Good Morning!

Today’s article is brought to you by: 95% human and 5% AI

Market Update

📊 Markets had another solid day Friday as the NASDAQ jumped over 2% & the 10-year yield fell back below 4%. The 10-year is a benchmark rate for the cost of borrowing, and thus directly impacts the pace of investment for businesses and consumers alike.

💰️ Bonds vs Equities: With the yield on bonds becoming increasingly attractive, investors are finding it harder to justify further allocation to equities.

• The 6-month T-Bill, a bond backed by the US Government, is currently offering a 5.16% return. The same t-bill was offering a near-zero return this same time last year.

• If you can earn 5% a year basically risk-free in bonds, what has to be true for equities to be the better option?

Banger Tweet of the Day

Death to exorbitant tipping options!

CEOs Make A Lot of Money

A new rule laid out by the SEC will require companies to report how much their CEOs are actually making, accounting rules aside.

The Old Way: A large portion of executive pay comes from stock in the company, which is valued as of the day the stock is granted.

This can be misleading for the obvious reason that stock prices move 5 days a week, thus the amount a CEO receives when they exercise will differ.

Keep it Real: The new measure, aptly titled “Compensation actually paid”, will require companies to report the change in the value of an exec’s stock since its grant date.

Love it or hate it:

• Proponents of the new rule like it because it will give investors & board members an apples-to-apples comparison of what CEOs are taking home.

• Critics say the rule is complex and costly to implement, with little benefit to the shareholder.

The Rule in Practice: Pharma giant Eli & Lilly disclosed total pay of $21.4 million in 2022 for its CEO under the old rules. Under Compensation Actually Paid, the value reached $64.1 million.

Business Bytes

🏪 Amazon to close 8 Go Convenience stores in cost-cutting move (CNBC)

• Amazon will be closing cashier-less stores in Seattle, New York, and San Francisco as it revisits its brick & mortar strategy and pushes to cut costs.

• The company still has ~20 Go stores across the US, excluding the 8 going bye-bye.

✂️ Meta announces big price cuts for VR headsets (The Verge)

• The higher end Meta Quest Pro is dropping from $1,500 to $1,000

• The Quest 2 will drop from $500 to $430.

• This is hard to see as anything but brutal for Meta - who will soon have to compete with Apple in VR. The company experienced year-over-year losses for VR in Q4 2022, not great for a business losing $15 billion a year.

⏸️✋ Amazon pauses construction of HQ2 in Virginia (CNBC)

• The first phase of the campus is set to open in June, while the second phase is being pushed out.

• It looks like the pause is due to, you guessed it, cost-cutting measures. The company is looking all over for savings.

🛑 More Bans coming for TikTok (TechNewsDay) 

• Following government bans from Canada and the EU, the Bank of Canada and the Government of Quebec banned employees from using the app.

• Denmark’s Speaker of Parliament also sent an email to politicians and staff urging them to delete the app due to espionage risk.

• Blackberry’s VP of threat research (yes, that Blackberry) commented that private organizations with security risk will soon follow public orgs.

Inflation Hits the Tooth Fairy

Apparently the Tooth Fairy is adjusting her payouts for inflation.

🦷 Behind the Numbers:

• Delta Dental ran its annual Tooth Fairy poll, showing the average payout now sits at $6.23, up from $5.36 in 2022.

• According to Delta Dental, the poll generally mirrors the overall health of the economy, and loosely tracks the S&P500.

• The chart is really a quality of life index.

🇺🇸 US Region Rankings:

• The South paid the highest of all regions at $6.59

• The West was second at $6.25, a 53% YoY increase. We’re catching up baby.

• The Northeast sat at $6.14, down from $7.36 last year. NE got carried away in 2022.

• The Midwest is way behind - paying only $5.63 per tooth. C’mon y’all.

I can’t believe kids are making so much off their teeth. I used to be pumped about getting $2.

Today’s Challenge: Read for 15 minutes before bed & don’t go on your phone.

Thanks for reading, go out and make today a great one.

Much Love,

Andrew (and AI)