What the experts say

Interest rates clobber small caps

Small-cap stocks have fallen way behind bigger peers, said Hardika Singh and Jack Pitcher in The Wall Street Journal. “The S&P 600, an index of small companies with an average market value of $1.8 billion,” has rebounded somewhat on bets the Federal Reserve is done raising interest rates. However, it still “trails its large-cap counterpart by the widest margin in a calendar year since 1998,” returning just 0.1 percent this year compared with 17 percent for the S&P 500. Higher rates have hurt smaller companies more than their larger peers, who can lock in borrowing costs years earlier. “Interest expenses have surged” for those not so fortunate. TV broadcaster E.W. Scripps said the $57 million it paid in interest in the third quarter exceeded its operating income.

Companies cut back on benefits

Employee perks are hitting the chopping block, said Irina Ivanova in Fortune. Tuition assistance, charitable-gift matching, and even dental insurance are starting to be retracted from offers, according to a Glassdoor analysis of workplace trends. “Mobile phone discounts, which were available at a majority of employers six years ago, have fallen off a cliff.” Same with gym memberships, “which were all the rage among tech-sector employers in 2019.” Companies are looking to cut costs in a tight monetary environment, and more benefits are coming under scrutiny. But not everything. Glassdoor found that “benefits that focus on family—including adoption or fertility assistance, and parental leave—have grown sharply.” Offering these policies can be “surprisingly cheap,” since they're used by only a small portion of employees.

Short sellers team up with regulators

Short sellers earn cash on the side as Wall Street whistleblowers, said Austin Weinstein in Bloomberg. Big-name short sellers such as Nate Anderson, the founder of Hindenburg Research, and Carson Block of Muddy Waters have been sharing some of their bombshell research with the Securities and Exchange Commission's whistleblower office. “If the SEC investigates and levies a fine” over $1 million, whistleblowers “can collect up to 30 percent of the proceeds.” Tipping off the agency doesn't preclude short sellers from making money by betting against a company's stock. “Some SEC officials are queasy about using material from short sellers,” but it does make their job easier. “A good short report can cut months or years off of an investigation.”