SFM Observer - September 2024

Glenn Sweeney |

Issued: October 2, 2024 

 

The Dow closed the month of September at 42,330 for a monthly gain of 747 points or 1.8%. The Federal Reserve came through with a ½ % cut in short term interest rates.  They have two more meetings this year and rate cuts are expected to continue at these meetings.  Inflation numbers have been coming in as expected and approaching the Fed’s 2% target.  The big banks have warned that consumer borrowing on credit cards and home equity has been rising and is now flashing a yellow light of caution.  Lower income consumers are using credit to keep up with inflation.

Some interesting events from the month just past:

  • Nordstrom department store’s founding family is trying to take the company private and take it out of the stock market.  They are offering $3.8 billion for the chain and they feel they can run the stores better if they can make long term decisions and not worry about pleasing investors.  Retail restructurings have a history of taking much longer than anticipated and often not achieving the desired result.

  • Microsoft and Amazon are ramping up Artificial Intelligence and Cloud investments in Europe.  Amazon recently announced a planned $10.5 billion investment in the U.K. over the next five years.  Microsoft has similar investment goals with major investments planned for Germany, Sweden and France.  The investments include real estate, advanced chips and data centers.

  • United Airlines is teaming up with Elon Musk’s Starlink to offer reliable internet service in its planes.  The satellite-based service is more reliable in remote areas and works similar to your service at home.  It is particularly superior when traveling over the ocean.   United is hoping this service will burnish its image with the business flyer.

  • Tupperware, the plastic food storage company, has filed for bankruptcy after years of falling sales.  Tupperware was founded by Earl Tupper in 1946 and was sold at Tupperware parties in the early days.  I remember my mother hosting Tupperware parties in the 1960’s and she would always have a good turnout and the women would share baked goods and coffee.  It was a social event.

  • Domino’s Pizza added 2 million new loyalty club members by offering an “Emergency Pizza”.  An emergency pizza is one you can order for free up to 30 days after becoming a member and placing an order.  Apparently, the promotion worked to spur sales after a weak sales period for the nation’s largest pizza chain.

Thank you for reading this issue of the SFM OBSERVER.  If you have any comments or questions, please send us a reply.  If you have a friend or associate that might be interested in the SFM OBSERVER, feel free to forward this email. 

Until next month,

Glenn Sweeney CFA