What we’re reading (1/13)
“Investors Hope Earnings Season Can Revive Faltering Stock Rally” (Wall Street Journal). “The Dow Jones Industrial Average has given up all of its gains since the presidential election, down 0.7% from Nov. 5. The Russell 2000 index of smaller stocks, thought to be one of the biggest potential beneficiaries of a second Donald Trump presidency, has fallen 10% from its recent high in late November. A spate of hotter-than-expected economic data, including Friday’s blockbuster jobs report, has spurred growing doubts about whether the Federal Reserve will cut interest rates this year. Government-bond yields have soared in response, putting pressure on stocks.”
“After A Great Run For Stocks, Be” (New York Times). “[H]istory suggests a sobering lesson: Stocks and sectors go out of fashion. What worked over the last two years may not work in the next one. Periods of outsize returns are followed by market declines, sooner or later…Tech stocks have bolstered returns before. They were the key to outstanding market performance in the 1990s, the dot-com era. From 1995 through 1998, the S&P 500 gained more than 20 percent annually, and came close to 20 percent in 1999, largely on the strength of tech stocks. But the market rose too high, forming a bubble that burst in March 2000. Starting that year, for three consecutive years, stocks had catastrophic losses. If you invested in stocks for the first time in late 1999, your holdings would have been underwater until well into 2006. Returns for an entire decade were disappointing. By some metrics, stocks aren’t as extravagantly priced today as they were then, but they are high enough to be concerning.”
“SEC Charges Robinhood With Securities Violations, Brokerage To Pay $45 Million Penalty” (CNBC). “Two Robinhood broker-dealers agreed to pay $45 million in combined penalties to settle administrative charges by the Securities and Exchange Commission that they violated more than 10 separate securities law provisions related to their brokerage operations. The violations by Robinhood Securities LLC and Robinhood Financial LLC related to failures to report suspicious trading in a timely manner, failing to implement adequate identity theft protections, and failing to adequately address unauthorized access to Robinhood computer systems, the SEC said Monday.”
“Economists Are in the Wilderness. Can They Find A Way Back To Influence?” (New York Times). “Partway through a panel discussion at a recent economics conference in San Francisco, Jason Furman, a former adviser to President Barack Obama, turned to Kimberly Clausing, a former member of the Biden administration and the author of a book extolling the virtues of free trade. ‘Everyone in this room agrees with your book,’ Mr. Furman said. ‘No one outside of this room agrees with your book.’”
“How Many Children Use TikTok Against the Rules? Most, Study Finds” (University of California San Francisco). “TikTok, Instagram, YouTube and Snapchat require users to be at least 13 years old to have an account. But [a new UC San Francisco] found that a majority of 11- and 12-years-olds across the country have accounts on the platforms, and 6.3% have a social media account they hide from their parents.”
