Trial Balance

FOMC Minutes, Inflation Data, and AI in Debt Collection: Trial Balance

This week we look ahead to PCE inflation data, the final estimate of Q1 GDP growth, and more.

While Meta continues to bleed cash after its Metaverse expenditures, nine-figure fines from regulators accompanied by new legal issues that impact its core business model are threatening one of the world’s largest companies; and executives of all types should be taking notes.

No matter the size of the company, leadership must be aware of external factors around their products, industries, and ventures. High confidence, displayed by leaders in the 2023 Q2 Outlook survey, needs to come hand-in-hand with reasons for that confidence, or business may not be so great if everything doesn’t go to plan.

As Washington continues to negotiate the U.S. government’s debt ceiling, most industries are business as usual. Despite Janet Yellen recently saying the U.S. could default as soon as next week, companies and their leaders are attending spring events and tradeshows, keeping an eye on AI, and trying to figure out how to manage their labor issues. There’s not much else leadership can do besides ensuring cash is plentiful and access to capital secured.

Today is Bitcoin Pizza Day, or the 13-year anniversary of the first known legitimate Bitcoin transaction, when a Floridian programmer named Laszlo Hanyecz paid 10,000 bitcoins ($269,160,000 today) for two pizzas from Papa Johns. Hanyecz paid another person in bitcoin to order him the pizzas to be delivered. Although the digital currency was only worth pennies then, Hanyecz might have kneaded some better judgment in that decision. Dough!

(The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.)

Part 1: Does AI Threaten the Legitimacy of Blockchain Technology?

After the mixed reviews of Bitcoin 2023 in Miami, reporter Adam Zaki dives into what elements of cryptocurrency and blockchain technology are still viable within the greater financial landscape. While AI and ChatGPT seem to have all the factors crypto lacks (immediate and impactful change, clear usage models, easy-to-see value), Zaki aims to find out where, if any, the interest in crypto still lies. Also, where are all the investments and initiatives that crypto once inspired big companies to crow about? (5/25)

Part 2: Economic Calendar

Monday —  SIFMA holds its Anti-Money Laundering and Financial Crimes conference today and Tuesday in New York. Topics include crypto and digital assets and emerging fraud trends.

Banking behemoth JP Morgan Chase holds an investor day in New York, with members of the executive team presenting.

Tuesday — Data on April new home sales arrives, as fluctuating interest rates and low supply keep buyers at bay.

FinovateSpring, a financial services conference for banks and fintechs, kicks off in San Francisco and runs through Thursday.

Jason Furman, former chair of the Council of Economic Advisers, Richard Clarida, former Fed vice chair, and former Fed Chair Ben Bernanke join the Brookings Institution on Tuesday for an event titled, “The Fed: Lessons learned from the past three years.” The live event is full but you can still attend virtually.

Wednesday — The Federal Open Market Committee releases the minutes of its May 2 meeting

Thursday — The Bureau of Economic Analysis releases its first revision of real U.S. GDP growth for the first quarter of 2023, expected to remain unchanged at 1.1%, and its quarterly measure of corporate profits.

Friday — A mother lode of data for the last Friday of May, with reports on durable goods orders (projected to have contracted in April); personal income and personal spending; the personal consumption expenditures (PCE) price index and core PCE price index (projected to have increased slightly to 4.6% year-over-year); retail and wholesale inventories; and the University of Michigan’s final numbers on monthly consumer sentiment.

Earnings this week — Lowe’s, Dick’s Sporting Goods, BJ’s Wholesale Club, Costco, Williams-Sonoma, SeaDrill, Kohl’s, Petco Health and Wellness, Analog Devices, Nvidia, Children’s Place, Abercrombie & Fitch, Dollar Tree, Best Buy, Burlington Stores, Ralph Lauren, TD Bank, Big Lots, Booz Allen Hamilton, Intuit, Urban Outfitters, Medtronic, Autodesk, Snowflake, UiPath, Workday, The Gap, and others.

Part 3: How AI Will Transform the Ability to Collect Business Debt

Artificial intelligence (AI) holds tremendous promise for creditors who want to reduce the impact of bad debt on cash flow and profitability. Because AI solutions learn as they absorb and analyze customer behavior, these ultrasmart systems will become more powerful with time, streamlining customer communications and reducing billing and collections costs.

A guest column offers six ways AI may soon deliver solutions for managing receivables risk. (May 23)

Stat of the Week

$1.3 billion

(The record-breaking fine issued to Meta for violating EU privacy laws by transferring Facebook users’ personal data to servers in the United States.