Barron’s Weekend Summary: Women now occupy more senior roles in U.S. companies than ever before, and have helped some of the nation’s biggest, most important companies navigate the Covid pandemic and the challenges that have arisen in its wake.
Cover Story:
In honor of International Women’s Day (March 8), this week, the publication identifies 100 from some of the most influential women in the world of finance. Women now occupy more senior roles in U.S. companies than ever before, and have helped some of the nation’s biggest, most important companies navigate the Covid pandemic and the challenges that have arisen in its wake. Women are also shaping the world of finance and economic policy from an array of powerful perches.
Interview:
Anne Walsh, chief investment officer for fixed income at Guggenheim Investments, graduated from college at 19 and started her career as an analyst at The Retirement Systems of Alabama. She joined Guggenheim Investments, the global asset-management and investment-advisory business of Guggenheim Partners, in 2007, after earning a law degree at night and working in the insurance industry. Walsh now oversees more than $250 billion in fixed-income investments, including agencies, credit, municipals, and structured securities. Barron’s has recognized Walsh on its annual list of the 100 most influential women in U.S. finance.
Tech Trader:
This past week of earnings news brought a fresh wave of data points from enterprise tech companies.
HP Enterprise, which makes servers, storage, and networking hardware, posted 2% revenue growth for the quarter. Pure Storage, which makes flash-memory-based enterprise storage, crushed expectations for the January quarter. Pure posted 41% growth in the quarter. It was the company’s best growth in four years. Broadcom, a key chip provider to cloud players, said its April- quarter results would accelerate from 16% growth in the January quarter. The trend is more obvious on the software side. Salesforce, the software-as-a-service sector’s largest and most seasoned player, has expanded its cloud-based offerings from its core customer relationship-management software into a host of new areas, in part via acquisition, including last year’s $28 billion purchase of messaging service Slack. The same pattern is playing out at Workday, which sells human-resources and financial-management software to large enterprises. Workday posted 22% revenue growth in its January quarter.
The Trader:
-The last full trading week of February ended with optimism that Russia’s invasion of Ukraine would end quickly and not become a global issue. How wrong we were. The scenes out of Ukraine have been devastating, and while resistance has been stiff, Russia’s tactics have gotten more extreme. Europe has rallied together in response, but sanctions don’t look like they will bring a speedy end to the war. No wonder, then, that the stock market had a tough week. The Dow Jones Industrial Average shed 1.3%, its fourth week of losses in a row, while the S&P 500 also shed 1.3% and the Nasdaq Composite fell 2.8%.
-For aircraft leasing companies, the Russian-Ukraine conflict is an unwelcome event for an industry looking to emerge from the problems of pandemic. Investors in aircraft leasing companies aren’t happy either. Shares of AerCap, Air Lease and BOC Aviation are down more than 20%, on average, from 2022 highs. The S&P 500 is off about 10% from its 2022 high. AerCap, the world’s aircraft lessor, has been hit the hardest. Its shares are down roughly 30% from recent highs.
-Foot Locker’s fiscal fourth quarter was stronger than expected when it reported results last Friday, but the market focused instead on the sneaker retailer’s outlook, which called for lower full-year revenue as it sells fewer products from main supplier Nike. It was the first major indication that Nike may be distancing itself from Foot Locker, and that spooked investors. The shares dropped nearly 30% that day, and have continued to slide this week, hitting fresh 52-week lows, as numerous analysts downgraded the stock and lowered their estimates. The stock is down about 29% so far this year, and 39% in the past 12 months. Shares closed on Thursday up 0.1% to $30.
Features:
-Ukraine has crept into global markets. Investors confront a rapidly changing geopolitical scene atop an economy already struggling to cope with inflation, supply-chain woes, and looming interest-rate hikes. No wonder stocks have whipsawed around. To help cut through various aspects of this unfolding crisis—energy, Putin, NATO, and, of course, investing—Barron’s spoke with eight leading experts including Daniel Yergin: U.S. Oil Is Now a Security Asset, Carlos Pascual: Former US Ambassador to Ukraine Is Watching One Key Factor and Tina Fordham: Whether Russia Conquers Ukraine or Not, ‘We Are in a New Territory’.
-Russian President Vladimir Putin also turned up the heat on Ukraine’s allies, saying that countries that impose a no-fly zone over Ukraine are participating in the conflict, CNN reported. Putin also likened Western countries’ sanctions to a declaration of war—before noting that has not happened, according to the BBC. The war dominated headlines this past week, sending investors scrambling for the exits: Both the Dow Jones Industrial Average and S&P 500 lost 1.3% for the week, while the Nasdaq Composite tumbled 2.8%.
European Trader:
The airline sector’s recovery has hit multiple bouts of turbulence in the past year. The industry was looking optimistically toward the spring and summer months—until Russia invaded Ukraine. Despite the obvious risks and uncertainties, the steep stock declines of the past month may tempt investors to take a closer look at some of Europe’s best carriers. Hungarian low-cost airline Wizz Air Holdings, a rapidly expanding dominant player in Central and Eastern Europe, has been among the worst affected carriers. The stock has fallen almost 40% since its 2022 high on Feb. 10. In many ways, that isn’t surprising—the carrier has the greatest exposure to Russia and Ukraine, which together account for 9.5% of its first half of 2022 capacity, Raymond James analysts say. The next highest is low-cost rival Ryanair Holdings.
Emerging Markets:
-Chinese leaders on Saturday announced a GDP growth target for 2022 that was the lowest in 30 years and yet still higher than what most analysts predicted. At the country’s largest annual legislative gathering, Premier Li Keqiang said the Chinese economy should expand “around 5.5%” this year. That’s in the upper range of most economists’ forecasts, and far higher than World Bank and International Monetary Fund expectations.
-From an economic standpoint, Putin chose the perfect time to invade. Oil prices are already high and have moved much higher, generating billions of dollars for the Russian economy. Agricultural commodity prices, another major export of the former Soviet Union, have also surged. Europe rendered itself even more beholden to Russia for energy after cutting fossil fuels and shutting down nuclear power. In addition, the U.S. is no longer energy self-sufficient, and we even import oil from Russia. This leaves one wondering whether Putin can exact more-serious sanctions on the West that it can on him.
Commodities:
Palladium prices have climbed to their highest level on record as global sanctions on Russia threaten to disrupt the flow of output from one of the world’s largest producers of the metal. Prices for the precious and industrial metal have soared since the start of Russia’s incursion into Ukraine, with a February gain of more than 6%, up a third month in a row. Palladium settled at $2,981.90/oz. on March 4, its highest based on records going back to November 1984.
Streetwise:
Jack Hough looks at the price of crude oil, and ponders how high it might go in view of Russia’s invasion of Ukraine. The US buys Russian oil for technical reasons that are related to grade, refining profitability, and geography. One of them is that although Houston can launch men to the moon, it can’t easily ship crude to Los Angeles or New York because of maritime restrictions in the Jones Act, passed in the petro predawn of 1920. There’s a thoughtful case for allowing Russian oil imports that has to do with avoiding economic self-harm, and a more satisfying case for banning them that involves unprintable words and impolite gestures. It could go either way.