Operation Job Destruction Is Underway. Keep your eye on the unemployment rate in the coming months — it is likely to be a strong signal for when the Fed will pivot and begin the cool down of their tighter financial conditions. Inflation is already moving in the intended direction, but employment is being stubborn. #FINStratAwareness

You’re going to see more layoffs through Q1. You’re going to see unemployment remain the same until about 3 months out Rough range of April-June data will begin registering the layoffs. This is because the vast majority of white-collar jobs give around 3 months of severance where you cannot claim Unemployment. #FINStratAwareness

Oil giants are (still) raking in historic profits, but it could be a grand finale as green energy ramps up
Pump it up… Energy powerhouses pulled in ginormous profits last year, continuing a multiyear streak of blockbuster earnings. Last week, Exxon reported a historic $56B profit for 2022, the biggest for any Western oil biz ever. Shell also rang in a slick annual profit, which was $10B higher than its last record, in 2008. Meanwhile, Chevron pulled in a record $35B, but fell short of expectations. Up next: BP, TotalEnergies, and Valvoline report this week.
Full tank: Rather than ramping up production, oil giants are investing in themselves — and their shareholders. Last week Chevron agreed to buy back a whopping $75B of its shares, and last year Exxon tripled buybacks to $30B.
Big crank: Western oil biggies are expected to have earned a combined $200B in profit last year, reigniting talks among US lawmakers about imposing a windfall tax on their excess earnings.
Drilling down… For much of last year, oil giants benefited from rising prices as Russia’s war on Ukraine strained supply and demand rebounded while production stayed tight. But in the last quarter of the year, gassy growth slowed as prices fell. This year, big oil’s profit boom is expected to cool. Pump prices have dropped 30% from last year’s highs, as the global economy slows and recession jitters curb demand. Still, with China’s reopening, analysts predict oil could climb as high as $120/barrel (China’s the world's second-largest oil consumer behind the US).
THE TAKEAWAY
It could be big oil’s big finale… before the fall. Last week, oil titan BP said it expects renewables will make up 35% to 65% of the energy market by 2050, up from just 10% today. The pivot from fossil fuels to green energy could be accelerated by the “energy trilemma” (affordability, security, sustainability). Last year, clean-energy investment hit a record $1T, matching fossil-fuel investment for the first time. It’s expected to hit $2T by 2030.

Twitter is facing a lawsuit from The Crown Estate over unpaid rent at its London HQ. The Crown Estate manages a range of assets from shops and offices to the seabed around England, ultimately owned by the British monarch. No further details were available, and a spokesperson for the Crown Estate declined to comment beyond confirming the suit. #FINStratAwareness

House Republicans to set up crypto committee after industry turmoil. House Republicans announced the establishment of a new crypto subcommittee on that will focus on digital currency following the collapse of crypto exchange firm FTX last year. The panel will be led by Rep. French Hill (R-Ark.) It aims to create clear guidelines for federal regulators* in the 'digital asset ecosystem'. #FINStratAwareness

Crypto.com cuts 20% of staff, citing economic hurdles and FTX collapse. Several hundred individuals found out on Friday that they no longer had access to Crypto.com’s systems and were being laid off. Crypto.com’s latest cuts come after similar moves by other crypto exchanges, lenders and other industry players. At least 1,500 crypto jobs have been axed this month* alone, including about 950 that were cut at Coinbase Global Inc. #FINStratAwareness

“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.” Michael Porter #LessonsInStrategy

Bed Bath & Beyond reports wider-than-expected loss as possible bankruptcy looms. Bed Bath & Beyond on Tuesday posted wider quarterly losses than it projected just last week. It reported a negative operating cash flow of $307.6 million for the period. CEO Sue Gove said the company had aggressively cut costs and was on track to close the 150 stores it had previously announced it would shutter. #FINStratAwareness

Homebuyer sentiment ticks up again on signs of a market top. More consumers are coming around to economists' views that home prices and mortgage rates probably peaked last year,* according to a monthly survey by Fannie Mae. Despite the improvement, at 61.0 Fannie Mae’s Home Purchase Sentiment Index (HPSI) remained near October’s all-time low of 56.7 after gaining 3.7 points from November to December. #FINStratAwareness

Gold trades near 8-month high and analysts expect its rise to continue. Spot gold was trading just above $1,872/oz early on Tuesday morning after hitting $1,881.5 per troy ounce on Monday, its highest point since May 9. Saxo Bank’s Ole Hansen said focus this week will be on Thursday’s U.S. CPI inflation print and placed the “next major hurdle” for gold at $1,896/oz #FINStratAwareness