Almost Friday.

Thanks for Showing Up Best Buy

Good old Best Buy (BBY - Get Report) , a long-time nemesis of yours truly. Different story, different day. We bring to you Thursday Best Buy's news that it's shuttering all 250 of its smaller mobile stores. Mostly located in malls, these stores have long been ridiculous afterthoughts to the company. The locations are terrible, the stores eerily reminiscent of RadioShack (former stock symbol: RSH, for you stock history buffs) in terms of layout (minus the batteries and transistors). Credit to Best Buy for finally calling it a day on these things, whose rollout was spearheaded by ousted former CEO Brian Dunn. To be sure, the announcement raises two key questions surrounding a company that has shockingly, managed to keep Action Alerts Plus holding Amazon (AMZN - Get Report) at bay the past three years. First, has the cost-cutting machine that has become the modern day Best Buy finally run its course? If so, that should terrify the Best Buy bulls who have grown accustomed to the company smashing earnings estimates thanks to cost cuts. Cost cuts have been key in Best Buy being able to compete on price against Amazon while still pleasing the Wall Street beast. Second question is why in the world Best Buy continues to refrain from shuttering more stores? The party line from the Best Buy PR machine is that it doesn't have many unprofitable stores (if any ...) and they are key in efforts to ship quickly to consumers. The company has only closed 95 stores from its peak count of 1,103 in fiscal 2012. Considering the shift to online shopping that has triggered mass store closures elsewhere in retail, Best Buy may be hit down the line for its slow movement on store consolidation. Mic drop.

Welcome Back, Jerome

Sorry bulls but yes, Jerome Powell will make his return to the airwaves Thursday as he testifies in front of lawmakers. This newsletter is the first place where you heard the market may be at risk due to Powell's different approach to talking in public vs. predecessors Ben Bernanke and Janet Yellen. The market sometimes hates being told realities. Here is yet another key consideration gleaned from my chats: the Fed is mildly petrified about how the market will shake out in 2019. I don't think this fear -- sparked by ballooning deficits, rising inflation and the unknown that is the impact of higher interest rates -- will start to get priced into stocks until fall of this year. So on that front, don't be worried. But if you are trying to model out future earnings for any company, could be tech giant Apple (AAPL - Get Report) or retail king Walmart (WMT - Get Report) , it should be a major consideration. Do yourself a favor: Price in more risk into that 500-stage multi-factor model (which you aren't using, I know). Until then, enjoy Jerome's speech.

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I had the CEO of Tyson Foods (TSN - Get Report)  , Tom Hayes, on-camera Wednesday afternoon. Hayes has done a heck of a job since taking over the top spot in 2017 at the food producing behemoth. Hayes told me he is "on the hunt" for the company's next big acquisition. My impression is that some form of material deal is likely within the next year. I am still transcribing my notes from the interview but one thing that stood out was inflation -- had to ask given the inflation concerns in the market right now. What better company to discuss early signs of inflation than a gigantic food producer? In short, consumers should get ready to feel the impact of inflation in food this year. From higher materials costs to wage inflation due to driver shortages, companies are feeling a pinch that will have to be passed onto shoppers. 

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Best Buy, Quick Take

About those Best Buy store closures...

Hey @Jeffmacke what's up with Best Buy??

— Brian Sozzi (@BrianSozzi) March 1, 2018

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