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Analyst commentary: "The spike in insider sales and the lack of buying interest is worrying," noted Vincent Deluard, global macro strategist at StoneX. "The median ARKK holding has lost 55% since its 52-week high... if insiders are not buying now, why should investors?" Deluard also noted that "flows in ARK ETFs may have spurred research and innovation," but they also "allowed insiders and founders to cash out at absurd valuation." "Time will tell whether ARK Investment Management funded the next industrial revolution or organized a historical transfer of wealth from the public to insiders and early investors." Download Seeking Alpha for your Phone or Tablet
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Central Banking
The Federal Reserve's most-recent dot plot, which signals the central bank's outlook for the path of interest rates, currently shows a median forecast for three hikes in 2022, though several market participants are expecting more. Goldman Sachs is out with a fresh research note indicating that the Fed will raise rates four times this year, given rapid progress in the U.S. labor market and hawkish signals that signal faster normalization. The forecast comes after last week's release of FOMC minutes, which laid out a triple play for policy tightening: Rate hikes, tapering and a balance sheet runoff.
Bigger picture: Goldman is also predicting an expedited runoff process, which would begin in July, if not earlier. The move would see the Fed shrink its nearly $9T balance sheet by allowing holdings of its Treasurys and mortgage-backed securities to mature. Fed officials have cautioned that they remain data-dependent and would communicate their intentions clearly to the public, but many are flagging the central bank's "transitory" forecast that never came to fruition.
"With inflation probably still far above target at that point, we no longer think that the start to runoff will substitute for a quarterly rate hike," said Jan Hatzius, chief economist at Goldman. "We continue to see hikes in March, June, and September, and have now added a hike in December. Even with four hikes, our path for the funds rate is only modestly above market pricing for 2022, but the gap grows significantly in subsequent years."
Go deeper: As markets price in the liftoff of U.S. interest rates, yields have been ripping higher. The 10-year Treasury yield has climbed over a quarter of a point since the beginning of the year, soaring 30 bps to 1.81% since Jan. 1. Real yields, which are inflation-adjusted, have also risen at a pace not seen since the height of pandemic fears in March 2020, eating into the positive backdrop for risk assets and threatening equity valuations.
Bigger picture: Goldman is also predicting an expedited runoff process, which would begin in July, if not earlier. The move would see the Fed shrink its nearly $9T balance sheet by allowing holdings of its Treasurys and mortgage-backed securities to mature. Fed officials have cautioned that they remain data-dependent and would communicate their intentions clearly to the public, but many are flagging the central bank's "transitory" forecast that never came to fruition.
"With inflation probably still far above target at that point, we no longer think that the start to runoff will substitute for a quarterly rate hike," said Jan Hatzius, chief economist at Goldman. "We continue to see hikes in March, June, and September, and have now added a hike in December. Even with four hikes, our path for the funds rate is only modestly above market pricing for 2022, but the gap grows significantly in subsequent years."
Go deeper: As markets price in the liftoff of U.S. interest rates, yields have been ripping higher. The 10-year Treasury yield has climbed over a quarter of a point since the beginning of the year, soaring 30 bps to 1.81% since Jan. 1. Real yields, which are inflation-adjusted, have also risen at a pace not seen since the height of pandemic fears in March 2020, eating into the positive backdrop for risk assets and threatening equity valuations.
Today's Markets
In Asia, Japan closed. Hong Kong +1.1%. China +0.4%. India +1.1%.
In Europe, at midday, London -0.1%. Paris -0.3%. Frankfurt -0.3%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.2%. Crude -0.1% at $78.85. Gold +0.1% at $1799.30. Bitcoin -0.7% to $41649.
Ten-year Treasury Yield +4 bps at 1.81%
In Europe, at midday, London -0.1%. Paris -0.3%. Frankfurt -0.3%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.2%. Crude -0.1% at $78.85. Gold +0.1% at $1799.30. Bitcoin -0.7% to $41649.
Ten-year Treasury Yield +4 bps at 1.81%
Today's Economic Calendar
What else is happening...
Tesla (NASDAQ:TSLA) raises price of 'Full Self-Driving' software to $12,000.
Mattress Firm (MFRM) files for IPO six years after going private.
FedEx (NYSE:FDX) flags shipment delays as reduced staffing hits deliveries.
Roblox (NYSE:RBLX) and Starbucks (NASDAQ:SBUX) make BTIG's top picks list.
Despite BTC slump, crypto miners wrap up Q4 with robust mining growth.
U.S. becomes the world's largest LNG exporter for the first time in history.
EV buy? GM (NYSE:GM) is in sync with California on emission rules.
Adobe (NASDAQ:ADBE) Metaverse? Jefferies lists 11 tech predictions for 2022.
Mattress Firm (MFRM) files for IPO six years after going private.
FedEx (NYSE:FDX) flags shipment delays as reduced staffing hits deliveries.
Roblox (NYSE:RBLX) and Starbucks (NASDAQ:SBUX) make BTIG's top picks list.
Despite BTC slump, crypto miners wrap up Q4 with robust mining growth.
U.S. becomes the world's largest LNG exporter for the first time in history.
EV buy? GM (NYSE:GM) is in sync with California on emission rules.
Adobe (NASDAQ:ADBE) Metaverse? Jefferies lists 11 tech predictions for 2022.


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Our best ideas → Stock Ideas
ETF's Investing Ideas → ETF Ideas
Dividend stocks ideas → Dividend Ideas
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