What we’re reading 7/20
“Where Do Economists Think We’re Headed? These Are Their Predictions” (Wall Street Journal). “The Wall Street Journal’s latest quarterly survey of business and academic economists shows forecasters remain firmly optimistic about the economic outlook, despite some hints of weakness in recent data.”
“Can Value Stocks Really Make A Comeback?” (Morningstar). “For value stock investors, 2024 looked like another “Wait ‘til next year” scenario, with mega-sized technology stocks driving the market higher. However, after months of lagging behind growth stocks (especially those riding the artificial intelligence wave), value stocks surged ahead this past week. A prime catalyst came from geopolitical concerns threatening the AI-driven boom in semiconductor stocks. At the same time, growing confidence that Federal Reserve rate cuts are finally on their way has the potential to make the dividends offered by many value stocks more attractive.”
“‘Greatest Bubble’ Nearing Its Peak, Says Black Swan Manager” (Wall Street Journal). “‘[Universa Investments’ Mark] Spitznagel predicts an even worse shakeout than a quarter-century ago because the excesses are more extreme—the “greatest bubble in human history.’ High public indebtedness and valuations make a Washington-led rescue harder to pull off. He sees today’s benign slowdown in inflation overshooting and says the U.S. economy could enter a recession by the end of the year.”
“What Presidential Election? So Far, The Stock Market Doesn’t Care.” (New York Times). “The stock market…is remarkably indifferent to the nation’s political fortunes. On Monday there were big moves in stocks perceived as benefiting from a Trump presidency, but that exuberance didn’t last. Instead, the market seems to be focused on issues that have little to do with politics, like the possibility of a Federal Reserve rate cut, heartening corporate earnings reports or the allure of artificial intelligence stocks.”
“Microsoft’s Global Sprawl Comes Under Fire After Historic Outage” (Washington Post). “A cascading computer outage that grounded planes, stymied hospitals and disrupted critical public services exposed the depth of the global economy’s dependence on a single company: Microsoft. Regulators and lawmakers across the political spectrum raised alarm that the sprawling outage that knocked out Windows showcases the danger of so much power concentrating into one firm, which drives governments, businesses and critical infrastructure around the world.”
