What we’re reading (8/13)
“Welcome To The Peak Everything Market And Economy” (CNN Business). “The rapid shutdown of the economy in the spring of 2020 led to a brief but painful recession. But the resulting reopening has caused a massive boom that has some wondering if America is now in the midst of a new Roaring Twenties...just like 100 years ago. Still, there are indications that the economy and market may soon be reaching peak levels -- for just about everything…[e]arnings momentum should begin to fade…housing prices may finally pull back a bit…inflation could cool, but it won’t go away for good[.]”
“A Fed Policy Shift Could Be Near. Buying Bank Stocks Looks Like A Good Strategy.” (Barron’s). “Federal Reserve Chairman Jerome Powell could more definitively signal an end to the easy-money policies that have propelled the equity market ever higher over the past 21 years, at the Fed’s annual summer gathering in Jackson Hole, Wyo., on Aug. 26-28. Such a shift could make it harder to thrive in the stock and options market.”
“GameStop’s Power Player: How Outsider Ryan Cohen Wrested Control” (Wall Street Journal). “Ryan Cohen rose to become chairman of GameStop Corp. with the verve of an old-school corporate raider. Wielding little more than a minority stake and a sharp tongue, Mr. Cohen pushed out GameStop’s executive team and installed longtime associates on the company’s board. The tactics made the co-founder of online pet store Chewy Inc. a favorite of the individual investors who sent GameStop’s stock on a roller coaster this year; they call him ‘Papa Cohen.’”
“The Elan Of Elon Musk” (DealBook). “Much has been written about Carson Block, the volatile and sometimes venomous short-seller who runs Muddy Waters Capital. Now, Block is penning some rare words of his own. Block just sent clients his first shareholder letter since starting a hedge fund in 2015. In the letter, obtained by DealBook from a source familiar with the fund, Block, a longtime critic of Elon Musk, Tesla’s C.E.O., said that his firm’s multiyear bet against the electric carmaker had been sent to ‘heaven,’ with no plans to revive it. Block said Musk’s ‘narcissism’ drew his disdain and stoked the belief that Tesla’s business would crater. But Block added that he underestimated Musk’s ability to raise capital in huge amounts, reinvent himself and captivate shareholders.”
“Half Of Lumber Dealers Now Sit On Excess Inventory In The U.S.” (Bloomberg). “In July, 49% of building-material dealers and manufacturers said they had excess lumber capacity, while none described their levels as “very tight,” in a survey by John Burns Real Estate Consulting LLC. Back in April, 40% said their wood inventories were ‘very tight.’ Lumber prices have come down from records in May, when sawmills were caught off guard with low inventories amid a surge in home building and renovation. Producers have since increased output, and a shortage of other building supplies such as siding and windows has slowed the pace of construction.”
