Uncle Sean's Update - 8/11/23

​Happy Friday!!!
 
The forecast in Austin today is for 108 degrees with wind gusts of 25+ MPH…. 😬🥵  Here is the Uncle Sean Update for 8/11/23:
 

• The BLS July CPI Report came in at 3.2% YoY (expectation was 3.3% and June was 3.0%) – Core CPI remains a little more sticky but also improved to 4.7% (expectation was 4.8% and June was 4.8%).
  • While still above the Fed’s 2% target, we continue to see improvements in the inflation data.    Expect smaller movements in the YoY data due to base effect from here. 
  • Monthly CPI came in at 0.2% which was almost entirely driven by shelter costs (0.4% for the month and 7.7% YoY).
    • If you really want to get technically weird like me 😊, monthly CPI was rounded up from 0.1669% - but I digress...  CNBC has a good summary as always.

 

• 👀 CSI making some moves as they announced 12 new core deals over June and July – NICE!!!!!

 

• AMEX certainly appears to be leaning into the BaaS & embedded finance space – check out American Express Sync™ Commercial Partner Program offering B2B API’s for fintechs to embed Amex virtual cards into their own spend management / payment platforms.

 

• A HUGE congratulations to Mr. Stacey Zuniga for his promotion to Chief Revenue Officer at ENACOMM – great job, buddy!!!

 

• And more personnel updates:
  • Cable announced they have hired Candace Sjogren as Chief Revenue Officer.
  • Early Warning Services (Zelle and Paze) hired Cameron Fowler as Chief Executive Officer.
  • Cloudcase announced the hiring of Emily Bogan as Chief Product Officer USA.

 

• Greenlight launched a credit builder for teens by allowing parents to add teenagers as authorized users to the Greenlight Family Cash Card credit card.

 

• Did everyone see this – it’s actually pretty cool…  The FDIC recently updated the Technical Assistance Video Program as part of the Bankers Resource Center.  Could be used for internal training / education purposes for varying levels of employees (both bankers and non-bankers).  Updated video topics include:
  • Overview of the FDIC and the Examination Process (30:10)
  • Information for New Board Members (14:10)
  • Corporate Governance (32:01)
  • Interest Rate Risk (29:00)
  • Current Expected Credit Losses (15:18)

 

• PayPal pushes ahead into crypto and launched their own U.S. dollar-denominated stablecoin (PayPal USD – PYUSD) issued by Paxos Trust Company. 
  • Note that PayPal started allowing customers to transfer, send, and receive crypto including bitcoin and ether back in Nov. 2020.
    • Maybe slightly ironic to Uncle Sean that this announcement occurs in the same week that the Federal Reserve announced the establishment of a Novel Activities Supervision Program focused on crypto-assets, distributed ledger technology, and complex tech-driven partnerships with nonbanks to deliver financial services to customers….

 

• InComm Payments enters into the employer health benefits arena by acquiring Zenda, a developer of AI-powered HSA and FSA solutions for employee benefit programs.

 

• Dwolla announced the launch of Dwolla Connect payments platform designed for mid- to enterprise-sized businesses. 

 

• Marqeta disclosed in their second quarter 10-Q earnings release that they extended their partnership with Block through 2027 (page 27, Item 15 of the 10-Q), which is a good thing as Block accounts for 78% of Marqeta’s revenue (page 36, Customer Concentration).  The bad news is the contract extension comes at a cost with expected lower net revenue and lower gross profit (page 52).

 

• Well, ICYMI….  Moody’s downgraded the credit rating of 10 banks by one notch, placed 6 more regional lenders on review for potential downgrade, and revised the outlook for 11 more.
  • I was going to write about this….  Something along the lines of “well thank you, Captain Obvious”…  but…  nah…  😝
    • HOWEVER (see what I did there – I just can’t help myself)…  I will reiterate what we discussed in our BHB - Inside the Numbers review (specifically at the 58 minute mark if you want to just hear the punchline), Uncle Sean actually expects a positive tailwind over the next few quarters of Net Interest Income for banks that are continuing to lend as the loan portfolios reprice to the higher rate structure – provided Asset Quality and employment remains intact. 
      • In that , I source a really good Fitch article from April of last year that you can find here stating, “The OCC’s recent estimates indicate that a 200-bp parallel rate shock would result in a median increase of 7% to net interest income for banks over the following 12 months.”

 

• Notable FinTech funding for the week:
  • Parcha (AI powered compliance and operations automation platform) raised $5M in Seed round.
  • Chargeflow (AI powered platform for preventing fraudulent chargebacks) raised an additional $11M in Seed round bringing total funding to $14M.
  • Doc2doc Lending (alt lending platform for physicians and dentists) raised $35M in Debt and Equity capital.

 
 
Random Uncle Sean stuff:

• The college athletics world is buzzing right now with gargantuan (did I spell that right – LOL) conference movements….  The Big Ten now has a stunning 18 teams, the Pac-12 has dwindled to 4 teams and may likely take a knee and bow out….  What happened???  In short, TV…  CBS Sports has a good summary.
• Wow – if you thought it’s been crazy in the college athletics world….  Check out the transportation logistics space - Yellow files for bankruptcy and publicly blasts the union for the demise of the 100 year old company.  Meanwhile, UPS Teamsters Union successfully negotiates $170K average in pay and benefits for their drivers – HOLY MOLY!!!! 
  • $170,000??? 😮 I think Aunt Patty would look great in brown…  LOL!!!! 🤣😂
• Okay, okay – on to the good stuff….  Dad Jokes!!!!
  • I’ve been cutting carbs…  with a pizza cutter, but hey!!! 🍕😉
  • I bet Barn Owls were relieved when humans finally started building barns.
  • What were Electric Eels called before we invented electricity??? 🤷‍♂️
  • (thinking I’m funny) “Hey Aunt Patty, what’s another word for synonym…???” 😜
    • And she replies, “No it’s not!!!!”  Dang – she’s getting good… 

 
 
Have a GREAT weekend, stay hydrated, and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.