Was this email forwarded to you? Sign up here.
Situational awareness: Fed chair Jerome Powell today will testify about the U.S. economic outlook before the Joint Economic Committee — the first time he’s ever appeared before that committee.
(Today's Smart Brevity count: 1,228 words, < 5 minutes.)
Illustration: Aïda Amer/Axios
Money managers are not just bullish about the stock market, they're euphoric about the current and future state of the global economy, data from the Bank of America Merrill Lynch shows.
What's happening: BAML's monthly survey of fund managers from around the world finds investors are all in on the stock market, with global optimism rising by the most in 20 years and expectations of real economic growth jumping by the most in the history of the survey.
Why it matters: Investors have done a complete 180-degree turn in sentiment, moving from distrustful of the market's 2019 gains to full-fledged cheerleaders.
Details: The survey saw a 43 percentage point increase in the number of investors expecting a stronger global economy in the next year, the biggest month-to-month jump on record.
Further, fund managers now expect global production numbers to rebound to levels not seen in more than a year and earnings per share readings to be well above their current levels. Plus, a majority say they now want more companies to increase capital expenditures rather than reduce debt or improve their balance sheets.
Watch out: "Investor sentiment and behavior is reacting to this breakout much differently than recent ones," Mark Hackett, chief of investment research at Nationwide, says in an email.
The last word: BAML's data isn't showing excess greed just yet, analysts say, but they caution the "easy part" of the market rally is over. Now comes the hard part.
America's largest milk producer, Dean Foods, is set to file for bankruptcy, as demand for cow milk has plummeted. Dean Foods also produces Land O'Lakes, Dairy Pure and Organic Valley. (CNN)
SoftBank's Vision Fund has invested $100 billion in companies around the world that have mistreated workers in a "modern bait and switch." (NYT)
Disney+ users suffered a number technical glitches and malfunctions as the service launched on Tuesday, but stock traders didn't care and sent shares 1.35% higher. (CNBC)
While marijuana is illegal and seen as a dangerous narcotic in China, hemp is widely grown and Chinese companies are looking to take a foothold in the fast-growing global CBD market. (WSJ)
Hong Kong's benchmark Hang Seng index tumbled nearly 2% overnight as protests continued in the city, continuing a slide that began when it fell by the most in three months on Monday. (Bloomberg)
The S&P 500's bull run over the past 128 months has been impressive, but it is also not well understood, analysts at LPL Financial note.
The intrigue: While the stock market's gains have continued for longer than the previous record-long bull market that Americans witnessed through the 1990s, it has produced far fewer returns for stock investors.
Details: This bull market's average returns have not been as strong as during the last long run, and they are historically worse than the average bull market, delivering 15.3% average annualized gains compared to the average bull market annualized gain of 18.9%.
Reality check: "While the selloffs were swift and deep, the S&P 500 didn’t fall more than 20% on a closing basis (the classic definition of a 'bear market')," LPL analysts note.
The positive sentiment in the stock market looks to have also gotten into real estate buyers.
By the numbers: An index tracking applications rose 9.6% from a week earlier to its highest level in more than a month and MBA's refinancing index increased 13% from the previous week and 188% from the same week one year ago.
What they're saying: “Last week was a solid week for homebuyers," says Joel Kan, MBA's associate vice president of economic and industry forecasting, says in a release accompanying the data.
Hedge funds again lagged the returns of U.S. stocks as well as a combined fund of 50% global stocks and 50% global bonds in the third quarter and in October, according to data from eVestment.
Why it matters: Hedge funds aim to deliver consistent returns for investors that outperform during times of market stress, but despite increased uncertainty and geopolitical tensions in Q3, the industry saw negative returns on an overall basis.
What it means: With the stock market again in favor, investors are likely to pull even more money out of hedge funds given their lackluster performance during the third quarter.
The big picture: Year to date, not a single major category of hedge fund has outperformed the S&P and the only hedge funds that delivered better returns than the 50% global bonds and equity fund were those dedicated to Chinese and Russian assets.
Why it matters: Once again, Facebook will be asking users to hand over more sensitive information when it is under fire for how it manages the information and access it already has.
Between the lines: Facebook CEO Mark Zuckerberg said at F8 last year that the company wasn't going to slow down on developing new products even as it works to restore trust.
Details: Facebook said it will roll out Facebook Pay on Facebook and Messenger this week in the U.S. for "fundraisers, in-game purchases, event tickets, person-to-person payments on Messenger" as well as some businesses on Facebook Marketplace.
Separately, the Bank for International Settlements announced Tuesday that outgoing ECB executive board member Benoît Cœuré will lead a new unit at the BIS focused on financial technology like digital currencies.