What we’re reading (12/30)
“Stock Pickers Are Struggling To Beat The Market” (Wall Street Journal). “[A]s 2021 draws to a close, most professional stock pickers find themselves in familiar territory: trailing the benchmark S&P 500 index…[s]ome 85% of active U.S. stock funds were on pace to underperform the S&P 500 this year as of Nov. 30, according to Morningstar Direct. In the same period a year ago, 64% of such funds were running behind the S&P 500, according to Morningstar.”
“Ivy Zelman Called The Housing Market's Peak Before The 2008 Crash. She Told Us Why Home Prices Will Tank Far Sooner Than Buyers, Sellers, And Wall Street Think.” (Insider). “[S]he says the seller's market is living on borrowed time. One reason, in her view, is that people are underestimating the enormous amount of construction being planned. In November, Zelman estimated that national demand for single-family homes sat at about 900,000 units a year, but 1.1 million units were planned — a difference of about 20%.”
“Mortgage Rates End Year About Where They Have Been” (Washington Post). “According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average rose to 3.11 percent with an average 0.7 point. (A point is a fee paid to a lender equal to 1 percent of the loan amount. It is in addition to the interest rate.) It was 3.05 percent a week ago and 2.67 percent a year ago.”
“When It Comes To Inflation, I’m Still On Team Transitory” (Alan Blinder, Wall Street Journal). “Several factors point to lower inflation rates ahead. First, the price of crude oil, which more than doubled between November 2020 and October 2021, has begun to fall. Second, normal consumption patterns will re-emerge as pandemic fears subside. Consumers will start buying more restaurant meals, hotel rooms and movie tickets—and fewer things that are shipped in boxes. Omicron may delay the return to normalcy, but it will happen. Third, capitalism is on our side. Shortages raise prices, but high prices create opportunities for profit, which attract capitalists to alleviate the shortages. They don’t do this out of altruism, but out of self-interest.”
“South Africa Lifts Curfew As It Says Covid Omicron Peak Has Passed” (CNBC). “South Africa lifted a midnight to 4 a.m. curfew on movement with immediate effect as it believes the country has passed the peak of its fourth Covid-19 wave driven by the Omicron variant, a cabinet statement said on Thursday.”
