Episode 72: Inflation Fears and Fed Keeps Rates Low
Growing at a 1.68% annual rate, inflation broke through its long-term trend line last month, leading a growing cohort of Wall Street strategists to think it may be time for investors to reposition.
Keep Pumping it up: Fed Chair Powell said this week he plans to keep interest rates low, fueling concerns that inflation may exceed the Fed’s longstanding 2% target, especially as the infusion from the just approved $1.9 trillion relief bill works its way through the economy. If that happens, many investors' playbooks may have to be re-written, since price pressures tend to erode capital, make companies’ future profits less valuable today, and could lead to higher interest rates. We asked a slew of strategists and investors for their top trades to hedge against rising inflation.
Big Ups to the Boards: All S&P 500 company boards include at least one woman. In January, women gained 22 more S&P board seats, the biggest jump in nearly two years. But men still make up more than 70% of those seats, representing 92% of all S&P 500 CEOs. While the number of female Fortune 500 CEOs hit a record in November, that means women-led businesses still make up only 8% of the companies on the list.
More Goodness: Phyllis Newhouse made history by ringing the NYSE bell as the first woman of color to bring a SPAC public. “We have the power to change history, but you can only change it in the numbers. You can only change it when you leverage what everyone brings to the table. And this why it is so important to allow other people to sit at the table.” - Phyllis Newhouse CEO of Athena Technology Acquisition Corp.
Market Close
Dow 30 32,628.04 -234.26 (-0.71%)
S&P 500 3,912.81 -2.65 (-0.07%)
Nasdaq 13,215.24 +99.07 (+0.76%)
IPO
Denver-based Frontier Group Holdings Inc., the parent company of Frontier Airlines, has filed for an initial public offering. The ultra-low-cost airline is seeking to sell $100 million worth of shares, although that figure is often a placeholder used to calculate fees. Underwriters include Citigroup, Barclays, and Deutsche Bank. Shares would trade on the Nasdaq under the symbol FRNT. Frontier filed for an IPO in 2017 but later withdrew plans. The offering comes on the heels of Sun Country Airlines Holdings Inc.’s February launch. Sun Country is backed by private-equity giant Apollo Global Management Inc.
LATAM
LatamList – Fondeadora, the Mexican challenger bank, added $14M to its Series A funding round. The startups previously raised $14M in August 2020, bringing the Series A total to $28M. Fondeadora is a neobank aiming to democratize personal finance in Mexico and digitize the system. The Fondeadora account is free of charge and operates with an app and debit card.