Hedge funds that have focused for years on big tech investments are finding themselves in trouble as the industry stalls. Juliet Chung reports for The Wall Street Journal: A major bright spot for the hedge-fund industry in recent years has suddenly darkened as stocks of technology and other fast-growing companies sell off, handing out large losses to some big investors. Hedge funds investing in growth stocks turned in their worst performance in years in 2021, according to portfolio managers and their clients. Many funds were hit by large losses late in the year, with the drubbing … [Read more...]
About Jeremy Jones, CFA
Inflating Their Way out of Inflation
Spending more money to end inflation is much like drilling a hole in the bottom of a boat to let the water out. Yet, that's just what many Democrats want to do. In The Wall Street Journal, former chairman of the Senate Banking Committee Phil Gramm, and former Deputy Staff Director of the Senate Banking Committee Mike Solon, point out the inanity of Democrats' attempts to justify more spending as a way to stop inflation. They write: For 40 years, the pain of inflation was only a fading nightmare. Then last year, piled on top of Donald Trump’s ill-advised postelection spending surge, the Biden … [Read more...]
INFLATION EFFECT: Stocks Threatened by Rising Real Yields
Stock prices for shares with high valuations are being threatened by rising real yields. The Financial Times reports: A jump in real yields — the return bond investors can expect once inflation is taken into account — has jolted markets in early 2022 and is behind a pullback in high-flying technology stocks, investors say. The yield on 10-year inflation-linked US government bonds has surged 0.24 percentage points since the end of December to minus 0.86 per cent, as investors position for the end of the Federal Reserve’s bond-buying programme and bet on interest rate rises from the US … [Read more...]
INVESTING BY NOTIFICATION: Future or Folly?
Do you want to make decisions for your $2 million dollar portfolio based on the automated notifications coming across your mobile device? That's what UBS is hoping for, as they roll out digital advice to investors across the globe. Margot Patrick reports for The Wall Street Journal: UBS Group AG UBS +0.29% doubled profit in its U.S. wealth business over the past five years by wooing rich families with white-glove service. For its next act, it is going after the not-as-rich with cheaper digital advice. The Swiss bank bills itself as one of the world’s largest wealth managers, with access to … [Read more...]
This Isn’t the First Time the Fed Got Inflation Wrong
At the Financial Times, Frederic Mishkin explains how the Fed has gotten inflation so wrong, and that this isn't the first time. He writes: Three flaws in the Fed’s monetary policy framework have led to overly expansionary monetary policy. First, there has not been enough focus on demand shocks. The Fed has based its view that the inflation surge would be shortlived on the extensive negative supply shocks that Covid-19 has imposed on the economy. Although, negative supply shocks are surely one source of the surge in inflation, the Fed has not paid enough attention to very strong … [Read more...]
TECH WRECK: NASDAQ Stocks Suffering
The mostly tech oriented stocks of the NASDAQ Composite Index have not been faring well. Nearly 40% are down 50% from their 52-week highs. Vildana Hajric reports on the carnage for Bloomberg, writing: Roughly four in every 10 companies on the Nasdaq Composite Index have seen their market values cut in half from their 52-week highs, while the majority of gauge members are mired in bear markets, according to Jason Goepfert, chief research officer at Sundial Capital Research. “Whatever the fundamental and macro considerations, there is no doubt that investors have been selling first and … [Read more...]
IKEA UPGRADE: Furniture, Meatballs and…Robots?
IKEA is best known for its self-assembled furniture, and Swedish meatballs available at its stores. But the next big thing people may associate with IKEA are robots. The company plans to employ many more robots and automation in its business to adapt to surging demand. Colin Campbell reports for Supply Chain Dive: Ikea is seeking to improve its e-commerce capabilities after struggling to adapt to the surge in orders at the beginning of the pandemic. Ikea upgraded its physical stores in addition to its distribution and customer fulfillment networks as it pursues … [Read more...]
EV MARKET: It’s Getting Crowded in Here
New entrants are rushing into the EV space. The latest is Sony. The dash to sell EVs should tell EV investors something about the barriers to entry in the business and of the ultimate profitability in the industry. Based on the frothy share prices of EV firms, nobody appears to be listening to the message. Bloomberg's Takashi Mochizuki and Yuki Furukawa explain Sony's dive into EVs, reporting: Sony Group Corp. is exploring the commercial launch of its own electric vehicle, joining tech rivals like Xiaomi and Foxconn in a rush into the red-hot industry. Sony Chief Executive Officer … [Read more...]
Evergrande’s Situation Just Keeps Getting Worse
Troubled Chinese developer, Evergrande, has seen its fate go from bad to worse. News of its financial troubles has scared away potential customers, and now, local authorities are accusing the firm of illegal permitting activity and demanding it demolish thirty-nine buildings. Anniek Bao and Elaine Yu report for The Wall Street Journal: The crisis engulfing China Evergrande Group EGRNF -2.62% deepened, as the embattled property developer said it had been ordered to tear down dozens of buildings on an extravagant man-made island in southern China. At the same time, Evergrande released data … [Read more...]
Older Automakers Gearing Up to Take on Tesla with Electric Vehicles
Tesla has surely paved the way to a new understanding of electric vehicles, but its production is still very small, and limited to a narrow range of vehicle options. Mega-automakers like GM, Volkswagen, and Mercedes-Benz are preparing to compete with Tesla more directly by ramping up their battery supply lines and developing new models. Ben Foldy reports in The Wall Street Journal: Auto makers are trying to control more of the supply chain for electric vehicles, forging new partnerships with raw materials producers and investing in facilities that make chemicals for batteries. General … [Read more...]
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