What we’re reading (9/27)
“It's Hard To Be Bearish On The Stock Market As Risk-Happy Millennials Inherit $2 Trillion Per Year, Fundstrat's Tom Lee Says” (Insider). “‘Bull market until 2038? This is a possible base case...[i]f demographics are destiny, US stocks will do very well,’ Lee wrote in June, pointing out that every stock market peak since 1900 has coincided with a generation's peak. It is a theory shared by ARK Invest's Cathie Wood, who has cited Lee's research as evidence. ‘I do believe that both crypto and the equity markets are going to be powered by millennials,’ Wood said at a conference last week.”
“Individuals Embrace Options Trading, Turbocharging Stock Markets” (Wall Street Journal). “By one measure, options activity is on track to surpass activity in the stock market for the first time ever…[s]ome analysts say the zeal for options trading is translating to bigger swings in individual stocks, and fueling the momentum behind many rallies. When individual investors buy call options, the Wall Street firms that sell options often hedge their positions by buying the shares, further contributing to rising markets.”
“Going Public? Here Is A How-To Guide” (The Economist). “[G]oing public combines mixed emotions, much complexity and myriad idiosyncracies. Despite that, and undeterred by recent wobbles in equity markets, startups have been listing in droves. So far this year tech firms have raised $60bn, according to Dealogic, a data provider, more than at the height of the dotcom bubble in 2000. Include all types of business and the figure is close to $250bn…[o]ne headhunting agency is said to have more than 50 searches under way for finance chiefs at startups hoping to go public soon.”
“Goldilocks Is Dying” (Nouriel Roubini, Project Syndicate). “The recovery in the first half of 2021 has given way recently to sharply slower growth and a surge of inflation well above the 2% target of central banks, owing to the effects of the Delta variant, supply bottlenecks in both goods and labor markets, and shortages of some commodities, intermediate inputs, final goods, and labor. Bond yields have fallen in the last few months and the recent equity-market correction has been modest so far, perhaps reflecting hopes that the mild stagflation will prove temporary.”
“The Supply-Chain Mystery” (The New Yorker). “Americans are not facing Soviet-style empty shelves, or having to scrap for the basics. In aggregate, we are hardly in a condition of scarcity. Still, supply-chain trouble suggests that something is off with the way we’re operating in the world, and that we don’t yet know the extent of our vulnerabilities. The issues can also be a serious impediment to a broader economic recovery.”
