What we’re reading (7/21)
“A Stock Market Rotation Of Historic Proportions Is Taking Shape” (Wall Street Journal). “The stock market has suddenly turned upside down. The market’s laggards have sprung to life in recent days, while the seemingly impervious “Magnificent Seven” group of technology stocks has stumbled. Investors are even more focused than usual on corporate earnings as they try to anticipate what comes next. The Russell 2000 index of smaller stocks beat the S&P 500 over the seven days through Wednesday by the largest margin during a period of that length in data going back to 1986, according to Dow Jones Market Data. The Russell 1000 Value index, meanwhile, notched its biggest lead over its growth-stock counterpart since April 2001, after the dot-com bubble burst.”
“History Says The Wild Small-Cap Stock Rally Isn’t Going To Last” (Inc Magazine). “Small-cap stocks have been the big surprise in markets this month, fueled by a combination of rate cut expectations and rising odds for a second Trump presidency. That said, the group's blistering rally has fallen off as abruptly as it began. While the market's strength does seem to be broadening beyond mega-cap tech names, that does not mean small-caps will keep marching higher. From July 1 to July 16, the S&P 600 small-cap index recorded a 10.2 percent gain. In the last two days, however, the index fell about two percent.”
“RIP Hedge Fund Superstars” (Insider). “What is clear is that hedge funds run by an individual star, by one prodigious mind, are not raising the massive money they used to. Clients who once were proud to hand their money to a specific person are pushing back; they want to pay lower fees and see less-volatile returns. The funds that have survived rely on a stable of faceless traders testing out different ideas, brokering transactions, and harvesting the returns for the collective. Quant strategies — which are built on algorithmic trading — have also become more popular with the ultrawealthy. More robots, fewer people, lower overhead.”
“Apple Should Buy HBO” (Spyglass). “Two problems: Apple needs content, Warner Bros Discovery needs money. One solution: Apple has money, WBD has content. Come on folks, this isn't rocket science. It's not any kind of science. It's business. Well, as much as show business actually is still a legitimate business. A distinction which seems tenuous at best for most companies these days.”
“Costs From The Global Outage Could Top $1 Billion – But Who Pays The Bill Is Harder To Understand” (CNN Business). “Experts largely agree it’s too early to get a firm handle on the price tag for Friday’s global internet breakdown. But those costs could easily top $1 billion, said Patrick Anderson, CEO of Anderson Economic Group, a Michigan research firm that specializes in estimating the economic cost of events like strikes and other business disruptions.”
