The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.
Capital allocation is a hot topic. For Scott McKinney, finance chief of Tiptree, it’s everything. In this week’s Q&A, McKinney and senior reporter Vince Ryan discuss the holding company’s Berkshire Hathaway-like operating model and its rationale for investing equity in middle-market companies at sensible valuations.
“We’re looking for good strong management teams with cash-flowing businesses and a margin of safety,” McKinney tells CFO. McKinney also discusses the importance of FP&A and how organic growth in the insurance business is allowing the publicly held company to be highly selective with its next deal. (11/2)
Reporter Adam Zaki will also publish a story on different approaches to leadership development with takes from author and leadership consultant Jacqueline Baker, Orange Comet’s CFO Erik Nakamura, and SeatGeek’s VP of finance Teddy Collins. (11/3)
All Hallow’s Eve may be the scariest day for kids this week, but for adults in the bond market, it will be Wednesday’s release of the Department of Treasury’s borrowing plan. The quarterly refunding announcement will detail how much Treasury intends to rely on notes and Treasury bonds, two-year to 30-year issuances, versus short-term debt (T-bills) to finance its expanding balance sheet. If Janet Yellen’s team intends to rely more on longer-term funding, it could push benchmark yields like the 10-year higher and further tighten financial conditions, according to Barron’s.
On Wednesday the Federal Open Market Committee announces its latest moves on interest rates. There’s less than a 2% chance the Fed raises the target Fed funds rate above its current 5.25%-5.5% range, according to futures pricing. Fed Chair Jerome Powell is unlikely to signal that the Fed is done raising rates, however, given his recent comments that the FOMC is committed “to bringing inflation down sustainably to 2%.”
For its December 13 meeting, the FOMC will be paying close attention to the bucketful of U.S. jobs data coming out this week — job openings and labor turnover, the employment cost index, nonfarm payrolls, October’s unemployment rate, U.S. hourly wages, and the Challenger, Gray monthly report on layoffs. Some economists expect to see hints of the market cooling.
Monday at 8 p.m. Eastern, Apple holds an online-only launch event with the theme “Scary Fast.” Kudos to those who figured out from the title that the event is about Apple’s new M3 processors. Apple is likely to announce new iMac and Macbook Pro models based on the chip, according to press reports. Go to Apple’s home page to stream the announcement.
The bigger tech news is President Joe Biden’s executive order on artificial intelligence, through which the federal government hopes to establish new standards for AI safety and security. One of the proposed requirements is for advanced AI developers with government contracts to notify the government when training their models and to share the results of red-team safety tests. The order also calls for the Department of Commerce to develop guidance for content authentication and watermarking to label AI-generated content clearly.
Fortunately, (or, for Beatles fans who are purists, maybe unfortunately) Biden’s order does not forbid the use of AI to create new Beatles songs. This week, the Beatles will release their final “new” song, “Now and Then,” which used AI to improve a recording of John Lennon singing the unfinished song in the 1970s. A short documentary from Peter Jackson about how the song was produced will be released on Wednesday.
Earnings this week: McDonald's, Pinterest, Transocean, SoFi Technologies, Caesars Entertainment, JetBlue, Caterpillar, First Solar, Pfizer, Advanced Micro Devices, CVS Health (CVS), Etsy, Airbnb, Electronic Arts, PayPal, AIG, Yum! Brands, DuPont, Apple, Moderna, Palantir Technologies, Starbucks, Duke Energy, Paramount, DraftKings, Fluor, Dominion Energy, BP, Wayfair, Apollo Global Management, and more.
Part 3: From Staff Accountant to CFO
Shana Rowlette joined beekeeping supplies manufacturer and retailer Mann Lake 12 years ago as its first staff accountant and in 2019 she took over as CFO. In the first part of a two-part series, Rowlette discusses how immersing herself in all aspects of the business helped her rise to the top finance spot.
“Our former CFO’s exact words were, ‘Hey, new girl, figure out the ERP system.’ It turned out to be one of the great stepping stones of my career because to make sure everything flowed properly, I had to go to every department to learn how they processed things.” (10/31)