5 ways to hedge against an inflation spike, plus what it’s like to work for Cathie Wood

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Your weekly recap/outlook

This past week was a total throwback. GameStop traders ran rampant. The US stimulus outlook caused significant market gyrations. It felt like the last week January all over again.

GameStop surged 104% in the final 30 minutes of trading on Wednesday and extended those gains to 311% at Thursday intraday highs. The spike was enough to cost short-sellers – apparently gluttons for punishment – another $1.9 billion in mark-to-market losses. The rally petered out on Friday, but it was refreshing for everyone’s favorite brick-and-mortar game retailer to get another couple days in the sun.

Strangely enough, the latest GameStop frenzy was largely overshadowed by a bond-market tantrum that saw 10-year Treasury yields climb to a more than one-year high. The culprit was renewed inflation fears stemming from President Biden’s proposed $1.9 trillion stimulus bill.

The worry is that consumer prices will overheat as the US economy snaps back into shape, and the Fed’s assurance that it will keep a loose monetary policy for the foreseeable future did nothing to soothe nerves. The most overvalued segments of the stock market – most notably mega-cap tech – sold off swiftly as the skyrocketing yields suddenly made bonds an attractive alternative.

At the center of all this going forward, per usual, is the economic recovery. The degree of progress will inform ongoing stimulus negotiations, which will stoke further debate about inflation risk. The narrative that prevails will determine whether the bond-market outburst was a flash in the pan, or a longer-term development that could upend portfolios and send stocks into another tailspin. Stay tuned.


5 ways to guard against inflation

Traders in the S&P 500 stock index futures pit signal offers near the close of trading at the Chicago Mercantile Exchange May 23, 2007

John Normand of JPMorgan is keeping a close eye on rates, and says a small increase could make a huge difference because the economy is so leveraged. Normand says he’s still “comfortable” investing today, but that might change if real rates pick up. He laid out five asset classes that will protect investors if inflation ramps up.

Read the full story here:

JPMorgan says these 5 cross-asset hedges are the best ways to protect portfolios from stimulus-driven inflation


Working at Cathie Wood’s Ark Invest

cathie wood ceo ark invest profile 2x1

All eyes were on Cathie Wood’s Ark Invest this past week amid volatility in tech stocks. In recent interviews, two Ark analysts share how Wood has built the firm to weather pullbacks – and their responses provide insights into what it’s like to work at the reputed firm.

Read the full story here:

Famed investor Cathie Wood has staffed her firm with analysts in their 20s and 30s as she looks to predict the future. 2 analysts break down what it’s like to work at Ark Invest.


SPAC winners and losers 

Traders and clerks at the CME Group toss confetti to celebrate the final trading session of the year December 31, 2010

The red-hot SPAC craze isn’t slowing as 154 SPACs have raised $48.5 billion so far this year. JPMorgan’s Michael Cembalest studied 85 SPACs to examine the winners and losers in the ecosystem. He also shared why it will be important to monitor the SPAC market over the next two years.

Read the full story here:

The chairman of investment strategy at JPMorgan’s $2.2 trillion asset management arm studied 85 completed SPAC IPOs – and lays out the winners and losers in the ‘significant wealth transfers’ within the ecosystem


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider