April showers bring… more rate hikes and bank troubles?
With beach days and summer fun just weeks away, the month of May brings with it some work before we can dig our feet into the sand. The Fed meets this week, and further rate hikes may push the U.S. economy toward triggering a deeper recession. With the goal of a 2% inflation rate still a top priority for Powell and his team, this meeting will determine how hawkish he and the Fed genuinely are.
As per the banks, regulators seized First Republic’s assets on Monday morning and sold a bulk of them to JP Morgan in the largest bank failure since 2008. This is eerily the third bank collapse in two months. With the jobs report scheduled to come out this week, too, it’ll be interesting to see if job growth continues and in which sectors. Also, the former Alibaba CEO Jack Ma, once one of the world’s wealthiest people forced to go into hiding to avoid Chinese regulators, has reemerged as a teacher at The University of Tokyo, a public college in Japan. They say one should change careers every seven years, right?
Speaking of education, Tuesday of this week happens to be National Teachers’ Day. So if you’re a parent, pick up a gift card at a coffee shop and send your kid in with it. And remember, if applicable, participate in budget votes at your local public schools over the next few weeks, too.
(The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.)
This week, reporter Adam Zaki looks into the future of commercial real estate while breaking down the philosophy behind two approaches: leaders that are adamant and actively investing in the expansion of office spaces and those who believe that office spaces will never be what they once were pre-pandemic. (May 5)
Also, contributor Sandra Beckwith’s Q&A with Alice Globus, the former astrophysicist-turned-CFO of Nanotronics, discusses the catalyst that caused her career shift, how problem-solving approaches in science translate to finance, and how knowledge and work experience play a critical role in Globus’ duties and the team she has built. (May 4)
Monday — The Miliken Insitute’s Global Conference takes place in Beverly Hills, but you can live stream the sessions, which cover everything from gene therapies to renewable energy, artificial intelligence to fintech.
Tuesday — The Federal Open Market Committee will hold its policymaking meeting Tuesday and Wednesday, with Chair Jerome Powell’s always-popular press conference held on Wednesday.
The Job openings and labor turnover survey is due from the Bureau of Labor Statistics. Projections for openings have fallen to 9.6 million for March from February’s 9.9 million.
Wednesday — The FOMC’s interest-rate statement is released. According to the CME Fedwatch tool, markets are showing an 85% probability of a 25-basis-point increase in the Federal funds rate. For the June meeting, as of Monday morning, Fed funds futures predict a nearly 70% probability of no rate hike.
An open meeting of the Securities and Exchange Commission includes discussions about the modernization of share repurchase disclosures.
Thursday — Another Congressional airing of the causes of bank failures is slated. The Senate Banking Committee’s hearing, “Holding Executives Accountable After Recent Bank Failures,” features Tom Quaadman, executive vice president for capital market competitiveness at the U.S. Chamber of Commerce.
The City University of New York’s Baruch College holds its annual Financial Reporting Conference. Speakers include the FASB’s Richard Jones and PCAOB chair Erica Williams. CFO is attending.
U.S. productivity and unit labor costs data is due from the BLS. Projections are for productivity to have been flat in the first quarter.
Friday — The U.S. employment report rounds out the week, with economists forecasting some slippage in nonfarm payroll gains but very small changes (if anyt) in hourly wages and the unemployment rate.
Earnings on tap — SoFi, Sterling Bancorp, KBR, Apple BMW, Volkswagen, Ford, Lyft, Uber, Marriott, HSBC Sunoco, Cisco, LendingTree, Dupont, CVS Health, Yum! Brands, Estee Lauder, Kellogg, Paramount Global, Cars.com, Warner Bros., Icahn Enterprises, Pfizer, and Starbucks.
A chart of accounts (COA) with too many accounts can create headaches for finance teams. It leads to more review time, more reconciliations, additional system maintenance, and greater chances for coding errors to occur, explains Perry D. Wiggins, CFO of benchmarking group APQC. Wiggins highlights some of the challenges of an oversized COA and describes how leading organizations trim and prevent excess accounts. (May 3)
(First Republic is the second-largest bank failure in U.S. history.)