Week InReview
Friday | Apr 30, 2021
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Comfort in. Status anxiety out. |
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Illustration: Shonagh Rae/FT |
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In fashion, there has already been a wave of heated debate about what to expect in the post-pandemic world. When it hit, Covid-19 caused demand for tracksuits, pajamas, hoodies, sportswear and other leisurewear to surge. Some designers think this has sparked a permanent move towards more comfortable styles.
Maybe so. But, according to a report from BCG consultants “Fashion won’t – and shouldn’t – return to what it was,” since “the behavior, preferences and shifts in mindsets that people have adopted during the pandemic will lead to permanent changes.”
— Financial Times
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The Federal Reserve held its key interest rate near zero and said it plans to continue supporting the economic recovery, while acknowledging recent progress in growth and employment. Fed officials voted unanimously Wednesday to maintain the central bank’s policies, aimed at holding down borrowing costs, until the economy heals further from the effects of the Covid-19 pandemic. (The Wall Street Journal | Apr 28)
The Securities and Exchange Commission is weighing guidance to curb growth projections made by listed blank-check companies and specify when they qualify for certain legal protections. (Reuters | Apr 27)
Bond investing needs a complete rethink. The U.S. Federal Reserve is replaying some history. It is supporting the Treasury in “war finance” as the battle against Covid-19 continues. This, along with the speculative attitude in the markets as a result of Fed actions, feeds the liquidity that is likely to stay quite good for a long period of time. (Financial Times - opinion | Apr 27)
Two groups representing investor interests want Gary Gensler, new chair of the Securities and Exchange Commission, to make sure accounting rules reflect investors’ needs. The chair’s pick for SEC chief accountant needs to agree that investor perspective should take priority in the development of new financial accounting rules, the Council of Institutional Investors wrote. The letter went to Gensler on the heels of a letter from the Financial Accounting Standards Board. (Bloomberg Tax | Apr 27)
Investors generally seem quite optimistic on the post-pandemic economy. Stocks are hitting records. Meanwhile, yields on U.S. government bonds and certain derivatives are suggesting the economy will be strong enough for the Federal Reserve to start raising short-term interest rates by 2023 and keep going for a couple of additional years. (The Wall Street Journal | Apr 26)
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Powell waves inflation worries away as Fed holds rates near zero |
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(Apr 28) — After yesterday’s Fed meeting, Powell had a ready answer to counter criticism that the Federal Reserve is running risks with inflation, as he signaled it will maintain aggressive support as the U.S. recovery gathers speed. That’s likely to push up prices amid surging demand, but “an episode of one-time price increases as the economy re-opens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation,” he said. Read more.
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Powell's response when asked about markets: Parts of the markets “are a bit frothy, and that’s a fact,” Powell also said when asked about markets. While he didn’t specify which, you don’t have to look too far for candidates. Read more.
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Powell Says Archegos collapse revealed breakdowns: Powell said the central bank is examining the Archegos Capital Management blowup because it revealed risk-management failures at a number of banks his agency supervises. The Archegos exposures weren’t well understood by some banks, Powell said, adding that it’s “troubling” in an aspect of banking that’s supposed to carry clear risks. Read more.
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Early bet placed on Jackson Hole surprise as Fed officials meet: One large option bet built up over the past week is aiming for a surprise at the Federal Reserve Bank of Kansas City’s annual symposium in Jackson Hole. While much of the focus this week was on Powell’s press conference yesterday, some are looking ahead to the August event in Wyoming, which has often been used by central bankers to signal changes in monetary policy. Read more.
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Emotet malware nukes itself from all infected computers worldwide
The so-called Emotet malware botnet on Sunday began uninstalling itself from infected devices world-wide through code pushed by law enforcement authorities in Germany.
Hacks like SolarWinds threaten financial stability
New York’s financial regulator warned that the next financial crisis could come from a cyberattack like the recent SolarWinds incident that hits many targets at once. “The SolarWinds attack confirms that cyber risks are a threat not just to consumers and individual companies, but also to the stability and soundness of our entire financial services industry,” the New York State Department of Financial Services said in a report released Monday. see also CISA's guidance on how to combat specific Russian hacking methods
Garbage out, hacker in
Improperly disposing of computers and devices can expose businesses to cybersecurity risk. Data often isn't wiped completely from old machines, leaving hackers valuable clues about how to break into corporate and government networks.
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Ruby slippers have nothing on these golden Crocs.
Photo: Chris Pizzello-Pool/Getty Images
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Like it or not, Crocs are cool again
First, Questlove wore a shimmery gold pair of its foam clogs on the Oscars red carpet, an event that is the height of Hollywood glamour. Then on Tuesday, the company reported a blockbuster 64% increase in first-quarter sales from a year earlier, helping its shares soar to an all-time high on Wednesday.
Remember the 2008 crisis classic 'Margin Call'? Wall Street does.
"Margin Call" viewings track volatility: Ten years after its release, it's the film investors return to when panic grips the markets. Data from an account management system that tracks income from the film show viewing tends to surge during times of market volatility.
New iOS update lets you stop ads from tracking you
Facebook and other advertisers fought the move, but App Tracking Transparency is finally here. After you install iOS 14.5, you'll see a pop-up when you open any app that tracks you across the web. You can either allow it, or "Ask App not to track."
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