Bloomberg - Evening Briefing - A Russian ‘dark fleet’

Bloomberg Evening Briefing

The bond market may have finally gotten the Federal Reserve’s message on rates, but it seems most stock investors are continuing to ignore it. Equities are still largely defying the one thing that’s repeatedly proved to be kryptonite in past rallies: Surging interest rates. And a lot of people on Wall Street just can’t figure out why. With a few Fed officials threatening to ramp up hikes given America’s booming economy, traders are quivering anew with fear as expectations rise for ever-higher rates. But wait: instead of taking a nosedive, the S&P 500 finished the week down just 0.3%, and the Nasdaq 100 eked out a 0.4% gain. What gives? Here’s your markets wrap

Here are today’s top stories

First, a small armada of oil tankers emerged to help Russia beat back sanctions for its war on Ukraine. Now hundreds of fuel vessels are taking steps to hide where they’re going. More than 300 mid-range ships were recently seen sailing without cargo or destination compared to an average of 14 at any given time prior to this year. This shift may be a sign that vessels are forming a “dark fleet” to haul Russian fuel under the radar after the European Union banned it less than two weeks ago. 

The turmoil engulfing Gautam Adani’s business empire, sparking a punishing stock market selloff for his businesses and shaking investor faith in India—not to mention raising questions about his connections with Prime Minister Narendra Modi—may open the door to a democratic revival in the country, according to billionaire investor George Soros.

George Soros Photographer: Simon Dawson/Bloomberg

China’s securities regulator has toned down curbs on local companies seeking initial public offerings overseas just as the economic rebound sparks renewed interest in the country’s assets. The China Securities Regulatory Commission said it would support the listing of firms with so-called variable interest entity structures if they are compliant, signaling a softening stance toward the country’s capital markets

Things are looking grim for crypto wunderkind Sam Bankman-Fried. A day after a judge almost threatened to revoke his bail, it appears yet another colleague at now-bankrupt FTX could be cutting a deal in the massive fraud case. Nishad Singh would be the third SBF adjutant to cooperate and could potentially offer insight into the campaign finance side of crypto exchange.

The Fed won’t be able to get US inflation down to its 2% target without “crushing the economy,” economist Mohamed El-Erian said on Friday, but he added the central bank is unlikely to change that goal post—at least officially. “You need a higher stable inflation rate. Call it 3 to 4%,” El-Erian said. “I don’t think they can get CPI to 2%...but that’s because 2% is not the right target.”

Less than a year after starting a company to develop aircraft engines, a Chinese aerospace expert and a battered Shanghai property developer instead launched China’s first high-altitude airship. The entity they created—Beijing Nanjiang Aerospace Technology—was among six firms sanctioned by the US for their alleged role in China’s military balloon program.

Said Haidar’s conviction that inflation was about to explode can be summarized by a single number: $63 billion. That’s how much Haidar Capital Management reported in assets to start 2022. The catch? His hedge fund oversaw just $1.2 billion. That massive leverage led to a crazy year—up 54% one month, down 20% another—but ultimately it all paid off, producing a 193% return for his investors. Still, Haidar came in sixth on the 2022 list of the biggest hedge fund earners.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

 What you’ll need to know tomorrow

Good Luck Finding (or Affording) a Mercedes

Driving a shiny new Mercedes-Benz may soon become a distant dream for many but the most affluent. The average price of a Mercedes reached almost $77,000 last year—a 43% increase over 2019 levels. That jibes with the carmaker’s push even further upmarket, focusing on top-end models like the S-Class sedan to bolster profits. The company has been working through pent-up demand after chip shortages curbed production last year.

A Mercedes-Benz S-Class luxury automobile rolls off the assembly line at the Mercedes-Benz Group plant in Sindelfingen, Germany. Photographer: Krisztian Bocsi/Bloomberg

The Evening Briefing will return on Tuesday, Feb. 21.

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