Finance

Despite an upbeat market forecast for the year’s second half, Ally Invest’s Lindsey Bell has a warning for the next few months.Bell finds the third quarter is usually the weakest time of the year, up 0.7% on average since 1950.However, she suggests it’s no reason to get discouraged.”The fourth quarter is where you usually see the pickup,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Wednesday.Zoom In IconArrows pointing outwardsHer forecast comes with the S&P 500 ending 2021’s first half at all-time highs. So far this year, it’s up more than 14%. Plus, the index is on a five-month win streak.What could spook the market near term? Bell says headline risks associated with Federal Reserve policy.”Investors have been skittish. They have gotten a little bit nervous about this topic in general,” said Bell, a CNBC contributor. “What we have seen is that the Fed raising rates has contributed to a peak in the stock market over different periods of time.”Yet, Bell calls herself “cautiously optimistic” and expects Wall Street to effectively work through potential jitters.”The peak in the stock market doesn’t typically happen when the Fed begins its rate-tightening process,” she said. “You shouldn’t be too worried about the Fed tightening anytime soon. But they will be coming probably next year or the year after.”For the next six months, Bell prefers to continue using a barbell approach to investing. She wants equal weights of growth, including Big Tech, and economically sensitive stocks.Bell predicts earnings per share and GDP growth projections will continue to grow in the second half and support the market. She also sees a world where tech stocks get a strong bid due to a slowing in the economic recovery.”It could be an area where investors start to turn to put their money simply because growth is expected to peak in the second quarter,” Bell said.Disclaimer More

In this articleLZLegalZoom made its market debut Wednesday, with shares opening 31% above their offer price in the company’s second attempt at going public.The online legal platform was valued at over $7.5 billion as shares soared as much as 38%. The stock closed up 35.18% at $37.85 per share, putting LegalZoom’s market capitalization at $7.35 billion. The stock opened at $36.75 per share after an initial public offering price of $28 each. The firm sold about 19.1 million shares at that price Tuesday night, raising about $700 million.LegalZoom provides legal and compliance solutions and operates across all 50 states and more than 3,000 counties in the U.S.”I’ll just start by saying, you know, our mission is to democratize law,” LegalZoom CEO Dan Wernikoff told CNBC on Wednesday. “The market itself is extremely large” for legal services, around $50 billion, he said.”When you think about legal services, 8% of our services are delivered online versus other categories, like accounting, where you see much more adoption of online solutions,” he said. “That’s the opportunity that’s in front of us and when we get really excited.”The firm had previously filed for a stock market listing in 2012, but withdrew it in January 2014. Four years later, LegalZoom was valued at $2 billion after Francisco Partners and GPI Capital made a $500 million investment in the firm.In a “TechCheck” interview, Wernikoff said the company tries to meet customer needs in a cost-effective way, especially for small businesses. “Today you only have a couple options. You either have a very low-cost solution which doesn’t provide any guidance, or you have to … pay for an expert and you’re worried about the time you’re spending with the expert,” Wernikoff said. “We try to get right in the middle of those two opportunities and use technology really to make the expert that much more efficient.”LegalZoom just one of many companies making their public debuts Wednesday, including Chinese ride-sharing company Didi, biometrics screening company Clear, digital ad firm Taboola and cybersecurity firm SentinelOne.— Reuters contributed to this report. More

Signage is displayed outside of a Bed Bath & Beyond Inc. store in Los Angeles, California, U.S., on Monday, Sept. 19, 2016.Patrick T. Fallon | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.WideOpenWest — The U.S. cable operator saw its stock price increase 13.4% after it announced it will sell five of its service areas in two separate deals for a combined $1.8 billion in an effort to lower its debt. The transactions are expected to close in the second half of the year.Bed Bath & Beyond — Shares of the retailer jumped 11.3% after reporting better-than-expected sales results for its fiscal first quarter and raised its full-year outlook. Volume in the stock was abnormally high, suggesting that part of the rise might be due to a return of Reddit traders that helped to boost shares earlier this year.Virgin Galactic — Shares dropped 2.1% after Bank of America double-downgraded the stock to underperform from buy. The firm said that Virgin Galactic’s surging stock price has already priced in much of the eventual gains expected when the company launches space tourism. BofA also noted the space sector continues to carry risk and volatility.MongoDB — Shares of the database platform company lost 5.7% after it said it would sell 2.5 million Class A common shares, seeking to raise $889 million. MongoDB said it plans to use the proceeds of the sale for general corporate purposes.Advanced Micro Devices — The semiconductor company’s stock is up 4.9% after Bank of America reiterated its buy rating on it, calling the stock “compelling” and “underappreciated.”Constellation Brands — Shares of the spirits and beer maker rose nearly 1.3% after the company’s quarterly report. Constellation Brands reported adjusted quarterly profit of $2.33 per share, matching Wall Street forecasts, according to Refinitiv. Its revenue came in slightly above estimates.Las Vegas Sands  — The casino and resort company’s stock traded 2.96% higher after reports came out saying Covid-related restrictions between Hong Kong and Macau, where the company owns and operates five properties, will loosen in July. Travelers from Hong Kong to Macau are currently required to quarantine for 14 days upon arrival.General Mills — The food producer saw shares rise 1.5% after it reported quarterly earnings of 91 cents per share, beating analysts’ estimates by 6 cents. The company also reported $4.52 billion in revenue, on estimates of $2.02 billion. — CNBC’s Hannah Miao, Yun Li and Jesse Pound contributed reportingBecome a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More

In this [email protected] great lumber bubble of 2021 has popped. After a jaw-dropping rally this spring, lumber prices have come back down to earth as supply increased, speculative trading action cooled and homebuilding demand eased. Lumber futures tanked more than 40% in June alone, suffering their worst month on record dating back to 1978. The building commodity is down more than 18% in 2021, headed for the first negative first half since 2015.At their peak on May 7, lumber prices hit an all-time high of $1,670.50 per thousand board feet on a closing basis, which was more than six times higher than their pandemic low in April 2020.Zoom In IconArrows pointing outwardsThe quick reversal of lumber’s monthslong rally came as Americans started to go on vacations again amid the economic reopening instead of taking on renovation and building projects. Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.”This drop suggests that the cause of that inflation—the mismatch of supply and demand—will not last forever,” said Brad McMillan, CIO at Commonwealth Financial Network. “As suppliers across industries get their acts together, those shortages will fade, along with the inflation. That looks to be happening for lumber now and will happen for other inputs later.”Goldman Sachs analysts said Tuesday that their channel checks suggested increasing consumer hesitancy around some home improvement projects given sticker shock from the rapid rise in certain commodity prices this year, notably lumber.Earlier this year, lumber prices exploded due to a combination of reduced supply amid mill shutdowns and surging demand for new and improved homes. At one point, the lumber shortage led to the average price of a new single-family home increasing by nearly $36,000, according to the National Association of Home Builders. The red-hot housing market also saw a record shortage of existing homes available. In April, about 1 in 4 homes for sale were newly built, the highest share ever. Historically new homes make up about 1 in 10.Recently, there have been signs of the housing boom fizzling. Weekly mortgage demand fell 6.9% last week to the lowest level in almost a year and a half.Now, lumber futures prices are on track for their sixth consecutive weekly loss, wiping out all of their 2021 rally. The price fell another 6% on Wednesday to around $710 per thousand board feet.”It was a bubble but it is still double where it was pre Covid,” said Peter Boockvar, CIO at Bleakley Advisory Group. Still, Boockvar believes just because the lumber bubble might have burst, it doesn’t mean the threat of inflation isn’t real.The investor pointed to the CRB raw industrials index, which is at a 10-year high right now. The index tracks materials that don’t trade on a futures exchange and thus better reflect actual supply and demand and not the behavior of speculators.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

China cracking down on bitcoin mining and Elon Musk suspending Tesla’s acceptance of bitcoin due to the large amounts of energy it takes to mine have both contributed to the cryptocurrency losing almost half its value from its high of over $64,000 in April.It’s also making it hard for even bitcoin bulls to ignore what many say are bitcoin’s sustainability issues. (Though not everyone agrees.)So what’s the solution? Here’s why bitcoin uses so much energy and a few ways bitcoin mining could be more eco-conscious, according to experts.Why bitcoin mining has sustainability issuesBitcoin’s main sustainability issue is the huge amount of energy used in bitcoin mining.Bitcoin mining is how new bitcoin are released into circulation. Miners verify transactions on Bitcoin’s blockchain to help avoid fraud and, as a reward, they are given new bitcoin. To verify transactions miners must solve extremely complex math problems, essentially by trial and error, which requires complex computer systems and a large amount of computational power. That much computing power uses a lot of electricity.”Right now, millions of Bitcoin mining devices around the world are generating 130 quintillion of such guesses every second of the day non-stop. Combined, these machines are now consuming as much electrical energy as a country like the Netherlands,” says Alex de Vries, a financial economist who runs Digiconomist.And because of that, the higher the price of bitcoin goes, the more energy it takes for miners to get bitcoin.”That is why energy consumption usually grows or shrinks when Bitcoin respectively gains or loses value,” says Marc Bevand, a computer security expert who developed the original methodology for the Cambridge Bitcoin Electricity Consumption Index.Those monster computer systems also pose an issue: “The other half problem is the large scale and frequent machinery replacement for supporting high-intensive mining activities. Production and disposal of those electronic machineries are emission intensive,” says Dabo Guan, Chair in Climate Change Economics Department of Earth System Science, Tsinghua University, Beijing, China.Using renewable energy could reduce greenhouse gas productionThe problem with using so much electricity is that energy generated by burning fossil fuel releases greenhouse gasses into the atmosphere, which then cause climate change. So while transitioning bitcoin mining use renewable energy may not reduce the overall energy consumption, it could reduce the use of fossil fuels.A research paper published by Guan and colleagues in April showed, for instance, that the energy consumption of the Bitcoin blockchain in China was expected was expected to generate an amount of greenhouse gas emissions equivalent to the yearly output of the Czech Republic or Qatar.It is unclear, however, exactly what amount of greenhouse gas emissions would be conserved if bitcoin mining transitioned to renewable energy 100%, because know one knows how much mining is already done with renewable energy sources.Commonly cited estimates range from 39% to 73% renewable energy. Jesse Morris, CEO of non-profit Energy Web says most estimates find 20% to 50% of bitcoin is powered by renewable energy, but all available numbers are based on self-reported data, which is unverifiable.Bitcoin miners in China for instance, are known to use both fossil fuel and hydroelectric energy (the most common renewable energy by bitcoin miners). But Since the Chinese government started cracking down on bitcoin mining, many miners are leaving and heading to Texas, among other potential new homes.That “might make even worse environmental impact if the miners move to Texas,” says Guan. “Texas has the highest portion in the U.S. in terms of fossil fuel electricity.”For progress to be made, there first has to be an accurate understanding of how much power is being used and what percentage is renewable. Musk said he had spoken with a group of miners who committed to publish data on their renewable energy usage, a development he called “potentially promising.”The Crypto Climate Accord, a group working to make the cryptocurrency industry powered by 100% renewable energy, is building software that would allow miners to anonymously report the amount and kind of power they are using, says Morris. (Energy Web is a founding member of the accord.)Others, like de Vries, are skeptical that bitcoin miners would voluntarily be transparent about their energy usage. “I don’t expect more openness from Bitcoin miners directly as the amount of illegal mining activities is growing rapidly,” he says. “These miners won’t disclose anything.”Still, some, like Bevand, say that Bitcoin will naturally transition to clean energy as it becomes cheaper than electricity that releases carbon emissions.”Sustainability of bitcoin mining is a problem that will solve itself because of technological trends. …[M]iners do everything in their power to find the cheapest electricity possible, and this often pushes them to use renewables because they have recently become the cheapest electricity,” Bevand says. “For example, according to the International Energy Agency (IEA) the cost per megawatt to build solar plants is below fossil fuels worldwide for the first time.”But fundamentally, powering mining with renewable energy is a “short-term solution” of debatable worth, says Guan.If there is limited renewable energy available — say a drought leads to limited hydro-electric energy — then some question whether that energy should be going towards Bitcoin to begin with. “Those electricity usually can serve for better purposes,” Guan says.A carbon tax could incentivise miners to go greenSince carbon emissions are triggered by mining activities, implementing a carbon tax on miners would be an “effective” way to motivate “greener mining activities,” says Guan.A carbon tax would potentially make mining bitcoin less attractive, de Vries says. And “bitcoin losing its appeal would logically reduce the price of bitcoin. This, in turn, reduces the amount of money earned by miners and how much they spend on energy-hungry machines (so reducing the climate impact as well),” he says.But this solution has its issues, too.First, there would need to be an independent standard for tracking emissions associated with cryptocurrencies, a paper published on June 18, “The true costs of digital currencies: Exploring impact beyond energy use,” suggests. The paper, of which de Vries is an author, says the cryptocurrency industry could use some iteration of the Greenhouse Gas Protocol, which is an international cooperatively designed accounting standard for tracking greenhouse gas emissions in the public and private sectors.But even if carbon emissions are centrally accounted for and independently verified, putting a carbon tax on a decentralized currency is hard to do. “Mining operations can be moved with relative ease and miners could simply relocate to jurisdictions where a carbon tax isn’t implemented,” says Peter Wall, the CEO of Argo Blockchain.Also, it would be inappropriate to levy a carbon tax on bitcoin before other parts of the economy, Morris says.”There are dozens if not hundreds of industries besides crypto/bitcoin that are responsible for much larger amounts of carbon emissions: oil and gas, transportation, aviation, steel, consumer electronic use and manufacturing….the list goes on,” according to Morris.”To single out bitcoin individually and tax it’s carbon footprint does not make a ton of logical sense in this regard.” Change how bitcoin is organizedBitcoin was created to operate with what’s called a “proof-of-work” mechanism, which results in high energy consumption mining.”With proof of work, the system selects [for a bitcoin reward] the first miner who solves an energy-intensive computation,” Bevand says. So the more work, or computational power, a miner puts in, the more chance of getting bitcoin.But there is an alternative mechanism called “proof-of-stake,” which some alt cryptocurrencies already use and which Ethereum 2.0 will use as part an upgrade.Proof of stake organizes the cryptocurrency based on how much of the currency a user owns, not based on which miner solved a problem. Generally speaking, if you own 3% of Ethereum 2.0, then you will be able to verify 3% of transactions, for example, Bevand says. There are some additional factors to consider, like users have to own a minimum amount, he says.But with proof of stake, there is no computation, so “it requires no energy expenditure,” Bevand says.If bitcoin moved to a proof of stake mechanism, “the energy consumption of the network could go down by 99.95%,” says de Vries.However, it’s not necessarily realistic that such a change will happen.First of all, “the plane is in the air and attempting to change to proof-of-stake would be akin to trying to change the engine of the plane in mid-flight,” Wall says.Additionally, many see the proof-of-work system as the most secure, says Walls. And the amount of centralization required (e.g., among only to those who have a certain amount of crypto) for proof-of-stake is deal breaker for many in the Bitcoin community, who take pride in the fact that bitcoin is decentralized, Bevand says.”This is part of the reason why they aren’t very popular: many people don’t trust them,” he says.See also:Bill Gates: Stop shutting down reactors, build new nuclear power plants to fight climate changeHow this ex-Intel boss became an ‘accidental environmentalist’ fighting to eliminate single-use plasticsTrillions of pounds of trash: New technology tries to solve an old garbage problem More

Robinhood will pay roughly $70 million in penalties for its systemwide outages and misleading communication and trading practices, the Financial Industry Regulatory Authority said Wednesday.The settlement regards the technical failures Robinhood experienced in March of 2020, Robinhood’s lack of due diligence before approving customers to place options trades and purveying misleading information to customers about aspects like trading on margin. The stock market was diving that month in especially wild trading amid the outbreak of the Covid-19 pandemic.FINRA — a self-regulatory organization that oversees brokerage firms and their registered representatives — said it fined Robinhood $57 million and ordered the stock trading app to pay nearly $13 million in restitution to thousands of clients.”FINRA considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so,” the organization said in a statement.Robinhood — expected to go public sometime this year — suffered multiple days of outages beginning in early March of 2020, leaving clients unable to trade equities, options or cryptocurrency. The platform remained offline during some of the highest volume trading days amid the fastest bear market in history.The popular online brokerage also faced criticism over the death of a 20-year old trader who killed himself after believing he racked up huge losses on Robinhood. The suicide was mentioned in the FINRA press release.Robinhood neither admitted or denied the charges.”Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams,” Robinhood head of public policy communications Jacqueline Ortiz Ramsay said in response to the fine. “We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all.”Robinhood said it now has approximately 2,700 customer support staff, the brokerage said in a blog post. That is more than triple the staff it had during March of 2020.The Menlo Park, California-based company forecasted this fine was coming and set aside $26.6 million for settlements, according to an annual audit filing with the SEC; however, the fine is more than double the amount reserved.”The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood’s violations, including FINRA’s finding that Robinhood communicated false and misleading information to millions of its customers,” said Jessica Hopper, executive vice president and head of FINRA’s Department of Enforcement. Finra fined Robinhood $1.25 million in 2019 for best execution violations.Robinhood is expected to go public in the coming months with a valuation north of $30 billion.— with reporting from CNBC’s Kate Rooney.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

Hill Street Studios | DigitalVision | Getty ImagesIt’s now been more than a year that borrowers haven’t had to make a payment on their federal student loans.That break is currently scheduled to end in September.However, U.S. Education Secretary Miguel Cardona told the Senate Appropriations Committee this month that he was involved in conversations over whether that was the best time to resume payments. And in May, at an Education Writers Association conference, Cardona said extending the payment pause was on the table.The White House is under increasing pressure to give borrowers more time.More from Invest in You:Before you start post-pandemic spending, make these money moves7 ways to save money on travel this summerAs ‘buy now, pay later’ apps become more popular, be cautiousSen. Elizabeth Warren, D-Mass., and Senate Majority Leader Chuck Schumer, D-N.Y., sent a letter this month to President Joe Biden, urging him to extend the payment pause until March 2022. That would mean most borrowers wouldn’t have made a payment on their student loans in two years.More than 120 organizations, including the American Civil Liberties Union, the National Consumer Law Center and the Consumer Federation of America, also recently wrote to the president, asking him to extend the payment pause until student debt has been forgiven.”Your administration now has a once-in-a-generation chance to repair the damage caused by policy failures at the federal and state level and decades of government mismanagement and industry abuses — an opportunity and an obligation that must be fulfilled before any action is taken to resume monthly student loan payments,” they wrote.Zoom In IconArrows pointing outwardsThere are more than 44 million student loan borrowers in the U.S., and the country’s outstanding balance is expected to exceed $2 trillion by 2022. The average student loan balance is around $30,000, up from $10,000 in the early 1990s, with many borrowers owing $100,000 or more.The average bill is $400 a month, and research has found those payments make it harder for people to save for their futures, open businesses and start families.Most student loan borrowers have accepted the government’s offer to put their payments on hold. Just around 11% of borrowers are in repayment, according to the most recent data analyzed by higher education expert Mark Kantrowitz.Borrowers were struggling before Covid, with more than 1 in 4 in delinquency or default. After more than a year of record-high unemployment levels, that pain has only worsened. The Congressional Budget Office recently predicted that the jobless rates for younger workers will be slower to improve than the overall rate.”Best guess is that the payment pause and interest waiver will be extended if the unemployment rates for college graduates have not yet normalized as of Sept. 30, 2021,” Kantrowitz said.The unemployment rate for those with an associate’s degree was more than 5% in May, compared with 2.8% before the pandemic.Close to 3% of bachelor’s degree recipients remain jobless, up from around 2.2% pre-Covid. More

Traders on the floor of the New York Stock Exchange.Source: NYSEThe floor of the New York Stock Exchange, which has been quiet in the past year, has suddenly come to life.Traders have been returning, restrictions have been relaxed so more visitors can come on the floor, and the IPO business is booming.”We saw exciting and innovative businesses come to the market in the first half of the year, and we expect that IPO pipeline to continue throughout the second half,” Peter Giacchi, head of DMM floor trading at Citadel Securities, told me.Busy week for IPOsThe IPO business, which has taken a back seat to SPACs for a good part of 2020 and early 2021, has returned big-time.This week alone, 18 companies are seeking to go public, including Chinese ride-hailing company Didi Global in what will be the biggest IPO of the year (Didi has reportedly priced at $14), along with doughnut chain Krispy Kreme, cybersecurity company SentinelOne, travel security firm Clear Secure, and online legal platform LegalZoom.That’s the most companies in a single week since 2004.”The setup could not be more perfect,” Santosh Rao, head of research at Manhattan Venture Research, told me. “It’s risk-on sentiment, with markets at new highs. And when the VIX [Volatility Index] is below 20, it has always helped the market.”There’s another reason for the sudden rush of companies this week: the end of a strong quarter.”You want to get the company out at the end of the quarter, because if you wait into the next quarter you have to publish updated financials,” Rao said.The IPO rush will likely start the second half like it is ending the first half: with a bang.First half a monster for IPOsAlmost any way the data is sliced, the first half of the year was a monster for the IPO market, which saw 213 IPOs raise over $70 billion.”That is above the full-year average for the last 10 years,” Matt Kennedy, senior market strategist for Renaissance Capital, which advises clients on IPOs and runs the Renaissance Capital IPO ETF, told me. “We haven’t seen this level of activity since the 1996-2000 time frame.”It’s not just the number of IPOs: the dollar value was high. There are 16 IPOs that have raised a billion dollars or more in the first half, and Didi and SentinelOne are likely to make it 18. “That is far and away the largest number of billion-dollar IPOs in a first half ever,” Kennedy said.After slowing somewhat in May, June was also the busiest single month since August 2000.These numbers are all the more remarkable, considering that SPACs continue to compete with IPOs for listings. The SPAC business, however, has slowed considerably. Fifty SPACs raised $9.3 billion in the second quarter, an 89% decline in proceeds from the prior quarter.Rewards for IPO investors, but mostly on the first dayIPO investors have been rewarded: excluding two high-flying micro-caps, the average IPO returned 26% in the second quarter, according to Renaissance Capital.However, the vast majority of that return (24%) was earned on the first day of trading.”That is not ideal for retail investors,” because retail investors are buying in on the first day, so while some of that first-day return may be available, a good portion is not, Kennedy explained. “The majority of the returns are going to the institutional buyers.”The Renaissance Capital IPO ETF, a basket of roughly 60 of the most recent larger IPOs, tanked in May along with many speculative tech stocks, but has since rallied back into positive territory for the year, though it still lags the S&P 500.Second half starting strongThe IPO pipeline currently has 87 companies on file looking to raise a total of more than $20 billion, including the Mark Wahlberg-backed fitness studio F45 Training and luxury social club operator Membership Collective, owner of Soho House.There’s also plenty of private companies that have not filed that are expected to do so in the coming months, or who have filed confidentially, including:Robinhood (stock trading app)Warby Parker (prescription eyeglasses)Chobani (Greek yougurt)Flipkart (India’s largest online retailer being spun out of Walmart)Instacart (grocery delivery platform)GlobalFoundries (semiconductor designer)Dole Food Company (global fruit and vegetable company)Is the glut of IPOs causing problems for buyers?Kathleen Smith, chairwoman of Renaissance Capital, fears that business may be a little too good.”The activity is so great that many of our clients are complaining they can’t look at everything, and that’s bad,” Smith told me. “It means they’re not able to do all the homework they need to do.””You need to have quality control. The only quality control is when a fund manager is doing their homework, or some market event happens that causes recent IPOs to drop fast.”Can the IPO industry repeat the historic performance of the first half of this year?”In theory, we are set for another explosive quarter, but it is a volatile space,” Kennedy said.”The IPO market can turn on a dime, and if the returns to investors tank that could sour the whole market,” he said.Indeed, IPOs did tank in May, when speculative tech stocks, many of which were recent IPOs, tanked on inflation worries. They have since recovered.”These young companies trade on the potential for profitability down the road,” Rao said. “They are very sensitive to a rise in interest rates, but right now there is no big fear of much higher interest rates. That’s why it’s still risk-on. FOMO [Fear of Missing Out] is the biggest thing.” More