What we’re reading (8/18)
“Investors Bet Corporate Spending And Buybacks Will Support Stocks” (Wall Street Journal). “Investors are betting that cash-rich companies will increase spending on everything from factories to share buybacks, a combination many believe can boost stocks in coming months. Businesses including Tyson Foods Inc., consumer-products firm Newell Brands Inc., Morgan Stanley and alcohol seller Constellation Brands Inc. have said in recent weeks they plan to build factories, expand research budgets, pay down debt or seek acquisitions while also giving priority to dividends or share repurchases.”
“Palantir Bought $50 Million In Gold Bars In August As Cash Pile Grows” (CNBC). “While some companies such as Tesla are diversifying into bitcoin, data analytics software company Palantir is betting on gold. Palantir bought $50 million in gold bars in August, the company disclosed in its latest earnings statement. The move reflects a growing company stashing cash in an unconventional asset in response to economic uncertainty spurred by the coronavirus pandemic and governments’ response to it.”
“The S&P 500 Is Due For A 10% Correction And Will Slump For The Next Few Quarters As Tapering, Taxes, And Slow Earnings Growth Weighs On Returns, Morgan Stanley's Stock Chief Says” (Business Insider). “Morgan Stanley's chief US equity strategist doesn't see much upside left for the S&P 500 for the remainder of 2021. The firm's year-end price target for the benchmark index is 4000, a roughly 10% drop from current levels. Additionally, between now and the end of the year, Morgan Stanley expects a correction of even greater than 10%.”
“Why The S&P 500 Could Be Headed For An Imminent 7% Decline, According To BofA” (Business Insider). “The bank highlighted rising credit spreads as a big risk for the S&P 500, as it signals deteriorating credit conditions even as the market hits new record highs. The S&P 500 closed at a record high on Monday for the 49th time so far this year, and is up more than 2% over the past month.”
“Bill Ackman’s SPAC Gets Sued” (DealBook). “[The SPAC] run by the billionaire hedge-fund investor Bill Ackman, got sued this morning in a novel case that could have far-reaching implications for the SPAC industry. The case…contends that Ackman’s SPAC isn’t an operating company, but is actually an investment company like Ackman’s funds, which should be regulated by the Investment Company Act of 1940. If certain SPACs were regulated as investment companies, much of the industry could be affected because it would make it harder for anyone in the investment business to participate in a SPAC.”
