powell address the issue of rate cuts in his press conference? and 2) Will the committee’s Summary of Economic Projections show Fed funds dropping more than half a percentage point next year?
According to some analysts, last week’s strong jobs report may be evidence of the economy not slowing enough for inflation to drop.
“With inflation remaining on a downward but unstable pathway,” said Stifel's Chief Economist Lindsey Piegza, “the future of monetary policy will continue to depend on the evolution of price pressures.”
This week's other focal point will be the impasse in Congress over aid to Ukraine and changes to immigration and U.S. border policy. President Biden “sent a clear message to lawmakers last week that he’s open to striking a compromise with Republicans on border security,” according to CNN. Congress only has a week to get its act together before the Christmas break.
Also on the calendar this week is a public roundtable held by the Financial Accounting Standards on Wednesday. Stakeholders will discuss the proposed standards update on disaggregation of income statement expenses. To access the live stream, go to the attend a meeting remote option on the upcoming meetings section of the FASB website.
The Securities and Exchange Commission holds an open meeting on Wednesday. The approval of the Public Company Accounting Oversight Board’s budget for 2024 is on the agenda.
The Jewish festival of Hanukkah draws to a close on Friday evening.
Earnings this week: Casey’s General Stores, Oracle, Johnson Controls, Adobe, ABM Industries, Costco, Jabil, Lennar, Darden Restaurants, Scholastic, and more. — Vincent Ryan
Part 3: The 6 a.m. CFO
This week, Constant Contact’s Michael Pellegrino shares why it is important to be a decisive leader, his love of the outdoors and fly fishing, and what the Boston Bruins have to do with his favorite number.
“Every decision we make in life — big decisions, small decisions, decisions we make early in life and decisions we continue to make as adults — they all come together to define who we are and dictate the kind of life we ultimately lead.” (12/14)