⚾The U.S. economy just hit a home run

Good afternoon! Today we will be covering how the US GDP just hit a home run, the earnings season and the $5 Billion of Grayson Mill Energy.

Reading time: 4 Min

ECONOMY
💸The GDP just hit a home run

The U.S. economy exceeded expectations, growing at a 3.3% annualized rate in Q4 2023, outpacing the forecasted 2%. For the entire year, GDP accelerated at a 2.5% pace, defying earlier predictions of a recession.

Consumer spending played a pivotal role, contributing to a 2.8% increase in personal consumption expenditures for the quarter. Government spending, including a 3.7% rise in state and local expenditures and a 2.5% increase in federal spending, further fueled the economic expansion.

Inflation also showed signs of improvement, with core prices for personal consumption expenditures rising 2%, while the headline rate was 1.7%. The U.S. economy's resilience throughout 2023 has defied initial concerns, with GDP beating estimates and inflation easing, prompting optimism for a soft landing.

However, concerns linger about the potential lagged effects of previous monetary policy tightening, consumer spending sustainability, and the reliance on government deficit spending for economic growth. The economic landscape is further complicated by political and geopolitical uncertainties, including the presidential election campaign and global conflicts.

INVESTING
🎄It’s beginning to look a lot like Christmas because Earnings Season is here

Let’s see what the festive season has in store:

• Johnson & Johnson(JNJ):EPS $2.29, EST $2.28, Rev: $21.4B vs $21.02B

• Procter & Gamble(PG):EPS $1.84 vs $1.7, Rev:$21.44B vs $21.5B

• Netflix(NFLX):EPS $2.11 vs $2.23, Rev: $8.83B vs $8.71B

• Tesla(TSLA):EPS $0.71 vs $0.74, Rev: $25.17B vs $25.76B

• ASML(ASML):EPS $5.2 vs $4.78, Rev: $7.24B vs $6.89B

• IBM(IBM):EPS $3.87 vs $3.8, Rev: $17.38B vs $17.28B

• Visa(V):EPS $2.41 vs $2.34, Rev: $8.63B vs $8.56B

• Intel(INTC):EPS $0.54 vs $0.45, Rev: $15.41B vs $15.17B

M&A
🛢EnCap Investments reportedly selling Grayson Mill Energy for $5 Billion

EnCap Investments is reportedly considering the sale of Bakken shale-focused energy producer Grayson Mill Energy, with an estimated valuation of around $5 billion, including debt. The private equity firm has engaged Jefferies Financial Group to manage the sale, slated for later in 2024, contingent on market conditions.

The potential sale aligns with heightened M&A activity in the U.S. shale sector, driven by exploration and production companies seeking scale and premium drilling locations. EnCap's exploration of this exit strategy follows its successful 2023 divestitures, including a trio of companies sold to Ovintiv for $4.275 billion.

MEME OF THE DAY