“Achieving gains usually has something to do with being right about events that are on the come, whereas losses can be minimized by ascertaining that tangible value is present, the herd’s expectations are moderate and prices are low. My experience tells me the latter can be done with greater consistency.” ― Howard Marks

1. Fed Dials Back Bond Purchases, Plots End to Stimulus by June — the Federal Reserve approved plans to begin scaling back its bond-buying stimulus program this month and end it by June, a major step toward withdrawing its aggressive, pandemic-driven economic support amid a recent inflation surge. The Fed will reduce its bond purchases by $15 billion a month in November and by a further $15 billion in December, the central bank said Wednesday. It said similar reductions in the pace of net purchases “will likely be appropriate each month,” though officials would be prepared to adjust that pace “if warranted by changes in the economic outlook.” It also has been buying at least $120 billion a month in Treasury and mortgage securities—initially to stabilize financial markets and later to hold down longer-term interest rates.
2. Zillow Quits Home-Flipping Business, Cites Inability to Forecast Prices — the firm’s termination of its tech-enabled home-flipping business, known as “iBuying,” follows Zillow’s announcement about two weeks ago that it was halting all new home purchases for the rest of the year. At the time, Zillow pointed to labor and supply shortages for its inability to renovate and flip houses fast enough. Chief Executive Rich Barton said Zillow had failed to predict the pace of home-price appreciation accurately, marking an end to a venture the company once said could generate $20 billion a year. Instead, the company said it now plans to cut 25% of its workforce. Zillow and other tech-powered house flippers, known as iBuyers, purchase homes, renovate them and then try to sell them quickly, making money on transaction fees and home-price appreciation. Zillow used an algorithm to make home price estimates, called the “Zestimate,” and determine what it would pay home sellers.
3. Pfizer Says Covid-19 Pill Is 89% Effective in Preliminary Assessment — Pfizer Inc. announced in a preliminary look at study results found that its experimental pill was highly effective at preventing people at high risk of severe Covid-19 from needing hospitalization or dying, the latest encouraging performance for an early virus treatment.
The company’s drug cut the risk of hospitalization or death in study subjects with mild to moderate Covid-19 by about 89% if they took the pill within three days of diagnosis, Pfizer said Friday. The drug, called Paxlovid, was also found to be generally safe and well-tolerated in the early look at ongoing study results, the company said. Pfizer plans to ask the Food and Drug Administration to authorize the drug’s use this month, and the company could deliver doses this year. If authorized, there could be two Covid-19 pills that people could take at home before the end of the year to keep them out of the hospital. An antiviral from Merck & Co. and Ridgeback Biotherapeutics LP was cleared for use in the U.K. this week and is up for U.S. authorization.
4. Biden Wins Infrastructure Deal — the legislation will inject $110 billion in funding for roads, bridges and major projects, along with another $39 billion to modernize and make public transit more accessible to elderly commuters and the disabled. Major city transit systems, such as New York City’s, will see significant increases in funding based on federal funding formulas.
The spending will be paid for with a variety of revenue streams, including more than $200 billion in repurposed funds originally intended for coronavirus relief but left unused; about $50 billion from delaying a Trump-era rule on Medicare rebates; and $50 billion from certain states returning unused unemployment insurance supplemental funds.

The week ahead — Economic data from Econoday.com: