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CBO-Monthly Budget Review: February 2021
March 8, 2021--The federal budget deficit was $1,048 billion in the first five months of fiscal year 2021, CBO estimates-$423 billion more than the deficit recorded during the same period last year.
The federal budget deficit was $1,048 billion in the first five months of fiscal year 2021, the Congressional Budget Office estimates-$423 billion more than the deficit recorded during the same period last year. Outlays were 25 percent higher and revenues were 5 percent higher from October through February than during the same period in fiscal year 2020.
Outlays during the first five months of fiscal year 2020 were boosted by shifts in the timing of certain payments that otherwise would have been due at the beginning of March 2020, which fell on a weekend. Those shifts increased outlays through February 2020 by $52 billion. If not for those shifts, the deficit this year (through February 2021) would have been $476 billion more than in the same period in fiscal year 2020. Three-quarters of that difference is the result of three types of spending in response to the coronavirus pandemic-unemployment compensation, refundable tax credits (consisting of the recovery rebates, the earned income tax credit, and the child tax credit), and the Small Business Administration's Paycheck Protection Program.
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Source: CBO (congressional Budget Office)
Davis ETFs to Transfer Exchange Listing of All Four Funds to CBOE Global Markets, Inc.
March 5, 2021--Davis ETFs are actively managed ETFs with combined assets of over $1.2 billion and were launched in 2017. Davis Selected Advisers, L.P. announced today plans to transfer the listing of all four ETFs from The Nasdaq Stock Market LLC to CBOE Global Markets, Inc. The transfer is expected to take place on or about March 23, 2021. No shareholder action is required as a result of this change nor is the transfer expected to have any effect on the trading of Fund shares.
The ETFs that are transferring are:
Davis Select Worldwide ETF (Ticker: DWLD)
Davis Select U.S. Equity ETF (Ticker: DUSA )
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Source: Davis Selected Advisers, L.P
Buying the BUZZ: A new ETF to track stocks hyped on social media launches today
March 5, 2021--At this point, is anyone surprised?
A movie theater chain. The company that makes Tootsie Rolls. And of course, GameStop. The rally in so-called Reddit stocks has been one of the stock market's most surprising storylines in 2021. And now a new exchange-traded fund is launching that will track these "buzzy" stocks boosted by social media.
Launched by VanEck Vectors Social Sentiment, the new ETF (ticker: BUZZ) tracks the 75 stocks that are getting the most social media hype and packages them into an exchange-traded fund, according to VanEck's fund description of the new ETF.
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Source: fortune.com
CBO-Additional Information About the Budget Outlook: 2021 to 2031
March 5, 2021--In this report, the Congressional Budget Office provides additional information about the baseline budget projections that the agency released on February 11, 2021.
Deficits
CBO projects a federal budget deficit of $2.3 trillion in 2021, nearly $900 billion less than the shortfall recorded in 2020. At 10.3 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year. Those deficits, which were already projected to be large by historical standards before the onset of the 2020-2021 coronavirus pandemic, have increased significantly as a result of the economic disruption caused by the pandemic and the enactment of legislation in response.
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Source: CBO (Congressional Budget Office)
CBO-The 2021 Long-Term Budget Outlook
March 4, 2021--CBO presents its projections of the federal budget for the next 30 years if current laws governing taxes and spending generally did not change. Growth in revenues would be outpaced by growth in spending, leading to rising deficits and debt.
At an estimated 10.3 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year. In CBO's projections, deficits decline as the effects of the 2020-2021 coronavirus pandemic wane. But they remain large by historical standards and begin to increase again during the latter half of the decade. Deficits increase further in subsequent decades, from 5.7 percent of GDP in 2031 to 13.3 percent by 2051-exceeding their 50-year average of 3.3 percent of GDP in each year during that period.
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Source: CBO (Congressional Budget Office)
SPAC Froth Turns on Itself With Stocks Plunging 20% in Two Weeks
March 4, 2021--About five blank-check companies went public per day this year
Selloff occurs as stock investors sour on speculative groups
It may turn out that five new special purpose acquisition companies per day was too many.
SPAC mania is showing signs of hitting a stock-market saturation point, with an index tracking blank-check flyers suddenly down about 20% from its peak. The craze is being clipped as quickly as it whipped up, with sentiment souring on growth stocks amid a runup in interest rates and rotation into beaten-down names. Before the selloff, SPACs had almost doubled since October.
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Source: bloomberg.com
Beige Book-March 3, 2021
March 3, 2021--Overall Economic Activity
Economic activity expanded modestly from January to mid-February for most Federal Reserve Districts. Most businesses remain optimistic regarding the next 6-12 months as COVID-19 vaccines become more widely distributed. Reports on consumer spending and auto sales were mixed. Although a few Districts reported slight improvements in travel and tourism activity, overall conditions in the leisure and hospitality sector continued to be restrained by ongoing COVID-19 restrictions.
Despite challenges from supply chain disruptions, overall manufacturing activity for most Districts increased moderately from the previous report. Among Districts reporting on nonfinancial services, activity was mixed, though most reported modest growth over the reporting period. Some Districts noted that financial institutions experienced declines in loan volumes, but most cited lower delinquency rates and elevated deposit levels. Historically low mortgage interest rates continued to spur robust demand for both new and existing homes in most Districts, and home prices continued to rise in many areas of the U.S. On balance, commercial real estate conditions in the hotel, retail, and office sectors deteriorated somewhat, while activity in the multifamily sector remained steady and the industrial segment continued to strengthen. Districts reporting on energy observed a slight uptick in activity related to oil and gas production and energy consumption. Overall, reports on agricultural conditions were somewhat improved since the previous report. Transportation activity grew modestly for many Districts.
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Source: federalreserve.gov
SEC Division of Examinations Announces 2021 Examination Priorities Enhanced Focus on Climate-Related Risks
March 3, 2021--The Securities and Exchange Commission’s Division of Examinations today announced its 2021 examination priorities, including a greater focus on climate-related risks. The Division will also focus on conflicts of interest for brokers (Regulation Best Interest) and investment advisers (fiduciary duty), and attendant risks relating to FinTech in its initiatives and examinations.
The Division publishes its examination priorities annually to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets.
"This year, the Division is enhancing its focus on climate and ESG-related risks by examining proxy voting policies and practices to ensure voting aligns with investors' best interests and expectations, as well as firms' business continuity plans in light of intensifying physical risks associated with climate change," said Acting Chair Allison Herren Lee. "Through these and other efforts, we are integrating climate and ESG considerations into the agency's broader regulatory framework."
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Source: SEC.gov
Wall Street Lobbies to Bring More ESG Funds Into 401(k)s
March 3, 2021--Money managers are pushing for a revision of a Labor Department rule that effectively bars socially focused funds from many retirement plans
Money managers are lobbying to scrap a Trump-era rule that makes it difficult for 401(k) plans to invest in socially focused funds.
The Labor Department rule, announced in October, imposed restrictions on what can and can’t be offered as company 401(k) funds. One result is that plans can't use funds with nonfinancial goals as default investments for employees.
That means 401(k) overseers and managers need to show that environmental, social and governance strategies can boost financial returns-a challenge for the nascent industry. ESG-focused funds are a growing profit center for asset managers.
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Source: wsj.com
First Trust launches 'Target Income' gold ETF
March 3, 2021--First Trust has expanded its partnership with options specialist Cboe Vest Financial with the launch of a covered call strategy on gold.
The FT Cboe Vest Gold Strategy Target Income ETF (IGLD US) has listed on Cboe BZX Exchange and comes with an expense ratio of 0.85%.
The fund is actively managed by Cboe Vest, which also acts as sub-adviser to First Trust's suite of Target Outcome ETFs.
IGLD gains exposure to gold by investing in a portfolio of Treasury securities and FLexible EXchange (FLEX) Options on the $60 billion SPDR Gold Trust (GLD US), the largest gold ETP globally.
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Source: etfstrategy.com
