What we’re reading (2/17)
“Value Stocks Are Back — At Least For Now” (Institutional Investor). “In January, value subfactors outperformed the U.S. market by an average of nearly 3 percent, ‘some of the highest outperformance [we’ve seen] on a monthly basis for factors,’ according to the latest factor performance report by Investment Metrics. Meanwhile, only one growth subfactor — dividend growth — slightly beat the market in January.”
“The Inflation Hedges Haven't Hedged” (Morningstar). “[One] interpretation is that although inflation’s arrival caught market forecasters unawares, it did not surprise investors. They did not know when inflation would surface, any more than did the forecasters, but they knew that sooner or later, the bad news would arrive. Consequently, they had already bid up the prices of inflation hedges. Thus, when inflation did appear, gold and TIPS failed to react, because their values already anticipated the event.”
“Fed's Bullard Repeats Call For 1 Percentage Point In Rate Increases By July 1” (Reuters). “‘We are missing our inflation target on our preferred measure... and policy is still at rock bottom lows and we’ve still got asset purchases going on,’ Bullard said in a television interview with CNN. ‘This is a moment where we need to shift to less accommodation.’”
“Infinity Q Investment Adviser Faces Securities Fraud Charges” (Wall Street Journal). “Federal prosecutors charged James Velissaris, the former chief investment officer of Infinity Q Capital Management, on Thursday with securities fraud and obstruction of justice following the collapse of the investment firm…Prosecutors said he orchestrated a massive scheme to inflate the value of securities in his portfolio at Infinity Q. The Securities and Exchange Commission and Commodity Futures Trading Commission also filed civil complaints against Mr. Velissaris, saying he inflated the value of assets at the firm by more than $1 billion.”
“Mortgage Rates Jump To Nearly 4%” (CNN Business). “Mortgage rates increased again, rising to a level not seen since summer 2019. The 30-year fixed-rate mortgage averaged 3.92% in the week ending February 17, up from 3.69% the week before, according to Freddie Mac. It has not been this high since May 2019 when it was at 3.99%.”
