From Marketwatch: Retail traders have been particularly active in the market lately, Mizuho’s Azarm said, which suggests that they were responsible for much of the action in these more speculative names.
Trading volume in the U.S. equity market exploded earlier this week. Nasdaq Composite trading volume rose to nearly 14 billion shares on Tuesday, the highest level on record going back to 1995, according to Dow Jones Market Data. The market wasn’t as active on Wednesday. According to data tracked by Azarm, roughly 55% of activity in the U.S. market over the past two weeks has been tied to platforms typically used by individual investors.
“This is massive. Even during the 2021 meltup, we hardly saw anything this elevated,” he said, referring to the meme-stock frenzy that saw shares of GameStop Corp. Some of the recent surge in trading volume across the U.S. market appeared to be tied to penny stocks, Joe Saluzzi, partner and co-founder of Themis Trading, told MarketWatch. Volume in shares of companies trading at $1 or less has been unusually high lately, he said.
2. Two-Year Rise in S&P Puts It in 93rd Decile of 2-Year Returns
DC Lite Blog Mortgage demand. “Mortgage demand is crumbling. For the week ending January 3, mortgage loan applications for purchase sank 6.6%, the 4th decline in the last 5 weeks. The level of conventional purchase apps lowest since 2011! 30-year FRM back to 7%.”
5. Stocks Most Overvalued in 20 Years Versus Corporate Bonds and Treasuries
Dave Lutz at Jones Trading: US bond markets are signaling that equity bulls may be a little too exuberant now. Stocks are close to the most overvalued against corporate credit and Treasuries in about two decades. The earnings yield on S&P 500 shares, the inverse of the price-earnings ratio, is at its lowest level compared with Treasury yields since 2002, signaling that equities are at their most expensive relative to fixed income in decades.
For company debt, the S&P 500’s earnings yield, at 3.7%, is close to the lowest relative to the 5.6% yield of BBB rated dollar corporate bonds since 2008. “Bonds are less expensive than the ‘risky asset’ stocks,” said Michael O’Rourke, chief market strategist at JonesTrading. “As Treasuries remain under pressure pushing yields higher, equity valuations should adjust lower to remain competitive.”
6. FUBO Stock Story
Via MorningBrew:That moment when the popular kid asks you to bundle 🥰: In an effort to snag subscribers from YouTubeTV, Disney and small-fish sports streamer FuboTV are combining their live television forces to become the second-largest cable dupe in the US, Bloomberg reported yesterday.
Fubo’s stock more than tripled on the announcement. As part of the team-up:
Fubo will retain its name and CEO but will reorganize to absorb Disney’s Hulu + Live TV business (which doesn’t include regular ol’ Hulu). Disney will own 70% of the new-and-improved Fubo and will appoint most of its board.
Fubo will go from 1.6 million North American subscribers—near-bottom of the online television provider totem pole—to a combined 6.2 million with Hulu + Live TV (vs. YouTubeTV’s 8 million).
Fubo will also be able to create a new broadcast service and mini sports/news/entertainment bundles with Disney-owned channels, including ESPN and ABC.
Enemies to lovers: Fubo spent last year as Disney’s opp after it sued to block a joint Warner Bros./Fox Corp./ESPN sports streaming bundle called Venu. Under the new deal, Fubo will settle its lawsuit—which would’ve been heard yesterday—for $220 million plus a $145 million loan from Disney. Venu is now expected to resume its launch.
Separate bedrooms: Once the deal closes in the next 12 to 18 months, you’ll still access Hulu + Live TV from the Hulu app, and Fubo through the FuboTV app—at least for now. “Having two separate platforms today, obviously, it’s not ideal,” said Fubo co-founder and CEO David Gandler
9. Major Country Re-Introduces Strict Covid Rules as Mystery New Chinese virus Spreads
From The Express News: Members of the public are advised to avoid public places and to wear masks in public if they are showing symptoms of Human Metapneumovirus.
The local government has issued guidance encouraging individuals to shun public settings if experiencing symptoms related to Human Metapneumovirus (HMPV) and has recommended mask-wearing in crowded locales after identifying three cases of the respiratory ailment.
In recent developments, three children have contracted the disease: an eight-month-old boy and a three-month-old girl diagnosed in Bengaluru, and a two-month-old patient from Rajasthan currently receiving treatment in AhmedabadDespite the reimplementation of Covid-related mandates, Indian officials have appealed for calm, pointing out that HMPV is an established virus, with cases already reported both domestically and around the world. In fact, media sources indicate that a six-month-old in Kolkata had the illness as early as November.
10. How the Unconscious Mind Guides Our Behavior
From Psychology Today: Buried memories, past relationships, and hidden feelings affect our daily lives.
Key points
It’s easy to dismiss the idea of the unconscious mind as an old theory, but it has real, measurable effects.
The way you feel about yourself, your loved ones, and other people can be influenced by unconscious bias.
Past experiences can have powerful effects on what you remember and how you remember it.
Raise your hand if the concept of the unconscious mind brings to mind a cartoon iceberg, showing 10 percent of its mass above water shining brightly in the sun, and 90 percent underwater, dark, gloomy, and mysterious—something you probably saw in your Psych 101 textbook.
Some people consider the unconscious a discredited notion, a fusty old concept associated with Sigmund Freud, his Viennese couch, and his cigars—something people once believed could only be reached through dreams or fantasies. But no! The unconscious mind is alive and well in each of us, and has powerful effects on our everyday functioning.
Our emotions, our memories, and even the way we see ourselves (and those who are dear to us) are deeply influenced by unconscious beliefs and feelings. These effects have been studied extensively over the past few decades, offering plenty of evidence for the power of the unconscious mind.
Take emotions, for instance. It’s not hard to understand how your feelings can be affected by unconscious beliefs and desires; it’s face valid, as a social scientist might say. (Perhaps you’re romantically interested in someone you believe you shouldn’t want to be with—a conflict that can generate a lot of frustrated energy.)
In fact, every school of thought in the field of psychotherapy—from psychoanalysis to CBT to relational treatment—is premised in large part on the notion that your past experiences will influence the present. (To say it another way, the way you feel now is filtered through your expectations, which are derived from your previous experiences.)
In psychoanalysis, as Jonathan Shedler, Clinical Professor of Psychiatry and Behavioral Sciences at UCSF says, feelings and conflicts from the past can be retained and can “leak out” into the present (Shedler, 2022). “Conflicts involving anger are… commonplace,” Shedler writes. “Some people, especially those with a certain kind of depressive personality, seem unable to acknowledge or express anger toward others but instead treat themselves in punitive and self-destructive ways.”
Personally, I saw this in a former patient, T, a woman with obsessive-compulsive disorder: She repeatedly worried over, checked, and re-checked the leftovers in her family refrigerator. T’s main concern, which came out as therapy progressed, was her chronic worry that her mother’s food had been poisoned, to which she responded by checking the food for any such poison. But in so doing, T became concerned that she might have accidentally put poison in the food herself… which motivated her to go back and check it again.
Beneath her worry, T acknowledged, was the anger she felt toward her mother, which caused T to fantasize about getting revenge with poison and to cover those fantasies with an act ostensibly undertaken to save her mother’s life. T’s compulsive symptoms, as I saw it, represented a defense against her own disavowed anger.
Unconscious knowledge and beliefs can also affect the way you see yourself and the other people around you. Neuroscientists might put this in the context of conceptual activation—which is to say, the notion that within your “neural network,” two different but similar ideas can be lightly activated by each other.
Drew Westen, professor of Psychology and Psychiatry at Emory University, puts it this way: “When we attend to something, our brain simply enhances activation of the same… circuits that represent information that is peripheral to consciousness or even outside of awareness.” Practically speaking, this is the neural mechanism through which new people are experienced through the lens of your memories of people from the past.
Likewise, I saw this effect play out in my own private practice: M, an adult male patient who argued frequently with his romantic partner, told me that his father had abandoned his family when he was a teen. His feelings of betrayal pervaded many of his relationships, and they intruded into our therapy as well: When M cancelled a session just hours before it was scheduled to begin, I urged him to come in to see me later in the day, and told him that I’d have to assess my late-cancellation fee if he did not do that.
M became enraged, accusing me of using him only for the sake of profit and fully discounting our long working relationship. When I told him that the fee that his particular insurance company would pay me for our session was actually less than my standard late-cancellation fee, he stopped mid-rant. The reality of our work together no longer matched the assumptions about human relationships that he’d drawn from his tragic personal experience, and it was difficult for him to see me in a new light.
Unconscious processes can also affect what you remember and how you remember it. Quite often it is possible for one’s memory to record knowledge or experience while leaving no conscious trace of having done so.
People suffering from prosopagnosia—who have lost the ability to recognize different faces—“nevertheless produce differential electrophysiological responses to familiar versus unfamiliar faces” (Bruyer, 1991). And experiments with people whose brains are damaged in the hippocampal region—a part of the brain utilized in creating new memories—suggest that people whose memories are impaired, and who cannot remember events in their own histories, can still somehow retain the emotional significance of those events.
The well-known and well-studied amnesiac Henry Molaison (often referred to as “H.M.”), became unable to form new memories after brain surgery in 1953. After visiting his mother in the hospital, Molaison remembered nothing of the visit, but “was nevertheless able to feel in some vague way that something had happened to his mother.”
He could also learn to carry out new tasks (using procedural memory, which is said to be distinct from the autobiographical memories that Molaison could not make), like writing words upside-down and backward. Although Molaison was able to learn to do this through regular practice, Westen said in 1999 a paper presented at the Annual Meeting of the Rapaport-Klein Study Group, “he had no idea that he had ever seen the task before.”
Even without priming, though, a basic understanding of the unconscious and its effects on human behavior can lead to a new, more fruitful perspective. It’s not always possible to be aware of the influence of the past on your present-day feelings and decisions, but it’s important to acknowledge that this influence is there and that it can run deep.
I’ll close with a telling anecdote about a 1996 study of college students, from the Journal of Personality and Social Psychology, entitled “Positive Illusions About the Self.” It’s probably not too difficult to think of someone suffering from excessively positive illusions in that way; what this experiment suggested was that these people might be unconsciously using these illusions to defend against inner self-doubt.
In the study, Richard Robins and Jennifer S. Beer gathered a large number of first-year college students, matched them according to grades and standardized test scores, and separated out the students who were prone to self-aggrandizement of their academic skills and artificially heightened expectations of their college performance. After two years in school, these self-enhancing students were no more pleased with their performance than the other, more realistic group—but they were 32 percent more likely to have dropped out of college entirely. Unconsciously, perhaps, they had always suspected that their abilities wouldn’t hold up in a college environment, but instead of acknowledging their fears and seeking assistance, they defensively overstated them.
All of us, then, can learn from the example of these students: Understanding the influence of our unconscious minds can offer useful and important information about ourselves, and we ignore this information at our own risk.
Plug Power (PLUG) shares surged for a second straight session after the Treasury Department announced final rules on tax credits for producing clean hydrogen.
The tax credits were made available through the Inflation Reduction Act of 2022. The Treasury Department noted in its statement Friday that the rules underwent “significant changes and flexibilities that address several key issues to help grow the industry and move projects forward,” while adhering to the emissions requirements included in the act.1
Officials explained that the changes “clarify how producers of hydrogen, including those using electricity from various sources, natural gas with carbon capture, renewable natural gas (RNG), and coal mine methane can determine eligibility for the credit.”
9. The Female vs. Male Bachelor Degree Gap is Widening
10. This Money Bias is the Biggest Barrier to Building Wealth
Via CNBC: It’s officially the time of year when you get around to that thing you’ve been putting off. And for millions of Americans, that means coming to grips with their finances.
If you’ve been avoiding funding your 401(k) or opening a brokerage account, you’re not alone. Nearly half of U.S. adults — 48% — report owning no investable assets, according to a 2024 survey from Janus Henderson.
And for many, the reasoning behind the procrastination is simple: Investing is (seemingly) too complex.
It’s a pattern of thinking that, if not overcome, could cripple many young people financially, says Amos Nadler, founder of Prof of Wall Street and a Ph.D. in behavioral finance and neuroeconomics.
“It’s a bias that we call ‘complexity aversion,’” he says. “And it’s the biggest barrier to building wealth for people who are not in markets or who have never invested before.”
Here’s how this cognitive bias could be costing you money.
The importance of overcoming complexity aversion
On a very basic level, people who put off doing essential financial tasks have the same fears as those who can’t bring themselves to start an exercise routine — they don’t want to make a mistake or feel foolish.
Just as someone might say they don’t know the first thing about how all that fancy gym equipment works, a financially avoidant person might say, ”‘Man, this is over my head,’” says Nadler. ”‘I’m just not a numbers person.’”
Feeling this way about money is tied closely with another common cognitive bias known as risk aversion. Essentially, not only are you afraid you’ll screw up, but you fear that you’ll lose out on money you put time and effort into accumulating. And because fear of losing what you have can outweigh the joy of building wealth, you stay put.
The impulse is, “I’ve worked hard for it, and I’m risk averse. I’d rather just have the cash,” Nadler says. “I know inflation is eating away at my cash, but the market so volatile, so I’m scared.”
But the need to start investing — especially among young people — extends beyond the need for your money to keep up with inflation. By procrastinating on this particular financial project, you’re losing what many experts call your most valuable asset: time.
The longer you’re in the market, the more time your money has to grow at a compounding rate. For every year you delay getting started in the market, you potentially shave thousands of dollars off your future net worth.
Play around with an online compounding interest calculator, and you’ll likely discover that sitting on the sidelines for even a few years can have a massive effect on your long-term gains.
Consider a 20-year-old who invests $200 a month into a retirement portfolio that earns an annualized total return of 8%. By the time she’s ready to retire at age 67, she’ll have $1.25 million saved. If she starts at age 25, with all other conditions the same, her total drops to about $830,000. And if she puts things off until age 30, she’d retire with $547,000.
How to move past complexity aversion
So, how do you get started? You could always open a brokerage account or self-fund a retirement account, such as an IRA. Doing so requires just a few easy steps.
But if your employer offers a workplace retirement account, such as a 401(k), opting in may be an even easier way to get started. Designate a percentage of your salary to contribute to the account out of each paycheck and select one or more mutual funds for your portfolio.
These plans commonly hold low-cost, highly diversified options, such as index and target-date funds, which give investors exposure to large swaths of the market.
7. U.S. Foreign Aid Accounts for About 1% of Federal Budget
8. AI and Gambling
Fear and coding in Las Vegas–Inside the gambling industry’s big bet on AI.
Via Business Insider:Narrativa is among a crop of startups seizing on the artificial intelligence boom to enthusiastically automate writing tasks that would once have fallen to humans. From penning regulatory documentation for Pfizer to zhuzhing up marketing copy for insurance and e-commerce firms and helping generate breaking news articles for The Wall Street Journal, the Los Angeles-based Narrativa boasts roughly 50 clients in various industries. But one of its core focus areas, comprising a quarter of its business, is a little more polarizing than the rest: gambling.
Working with major industry players like 888 and Betway, Narrativa uses large language models to pump out everything from automated summaries of sports games to SEO-friendly reviews of online casino games and promotional social media posts. With no humans required, the 20-person company’s AI tools produce 10 million words a month for gambling clients — the effective output of 170-odd full-time writers producing a grueling 3,000 words a day. It’s all in service of enticing gamblers to place more bets.
“You want to create a community, you want people coming back for more,” Matthew Rector, Narrativa’s vice president of content, says. “You want to foster that environment, and our content helps facilitate that.”
Sam Altman, Elon Musk, Satya Nadella, and the tech industry’s other top impresarios talk a big game about how AI may one day attain sentience, solve the climate crisis, and lead society to a post-scarcity economy. Today, though, the technology is being embraced by traditional industries for more prosaic — and mercenary — aims. Key among them is the gambling industry, which is rapidly adopting AI for everything from writing alluring online marketing copy to identifying and helping problem gamblers to tracking people and perfecting the physical layout of casinos. The ultimate goal: to harvest ever more money from gamblers, by profiling them, feeding them content and games personalized to their whims, and cajoling them to stay longer and make bigger bets.
9. Baby Boom: 2600 Indians Born Per Minute
10. Strategies for Wealth & Happiness
Alan Watts on applying yay one thinking to yourself:
“You are under no obligation to be the same person you were five minutes ago.” * Charlie Munger on preparation:
“Neither Warren nor I are smart enough to make decisions with no time to think. We make actual decisions very rapidly, but that’s because we have spent so much time preparing ourselves by quietly reading.” *** Jim Rohn on failure:
“Failure is rarely the result of some isolated event. Rather, it is a consequence of a long list of accumulated little failures which happen as a result of too little discipline. Failure occurs each time we fail to think … today, act … today, care, strive, climb, learn, or just keep going … today. If your goal requires that today you write ten letters and you write only three, you are behind by seven letters … today. If you commit yourself to making five phone calls and you make only one, you are behind by four phone calls … today. If your financial plan requires that you save ten dollars and you save none, you are behind ten dollars … today. The danger comes when we look at a day squandered and conclude that no harm has been done. After all, it was just one day. But add up these days to make a year and then add up these years to make a lifetime and perhaps you can now see how repeating today’s small failures can easily turn your life into a major disaster.”
