US inflation hit a new 40-year high last month of 8.6% [AP]
On a month-to-month basis, prices jumped 1% from April to May, much faster than the 0.3% increase from March to April. Behind that surge were much higher prices for food, energy, rent, airline tickets and and new and used cars…. Some evidence in recent weeks had suggested that inflation might be moderating, particularly for long-lasting goods that were caught up in supply chain snarls and shortages last year. But that trend appeared to reverse itself in May, with used car prices rising 1.8% after having dropped for three straight months.
Janet Yellen says the U.S. is likely to avoid a recession. [DealBook]
“There’s nothing to suggest a recession is in the works,” Ms. Yellen said…. Although Ms. Yellen expressed optimism that the United States would be able to avoid a recession, the economy faces some serious headwinds including the war in Ukraine, higher energy prices and the continuing Covid lockdowns in China. It will be up to the Fed, she added, to achieve a so-called soft landing where it raises borrowing costs enough that it reduces demand and tames price gains without causing a recession./“It’s an art,” Ms. Yellen said of the Fed’s job.
Ending Payment for Order Flow: Easier Said Than Done [WSJ]
In some theoretical scenarios, making market participants vie for the best price improvement might compete away the ability to also pay the broker for the order. However, much would likely depend on how auctions are structured, who participates in them and on accompanying price measurement or fee changes.
Wholesalers might not bid on some orders that today would be routed to them for price improvement; what happens to those? The options market features retail auctions, but payment for order flow is still present. Mr. Gensler said the SEC should look to learn from the options market.
Coatue, JPMorgan Weigh Funds to Buoy Capital-Hungry Startups [Bloomberg via Yahoo!]
Philippe Laffont’s Coatue has begun discussing its planned Tactical Solutions Fund with potential investors, some of the people said. The firm is targeting $2 billion for the effort and already has raised $1.2 billion from anchor investors, a presentation shows. While it will mostly provide capital to publicly traded companies, about 20% will be earmarked for closely held startups, potentially including those the hedge fund has previously backed, one of the people said…. The alternatives arm of JPMorgan’s asset-management unit is in the early stages of exploring whether to raise a fund that would pursue a related strategy, some of the people said….
More companies may seek capital in part because of a slowdown in the market for initial public offerings as well as scarcity of private funding, the presentation shows. Coatue intends to make a “significant” capital commitment to the fund and invest the war chest within two years, though it has an option to extend that period by an additional year.
Crypto Firms Cut Back on Hiring During Market Slump [WSJ]
In the past few weeks, Coinbase Global Inc., the largest American crypto exchange, rescinded offers to employees who accepted jobs and said it would slow its hiring pace. Another crypto exchange, Gemini Trust Co., cut 10% of its staff, citing the effects of the market downturn…. At the hiring website CryptoJobs, the number of job listings has fallen by 20% over the past two months, according to project manager Evy Lee.
Larry Ellison’s Lanai Isn’t for You—or the People Who Live There [WSJ]
Over the past decade, and especially since the pandemic began and Ellison moved to Lanai full time, Gima and his neighbors have begun to see what $90 billion can do. Their once-sleepy island is now a common destination for yachts and private jets, as Ellison buddies such as Elon Musk drop by to visit. (Ellison sits on Tesla Inc.’s board and is one of the biggest outside backers of Musk’s rocky effort to buy Twitter Inc.) Tom Cruise has visited, which still gets people talking, and former Israeli Prime Minister Benjamin Netanyahu took a Pilates class at the Four Seasons last year…. Eight residents… say Cruise flipped and totaled one of Ellison’s cars while driving on some of Lanai’s mostly unpaved roads.