Weekly Portfolio Update, August 27 2023

Dramatic macro news and some portfolio company milestones

Last week’s macro news was dramatic. The BRICS summit didn’t produce a gold-backed currency but did induct Saudia Arabia and the United Arab Emirates as new members. Which means two of the world’s top three oil producers (Russia and Saudi Arabia) are now in an anti-dollar coalition.

Here at home, wages are rising as labor unions flex their newfound muscles. From CNBC:

Labor unions are pushing hard for double-digit raises and better hours. Many are winning

From writers’ rooms to car factories, workers are pressing companies for higher pay and better quality of life. Many are willing to walk off the job to get there, and some are winning.

Emboldened in the wake of shifting job security and grueling conditions during the Covid-19 pandemic, skyrocketing company profits, inflation, a decades-high approval rating for labor unions and growing disparity between worker pay and executive compensation, more workers across industries have taken a hard stance against companies for dramatic improvements in compensation and working conditions.

Some, like UPS’ workers’ union, are nailing down record labor deals following threats of striking. Others have gone on strike to force the issue. Workers at key Boeing supplier Spirit AeroSystems in June approved a deal with the company after a brief work stoppage. Writers Guild of America members have now been on strike for more than 100 days.

Perhaps responding to the twin threats of higher oil prices and wage inflation, Fed chair Jerome Powell made a hawkish speech in which he extended “higher for longer” beyond what the markets had expected. Rising interest rates and the resumption of student loan payments should make October a fascinating month.