The Morning Ledger: S&P 500 Hits Intraday Record, Qualcomm CFO on AI and Tapestry on inventory shipments
Good morning. The S&P 500 crossed 5000 for the first time in intraday trading, the latest milestone for a U.S. stock market powered by a resilient economy and subsiding inflation.
The broad U.S. stock index popped over 5000 in the final minute of trading Thursday, according to Dow Jones Market Data, before settling slightly below the mark. The S&P 500’s daily advance of 0.1% was enough for another record close, its ninth of 2024.
A drumbeat of earnings reports has driven moves in individual stocks, including The Walt Disney Company on Thursday, and continued to shape the outlook for the broad market.
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Qualcomm’s CFO on Experimenting With AI and Debt Planning Amid Potential Rate Cuts
Akash Palkhiwala , finance and operations chief at chip maker Qualcomm , talked with CFO Journal's Mark Maurer about the company’s plans for its soon-to-be maturing debt and its experimentation with generative artificial intelligence on its finance team. Palkhiwala, who has been CFO since 2019, received the additional post of chief operating officer last month, giving him oversight for the global go-to-market organization and operations. Edited excerpts follow.
WSJ: How is the prospect of falling interest rates affecting the timing of when you refinance?
Palkhiwala: We have a maturity coming up in May. It’s approximately $915 million. Our historical approach has been to refinance when our bonds mature. The environment obviously is in transition. There’s a lot of changes happening and it’s difficult to predict exactly where the interest rates will go. We’re analyzing given the current situation and have not made a decision yet, but we’ll evaluate it.
WSJ: Where are you applying generative AI in the finance function?
Palkhiwala: In the finance realm, there are a lot of areas we’re evaluating. Using gen AI for some kind of forecasting for cash flow, for cost structure, with employees. Using it for Q&A, where rather than going through a very detailed model, you can ask the model a question. You could get an answer to some of those questions very quickly. Looking at intersystem trends, say employee expense reports and using gen AI to flag things that are inconsistent with historical trends and then having our employees evaluate it. There’s a lot of experimentation going on right now. One of the challenges is you could use it at a lot of places. How do you find the places where there’s a biggest bang for the buck and deploy it in those areas, versus doing something that’s broader and diluting your effort across a lot of different initiatives?
Tapestry Diverts Some Inventory in Response to Red Sea Attacks
Coach owner Tapestry is diverting certain inventory shipments in response to the Red Sea conflict, Chief Financial Officer Scott Roe told Jennifer Williams .
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Houthi rebels have stormed onto cargo ships in the Red Sea in response to Israel’s war with Hamas militants in Gaza, causing freight rates to surge. Tapestry, which also owns Kate Spade and Stuart Weitzman, is monitoring the conflict and has seen a “small impact” on freight costs and a few shipping lanes, the CFO said in an interview. “We have options,” according to Roe, who also serves as the company's chief operating officer. “We’re rerouting around the Red Sea where we can.”
Tapestry hasn’t disclosed specifics about the inventory impacts, Roe said, adding that it’s not material.
WSJ CFO Network Summit
March 5-6, 2024 | New York, New York Request an invitation | Participants and program
The era of cheap money is behind us and CFOs must now grapple with how to operate in a high interest-rate environment, how fast to invest in artificial intelligence, and how to manage geopolitical tensions and thorny labor relations. With U.S. elections on the horizon, the CFO Network will discuss–through both newsmaking interviews and peer-to-peer discussions–how finance executives are reading the markets, driving the push for greater corporate efficiency and managing the pushback on ESG and DEI. Join WSJ journalists and some of the biggest names in corporate finance to discuss, debate and make headlines.
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About Us
The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO. The WSJ CFO Journal team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.
You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.