Fed Rate Roulette

FED: Maintains Rates

The Federal Reserve maintains interest rates at the same level for the fourth consecutive meeting, hinting at a potential future cut. However, Fed Chair Jerome Powell dampened expectations for a rate cut as early as March. The Federal Open Market Committee indicated no urgency in lowering rates, stating the need for more confidence in inflation consistently approaching 2%. Powell echoed this sentiment, expressing doubt about reaching such confidence by the March meeting.

Powell acknowledged recent significant progress in inflation but stressed the importance of additional data to confirm this downward trend. This statement came after the Fed's two-day meeting, during which the Fed shifted from a previous inclination towards a rate hike to a more neutral stance on future policy.

The decision to keep the federal funds rate target range at a 22-year peak of 5.25% to 5.5% was unanimous. The Fed also confirmed its plan to keep scaling down its balance sheet by up to $95 billion monthly. Powell announced detailed discussions about the balance sheet are scheduled for their March meeting.

🎯 GRIT TAKE: Many investors hoped the Fed would signal…Upgrade to VIP to read the full GRIT Take. 

EARNINGS: Peloton

Peloton reported its second consecutive quarter of gross profit from its high-end fitness products, yet faces ongoing challenges, having missed several targets set by CEO Barry McCarthy.

In its holiday quarter, Peloton's loss per share was higher than expected, although it exceeded sales estimates. The company's net loss improved year-over-year to $194.9 million, but sales fell to $743.6 million. Peloton's outlook for the current quarter and full year is cautious, with lower sales and a larger EBITDA loss than analysts predicted.

However, the company saw higher-than-expected subscription growth and strong sales through partners like Dick’s Sporting Goods and Amazon. Two years into McCarthy's tenure, Peloton shows improvement in some areas but still lags behind key objectives.

Earnings: 

• Loss per share: 54 cents vs. 53 cents expected  

• Revenue: $743.6 million vs. $733.5 million expected 

PGA: Strikes Big Deal

The PGA Tour has partnered with Strategic Sports Group, a group of billionaire sports team owners, to invest up to $3 billion in PGA Tour Enterprises, a new profit-driven entity. The consortium, led by Fenway Sports Group, will initially invest $1.5 billion, possibly another $1.5 billion. The PGA Tour retains control of the company.

This deal opens the door for a potential co-investment from Saudi Arabia's Public Investment Fund, subject to regulatory approvals. Nearly 200 PGA Tour members will have the opportunity to become equity holders in the new enterprise, with over $1.5 billion in equity grants available based on their career achievements and PGA Tour involvement.

The group includes owners from major sports teams, such as the Boston Red Sox, Milwaukee Brewers, Atlanta Falcons, Boston Celtics, and New York Mets. Its focus will be on revenue generation and global golf expansion.

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Icon Of The Seas

The world's largest cruise ship, Royal Caribbean's Icon of the Seas, set off from Miami for its first commercial voyage, a week-long tropical island tour. This impressive vessel, five times larger than the Titanic, can host up to 7,600 passengers.

It boasts eight unique areas, seven pools, and six waterslides across its 20 decks. Costing $2 billion, it measures 1,200 feet and weighs 250,800 metric tons. The ship, a pinnacle of Royal Caribbean's 50-year evolution, runs on cleaner-burning liquified natural gas. Year-round, it will sail seven-night Caribbean cruises from Miami, including stops at the exclusive Perfect Day at CocoCay and its new Hideaway Beach.

Chart of the Day

📊 Russian Oil Exports To China

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