A Burger King buyout, big guesses about the global economy and more

MARKETS

So stocks are up — a whole lot. The S&P 500 ended Friday up more than 20% since last January, and the Nasdaq is +35% over the same time. (The TSX, though north only 1.5% since Jan. 2023, has rallied almost 13% since October.) On a lot of investors’ minds is a familiar question: how long can this rally last? Markets have priced in, or come to assume, that interest rates will fall by more than 1% this year and that the economy will stay strong — and stocks could retreat if these rosy predictions prove wrong. (Barstool’s Dave Portnoy recently revived his 2021 stocks-always-go-up schtick, which you could argue is a markets-are-too-frothy metric.) Then again, as we pointed out last week, corporate profits have been rising fast, and history shows that some bull markets can run for decades, so maybe this one will too. We will, as always, have to wait and see.

NEWS

?? RBI spends a whopper on Burger King. Toronto-based fast-food giant Restaurant Brands International —?parent of Timmies’, Popeyes, Burger King, etc. — announced that it’s dropping US$1 billion to buy a company that operates 1,022 Burger King locations. Basically, RBI wants to control these restaurants, instead of relying on a franchisee, so that it can quickly remodel 600 locations and restore BK to its flame-grilled glory. A lot is on the line. Burger King accounts for 63% of RBI’s sales, but over the last decade or so, the chain’s performance has suffered as a result of crawling service and questionable menu options, like a Halloween Whopper that turned your poop green. Will RBI succeed in reviving BK? Tim Hortons’ sales have started to recover after a similar RBI turnaround effort, so we’ll see.

?? The masters of the universe are feeling masterly again. Each January, billionaires, policymakers, and politicos descend on Davos, Switzerland, to rub shoulders and loudly opine about all the Big Issues as part of the World Economic Forum. This year, the business bigwigs generally agreed that the global economy is looking good, but they didn’t offer many “original or penetrating insights” into the events shaping the world, as Politico’s John Harris observed. That’s likely true because, in the internet age, the Davos crowd has just as much intel on, say, whether Houthi cargo-ship attacks will drive up inflation as anyone else with a few newspaper subscriptions. A year ago the Davos crowd wrongly predicted that 2023 would be terrible for markets, and they could be just as clueless about 2024.

Photo credit: Paramount Pictures

TLDR Podcast

Last week, we talked about whether it might be time for an American Psycho reboot. On our next episode, out Tuesday, we ask whether 2024 is going to look more like 1948 or 1970 inflation-wise. You can listen on Apple Podcasts, Spotify, or Google Podcasts.