What we’re reading (12/7)
“The Most Important Debate On Wall Street: Is Inflation Licked?” (Wall Street Journal). “Most of Wall Street thinks inflation has been conquered. There is a lot at stake if they are wrong…[s]till, the Fed’s preferred inflation gauge remains elevated at around 3%. And some investors are concerned it could be hard to get all the way back to 2%, leaving stocks and bonds vulnerable to a pullback.”
“What A Slowing Jobs Market Might Mean For Interest Rates” (New York Times). “Bonds have been on an impressive monthlong rally fueled by investors’ hopes that the Fed will begin cutting interest rates next year. That bet may be tested as soon as Friday with the release of new payroll data that Wall Street expects will show the labor market cooling further.”
“Greedflation: Corporate Profiteering ‘Significantly’ Boosted Global Prices, Study Shows” (The Guardian). “Profiteering has played a significant role in boosting inflation during 2022, according to a report that calls for a global corporation tax to curb excess profits. Analysis of the financial accounts of many of the UK’s biggest businesses found that profits far outpaced increases in costs, helping to push up inflation last year to levels not seen since the early 1980s.”
“Why Bonds Are Making A Huge Comeback” (Morningstar). “Just two months ago, the Core Bond Index was flirting with an unprecedented third straight year of declines as yields surged to their highest level since 2007, thanks to an unexpectedly resilient economy. “People are surprised by the speed with which the narrative has shifted,” says Kelsey Berro, a fixed-income portfolio manager at JPMorgan Asset Management.”
“From Unicorns To Zombies: Tech Start-Ups Run Out Of Time and Money” (New York Times). “WeWork raised more than $11 billion in funding as a private company. Olive AI, a health care start-up, gathered $852 million. Convoy, a freight start-up, raised $900 million. And Veev, a home construction start-up, amassed $647 million. In the last six weeks, they all filed for bankruptcy or shut down. They are the most recent failures in a tech start-up collapse that investors say is only beginning.”
