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Flirting with 5,000.

US equities fluctuated on Thursday, with the S&P 500 briefly hitting 5,000 before closing just below the level in a rally driven by a narrow group. Walt Disney’s gains propelled it to its best performance since December 2020, while Arm Holdings added $38 billion in value on an upbeat outlook. “AI is not in any way, shape or form a hype cycle,” Arm CEO Rene Haas said. AI hopes have sustained gains in tech companies, which have brought in more cash than ever before. Apple, Microsoft, Alphabet, Amazon and Meta have generated a record $139.5 billion of cash combined, data compiled by Bloomberg show. Meanwhile, US Treasuries struggled to gain traction despite a strong $25 billion sale of long-term bonds.

China-Russia cooperation | Chinese President Xi Jinping told Russian counterpart Vladimir Putin in a phone call that the two nations need to work closely to defend security and oppose foreign interference. Xi said China and Russia need to have close strategic cooperation, adding that they should work together to safeguard their sovereignty, security, and development interests. The two leaders have been boosting their relationship in the nearly two years since Russia launched its invasion of Ukraine. Just weeks before the war began, Xi agreed to a “no-limits” friendship with Putin during the 2022 Winter Olympics in Beijing and signed a series of long-term energy supply deals.

Up & coming | All eyes will be on the US CPI revisions today, a print that is expected to get more attention this year than usual. Economists on Wall Street and in Washington learned their lesson a year ago: The revisions — typically small and therefore ignored — were large enough to cast doubt on overall inflation progress. In the euro area, Germany and Latvia will publish CPI data.

Gary Gensler, chair of the US Securities and Exchange Commission

Hedge funds must share more on their strategies under SEC rule

US regulators will begin requiring hedge funds to confidentially share more information about their investment strategies. New rules approved on Thursday will require firms to provide more details to watchdogs, including on investments, borrowing, and counter-party exposure. The Securities and Exchange Commission and Commodity Futures Trading Commission described the new regulations, which were proposed in 2022, as a way to better keep tabs on risk in the financial system. (Bloomberg Wealth - Investing | Feb 8) see also Hedge funds trading Treasuries to be tagged dealers by SEC (Bloomberg Markets | Feb 6)

Investors are almost always wrong about the Fed

Investors are more convinced than ever that interest rates are coming down later this year. Their record on these things, however, isn’t great. Wall Street has been caught offside in both directions while betting on the path of interest rates over the past few years. Few thought the Federal Reserve would get anywhere near 5% in the first place. Now traders keep ramping up bets that rate cuts are just months away, only to see that day recede with each batch of strong economic data. (The Wall Street Journal | Feb 8)

Faster US stock settlement has currency-market anchor scrambling

CLS, the world’s largest foreign-exchange settlement firm, is racing to figure out a way to get the $7.5 trillion-a-day currency market ready for a huge change to trading in US stocks. The US is less than four months from introducing what’s known as T+1, when it will halve the time it takes to complete equity transactions to just one day. The move will leave the world of foreign exchange — where trades typically take two days to complete — out of step. (Bloomberg Markets | Feb 7)

‘A problem we’ll be working on for years’: Fed chair says CRE's impact on banking has just begun

The commercial real estate downfall isn’t a one-trick pony. Not only are landlords losing out from canceled or expiring leases, but the banking industry could also take a massive blow as buildings sit vacant and lose value. Indeed, Federal Reserve Chair Jerome Powell has cause for concern that the ailing commercial real estate market is just beginning to have an impact on banks. "It feels like a problem we'll be working on for years" he told CBS in a 60 Minutes interview on Sunday, adding that “it’s a sizable problem,” albeit a “manageable one” that is more likely to affect smaller or regional banks. (Fortune | Feb 6) see also Yellen says commercial property is a worry, regulators are on it (Bloomberg Markets | Feb 6)

Concerns over liquidity at the top of traders’ minds this year

Reliable sources of liquidity are at the top of traders’ minds as they brace for another year of turbulence, according to a JPMorgan Chase & Co. electronic trading survey. Volatile markets are predicted to be the greatest daily challenge for a second year in a row, the annual poll of institutional traders found. Access to liquidity is the biggest concern about market structure, ahead of regulatory change and data costs. (Bloomberg Markets | Feb 6)

Treasury Secretary Janet Yellen. Photo: Samuel Corum | Getty Images

Yellen says regulators, institutions should deepen AI awareness

US Treasury Secretary Janet Yellen urged financial institutions, regulators, and market participants to deepen their expertise and monitoring capacity in the field of artificial intelligence, highlighting the critical role and potential risks the technology can have for financial services. The increasing use of AI in finance “brings potential benefits such as reducing costs and improving efficiencies, and potential risks like cyber and model risk,” Yellen said at a US House hearing, in prepared remarks on the annual report of the Financial Stability and Oversight Council.

— Bloomberg Politics

Chinese hackers embedded in US networks for a least five years

The Chinese state-sponsored hacking group known as Volt Typhoon has been living in the networks of some critical industries for “at least five years,” according to a joint cybersecurity advisory issued by the US and its allies on Wednesday. The compromised environments are in the continental US and elsewhere, including Guam, the advisory said. It was published by US agencies and their security counterparts in Australia, Canada, the UK, and New Zealand.

— Bloomberg Technology | Cybersecurity

CISA and partners release Volt Typhoon advisory

The US worked with intelligence bodies in Australia, Canada, New Zealand, and the UK to produce a report on how Chinese cyber actors pre-position themselves on IT networks for disruptive or destructive cyberattacks against US critical infrastructure in the event of a major crisis or conflict with the United States. Read about the risks and recommended counter moves in Joint Guidance: Identifying and Mitigating Living Off the Land Techniques.

— Cybersecurity & Infrastructure Security Agency, Federal Bureau of Investigation

Travelers at Hongqiao International Airport in Shanghai, China, on Feb. 7, 2024. Photo: Raul Ariano | Bloomberg

Enter the 'Year of the Dragon'

Millions of people around the world are busy preparing for one of the year’s biggest festivals — Lunar New Year, which marks the first new moon of the lunar calendar. This year, it falls on February 10, kicking off the 15-day Spring Festival. Whether you’re unfamiliar with Lunar New Year or need a refresher, here's a guide to some of the most common traditions associated with the occasion.

— CNN

‘Enshittification’ is coming for absolutely everything

The term “enshittification” describes the way that platforms decay. The American Dialect Society made it its Word of the Year for 2023. It’s a theory that explains how the internet was colonized by platforms, why all those platforms are degrading so quickly and thoroughly, why it matters, and what we can do about it. We’re all living through a great enshittening, in which the services that matter to us, that we rely on, are turning into giant piles of shit. It’s frustrating. It's demoralizing. It's even terrifying.

— Financial Times

Note-taking isn't about transcribing, it's about processing information

Taking notes is not about transcribing what is said. It's about processing the information in a way that helps you pull out what's important and make new connections. The problem with taking notes on a laptop is that we type too fast. Because many of us type almost as fast as someone presents, we write everything down. We shouldn't: it interferes with listening, taking in the core message, and deeper processing.

— Psychology Today