Warren, Clayton Argue Market's Health; Equifax Board Merits Closer Look - ICYMI

Here's what you need to know now for Tuesday, Sept. 26

Author:: Michael Brown
Publish date:: Sep 26, 2017 8:19 PM EDT

The bigwigs of regulation and policy were out in full force on Tuesday.

Janet Yellen spoke to the National Association for Business Economics Meeting in Cleveland while Sen. Elizabeth Warren and Securities and Exchange Commission Chairman Jay Clayton fenced off at a Senate Banking Committee hearing in D.C.

Yellen tiptoed the line between dove and hawk, stating that the Fed may have made an error in assessing the labor market and inflation trends. She also reiterated her belief that lackluster inflation was "probably temporary" and that personal consumption expenditures would reach the Fed's 2% target in the next few years. Yellen also cautioned against moving too gradually, noting the risk that the labor market could overheat.

Warren and Clayton on the other hand debated the health of the market for initial public offerings, about seven of which are set to price this week, including streaming technology company Roku Inc. and biotech NuCana Inc.

The Massachusetts senator contended that companies debuting today are performing better and are less likely to wipe out shareholders as they did during the dot-com bust of the early 2000s. In response, Clayton said retail investors today aren't getting the benefits of being able to invest in earlier stage companies because corporations are choosing to delay their public offerings due to costs until they are more mature and not growing as much, all of which means less profit for consumers.

Still no healthcare bill, but we've got new developments from the GOP that would help private companies get into the flood insurance business. The fallout for existing insurers like Progressive Corp. (PGR) - Get Report ? Well, they're excited to compete against the government for once.

The drama continued at Equifax Inc. (EFX) - Get Reporton Tuesday as the company announced its CEO would retire effective immediately. While you may not have missed the announcement, you may have missed the widespread entrenchment of Equifax's board, which should have helped prevent the security breach but was asleep at the switch.

Sure, the board isn't responsible for writing security code themselves, but they are indeed responsible for ensuring the right checks and balances are in place and to make certain they are putting the right people in the right places. Better luck next time, folks.

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Photo of the day: SMU's "Pony Express"

Sports remained at the top of many minds on Tuesday as U.S. federal prosecutors charged four NCAA basketball coaches and a marketing professional with ties to Adidas AG (ADDYY) with corruption. The incident is just the latest in a long string of scandals to hit college athletics over the last 30 years. Of the many scandals to rock the college ranks was the 1985 "Death Penalty" dealt to Southern Methodist University following a spate of recruiting violations including boosters paying players. The Dallas-based university was fined more than half a dozen times between 1974 and 1985 (including the 1981 title season featuring star running backs Eric Dickerson, left, and Craig James) until 1986 when its football squad was officially disbarred from playing the 1986 season. While it is unclear what the penalties for the four schools involved will be, it is unlikely they would see a penalty like that of SMU in the 1980s. As for Adidas, shares of the athletic apparel company closed down about 3% to $110.68 on heavy volume.

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