The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.
Part 1: CFO Compensation Data, Siemens Regional CFO, and a Bananas Morning
This week, reporter Adam Zaki will publish embargoed data from Rho on the latest CFO compensation numbers and talks to Bernd Blumenstein, CFO of Siemens Mobility Region of North America and the U.S. (4/10, 4/11, respectively)
Dr. Tim Naddy, VP of finance for the Savannah Bananas baseball team, will also be highlighted this week in the 6 a.m. CFO series. Much like the team he works for, Naddy’s mornings and leadership approach are expected to be inspiring and a bit bananas. (4/11)
Part 2: This Week
Jamie Dimon on Artificial Intelligence’s Profound Impact on Society
In his letter to shareholders today, JPMorgan Chase’s CEO Jamie Dimon discussed rising inflation and higher rates due to increased spending demands, a trend in which he hints global markets are underestimating. Increased spending around supply chains, rising healthcare costs, greener economies, and military spending are all significant factors, Dimon said.
In response to artificial intelligence and machine learning’s impact on commerce and banking, Dimon noted JPMorgan has more than 2,000 artificial intelligence and machine learning employees and data scientists working on 400 applications including fraud detection, marketing, and risk controls. The bank is also exploring generative AI in software engineering, customer service, and ways to boost employee productivity, he said.
“While we do not know the full effect or the precise rate at which AI will change our business — or how it will affect society at large — we are completely convinced the consequences will be extraordinary,” Dimon said. “[The impact will be] possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing, and the internet.”
Chase has created a chief data and analytics officer within their operating committee, that will report directly to him and COO Daniel Pinto. The position is not filled as of now.
Here are some other key points from the letter:
- Ongoing concerns about persistent inflationary pressures. “Many key economic indicators today continue to be good and possibly improving, including inflation. But when looking ahead to tomorrow, conditions that will affect the future should be considered. For example, there seems to be a large number of persistent inflationary pressures, which may likely continue. All of the following factors appear to be inflationary: ongoing fiscal spending, remilitarization of the world, restructuring of global trade, capital needs of the new green economy, and possibly higher energy costs in the future (even though there currently is an oversupply of gas and plentiful spare capacity in oil) due to a lack of needed investment in the energy infrastructure.”
- Beware of higher rates and recession — not just for banks but for the whole economy. “If long-end rates go up over 6% and this increase is accompanied by a recession, there will be plenty of stress — not just in the banking system but with leveraged companies and others. Remember, a simple 2 percentage point increase in rates essentially reduced the value of most financial assets by 20%, and certain real estate assets, specifically office real estate, may be worth even less due to the effects of recession and higher vacancies. Also remember that credit spreads tend to widen, sometimes dramatically, in a recession.”
- Rising geopolitical risks. “America and the free Western world can no longer maintain a false sense of security based on the illusion that dictatorships and oppressive nations won’t use their economic and military powers to advance their aims — particularly against what they perceive as weak, incompetent and disorganized Western democracies. In a troubled world, we are reminded that national security is and always will be paramount, even if its importance seems to recede in tranquil times.”
Upcoming U.S. Economic Data
Tuesday, April 9
- NFIB optimism index
Wednesday, April 10
- Consumer price index
- Core CPI
- Wholesale inventories
- Minutes of Fed's March FOMC meeting
Thursday, April 11
- Producer price index
Friday, April 12
- Consumer sentiment
Part 3: Congratulations On Your IPO — Here’s What Ahead
Whenever the IPO market heats up, there is a lot of talk about the arduous process leading up to the listing day. But few people talk about what happens next. Moira Conlon, founder and CEO of Financial Profiles, offers actionable post-IPO insights for CFOs as they start a new phase as a public company. (4/9)