The Fed is likely to signal a March interest rate hike and that further policy tightening is coming [CNBC]
“We don’t expect them to sound dovish,” said Mark Cabana, head of U.S. short rate strategy at Bank of America. “The [bond] market seems to be reacting to the drop in equities, plus the geopolitical tensions, so maybe the Fed sounds not as hawkish as they otherwise would have. But we don’t think the Fed is going to come out and tell the market it’s wrong for pricing in four rate hikes this year….” Cabana said the Fed could indicate that its first rate hike since 2018 could be as soon as the next meeting, which would be March. It made a similar comment in 2015, in the statement a month ahead of its first rate hike following the financial crisis.
SEC regulatory blitz begins with proposals to tighten rules on hedge funds, private equity [MarketWatch]
The proposed regulation would require private funds to report within one business day when they suffer “certain extraordinary investment losses” and “significant margin and counterparty default events,” according to an SEC fact sheet. The rule would also require reporting of changes in cash levels, changes to relationships with a prime broker and major withdrawals or redemptions…. The SEC also voted to propose a rule that would increase oversight of communication platforms that facilitate off-exchange securities trades, typically used in the markets for bonds and some derivatives.
SEC chair eyes tougher cyber rules to protect investors against hackers [CNBC]
The agency’s top official is considering more stringent requirements for a diverse set of firms underpinning the country’s financial infrastructure, including publicly traded companies, financial advisors, brokerage houses, trading systems, and firms that custody client assets, among others…. Gensler suggested rules to reduce risk among investment companies, investment advisors and broker-dealers by improving their “cybersecurity hygiene and incident reporting.”
A year after GameStop mania, meme stocks have tumbled [CNN Business]
Shares of GameStop have plunged nearly 35% in January while AMC has plummeted more than 40%.... And Robinhood, which went public last year briefly and became a meme stock itself following its initial public offering, has tumbled as well. Robinhood is down more than 25% this year and is trading at an all-time low….
The ginormous sell-offs in meme stocks at the start of 2022 may be a sign that investors recognize how bubblicious last year's rally was. That said, younger traders may now just be flocking instead to new themes (over memes).
Cathie Wood declares ‘innovation is on sale’ after rout in tech stocks [FT]
“We use volatility to our advantage,” she added. “We concentrate towards our highest conviction names and that tends to work very well as we go through these corrections….” Some of its biggest holdings have dropped sharply this year, with Tesla down 23.5 per cent, Zoom Video Communications down 20.7 per cent and Coinbase Global 26.1 per cent lower.
New York's mask mandate temporarily restored by appeals judge [NPR]
Judith Vale, an attorney for the state, said judge Thomas Rademaker's earlier ruling would "radically disrupt the status quo" and endanger the health of students and staff at schools….
Attorney Chad Laveglia, who brought the challenge on behalf of a group of parents, vowed to take the challenge "as far as it needs to go."
"The judge got it wrong entirely. It's so blatantly unconstitutional to grant a stay whatsoever," he said.