A cautious session is ahead for Tuesday, following the worst smackdown since June for major indexes. That’s as an increasing number of investors see the Fed pivoting from rate hikes to be a tall order in the face of stubbornly high inflation and a global growth mess. We’ll find out Friday when Fed Chairman Jerome Powell steps up to the mic at the sumptuous Jackson Lake Lodge in Wyoming on Friday.
Our call of the day from billionaire hedge-fund manager Bill Ackman makes the case that certain U.S. fast-food chains can withstand the heat from inflationary pressures, as detailed in the semiannual letter for the European listed portfolio, Pershing Square Holdings
While not a traditional hedge fund like Ackman’s Pershing Square, PSH is still managed in that vein. The closed-end fund has whittled a 26% loss at the end of June down to 11% in mid-August. Cushioning a difficult year has been the portfolio’s heavy exposure to interest rate swaptions, an option on an interest rate swap that bets on higher rates and hedges against global macro risk. Taking to Twitter last month, Ackman said inflation remains the biggest risk to the economy and the Fed must maintain its resolve on higher rates. As for those company bets, Pershing discussed its stake in Restaurant Brands
owner of Burger King, Tim Hortons and Popeyes. Those chains have seen comparable sales up 20% relative to pre-COVID levels, and QSR stepping up with the cash to “position them for long-term, sustainable growth.” But the company can keep …