May 10 (Tuesday)
Latest Morning Briefing Executive Summary: Inflation, Bonds & Stocks
Since 2008, the Fed’s quantitative easing had kept a lid on bond yields. But with the Fed now tightening—releasing bond yields to move solely by market forces—will yields be pushed above the inflation rate (where they usually reside)? A reversal from negative to positive real bond yields could trigger a credit crisis and recession; but we put the odds of that scenario at only 30%. Rather, we expect a soft landing for the economy, inflation moderating soon, and the Treasury bond yield marking time between 3.00%-3.25%. … For the stock market, high inflation boosts earnings yet depresses the valuations investors are willing to pay for those earnings. The lower valuations reflect investors’ fears that this will all end badly.
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YRI
Daily Markets Overview
Replay of Dr. Ed’s webinar on May 9.
Markets
Stocks Slide to Lowest in 2022 as Rout Continues | W
Tech giants lost more than $1 trillion in value in the last three trading days | C
Central banks
Fed Rate Hikes Are Good for Banks—Unless They End in a Recession | W
US
Inflation outlook for consumers falls from record high, Fed survey shows | C
Taming inflation: The role of businesses and employees | The Hill
Biden calls on Congress to ‘immediately’ pass major Ukraine aid package before new Covid funding | C
Yellen says financial system working well despite ‘potential for continued volatility’ | C
Geopolitics & trade
The EU can’t quite get it together on a Russian oil embargo | Vox
Hungary Holds Up European Oil Embargo on Russia | W
Putin Uses Russia’s Victory Day Parade to Justify Invasion of Ukraine | W
Putin’s Victory Day speech gives no clue on Ukraine escalation | R
Putin’s Ukraine Adventure Unleashes Nuclear Genies | W
Crypto
Bitcoin Price Falls 54% From Its High | W
40% of bitcoin investors are now underwater, new data shows | C
Corporate finance
Tech’s latest IPOs are getting demolished, with Robinhood, Rivian, UiPath down over 70% from offer price | C
Rivian stock plummets as Ford unloads 8 million shares of EV start-up | C
Big Tech is subtly controlling our lives—and we need to fight back | P
