Bloomberg - Evening Briefing - S&P 500 hits 5,000

The S&P 500 Index finished above 5,000 for the first time ever Friday as investors continue to bet on a resilient US economy, with unemployment low, inflation largely under control and the Federal Reserve’s unicorn-like soft landing very much in sight. The equities benchmark closed at 5,026.61 to notch five straight weeks of gains. Wall Street of course is hoping this all means interest rate cuts by summer or sooner. But despite the 5,000-point milestone, there’s caution that the S&P 500’s 20% rally since early November may hit a roadblock soon. The Fed kept its main interest rate at a 22-year high for a fourth straight meeting last week, and while officials signaled their openness to cutting them eventually, it won’t happen right away. “The big driver for the rally is the realization that the US economy is unlikely to falter in the way that the average prognosticator had expected,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “A better economy, healthy profits and lower inflation is providing the fuel.” —David E. Rovella

Economists long expected the share of retirees in the US population to soar as baby boomers aged. Covid-19 caused that number to spike well beyond expectations, a surge dubbed the “Great Retirement Boom.” But after appearing to be on the way back down, those numbers have surged again in recent months, reaching a post-pandemic record in December. The US now has around 2.7 million more retirees than predicted.

Chinese investors and their creditors are putting up “For Sale” signs on real estate holdings across the globe as the need to raise cash amid a deepening property crisis at home trumps the risks of offloading into a falling market. The prices they get will help finally put hard numbers on just how much trouble the wider industry is in.

A new Securities and Exchange Commission market-tracking database is a “massive, unprecedented government surveillance system” that could cost the financial services industry billions of dollars and compromise investors’ privacy, according to Citadel Securities. The company, along with the American Securities Association, a group of brokerage firms, asked the US Court of Appeals in Atlanta to review the SEC’s approval of the funding model for the database in response to “widespread investor concerns about transparency, governance, costs and data privacy.”

Sixteen financial firms agreed to pay more than $81 million in civil fines after a federal probe found their employees used personal text messages for business purposes, marking the latest round of penalties to emerge from regulators’ so-called WhatsApp investigations. US Bancorp Investments, Northwestern Mutual Investment Services, Guggenheim Securities and Oppenheimer were among firms cited by the SEC. 

Nigeria’s foreign-exchange market attracted more than $1 billion in the past two weeks as market confidence improves following the central bank’s efforts to steady the nation’s battered currency, Governor Olayemi Cardoso said. Foreign portfolio investors “have already begun to supply the much-needed foreign exchange to the economy,” he told senators in a banking committee hearing Friday.  

Olayemi Cardoso Source: Nigeria Central Bank

Israel received its first-ever sovereign downgrade as Moody’s Investors Service lowered its credit rating, citing the impact of the ongoing military conflict with Hamas on its finances. The nation was cut by one notch to A2, the sixth-highest investment grade and on par with Poland and Chile. Moody’s changed the outlook to negative, concluding a review that it started in October.

ASML Holding NV is showing off its latest chipmaking machine, a €350 million ($380 million) piece of equipment that weighs as much as two Airbus A320s. Media outlets were given a tour on Friday of the system known as High-NA extreme ultraviolet. ASML executives said the system will prove essential for artificial intelligence, a technology that is notorious for the intensity of the processing it requires.

An ASML High-NA extreme ultraviolet system Source: Michel de Heer/ASML

• Joe Biden mixes up two leaders while angrily rejecting memory claims.
• Kamala Harris calls Trump-appointee’s report “politically motivated.”
• Zelenskiy’s ugly fight with general exposes split in Ukraine.
• The S&P 500 just topped 5,000. Should you buy now?
• Barclays gives dozens of bankers nothing in grim bonus round.
• Grab, GoTo are said to revive talks for ride-hailing mega merger.
• Citigroup tells dealmakers to control their drinking at client events.

The acceleration of human-induced global warming, its increasingly visible effects on the world around us and the slow pace of change by governments and industry are enough to make anyone depressed. But fatalism in the face of humankind’s greatest challenge is arguably unjustified. In the new Bloomberg Originals series An Optimist’s Guide to the Planet, host Nikolaj Coster-Waldau, an Emmy nominated actor, producer, writer and United Nations Development Program Goodwill Ambassador, begins his global journey to meet the unique individuals who are discovering new ways to turn the tide.

Watch An Optimist’s Guide to the Planet Episode 1: Dusk or Dawn

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive Bloomberg’s flagship briefing in your mailbox daily—along with our Weekend Reading edition on Saturdays.

The Future Investor Series: Join us in Chicago Feb. 27 for The Future Investor: Navigating a Complex, Data-Driven World. The Future Investor series examines how data is playing a pivotal role across the financial landscape. We'll explore and chart a course for a future where data not only plays a key role in investment decisions but serves as a driving force behind investable enterprises. Register here.