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☆ Bank of Japan Blinked in Standoff With Markets
▼ + stars: | 2022-12-20 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Investors are often told not to fight the Fed. Japan has just shown the opposite: Markets fought the central bank, and markets won. On Tuesday the Bank of Japan lifted its cap on 10-year government bond yields from 0.25% to 0.5%, with global effects. Yields that had been suppressed by the BOJ jumped, lifting yields on Treasurys and bonds in other developed markets. The yen soared more than 3%, briefly having its biggest gain since 2009 before pulling back a bit, while Japanese stocks dropped.

☆ The Markets Don’t Believe the Fed
▼ + stars: | 2022-12-15 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The Federal Reserve has a credibility problem. It wants markets to believe that it will keep raising rates, that they will peak above 5% and that it will then hold them there until at least the end of next year. Fed officials can argue that two out of three ain’t bad, as Meat Loaf sang. But the failure to convince Wall Street is undermining the Fed’s tight-money policy. The 30-year mortgage rate has pulled back from a peak above 7.1% to below 6.5% in less than two months, and financial conditions overall are as loose as they were at the start of June, according to a Chicago Fed measure.

☆ Meta lawsuit: An Ethiopian professor was murdered by a mob. Son alleges Facebook fueled the violence
▼ + stars: | 2022-12-14 | by ( Eliza Mackintosh | ) edition.cnn.com time to read: +8 min

The case is a constitutional petition filed in Kenya’s High Court, which has jurisdiction over the issue, as Facebook’s content moderation operation hub for much of east and south Africa is located in Nairobi. “They have suffered human rights violations as a result of the Respondent failing to take down Facebook posts that violated the bill of rights even after making reports to the Respondent,” reads the complaint. The legal filing alleges that Facebook has failed to invest adequately in content moderation in countries across Africa, Latin America and the Middle East, particularly from its hub in Nairobi. In a statement to CNN, Meta did not directly respond to the lawsuit:“We have strict rules which outline what is and isn’t allowed on Facebook and Instagram. Last year, whistleblower Frances Haugen, a former Facebook employee, told the US Senate that the platform’s algorithm was “literally fanning ethnic violence” in Ethiopia.

☆ Blackstone’s BREIT Highlights Looming Dangers of Private Funds
▼ + stars: | 2022-12-12 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The Blackstone Real Estate Income Trust says withdrawals have come primarily from overseas investors, particularly in Asia. Top executives at Blackstone Inc. declared themselves baffled that so many retail investors want their money back from its giant private property fund, given its strong performance. They shouldn’t be surprised. The very design of the fund encourages investors to withdraw when they see others doing so. My worry is, those same incentives could hit other parts of the financial system as central banks pull back from easy money.

By the time Cherelle Griner arrived at the White House, it was clear Brittney Griner was on the verge of being released. As Cherelle Griner waited to meet with Sullivan, however, a change in venue signaled what was about to happen. Biden delivered the first official confirmation that Brittney Griner was on her way home, something he’d told aides he wanted to do himself. Shortly after, advisers delivered the official notification to Biden and Cherelle Griner: Brittany Griner was secure and in the hands of US officials. Biden then brought Cherelle Griner to a chair set up next to his at the Resolute Desk.

☆ Viktor Bout: The Russian arms dealer swapped for Brittney Griner
▼ + stars: | 2022-12-08 | by ( Eliza Mackintosh | ) edition.cnn.com time to read: +5 min

CNN —Brittney Griner’s freedom ultimately hinged on the release of a convicted Russian arms dealer whose life story inspired a Hollywood film. On Thursday, a source told CNN that the US basketball star had been released from Russian detention in a prisoner swap for Viktor Bout, nicknamed the “Merchant of Death” by his accuser. Viktor Bout is pictured in a temporary cell ahead of a hearing at a court in Bangkok in August 2010. Christophe Archambault/AFP/Getty Images“His early days are a mystery,” Douglas Farah, a senior fellow at the International Assessment and Strategy Center who co-authored a book on Bout, told CNN in 2010. He said that Bout graduated from the Military Institute on Foreign Languages, a well-known feeder school for Russian military intelligence.

Explosions at two Russian air bases Monday have focused attention on Ukraine's efforts to develop longer-range combat drones. The Russian Defense Ministry says the attacks were carried out by Ukrainian drones, which it claims were brought down by Russian air defenses. Imagery — both satellite and photographs — indicates some damage was done to Russian military planes at one base in Ryazan region. The Ukrainian Defense Ministry has offered no official comment on the explosions, and the Ukrainian government has not acknowledged adding long-range attack drones to its arsenal. The two bases hit, according to the Russian Defense Ministry, are hundreds of miles inside Russian territory and beyond the reach of Ukraine's declared arsenal of drones.

☆ Economists Think They Can See Recession Coming—for a Change
▼ + stars: | 2022-12-04 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

If the economy shrinks next year, no one should be surprised. We’re facing the most widely forecast recession in history—and investors don’t seem to care. Recession in Europe and the U.K. is already the average of economic predictions, while the U.S. average forecast for next year is growth of a miserly 0.2%, according to Consensus Economics, the third lowest since 1989.

☆ Inequality in Society Drives Stock-Market Performance
▼ + stars: | 2022-11-29 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

There’s a bit of GameStop in everything. The so-called meme stocks led by the videogame store put traditional investors to shame in early 2021, achieving 1,000%-plus gains in a few weeks and breaking free of the shackles of ordinary financial analysis. Reddit is mostly irrelevant again, and many of the meme stocks have crashed back to earth (though not GameStop). But just as with GameStop, there’s a fundamental truth that stocks and other financial assets are just tokens whose price is determined by supply and demand. Most of the time it is demand that matters most, with large amounts of supply—IPOs and secondary issues—usually a symptom of excessively high prices.

☆ 'The Phantom of the Opera' extends Broadway run due to demand
▼ + stars: | 2022-11-29 | by ( Marianne Garvey | ) edition.cnn.com time to read: +1 min

The Broadway musical “The Phantom of the Opera” announced in September that it would be closing in February because of declining ticket sales, but plans have changed. On Tuesday, the show’s producer, Cameron Mackintosh, announced the show will now run until April 16. An unexpected bolster in sales, as well as a busy Thanksgiving week, helped the longest-running show in Broadway history earn $2.2 million in sales last week, according to The New York Times. “We’ve sold out virtually everything that we have on sale.”The musical will celebrate its 35th anniversary in January. With music by famed composer Andrew Lloyd Webber, “Phantom” features a masked music lover who haunts the Paris Opera House.

☆ Crypto Speculation Is All But Over. Its Systemic Troubles Aren’t.
▼ + stars: | 2022-11-22 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The first question cryptocurrency owners should be asking themselves at the moment is whether their bitcoin, dogecoin and other tokens are safe. Hold them with the wrong broker or custodian, and they might vanish into an interminable bankruptcy proceeding, perhaps never to emerge. The second question is closely linked: Have prices fallen enough to justify buying back in? There is no definitive answer, of course, since these are speculative assets with no basis for valuation. But for both the remaining speculators and the true believers who think eventually we will all use a crypto financial system, it is worth thinking about how much investors are prepared for a systemic crisis.

☆ Markets Zoom Toward Collision With the Fed
▼ + stars: | 2022-11-16 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Investors are betting big that the Federal Reserve will be able to ease off its fight against inflation. The Fed needs to push back to prevent the markets prematurely easing on its behalf. Last week showed the extreme sensitivity of markets, when below-forecast inflation for October led to the second-biggest drop in 10-year Treasury yields on record, behind only the day in March 2009 when the Fed said it would start to buy long-dated Treasurys.

☆ Markets Zoom Toward Collision Course With the Fed
▼ + stars: | 2022-11-16 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

☆ Move Over, Inflation: Here Comes the Earnings Crunch
▼ + stars: | 2022-11-13 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Traders had been waiting for several months for signs that inflation was beginning to ease. Investors are rightly focused on inflation, where this week finally brought the good news of slower-than-expected price rises, and an excessively large jump in stock and bond prices as a result. The trouble is that even as markets delight in the prospect of smaller rate increases from the Federal Reserve, earnings are becoming more of a threat. Wall Street analysts have been slashing profit forecasts at a pace rarely seen outside recessions—and still seem optimistic. While recession is increasingly the consensus among economists, risky assets such as shares aren’t yet pricing in significant risk to earnings.

☆ Investors Rekindle Love Affair With Short-Term Success
▼ + stars: | 2022-11-03 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Investors are focused on the short-term again, and it is pushing CEOs away from spending on major long-term projects. Mainly the Federal Reserve and its aggressive interest-rate rises. Put simply, why bet on risky ventures that might possibly pay off in 10 years when you can earn 4.5% on a totally safe one-year T-bill? Interest rates are strongly encouraging investors to have a shorter-term outlook.

☆ Ethiopia: Warring parties agree to a truce in two-year civil war. Here's what to know
▼ + stars: | 2022-11-03 | by ( Eliza Mackintosh | ) edition.cnn.com time to read: +16 min

CNN —When Ethiopian Prime Minister Abiy Ahmed received the Nobel Peace Prize in 2019, he was lauded as a regional peacemaker. A year later, he launched a conflict that spiraled into a brutal civil war, spawning one of the worst humanitarian crises in the world. In November 2020, Abiy ordered a military offensive in Ethiopia’s northern Tigray region and promised that the clash would be resolved quickly. Yasuyoshi Chiba/AFP/Getty ImagesThe Tigray conflict has its roots in tensions that go back generations in Ethiopia. For months at the start of the conflict, Abiy denied that civilians were being harmed or that soldiers from Eritrea had joined the fight.

LONDON, Oct 28 (Reuters) - Fresh vegetables and fish are falling off the menu. Joanne Farrer used to regularly serve her three children roast beef dinners or stews packed with fresh vegetables. Volume sales of fresh vegetables fell by more than 6% and fresh meat by over 7% in August, for example, while sales of snacks and candy rose almost 4%. "We also know that cheap highly processed foods are the ones most likely to cause obesity." "If fresh food is cheaper then we'll get that, but it's not often on offer."

☆ Mystery Stock Surge Is Probably Just Another Bear Market Rally
▼ + stars: | 2022-10-16 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The fall in prices has many investors actively discussing when it might be time to make purchases. With volatility comes opportunity. Thursday saw the biggest intraday gain in the S&P 500 since the wild swings as stocks were approaching their lows in March 2020. Could the opportunity be that—whisper it—the swings are a sign that the great bear market of 2022 is finally getting close to bottoming out? There is talk of short-covering, psychologically important levels for the so-called market technicians and put options reaching payout points, but none can be proven.

☆ The Bank of England’s Dilemma: Easing and Tightening at the Same Time
▼ + stars: | 2022-10-11 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The Bank of England is testing one of the most challenging problems facing central banks today: Can they ease and tighten at the same time? On Tuesday the BOE had to intervene again in the country’s dysfunctional government bond markets, offering to buy up to £5 billion, equivalent to $5.5 billion, a day of inflation-linked bonds, just 24 hours after expanding its offer to buy conventional bonds. Inflation-linked prices rose a little in morning trading, but failed even to reverse Monday’s huge selloff.

☆ Markets Are Topsy-Turvy, and There’s Worse: It’s Hard to Cushion Your Portfolio
▼ + stars: | 2022-10-10 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Good news is bad news, and on Friday it was very good, and very bad. The monthly payrolls report showed a superstrong labor market, with more jobs created than expected and unemployment matching a 53-year low. Stocks dropped, as did bond prices, with bond yields up. Such is the world of high inflation—and it is creating serious problems for those trying to cushion their portfolios against severe loss. For 20 years there was a strong tendency for stocks to rise on days when bond yields rose, and vice versa.

REUTERS/Dado Ruvic/IllustrationNEW YORK, Sept 27 (Reuters Breakingviews) - American presidents often use economic sanctions as a geopolitical lever against countries with whom they are in conflict but have stopped short of a shooting war. Yet while sanctions can inflict severe economic pain, history suggests they lack a decisive political punch. The sanctions against Russia were swift and closely coordinated. Meanwhile, authorities slapped targeted sanctions on hundreds of Russian individuals, defense and transport firms, financial institutions, tech groups and energy companies. Economic restrictions sped up the country’s transition from apartheid to majority rule by the African National Congress.

☆ The Market Still Isn’t Priced for a Proper Recession
▼ + stars: | 2022-09-26 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The stock market is almost always late to wake up to the threat of recession, but it’s increasingly hard to miss the warnings from the Federal Reserve. Not only might there be a recession, but the Fed has no intention of stepping in to save investors this time. The problem is one I’ve been banging on about all year: Investors still aren’t factoring in much threat to earnings, even though recessions almost always hit earnings hard. Instead, most of the fall in stock prices has been due to rising rates lowering valuations. There’s been an acceptance of slightly lower earnings for this year, at least when the oil windfall boosting energy companies is excluded, but Wall Street continues to predict decent profit growth next year.

☆ Markets Are Right to Be Shocked by Britain’s Version of Reaganomics
▼ + stars: | 2022-09-23 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Reaganomics, voodoo economics, trickle-down theory; whatever you call it, 1980s political economy is back in Britain, and the markets hate it. The new British government announced surprise tax cuts on Friday costing about 1.8% of GDP, with no explanation of how to pay for them other than some hand-waving at “growth.”

☆ The Market Still Isn’t Priced For a Proper Recession
▼ + stars: | 2022-09-22 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

☆ James Mackintosh — Senior columnist, markets at The Wall Street Journal
▼ + stars: | 2022-09-19 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

James MackintoshJames Mackintosh joined the WSJ in 2016, after almost 20 years at the Financial Times, most recently as Investment Editor and writer of the Short View column. He is a graduate of St Catherine's College, Oxford, where he gained a first-class degree in Philosophy and Psychology. He spent two further years at the university in postgraduate study of philosophy before entering the real world. He has two cats and two children. He is @jmackin2 on Twitter.

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