This week we sat down with Townsquare Media (TSQ) CEO, Bill Wilson, to find out what’s going on with the company. We’ve covered TSQ in our institutional research, as well as here on Substack. We’ve also made our recent TSQ profile open to all subscribers.
You can find both the podcast and the report below.
Fed Meeting Recap
The big event on the economic calendar this week was the Fed meeting where the committee kept short-term interest rates at 5.25%-5.50%, as was expected. Although there was no drama on the prevailing rate target, it was the path of monetary policy looking forward that market participants were eager to hear about. Heading into the meeting, “stagflation” had become the word du jour, as financial pundits fretted over slowing growth (1Q 2024 GDP was +1.6%, slower than 3.4% in Q4 2023) and hotter-than-expected inflation prints (March CPI was up 3.8% and core PCE was up 2.8%). While admittedly neither the GDP nor the inflation reports were overly encouraging, we found the talk of stagflation to be a bit overdone. After all, GDP still expanded, and core PCE inflation of <3% hardly suggests rampantly out-of-control price stability.
When Fed chair Jerome Powell took the podium this week, he reminded investors how quickly inflation had already come down (from 2022 levels), that the economy was still growing on top of strong prior expansion (and faster than most developed economies around the world), and that currently “restrictive” monetary policy is showing signs of effectively cooling demand (the housing market notwithstanding, considering the recent Case Shiller report that showed home prices increased 6.4% in February). He went on to say, “I don’t see the ‘stag’ and I don’t see the ‘flation’” type backdrop that had suddenly worried many investors. While Powell did also note a lack of further progress to bring inflation below 3% and toward the 2% target, he also suggested that a rate hike was unlikely to be the next change to interest rates, calming budding concerns that a policy pivot was in the offing. We haven’t always agreed with the Fed’s policy or its timing on interest rate decisions, but in this instance we found the chairman’s take to be plenty rational.
By Friday—following an April jobs report that showed 175,000 jobs added versus an estimated 240,000 and unemployment rising from 3.8% to 3.9% (both of these metrics suggested a cooling in the labor market, yet are very solid by historical standards)—traders were pricing in an ~74% chance of a rate cut in September.
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Important Information: Performance Information. Past performance does not guarantee future results. The reports in this sample are for informational purposes only and the performance of the stocks selected is not indicative of the performance of all the stocks profiled in Boyar Research. The performance of the stocks selected and the performance of the stocks in Boyar Research may in fact diverge materially. Additional information regarding the performance of other companies featured in Boyar Research is available from Boyar Research upon request. This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. Clients of an affiliate of Boyar Research and employees of Boyar Research own shares in Townsquare Media, Inc.