CNBC/Kevin Stankiewicz
Palantir CEO rips Wall Street for its ‘destructive’ and ‘corrosive’ short-term focus

Palantir Technologies CEO Alex Karp sharply criticized Wall Street on Tuesday, saying there’s too much emphasis on near-term gains at the expense of developing healthy, long-lasting companies.

Karp made the comments in an interview with CNBC’s Wilfred Frost as part of an event hosted by The Executives’ Club of Chicago. The remarks were later aired on CNBC’s “Closing Bell.”

“We told the Wall Streeters that we will focus on building the long-term health of our company, that we are going to invest in our product development and in our clients, and you just have to battle it out with them,” said Karp, also a Palantir co-founder. The developer of data analysis software went public via a direct listing in September after nearly two decades as a private company.

Not everyone on Wall Street has such a short-term focus, Karp acknowledged. Nevertheless, he said it remains “one of the most destructive, corrosive attributes of an otherwise interesting and largely functioning system.”

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CNN Business/Matt Egan
Wall Street’s biggest fear isn’t Covid. It’s inflation

Coronavirus fears shook Wall Street to its core last March. The Dow crashed nearly 3,000 points — a stunning 13% — a year ago today.

Flash forward 12 months and the health crisis is not over, but investors are increasingly confident it soon will be.

For the first time since February 2020, Covid-19 is no longer the No. 1 fear among portfolio managers surveyed by Bank of America, the bank said Tuesday.

If anything, experienced investors are now concerned that the economy could recover so rapidly that it overheats.

Inflation is now the top risk cited by portfolio managers polled by Bank of America. The second most common concern is taper tantrums, which occur when markets freak out over surging bond yields.

The findings underscore how drastically the situation has changed during the past year. Confidence is growing because of the rollout of vaccines, easing health safety restrictions and unprecedented support from the federal government.

“Investor sentiment [is] unambiguously bullish,” Bank of America strategists wrote in the Tuesday report.

US stocks recovered swiftly from the pandemic. The Dow bottomed at 18,592 on March 23. The index is up a staggering 77% since then. The Nasdaq has doubled over that span.

But all of this optimism — on top of unprecedented stimulus from Congress and the Fed — is making some on Wall Street concerned that the economy could overheat.

The big fear is that resurgent inflation causes the Federal Reserve to rapidly raise interest rates, short-circuiting the economic recovery and the market boom. That’s what happened in the 1970s and early 1980s when the Paul Volcker-led central bank tamed inflation with aggressive interest rate hikes.

A record 93% of fund managers expect higher global inflation over the next 12 months, according to Bank of America. That’s up from 85% who said that in February.

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Kitco/Rajan Dhall
Poland’s central bank is set to go on a gold buying spree

Reuters reported that the Polish central bank wants to buy at least 100 tonnes of gold. At current price levels, this is worth around $5.5 billion.

President Adam Glapinski said, “At the moment, we have 229 tonnes of gold, of which more or less half was bought during my term in office.”

He added, “Over the course of a few years we want to buy at least another 100 tonnes of gold and keep it in Poland as well.” 

Some central banks have been stepping up their gold purchases as they become less reliant on the US dollar. Russia and China have been the most notable nations moving in this direction. Just three weeks ago Kitco reported that the nation’s gold share jumped to 22.9 percent over the year to June 30.

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Reuters/Asha Sistla
Gold firms on inflation bets; focus on Fed policy verdict

Gold prices edged up on Wednesday to hover near their highest in more than two weeks on prospects of higher inflation, although trade was range-bound as investors exercised caution ahead of the U.S. Federal Reserve’s two-day policy meet outcome.

Spot gold was up 0.2% at $1,734.00 per ounce by 0310 GMT, having touched a high of $1,740.90 since March 1. U.S. gold futures were up 0.1% to $1,731.90.

“Gold appears to be finding few friends finally even as U.S. yields and the dollar continue to grind higher … perhaps gold’s inflation hedging role is quietly returning to prominence and that is supporting prices,” said OANDA senior market analyst Jeffrey Halley.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but a resultant rise in Treasury yields tends to dull the appeal of the non-yielding commodity.

“Gold’s true test though will come once the FOMC meeting concludes and if it can remain steady in the face of another spike in U.S. yields, should that occur.”

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