What we’re reading (1/15)
“The Yield Curve Is No Longer Sending A Don’t-Worry-Be-Happy Signal, Warns Bond King Jeffrey Gundlach” (MarketWatch). “DoubleLine CEO Jeffrey Gundlach…has unveiled his predictions for the year ahead….he sees headwinds for a stock market that has been ‘supported by QE” and now faces Fed tapering, with Powell sounding ‘more hawkish’ every time he speaks...[h]e said the yield curve had seen ‘pretty powerful flattening’ and was ‘approaching the point where it signals economic weakening. At this stage, the yield curve is no longer sending a don’t-worry-be-happy signal, says Gundlach. It is instead signaling investors to pay attention, he said.”
“The Fed Is About To See A Lot Of New Faces. What It Means For Banks, The Economy And Markets” (CNBC). “In what likely will be just a few months’ time, the Federal Reserve will look a lot different: Three new governors, a new vice chairman, a new banking chief and likely a couple new regional presidents. But while the parts of the institution’s upper echelon may change quite a bit, the whole could look pretty much the same. That’s because Fed-watchers think ideologically there probably will be little change, even if Sarah Bloom Raskin, Lisa Cook and Philip Jefferson are confirmed as new members on the Board of Governors. White House sources say President Joe Biden will nominate the trio in the coming days.”
“Elon Musk’s Tesla Asked Law Firm To Fire Associate Hired From SEC” (Wall Street Journal). “A partner at law firm Cooley LLP got an unexpected call late last year from a lawyer for one of the firm’s most famous clients, Elon Musk’s Tesla Inc., with an ultimatum. The world’s richest man wanted Cooley, which was representing Tesla in numerous lawsuits, to fire one of its attorneys or it would lose the electric-vehicle company’s business, people familiar with the matter said. The target of Mr. Musk’s ire was a former U.S. Securities and Exchange Commission lawyer whom Cooley had hired for its securities litigation and enforcement practice and who had no involvement in the firm’s work for Tesla.”
“Meme Stocks Are Fading As Retail Traders Rotate Into Cryptocurrencies And The Metaverse, Fintech CEO Says” (Insider). “Last January, millions of retail traders banded together to drive eye-popping rallies in highly shorted, nostalgic companies, like GameStop, AMC Theaters, and BlackBerry. Day traders minted a new asset class dubbed the "meme stock" and regularly added new companies to the basket over the course of the year. At one point a tiny Danish biotech company surged more than 1,300% in a day on interest from individual investors looking for the next short squeeze. But observers say those wild spikes are likely to subside as retail traders look to new horizons to replicate last year's massive gains.”
“When It Comes To Living With Covid, Businesses Are On Their Own” (New York Times). “As the federal government’s efforts to contain the coronavirus hit their limits — as the administration itself admits — employers are largely on their own. Business leaders must decide whether and how to use tools such as their own vaccine mandates, masking, distancing, and testing at their offices and other work sites. And more fundamentally, they must decide what kind of company they want to run: one that manages cases or one that manages risk.”
