MoneyWeek 1099

“Companies should be prioritising slack, not efficiency and optimisation” There are many reasons why US stocks have massively outperformed over the last few decades – low interest rates have helped, as has the stunning success of America’s tech giants. But the huge gains have also been about America’s embrace of “optimisation”, says Edward Chancellor on Breakingviews. In the name of efficiency, US companies have run down inventories and contracted out their manufacturing to the other side of the world (mostly to China) and replaced as much equity as possible with debt. This has worked absolute wonders for their return on equity (ROE). Last year listed US companies produced an ROE of 17% – against a mere 9% in Japan. No wonder investors have been keener on paying more for the former than…

Anybody who fancies spending five months “counting penguins” and “running the world’s most remote post office” should get their application ready, says BBC News. The UK Antarctic Heritage Trust is looking for staff to run its Port Lockroy base on Goudier Island in the Antarctic Peninsula. The base was originally set up in 1944, but since 2006 it has served as a post office, gift shop and museum. In a normal year, there are around 18,000 tourists between March and November, although the site has been closed since the pandemic began and the incoming team will be the first to work there since 2019. Salaries range from £1,250 per month for an assistant role to £1,800 per month for the base leader.…

Sam Waley-Cohen (pictured) has become the first amateur jockey to win the Grand National since 1990, says the Daily Mail. Waley-Cohen, riding in his last race before retirement, won on 50/1 long-shot Noble Yeats, owned by his father. As an amateur, Waley-Cohen does not officially get a share of the £561,300 first-prize money, most of which goes to the owner. Instead, 10% will be donated to the Amateur Jockeys Association. Walmart truckers will now earn between $95,000 and $110,000 in their first year as the giant US retailer ramps up pay amid a chronic shortage of drivers, says Bloomberg. The top rate is 26% more than the previous average for its new drivers and more than twice the median $47,130 for US truck drivers in 2020. The firm employs 12,000 truckers,…

Superhero movie Morbius – which stars Jared Leto as the eponymous vampire anti-hero – suffered a record 74% drop in box-office sales following its opening weekend, says Forbes. The film made $39m in US cinemas in its first weekend, but slumped to $10.2m in its second weekend, the largest drop for any major superhero release. Software firm Sky Mavis says that it will refund $400m stolen from its Ronin Network platform by hackers, says the FT. The money was owned by users of its Axie Infinity game, in which players battle to win cryptocurrency and non-fungible tokens (NFTs). The firm has received $150m in new investment to help pay for the refund, with the rest coming from its cash reserves.…

“The world’s central bankers… are starting to see sense,” says Hamish McRae in The Mail on Sunday. Minutes from the March meeting of America’s Federal Reserve show that policymakers plan to shrink the Fed’s $9trn balance sheet faster than anticipated in response to soaring inflation. The balance sheet is made up of assets, principally US government bonds and mortgage-backed securities, which the Fed has bought during multiple rounds of quantitative easing (QE). Now QE is to be replaced by quantitative tightening (QT). “Officials broadly agree the Fed should shed up to $95bn of assets a month,” with the reductions to begin gradually next month, say Colby Smith and Kate Duguid in the Financial Times. The Fed can reduce its bond holdings by not reinvesting the proceeds of bonds as they mature,…

Over the past year, global semiconductor shortages have caused supply chain chaos, says Daniel Newman on MarketWatch. Now some analysts fear the chip industry could be heading for the opposite problem – “a massive glut of semiconductors in the next year”. Chip firms are racing to bring new capacity online, just when a slowing global economy could “see demand for chips fall off a proverbial cliff”. Chipmakers are due to spend $152bn on new factories and production equipment this year, a steep rise from the $113.1bn they spent last year, says Dashveenjit Kaur on TechHQ. But even this may not be simple, given reports of a scarcity of “everything from lenses, valves and pumps to microcontrollers, engineering plastics and electronic modules”. Chip-tool makers have told clients that they will have to…