What we’re reading (6/27)
“The Stock Market Hasn’t Been This Placid in Years” (Wall Street Journal). “The U.S. stock market is as calm as can be on the surface, while churning underneath more than it has in decades. The S&P 500 is so quiet it is almost disconcerting. The index hasn’t had a 5% correction based on closing prices since the end of October; no wonder the new day traders who started buying shares in lockdown think the market only goes up. The last time the S&P was this serene for so long was in 2017, a period of calm that ended with the volatility crash early in 2018—although back then it was even quieter for much longer.”
“Renaissance Suffers $11 Billion Exodus With Meager Quant Returns” (Bloomberg). “Disgruntled by subpar returns, clients have now redeemed -- or asked to redeem -- more than a quarter of the capital that Renaissance manages in hedge funds with outside money, according to investor documents seen by Bloomberg. The firm now is mostly managing its own internal capital, a person with knowledge of the matter said.”
“Interview: Marc Andreesen, VC And Tech Pioneer” (Noahpinion). “[from Marc Andreesen:] [I]t’s hard to overstate the positive shock that remote work works. Remote work isn’t perfect, there are problems, but virtually every CEO I’ve talked to over the last year marvels at how well it works. And remote work worked under the extreme duress of a pandemic, with all of the human impact of lockdowns and children unable to go to school and people being unable to see their friends and extended families. It will work even better out of COVID. Companies of all shapes, sizes, and descriptions are retooling their assumptions on geographic footprint, where jobs are located, where employees are located, how offices are configured, and if there should be offices at all. Combining these factors, it’s possible that we’ll see a huge surge in productivity growth over the next 5 years.”
“Big miners’ capital discipline is good news for investors” (The Economist). “The big five miners [Anglo American, BHP, Glencore, Rio Tino, and Vale] consolidated their market power with a spate of huge mergers in the 2000s, just in time for China’s emergence as a voracious consumer of metals. The result was a 15-year supercycle of high prices. Miners splurged around $1trn chasing higher volumes and mega-projects. Many proved disastrous—perhaps a fifth of that investment was returned to shareholders, according to one estimate. After a round of firings, a new generation of mining bosses promised to do better. In the past few years value, not volume, became the industry’s watchword. ‘We will never lose our capital discipline,’ vows Eduardo Bartolomeo, boss of Vale.”
“Investment Banking's Labor Crunch: A Junior Banker Shortage Is Forcing Rainmakers To Do Grunt Work And Firms Are Lowering The Bar For New Hires” (Business Insider). “Many US industries are confronting a surfeit of jobs and having difficulty filling vacancies…[a]nd while investment banking might seem a far cry from the retail industry, which has been one of the hardest hit sectors by labor shortages, financial firms have not been immune. For banks, it's not just struggling to boost the lackluster number of juniors. They're also expecting further losses, PwC partner Julia Lamm told Insider. ‘Companies are bracing for higher turnover numbers than ever before, staffing up the recruiting teams,’ and getting external recruiting agencies ‘geared up for more recruiting,’ said Lamm, who is a workforce strategy partner in the firm's financial services people and organization practice.”
