Market unmoved by Biden’s plans to tax wealth
US President Joe Biden has outlined his ambitions for comprehensive tax reforms targeting large corporations and private equity funds, with the market’s attention remaining steadfastly on interest rates.
President Biden’s ideal scenario would see businesses shouldering higher tax burdens, a reduction in executive compensation, and a quadrupling of the costs for shareholder buybacks.
Private investments hold back university fund returns
Private investment-laden portfolios of US university funds achieved a net return of 7.7 per cent in FY2023, but the gains were almost entirely due to public equities.
Historically, university funds with larger endowments tend to achieve better one-year investment returns than funds with smaller endowments due to significant allocations to private investing. The rise in the US stock market and disappointing returns on alternative investments reversed the trend in 2023.
SEC likely to deviate from European climate reporting rules
The Securities and Exchange Commission (SEC) is about to scrap the requirement for Scope-3 reporting. In doing so, the US stock market watchdog is driving a wedge between US legislation and the new European rules from the Corporate Sustainability Reporting Directive, or CSRD that will apply from next year.
Weak yen crowns top Japanese companies as ‘Seven Samurai’
That Japan unexpectedly slipped into recession will make the market care. Profits of listed companies are soaring, and share prices are peaking. Investors say there is much more in store, but the yen must continue to cooperate.
Goldman Sachs already refers to the “Seven Samurai” in its notes to clients, alluding to the classic Akira Kurosawa film, later remade in the US as “The Magnificent Seven.”
Billions of euros flow out of European property funds
Investors have been liquidating billions of euros in assets in European real estate funds for a year now. German investors in particular have been remarkably active in selling their property positions.
Picks-and-shovels strategies alive as Nvidia fuels AI gold rush
Artificial intelligence and semiconductor stocks rallied late Wednesday during after-hours trading after Nvidia wowed Wall Street with its Q4 earnings. Investors seem to bet on more demand for “picks-and-shovels” in today’s AI-gold rush, echoing dot-com optimism according to some.
‘Tokenisation is the next step for asset management’
Tokenisation is the next step for the asset management industry. So says not only Larry Fink, Blackrock’s CEO, but also Jeroen van Oerle, manager of Lombard Odier’s fintech strategy. He sees the potential impact mainly in private markets.
Europe has the same commercial property problems as US
Not only the US commercial real estate market is struggling with historically low prices due to interest rate hikes and the trend of working from home. Europe, too, is in trouble.
Carlyle bites back in debate over risks in private credit
The Bank of England (BoE) this week reiterated its concerns about the risks of higher interest rates and limited data disclosure in private credit markets. Harvey Schwartz, CEO of The Carlyle Group with some 380 billion dollars under management, believes those concerns are exaggerated.
‘Basel Endgame’ in US seen supporting private credit
While Wall Street is pulling out all the stops to curb ‘Basel III Endgame’, private lenders are in pole position for implementation of the banking rules. The price at which US big banks can borrow money will be skillfully undercut by private credit funds, but critics in the banking sector denounce the lack of effective supervision of the ‘non-bank’ lenders.