Wall Street Breakfast: No More Pajamas

No more pajamas

Less than two months back on the job, Disney (DIS) CEO Bob Iger seems to believe that the office is the Happiest Place on Earth. That’s because he has told employees that they need to be back in their workplaces four days a week. The new requirement will go into effect on March 1, with staff coming in Monday through Thursday.

Quote: “As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney,” Iger wrote in an all-staff email. “In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”

While other companies have also been tightening return-to-office requirements, Iger’s demands fall on the heavier side of such restrictions. Most major media corporations have chosen to compel hybrid workers to come back into office for two to three days per week, and Disney’s policy was also three days for much of the past year.

Go deeper: Iger reclaimed the CEO job from Bob Chapek in a surprise pre-Thanksgiving announcement. With a planned two-year stint, he’s set on making some profound changes including restructuring Disney’s distribution operations. (38 comments)


Things are getting edgy as traders seek to assess the thinking of the Federal Reserve going into 2023. Chair Jay Powell is set to participate today in an International Symposium on Central Bank Independence hosted by the Sveriges Riksbank in Stockholm, Sweden. While the event, which will start at 9 a.m. ET, may not include any updates to the state of U.S. monetary policy, markets will still be hanging on to every one of his words.

Snapshot: Powell’s speech follows a solid jobs report for the U.S. economy. Wage growth is rising, but cooled enough to bring down inflationary pressures, while employers are still hiring – at a pace of 223,000 in December – but are slowing down from last year’s unsustainable figures. The unemployment rate also came in at 3.5%, marking its lowest level in decades.

Many hope the data shows that a soft landing is still possible, especially when taking into account other economic numbers. The Consumer Price Index will be released on Thursday and is forecast to show the sixth straight month of falling inflation (at a pace of 6.5%). According to CME’s FedWatch Tool, traders are now pricing in a 77.2% chance that the FOMC will only raise its key lending rate by 25 bps at the end of January, continuing to slow its pace of increases.

Outlook: Earnings season also kicks off this week, with results and guidance helping paint a picture of the U.S. economy. A special thanks to everyone who participated in Wall Street Breakfast‘s “Survey Monday.” The poll was split pretty evenly among the nearly 500 participants, with 56% believing that S&P 500 companies will report their first losing quarter since 2020, compared to 44% who expect Q4 to still see some earnings growth. (1 comment)

Opposite directions

Shares of Virgin Orbit (VORB) rallied on Monday after the company announced the initial window for its historic flight would officially open later in the day. The “Start Me Up” mission, named after the Rolling Stones song, marked the first international mission for the company and the first commercial launch from U.K. soil (or from anywhere in western Europe). A modified 747 jet dubbed Cosmic Girl hoped to send commercial and government satellites from several nations into space via “air launch,” or launching a rocket from under the aircraft’s wing mid-flight.

Mayday! More than an hour after takeoff, its rocket suffered an “anomaly that prevented us from reaching orbit.” Shares tumbled back to Earth – and then some – falling 8.5% during the session, and tumbling another 24% AH to $1.47. It was only two months ago that Virgin Orbit said in a filing that “our losses from operations and liquidity conditions raise substantial doubt regarding our ability to continue as a going concern.”

While Bed Bath and Beyond (BBBY) is also teetering on the edge of bankruptcy, shares rebounded sharply on Monday. The stock skyrocketed 24%, and another 11% AH, to end the day at $1.80. When all was said and done, over 90M shares traded hands, compared to its average trading volume of around 23M.

What happened? Besides having a reserved place in the notable basket of meme stocks, there was speculation that the struggling home goods retailer might be an acquisition target. It has battled with shrinking sales for years as it competes with online players and other rivals, while inventory problems and its reliance on discount coupons have dented revenues. Many expect some kind of update today as Bed Bath reports earnings, which are expected to show a net loss of $386M for its fiscal third quarter. (15 comments)

Emergency in California

Nearly 200K homes and businesses in California remain without power early Tuesday as massive storms unleashed torrents of rain across the state, causing power outages, landslides and floods. The National Weather Service has warned that northern and central California are still in the path of a “relentless parade of cyclones,” promising little relief until the middle of the week. The storms have so far caused at least 14 deaths, while 34M Californians (or about 10% of the U.S. population) are currently under a flood watch.

Snapshot: According to PowerOutage.us, PG&E (PCG) was the utility with the most outages – with more than 164K customers without power – followed by Sacramento Municipal Utility District at 13K. The company has called up more than 5,000 dedicated personnel to respond to the storm, including contractors and mutual aid from neighboring states.

“PG&E teams got prepared and in position before the first storm rolled in on New Year’s Eve weekend to lessen the impact of these storms,” COO Adam Wright declared. “As we make assessments, we will restore power as quickly as safety allows. Challenging conditions could delay our efforts and extend our customers’ outages, but we won’t rest until our last customer is safely restored.”

Emergency declaration: President Biden has declared an emergency in California, authorizing the Department of Homeland Security and the Federal Emergency Management Agency to coordinate all disaster relief efforts and provide appropriate assistance for required emergency measures. (10 comments)