Three Things (2/14)
Feb 14, 2022
The below content and projections are the opinion of the authors. Any conclusions or takeaways are their own. This should not be considered as investment advice. Investing involves the risk of loss and returns are not guaranteed.
1) Consumer sentiment sinks in February and inflation expectations hit 14-year high amid price surges across the economy
- The University of Michigan’s index of consumer sentiment fell to 61.7 in February, the lowest since October 2011.
- The report showed consumers expect an inflation rate of 5% over the next year, the highest since 2008.
- Some 26% of survey respondents expect their financial condition to get worse over the next 12 months, the most since 1980.
Titan’s Takeaway: Last week’s data showed inflation is at a 40-year high and consumers hate few things more than seeing their purchasing power going down. The impacts longer-lasting price pressures will have on the economy are only just beginning to be understood.
2) Binance takes stake in Forbes, will help finance the company’s transition to public markets as crypto expands media influence
- The crypto exchange operator will invest $200 million in Forbes.
- This investment will assume commitments made by some investors as part of Forbes’ process to go public via a SPAC, or special purpose acquisition company.
- Binance founder Changpeng Zhao told the New York Times on Friday, “We don’t want to run a news company.”
Titan’s Takeaway: Significant media investments make the crypto industry just like any other economy-defining sector. And while nearly every major legacy business publication has staffed up to cover crypto in the last few years, a major exchange taking a stake in one of these publications could change the terms of engagement in the coming years.
3) Stocks slide, oil spikes after U.S. officials say Russia could invade Ukraine before the end of the winter Olympics
- U.S. national security advisor Jake Sullivan said Friday afternoon Americans in Ukraine should leave the country within 24-48 hours.
- Secretary of State Antony Blinken said “we’re in a window” where a Russian invasion of Ukraine could happen, including during the Olympics, which are set to end February 20.
- U.S. stocks on Friday afternoon fell quickly following these headlines, while the price of Brent crude oil — the international benchmark price — rose over 4% on Friday to more than $95 a barrel.
Titan’s Takeaway: Headlines related to Russia-Ukraine tensions have been simmering for weeks, but the latest developments shook financial markets on Friday. We’ll see if these moves have staying power, but it now appears possible investors will replace “fears over higher rates” with “fears over geopolitical tensions” as the market’s biggest bugaboo in the weeks ahead.
Cash Management
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