What we’re reading (9/24)
“Silicon Valley Had Its Heyday. Can Tech Ecosystems Now Grow Inland?” (DealBook). “Steve Case has long said tech ecosystems can — and should — expand beyond major coastal cities. In 2014, Mr. Case, a co-founder of AOL, started an initiative at his venture firm, Revolution, that focuses on investment outside tech hubs like Silicon Valley and New York. He has pushed for more venture capital to flow inland. But the landscapes of both the United States and business are shifting rapidly. The pandemic has given white-collar workers in states like California, New York and Massachusetts, which have received 75 percent of venture capital dollars in the past decade, an opportunity to work from wherever they want.”
“Never Mind Growth Vs. Value Stocks, Look To Beta” (Morningstar). “‘More than value versus growth, the factor that I prefer right now is beta, which represents risk and volatility,’ says Denise Chisholm, director of quantitative market strategy at Fidelity Investments. Investors must decide for themselves how much up-and-down portfolio risk they can stomach in the short term, even as high-beta stocks trade at low valuations. That's especially the case if the Federal Reserve needs to raise rates even more aggressively than is expected in order to contain inflation and the risk of serious recession increases.”
“The Fed Appears More Optimistic Than Some Investors. Here’s Why.” (New York Times). “Interest rate traders have been bruised this year as the Fed’s outlook for inflation and interest rates has repeatedly been upended by reality. The central bank raised interest rates this week by three-quarters of a percentage point — its third such increase since June. The Fed’s policy rate is now the highest it has been since 2008, well above forecasts at the start of the year. And policymakers predict it will move even higher as the central bank escalates its campaign to lower stubbornly high inflation.”
“Mandatory Overtime Is Garbage” (Vox). “Many American workers have very little control over their schedules. For some, that translates to too few hours, or a complete lack of control of when they’re expected to work week to week. For others, it means too many hours they can’t say no to. Often (but not always), mandatory overtime comes with a carrot of being paid time and a half for their labor. Sometimes, the carrot isn’t worth it, but workers have no choice. Their employer also has the stick and can fire them for refusing.”
“Wall Street’s Most Highly Regarded Titans Are Warning ‘The Worst Is Yet To Come’ For Stocks. Here’s Why People Like Ray Dalio, Jeremy Grantham, Carl Icahn, And Scott Minerd Are Bearish On The Market’s Near-Term Prospects.” (Insider). “Tom Lee, the top equity strategist at Fundstrat and the former chief US equity strategist at JPMorgan, said in a note to clients this week that he still sees the S&P 500 climbing to 5,100 in 2022, despite it currently sitting at 3,693. His reasoning is that inflation is falling and the Federal Reserve will be able to back off of their hawkish stance next year.”
