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Tuesday, January 17, 2023
Today's newsletter is by Brian Sozzi, an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Read this and more market news on the go with Yahoo Finance App.
Half a world away, big tech is in a world of its own.
On Saturday afternoon, in a ritual I've developed having attended several of WEFs, I walked up and down the "Promenade" to breathe in the environment and observe.
In a way, the exercise focuses my mind before I stay awake to churn out stories, chat up the powerful, and expand my iPhone contacts list.
The Promenade is where big businesses such as IBM, Salesforce, and Qualcomm set up little houses to wine and dine potential customers — and in some cases toss lavish nighttime parties. In recent years, crypto has had a large presence on the Promenade, and outside these locations you'll often find a host of colorful looking characters pontificating on bitcoin $1,000,000.
Amid the FTX fallout, the often bizarre crypto crews with limited badge access to key buildings have mostly rolled out of town — although there is an undercurrent of stablecoin-focused companies still beating the drum on their own awesomeness this year.
Most surprising to me this year, though, is the dominant showing of Big Tech companies at WEF despite the likes of Meta (META), Amazon (AMZN), and Salesforce (CRM) laying off thousands of workers amid sharp slowdowns in sales and profits.
Amazon, SAP, Meta, IBM, Salesforce, and Zoom all have cool installations on the Promenade. Their coffee machines look great inside, as does the furniture. It's as if tech isn't in a recession of its own!
These snazzy setups are surely expensive — not to mention the cost of sending representatives to spread the gospel in Davos, sit in on a few provoking panels in the Congress Center, and maybe close a few deals.
"Tech stalwarts are used to spending money like 1980 rockstars, and Davos is just another notch on the belt," Wedbush tech analyst Dan Ives tells me. "While layoffs are now on the doorstep and 2022 was a horror show year for tech stocks, these firms need to keep the foot on the marketing spending gas pedal as it’s an arms race in the tech world."
Some will say WEF is the most cost-efficient way to meet very powerful people all in one place and set the table for making money in the future. I get it, and agree to a certain extent. After all, I'm here, too.
But the tech recession is real, and is likely not ending in 2023 amid elevated interest rates.
Maybe it would have been good for Big Tech to give a nod to their now-former employees and currently hurting investors and reel it in at Davos 2023?
For some, perhaps they shouldn't even be in attendance given how far their fundamentals and stock prices have fallen. I think a more measured approach would have sent a needed signal to markets that tech execs are listening, and want to get out of this funk before 2025.
Alas, they are here in force. So in that regard, let's see what the nighttime parties bring, I suppose.
We'll have more on that this week along with a host of massive interviews featuring a Who's Who in global business, so I encourage you to stay highly engaged with Yahoo Finance Live for these market-moving discussions.
What to Watch Today
8:30 A.M. ET: Empire Manufacturing, November (-8.6 expected, -11.2 during prior month)
Goldman Sachs (GS), Morgan Stanley (MS), Interactive Brokers Group (IBKR), Signature Bank (SBNY), Pinnacle Financial Partners (PNFP), Old National Bancorp (ONB), Hancock Whitney Corp. (HWC), Citizens Financial Group (CFG), United Airlines (UAL)