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Record Buybacks in 2021 as Companies Plan Even More Next Year

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Companies bought back a record-breaking $850 billion worth of shares in 2021, and are planning even more buybacks in 2022. Mark Maurer reports in The Wall Street Journal: Sitting atop a haul of strong earnings, companies are planning to spend even more in 2022 on share buybacks and dividends, a trend finance executives don’t expect to slow despite a proposed 1% excise tax on repurchases. Many companies have bounced back from the blow dealt by the coronavirus pandemic and are in a period of hale growth, giving them ample leeway to reward their shareholders, said Howard Silverblatt, a senior … [Read more...]

Why Are Investors Worried about These Five Big Tech Stocks?

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Five big tech stocks are worrying investors, as they have gotten a harsh dose of reality over the last few trading sessions. Michael Wursthorn reports for The Wall Street Journal, writing: The stock market’s rise this year has narrowed around a short list of big tech companies, a sign of possible weakness heading into 2022. Five of the biggest stocks in the S&P 500 account for more than half of the broad benchmark’s gain since April, analysts at Goldman Sachs found. Of the S&P 500’s 22% advance this year, those stocks— Microsoft Corp. MSFT -1.20% , Nvidia Corp. NVDA -0.29% , Apple … [Read more...]

Will the World Buy Electric Cars Made in China?

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China wants to sell cars to the world. As the country's industry moves up the value chain, the next stop it wants to make is electric automobile exports. Jacky Wong reports in The Wall Street Journal: Chinese electric vehicles are speeding ahead in the country in 2021. Next they may want to make inroads overseas. Sales of new-energy passenger vehicles in China, including plug-in hybrids, have nearly tripled from a year earlier in the first 11 months of 2021, according to the China Association of Automobile Manufacturers. And that is against the backdrop of a sluggish overall car market. … [Read more...]

JUST BELOW THE SURFACE: Stock Index Strength Hides Danger Below

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If you're only looking at the movement of the major stock market indexes, you're missing out on what's going on under the surface. A divergence in the performance of the biggest stocks by market cap, which have more influence over the index's movements, and that of smaller stocks is a signal that trouble may be ahead. Eric Platt reports in the Financial Times: On the tech-heavy Nasdaq Composite the figures are even more striking, with more than 1,300 stocks down 50 per cent or more from their highest level of the past year. And roughly 80 per cent of the more than 3,000 stocks on the exchange … [Read more...]

PRICE WAR: How Low Can Streaming Go?

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You wouldn't guess it from your streaming charges here in America, but overseas, streaming giants are entering a price war. Netflix is cutting its prices for streaming services in India to battle for share with Amazon Prime Video and Disney. Newley Purnell reports in The Wall Street Journal: Netflix Inc. NFLX -0.91% is slashing its prices in India, a key market for global growth where it trails cheaper rival streaming services from Amazon. com Inc. and Walt Disney Co. The Los Gatos, Calif., company this week said in a blog post from India executive Monika Shergill that it is cutting its … [Read more...]

How Your Inflation Outlook Moves Interest Rates

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Is it all in your head? No doubt some economists and politicians wish it were, but even though inflation is real, how you think about it may have an effect on its duration. Nick Timiraos and Gwynn Guilford report in The Wall Street Journal: Supply-chain disruptions, labor shortages and climbing oil prices have pushed inflation to a 39-year-high. But attention is now focused on another variable: Do people think inflation is here for a while? Because people’s expectations can factor into inflation, the answer plays a critical role in determining how the Federal Reserve and the administration … [Read more...]

America’s Plan for Lithium

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Lithium prices are rising at the fastest pace in years. The electrification of the vehicle fleet is boosting demand while supply has been constrained by limited investment in new projects and supply-chain bottlenecks. What is America’s plan for a potential lithium age? It looks to be as incoherent as our policy toward oil, natural gas, and coal. Policymakers want more electric, but environmental opposition and permitting are limiting new supply. Thankfully, lithium is abundant so it is just a matter of getting resources developed.  Amrith Ramkumar explains in The Wall Street … [Read more...]

The Fed Risks Everything with Its Inflation Policy

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Former member of the Federal Reserve Board, Kevin Warsh, suggests that the Fed's easy-money policies are putting the very social contract that governs America at risk. He writes in a Wall Street Journal op-ed: If price stability is squandered, financial stability is put at risk. If financial stability is lost, the economy is imperiled and the social contract is threatened. During the past several quarters, U.S. inflation has surged—now running about triple the Federal Reserve’s 2% target. The surge in prices is unlikely to reverse on its own. The longer that prices are unstable, the … [Read more...]

THE BAD OLD DAYS ARE BACK: Highest Inflation Since 1982

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Americans are currently suffering through the highest rates of inflation since 1982. In Bloomberg, Reade Pickert discusses the rapid inflation emptying Americans' wallets today, writing: U.S. consumer prices rose last month at the fastest annual pace in nearly 40 years, underscoring how rapid and persistent inflation is eroding paychecks and increasing pressure on the Federal Reserve to tighten monetary policy. The consumer price index climbed 6.8% from November 2020, according to Labor Department data released Friday. The widely followed inflation gauge rose 0.8% from October, exceeding … [Read more...]

STRATEGIC THREAT: China Aims to Dominate Rare Earth Minerals Market

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China already controls much of the world's trade in rare earth minerals, which are vital to many new technologies from cell phones to fighter jets. Now the country's leadership is aiming for more control. Given China’s history with rare earths, there should probably be tariffs on any rare earth metals produced in the country to allow foreign competition. Keith Zhai reports in The Wall Street Journal: China has approved the creation of one of the world’s largest rare-earths companies to aim to maintain its dominance in the global supply chain of the strategic metals as tensions deepen with the … [Read more...]