What we’re reading (3/30)
“Real-Time Market Monitoring Finds Signs Of Brewing U.S. Housing Bubble” (Federal Reserve Bank of Dallas). “The gap between the actual price-to-rent ratio and its fundamental-based level in the U.S. has grown rapidly during the pandemic—comparable to the run-up of the last housing boom—and started showing signs of exuberance in 2021. The exuberance statistic confirms that recent increases are far from ordinary.”
“Under Unprecedented Sanctions, How Is The Russian Economy Faring?” (The Economist). “A battery of policies has helped stabilise the markets. Some are orthodox. The central bank has raised interest rates from 9.5% to 20%, encouraging people to hold interest-bearing Russian assets. Other policies are less conventional. The government has decreed that exporters must convert 80% of their foreign-exchange proceeds into roubles. Trading on the Moscow stock exchange has become, to use the central bank’s euphemism, ‘negotiated’. Short-selling is banned, and non-residents cannot offload stocks until April 1st.”
“Big Stock Sales Are Supposed To Be Secret. The Numbers Indicate They Aren’t.” (Wall Street Journal). “[B]lock trades…are supposed to be a secret between the selling shareholders and the investment banks they hire to execute the trades. But a Wall Street Journal analysis of nearly 400 such trades over three years indicates that information about the sales routinely leaks out ahead of time—a potentially illegal practice that costs those sellers millions of dollars and benefits banks and their hedge-fund clients.”
“Best Mutual Funds That Keep Topping The Market” (Investor’s Business Daily). “Why was it tougher for diversified stock funds to outperform? ‘Equity leadership was concentrated in megacap growth stocks, which mathematically makes it harder to outperform,’ said Jurrien Timmer, global head of macro for Fidelity Investments. "An investor would need to have even bigger concentrations in already very big names." Many megacap outperformers were tech stocks.”
“‘Mystifying’ U.S. Stock Rally Defies Economic Unease” (Reuters). “Many have taken heart from Fed Chairman Jerome Powell's assessment of the U.S. economy as strong enough to handle an aggressive pace of rate increases and may be cheering a Fed that now appears to be tackling sky-high inflation head on, analysts said.”
