What we’re reading (12/16)
“Dow Tumbles On Recession Fears. So Much For A Santa Claus Rally” (CNN Business). “Christmas is just 10 days away, and investors hoping for a Santa Claus rally have found little holiday cheer on Wall Street this month – especially Thursday. The Dow plummeted nearly 765 points, or 2.3%, Thursday, and it is down 4% in December following solid gains the previous two months. Verizon (VZ) was the only one of the 30 Dow stocks in positive territory.”
“Wall Street Fears the Fed Could Cause ‘Some Damage’” (DealBook). “[I]nvestors grow concerned about just how far central banks will push up interest rates to tame inflation. The Bank of England on Thursday raised its prime lending rate by 0.5 percentage points, and the European Central Bank is expected to follow suit with a similar increase. The market volatility was on full display on Wednesday in the U.S. Stocks jumped at the open as investors anticipated that Jay Powell, the Fed chair, would signal that the central bank would soon pull back on its policy of aggressive rate increases. But he did the opposite, and stocks slumped.”
“Services Prices Should Cool In Time, Too” (Fisher Investments). “Services are simply a few links further down the supply chain, so they felt the effect at more of a delay, hence why services inflation has lagged goods inflation…[b]ut just as spiking commodity prices are busy working through the goods side of the economy, so should they soon work their way through services.”
“Everyone Wants to Know What Private Assets Are Really Worth. The Truth: It’s Complicated.” (Institutional Investor). “Private equity valuations have become a lightning rod for investors over the past year, as many have pointed out the lag in performance reporting: Private equity firms don’t report returns to their limited partners until 45 to 90 days after a quarter ends. This practice, coupled with the fact that these firms are not subject to the whims of a public market, has made it seem like the asset class has posted better returns with less volatility than its public equity peers. The truth, though, is much more complicated than that.”
“Is That Co-Worker Really ‘Off To A New Adventure’?” (Wall Street Journal). “Vague, euphemistic announcements about chief executive officers’ departures are practically an art form…nonbosses are carefully managing [their] farewell messages too…Controlling the narrative can feel especially important when many businesses are cutting staff, and as economists are warning of a looming recession.”
