President Biden told CNN in a town hall this week that he just doesn’t have the votes to hike corporate taxes. Driving the divide is a substantial share of progressives who won’t allow topline taxes and higher spending bills, who are at odds with Democrats in swing states who are lobbying for the opposite. In order to pass the bill, the President would need 60 senate votes so they can bypass filibustering. They need every Democrat on board for that to happen. The White House has made clear that this is only a compromise on corporate taxes, other tax hikes are still in place. Markets are rejoicing because all the stimulus grease may be good for the economy, and now higher taxes will not eat at all the corporate profits.

FINSUM: This might avoid a lot of unneeded volatility, but other income tax and GAAP earnings taxes could be still be enough to disrupt markets.

A new study for BlackRock shows exactly how active funds have an edge moving forward in the transition to net-zero emissions. Active investors’ advantage over traditional investors comes by incorporating sustainable insights, identifying climate-related financial catalysts, and seeking investment in emerging tech. Rich Kushel, Senior Managing Director at BlackRock says their strategies can identify companies and data points that generate a higher alpha. BlackRock is putting their money where their mouth is by launching an array of new active ESG funds across bond and equity markets targeting value or growth in different capitalization categories. In total, there will be nine new funds with ESG objectives.

FINSUM: The traditional rules of investment haven’t applied to ESG and technology, so a new set of analytical insights and active management may outperform traditional analysis.

Labor shortages are rampant all across the country. It’s at its most prominent in food services and restaurants, as 80% of restaurants report to be understaffed. Companies like Miso Robotics are stepping in, as they test burger-flipping robots at CaliBurger and White Castle and are expanding their abilities to wing production at Buffalo Wild Wings. Miso says their strategy was never to swing in or capitalize on a labor shortage, but undoubtedly they are benefiting from the epidemic that is affecting the whole country.The labor shortages could continue, and those shortages permeate the AI and robotics industry themselves. There is a lot of demand for those working on robotics, and in the meantime, they aren’t fully capable of supplanting the restaurant workforce, which means there is a lot of upside.

FINSUM: Restaurant services are full of opportunities for robotics and it’s not just in cooking, they are also being used in a major way for food delivery services.

Former Harvard bankruptcy professor Elizabeth Warren is trying to reestablish support of tighter regulation on yet another financial industry sector. Looking to alleviate financial irresponsibility, the bill restricts PE from enforcing new loans on companies in order to withdraw dividends. Additionally, the bill creates a number of protections for workers that prohibit outsourcing and secure severance pay in the event of bankruptcy. Companies like Sports Authority, Shopco, and Gymboree all filed for bankruptcy under PE the debt Warren is trying to prohibit. Warren failed to draw the appeal across the aisle previously with the bill, but is hoping to gain more traction this time around. Opponents say the bill will draw down on private funding for new and small businesses and could harm the ability to make new hires or expand their workforce.

FINSUM: Regulation like this will undoubtedly harm some small businesses but the protection and benefits could out way those restrictions, however the bill won’t likely get enough traction in its current status to reach the oval office.

The overall bond market is almost a bust this year but investors flocking for a yield can only go to one place, junk bonds. Lending conditions are very loose with all the accommodations both fiscal and monetary policy made this year, and those attempting to stream any income have to learn to high-yield debt. Inflation is eating up anything to be gained in treasuries. Investors are now treating high yield debt like a more liquid asset than ever purely because traditional bonds are losing to inflation. All of the policy measures have made many feel corporate debt is less risky than ever but the excess demand may be tipping, as even some of the riskiest debt is being sought after. Still high nominal economic growth is good for borrowers and reduces to investors.

FINSUM: Investors should be aware of interest rates pass-through from Fed tightening to corporate debt, strong inflation could lead to weaker pass through and even lower spreads than the market is already seeing.

Sommelier is a unique new start-up that is automizing DeFi portfolio, and it just got a huge influx in funding. Sommelier raised $23 million in their series A led by Polychain Capital. Sommelier is a software company that has developed tools to automate liquidity management without the typical middleman. The DeFi is shaping the financial world in a way traditional finance can’t and using software to enact strategies that develop and test capital allocation. Sommelier is already giving liquidity providers tools to optimize placement and concentration in liquidity pools and this further funding will add to their to the kit they have for liquidity providers.

FINSUM: This is a big step in liquid automation, and will improve the efficiency in the crypto DeFi world.

Environmental, social, and governance investing drew in almost $35 trillion last year and that number is expected to grow another 42% by 2025, and while those dollars might be better for the environment the large inflows from unseasoned investors are pushing ESG into a price bubble. Large inflows are can disregarding traditional financial discipline which can affect debt/equity ratios, dividends, and distort valuations for future mergers and acquisitions. New companies in the onset of their financial growth are already being evaluated at 15 times revenue, on top of that investments in the traditional sector are suffering as outflows continue this could cause supply shortages and further inflation. Continued inflows into ESG could swell the bubble further and risk a collapse.

FINSUM: ESG could be swelling into risky territory, investors should be cautious particularly with retirement vehicles.

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