What we’re reading (12/18)
“Forget Stock Predictions For Next Year. Focus On The Next Decade.” (New York Times). “Consider how bad Wall Street forecasts have been. In 2020…the median Wall Street forecast since 2000 had missed its target by an average 12.9 percentage points a year. That error over two decades was astonishing: more than double the actual average annual performance of the stock market! Imagine a weather forecast as bad as that. A meteorologist says the high temperature the next day will be 25 degrees Fahrenheit and it will snow, so you dress for a winter storm. Actually, the temperature turns out to be 60 degrees and the skies are clear. That’s about the level of accuracy for Wall Street strategists through 2020.”
“Will Investors Care If The Fed Lessens Its Commitment To 2 Percent Inflation?” (The Hill). “The key issue for many economists is that raising the target rate could undermine the Fed’s credibility. As Dudley states: ‘Moving the goal posts would be interpreted as a failure, making it more difficult to anchor expectations around the new objective.’ This begs an important question: Will investors care if the Fed tolerates inflation of 3 percent to 4 percent if the economy slips into recession?”
“Holiday Discounts Are Already Hard To Resist. The Best Bargains Are Yet To Come” (CNN Business). “Stores are drowning in a glut of merchandise this holiday season, keeping the discounts fast and furious in the runup to Christmas. And the deals are only getting juicier. So if you have the patience and the willpower to wait to grab a few bargains for yourself, you’ll be richly rewarded.”
“Mortgage Buydowns Are Making A Comeback” (Wall Street Journal). “Scores of lenders including Rocket Mortgage and United Wholesale Mortgage are touting temporary buydowns as a way to soften the blow of rates that have roughly doubled over the past year. Home builders are also using them to entice buyers. About 75% of builders surveyed in early December by John Burns Real Estate Consulting said they were paying to reduce buyers’ mortgage rates, either for the full mortgage term or for a shorter period.”
“A New EU Rule Can Expose Greenwashers” (Wired). “In 2023, all companies listed on regulated markets in the European Union will begin applying the Corporate Sustainability Reporting Directive (CSRD), a new rule that will require them to publish, from 2024, detailed information about how they relate to the environment, the treatment of employees, human rights, anti-corruption, bribery, and boardroom diversity.”
