Marketbites: Venture Capital Funding Hits 9-Year Low
Portfolio Manager Commentary:
Markets fell to start to shortened trading week yesterday. All sectors ended lower with discretionary stocks seeing the largest decline of 3.2%. Treasury yields rose with the 10-year climbing to 3.9%. This is the highest yield seen since November as traders grapple with hotter-than-expected inflation data.
Home Depot and Walmart both reported earnings Tuesday. Home Depot was the worst performing Dow member, losing 7% after the home improvement retailer posted weaker-than-expected revenue for the 4th quarter. The company also issued a muted outlook. Walmart beat earnings and sales estimates, but the stock was languishing on Tuesday after guidance for fiscal 2024 from the world’s largest retailer disappointed. Walmart was still able to close the day with a slight 0.5% gain.
Today, the Fed is scheduled to release the minutes from its meeting of Jan. 31 and Feb. 1 where the central bank hiked rates by 25 basis points after that meeting.
Chart of the Day:
Fundraising by venture-capital firms hit a nine-year low in the fourth quarter, as the macroeconomic pressures that already weighed on technology startups began to affect the investors who underpin the industry. Venture firms raised $20.6 billion in new funds in the fourth quarter. That was a 65% drop from the year-earlier quarter and the lowest 4th quarter amount since 2013, according to data firm Preqin Ltd.. Fund backers, known as limited partners, invested in 226 venture-capital funds in the fourth quarter, the fewest for that time period since 2012, the Preqin data show. By contrast, they backed 620 funds in the last three months of 2021, when tech stocks peaked.