Legendary economist John Taylor joins the show to discuss the impact of government debt on real rates. They debate whether the bond market is the place to invest right now. One analyst explains why Klaviyo's debut is an opportunity in the DTC space.
Opportunities in the municipal bond market with higher yields for investors
Cisco's acquisition of Splunk signals renewed interest in cybersecurity and AI
DTC platforms like Klaviyo and Shopify offer valuable services and benefit from the growing e-commerce market
Deep dives
Muni bonds see resurgence as airports ramp up bond sales
Municipal bonds are seeing an uptick in issuance as airports look to tap the market to fund infrastructure projects. Major city airports such as Chicago, Atlanta, and Dallas are reviving plans to renovate and expand their facilities, and are turning to the $4 trillion muni market for funding. Despite rising interest rates, investors are finding opportunities in the muni bond market, with yields now offering higher income potential. Airports bonds, in particular, are appealing to investors, with AAA-rated bonds offering extra yield compared to other sectors.
Cisco announces acquisition of Splunk for $28 billion
Networking giant Cisco has made its largest acquisition ever, purchasing cybersecurity company Splunk for $28 billion. The deal represents a 24% premium to Splunk's closing price the previous day. Cisco's move reflects its strategy of expanding into software and services, and tapping into high-growth areas such as cybersecurity and artificial intelligence. The acquisition may have broader implications for the enterprise software sector, signaling renewed interest in M&A deals and potentially driving up valuations for other SaaS companies.
Buying Munis in the face of rising rates
Despite rising interest rates, investors are looking to municipal bonds as an attractive investment option. Yields on AAA-rated munis have risen, providing higher income potential for investors. The airport bond sector, in particular, is experiencing a resurgence, as major airports tap the market for funds to expand and renovate their facilities. Additionally, toll road bonds are also viewed as attractive investments, as traffic volumes rebound. The current market conditions are seen as an opportunity for investors to enter the muni bond market and benefit from higher yields.
Deere announces layoffs as demand softens
Agricultural equipment manufacturer Deere is laying off 225 production employees at its East Moline, Illinois plant. The move comes amid concerns that agricultural commodity demand is peaking, resulting in slowing demand for Deere's equipment. The layoffs point to a potential weakening in the agriculture sector and a decrease in demand for related commodities. Deere's stock price has also been negatively impacted, dropping to its lowest level since August.
Direct-to-consumer names struggle while platforms thrive
Direct-to-consumer (DTC) companies like Allbirds and Figs are facing challenges in the stock market, with declining share prices. However, the platforms powering these DTC brands, such as Shopify and Klaviyo, have seen strong performance. The discrepancy highlights the importance of providing tools for online merchants, as selling online directly can be highly competitive. Platforms like Shopify and Klaviyo offer valuable services to merchants and are benefiting from the growing e-commerce market. The performance of these platforms could have implications for the broader enterprise software sector and potential M&A activity.
Legendary economist John Taylor joins the show to weigh in on how the Federal Reserve should grapple with the glut of government debt that seems to be pushing yields higher. Plus, with stocks stalling and yields at multi-year highs, is the bond market the place to be buying right now? We’ll debate. And Klaviyo’s debut could be an opportunity to invest in the DTC space… one analyst joins us to make his case.
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