• Founder of world’s largest hedge fund doubles down on ‘cash is trash’ argument, warning of debt-fueled inflation
    MarketWatch

    Founder of world’s largest hedge fund doubles down on ‘cash is trash’ argument, warning of debt-fueled inflation

    With U.S. stocks down more than 20% from their February highs, investors who had taken money out of equities and corporate debt and put that money into cash in recent weeks have avoided a great deal of pain.

  • Here’s what Goldman Sachs is telling wealthy clients to do in this market
    MarketWatch

    Here’s what Goldman Sachs is telling wealthy clients to do in this market

    President Donald Trump told reporters at the White House coronavirus press briefing on Monday that he sees “a tremendous light at the end of the tunnel” amid the pandemic. Clearly, Silvia Ardagna, managing director in the investment strategy group within Goldman Sachs private Wealth Management, agrees with him.

  • Barrons.com

    The Stock Market Has Had a Heck of a Bounce. Why It’s Time for Another Drop.

    Ever since the market bottomed and started moving higher, we’ve been working under the assumption that there will be a retest of the lows. The market’s rally hasn’t changed that.

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  • Is the Dow staging a genuine rebound? Here’s what experts think as the stock market attempts to shake the bearish grip of the coronavirus pandemic
    MarketWatch

    Is the Dow staging a genuine rebound? Here’s what experts think as the stock market attempts to shake the bearish grip of the coronavirus pandemic

    Investors are seeing light at the end of the tunnel after a brutal period. But is it a train? Here’s what some strategists are saying about the outlook for the market as it tries to recover from COVID-19.

  • Amazon to suspend delivery service competing with UPS, FedEx
    Reuters

    Amazon to suspend delivery service competing with UPS, FedEx

    The online retailer told customers that the service, Amazon Shipping, will be paused starting in June, according to the Wall Street Journal, which was first to report the change. Amazon is suspending the service because it needs people and capacity to handle a surge in its own customers’ orders, the Journal reported, citing sources. "We regularly look at a variety of factors across Amazon to make sure we're set up in the right way to best serve our customers," an Amazon spokesperson told Reuters in an email confirming the halt in service.

  • U.S. senator to liquidate individual stock shares after coronavirus flap
    Reuters

    U.S. senator to liquidate individual stock shares after coronavirus flap

    U.S. Senator Kelly Loeffler said on Wednesday she would liquidate her individual stock share positions after the wealthy Republican and her husband were criticized over sales of millions of dollars in stock during the coronavirus outbreak. Loeffler, who was appointed to her Senate seat in January by Georgia's governor, has repeatedly denied any wrongdoing. In a Wall Street Journal opinion column on Wednesday, Loeffler said she was not changing her investment strategy because she has to.

  • 3 High-Powered Dividends Stocks With Over 7% Dividend Yield
    TipRanks

    3 High-Powered Dividends Stocks With Over 7% Dividend Yield

    After weeks of historic uncertainty, global stock markets are quickly settling down from now what is now nearly a month of record share price volatility. It appears that social distancing is helping slow new cases of the coronavirus, and there is hope that the global economy will return back to normal. Many stocks have bounced significantly from their lows because of this hope, but there are still plenty of deals to be had.Some well capitalized energy firms, which are already operating in uncertain times as many economies around the world remain in standby mode from the social distancing required to keep covid-19 at bay, are also having to deal with a dramatic drop in oil prices. This was brought by production disagreements between major producing countries, including Russia and Saudi Arabia, and a major oversupply of oil. In many parts of the industry, the companies that generate strong cash flows also have generous dividend payouts.But not all energy companies are created equal. The below firms are not directly dependent on oil prices for their profits and cash flow that they use for dividend payments. The sudden (but temporary) drop demand is certainly a near-term concern, but should improve quickly as people return to work. A recent screen in TipRanks database helped uncover important details on these three high-powered dividend stocks. Let's take a closer look.Valero Energy Corp (VLO)Valero is a pure play refiner. In its words, it has “premiere assets and low cost operations.” As one of the largest refiners out there, it’s hard to argue with them. Its 15 refineries support 3.2 million barrels per day (BPD) and its has over 3,000 miles of pipelines to market and distribute the fuel it makes. It’s a disciplined capital allocator, and though the current environment is adversely affecting demand, conditions should soon return back to more normal conditions.RBC Capital's Brad Heffern has Valero on its “Global Energy Best Bets Ideas” list and believes that the firm is “positioned to take advantage of global crude oversupply and a low position on the cost curve.” It also cited the “high complexity” of Valero’s refining operations, which is a good thing as it allows it to tactically shift refining to areas seeing higher demand, and/or better margins.Speaking of the dividend, Heffern sees “less risk of a dividend cut” compared to the peer group. Indeed, in the previous three fiscal years Valero has generated average operating cash flow of around $5 billion. Subtracting out an average of $1.5 billion to grow and maintain its extensive refiner facilities has left about $3.5 billion annually to buy back stock and pay the dividend. The dividend requires $1.5 billion, which is right at its target to pay out 40% to 50% of that free cash flow. So, looking back there appears to be plenty of cushion to fund and support the dividend payout. Overall, annualized, Valero's dividend comes out to $3.92, giving a yield of 8.5%.Unsurprisingly, Heffern rates Valero shares a Buy along with a $59.00 price target -- 15% upside from current levels. (To watch Heffern's track record, click here)Wolfe Research said it even more succinctly in a recent research note on Valero. Lead analyst Sam Margolin sees “ample liquidity, no [debt] maturities near term, and upside leverage with dividend growth.” We like the vote of confidence, and patience in the current environment that should only continue to settle down.All in all, among of the 10 analysts who've ventured an opinion on Valero in the last month, each and every one of them put a "buy" rating on the stock. The overwhelming consensus is that Valero shares should be worth $75.44 per share over the next 12 months. So, the message is clear: Valero is a Strong Buy. (See Marathon Petroleum stock analysis on TipRanks)Kinder Morgan (KMI)Oil and gas pipeline operator Kinder Morgan stresses that its business is driven by fee-based arrangements that are “entitled to payment regardless of throughput.” This implies its business is not driven by the swings in commodity prices and should insulate it from the current dramatic drop in oil prices.Also importantly, UBS analyst Shneur Gershuni detailed in a recent report that 80% of Kinder’s business is tied to natural gas and refined products, not crude oil. Gershuni also cited Kinder’s balance sheet strength, which was relayed in a discussion with Kinder CEO Steven Kean. He noted that Kinder still plans to boost its dividend another 25% this year, continuing a trend to boost its annual payout. The dividend is currently $1 per share and will go up to $1.25 for a current dividend yield of 7%, based off the current share price of $14.72.It's not surprising, though, why Gershuni reiterated his Buy rating on KMI shares along with a $26 price target. Should the target be met, investors pockets will jingle with returns in the shape of 77%. (To watch Gershuni's track record, click here)Turning to Kinder’s cash flow statement, its bias toward self-funding its operations is apparent. Operating cash flow production has average just below $5 billion over the past three annual periods. Capital expenditure, or the investment to grow and maintain its pipeline operations, was $2.3 billion, leaving $2.7 billion in free cash flow. That suggests there is ample room to continue and expand the payout to shareholders. Kinder is also paying down its debt over time. All good signs.When looking at Wall Street’s stance, Gershuni is not the only bull, as TipRanks analytics showcase KMI as a Buy. Out of 12 analysts polled in the last 3 months, 8 rate KMI a Buy, while 4 suggest Hold. Meanwhile, the 12-month average price target stands at $18.58 marking a 26% upside from where the stock is currently trading. (See Kinder Morgan stock analysis on TipRanks)Marathon Petroleum (MPC)Marathon Petroleum has some diversification that, despite the past saber rattlings by activist investors, is helping it through the current economic woes brought by fighting covid-19. It is an oil refiner, energy pipeline owner and facilitator, and, best know to most consumers, operates gas stations under the Marathon and Speedway brand names.Refining operations make money based off the price differentials, or spreads, of various types of oil. For instance, heavier, dirtier oil (think Canadian oil sands or Venezuelan oil) can trade at a higher price, which can make it more profitable for refiners to, well, refine, compared to lighter (and sweeter) grades. Gasoline margins at gas stations also oscillate based off of market demand and supply. Diesel and regular gasoline spreads also impact what Marathon chooses to refine. Its complicated stuff, but Marathon has its hands around how to navigate the spreads.Income was enough to raise the dividend to 58 cents. The annual payment, $2.32, gives the stock a yield of 10%, far higher than the 2% average dividend yield found on the broader markets. Marathon has a reliable dividend history, and adjusts the payment when needed to ensure that the company can afford the dividend.Marathon had been mulling over caving to activist investor demands, but for now it is not selling its gas stations and looks to be keeping the structure of its pipelines (midstream assets) intact. In a report on March 18, research firm Jefferies sees the decision to keep its relationships with its pipeline entities as a “positive”, and noted the hiring of a new CEO (Michal Hennigan) as the removal of another overhang.Lead analyst Christopher Sighinolfi ended his most recent report by suggesting MPC is a “deeply discounted security[y] and sees catalysts in the spin out of the gas stations and stock buybacks as catalysts to push the stock back toward recent highs.As a result, Sighinolfi reiterated a Buy rating on MPC shares alongside a $74 price target, which implies nearly 200% upside from current levels. (To watch Sighinolfi's track record, click here)What does the rest of the Street have to say? As it turns out, other analysts are in agreement. 7 Buys and 3 Hold ratings add up to a Moderate Buy consensus rating. The $62.11 average price target puts the upside potential below Sighinolfi’s forecast at $62.11. (See Marathon Petroleum stock analysis on TipRanks)Disclosure: The author has a long position in MPC and KMI.To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

  • Dow Jones Futures: Coronavirus Stock Market Rally Lacks Two Key Qualities; Analyzing Five Key Stocks
    Investor's Business Daily

    Dow Jones Futures: Coronavirus Stock Market Rally Lacks Two Key Qualities; Analyzing Five Key Stocks

    The coronavirus market rally had a strong day, but growth stocks are lagging and breakouts lacking. Costco fell late on March sales. Apple, Amazon, Microsoft, Dexcom and Nvidia are in focus.

  • These bargain bank stocks may emerge from the coronavirus crisis as big winners
    MarketWatch

    These bargain bank stocks may emerge from the coronavirus crisis as big winners

    With the U.S. economy set to contract severely this quarter amid the COVID-19 lockdown, bank stocks as a group have fallen much more than the broader market. On April 7, David Konrad, a managing director and analyst at D.A. Davidson, and Ian Lapey, a portfolio manager at Gabelli, discussed in interviews seven bank stocks that may turn out to be good investments. It sounds simple, but human nature makes it difficult for most investors to consider buying stocks during a time of panic.

  • 8 Dividends In Danger Of Being Cut
    Benzinga

    8 Dividends In Danger Of Being Cut

    With interest rates at all-time lows, income investors have few places to turn for solid yields. To make things even more difficult, the (coronavirus) COVID-19 stock market sell-off has already triggered a handful of companies to cut or suspend their dividends.Red Flags Not only do dividend cuts drive away income investors, they're also a sign of potential liquidity issues at the underlying company. The sell-off has driven dividend yields of a number of S&P 500 stocks to their highest levels in years. But as attractive as a double-digit dividend may seem on the surface, a dividend is only as good as the company paying it.The quickest way to assess the reliability of a dividend is to look at a company's payout ratio. A payout ratio is a measure of the percentage of a company's EPS that is going back out to meet its dividend payment obligations. Ideally, a healthy dividend stock will have a payout ratio at or below 50%, but anything approaching 100% or higher is often a sign that the payout is unsustainable.Another red flag for investors to watch for is dividend yields that are too good to be true. A handful of real estate investment trusts and other companies pay yields at or above 8%, but most companies never intend to have yields that high. In many cases, stocks with yields that high have suffered large sell-offs that drove the payouts higher relative to the share price and could also indicate fundamental problems at the company.See Also: Exxon's CEO On How Oil Giant Plans To Maintain Dividend, Focus On Balance SheetDividends At Risk Here are eight S&P 500 stocks with dividend yields of at least 7% and payout ratios of above 100%, according to Finviz. * ONEOK, Inc. (NYSE: OKE), 16% yield. * Williams Companies Inc (NYSE: WMB), 11.8% yield. * Newell Brands Inc (NASDAQ: NWL), 7.1% yield. * AT&T Inc. (NYSE: T), 7% yield. * Wynn Resorts, Limited (NASDAQ: WYNN), 7% yield. * Chevron Corporation (NYSE: CVX), 6.4% yield. * Kraft Heinz Co (NASDAQ: KHC), 6.1% yield. * Baker Hughes Co (NYSE: BKR), 6.1% yield.Benzinga's Take Dividend investors looking for yield should tread very carefully in the market these days. There may be a number of companies waiting until their first-quarter earnings report to announce dividend cuts.Do you agree with this take? Email feedback@benzinga.com with your thoughts.See more from Benzinga * Here's How Large Option Traders Are Playing High-Yield AT&T As Market Falls(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Covid Report: Small Biotech Surges On Plan To Test Vaccine In May
    Investor's Business Daily

    Covid Report: Small Biotech Surges On Plan To Test Vaccine In May

    Novavax stock popped Wednesday after the small biotech company said it plans to begin human testing of its coronavirus vaccine in mid-May. The company expects preliminary results in July.

  • Why Is Warren Buffett Ignoring the Coronavirus Market Dip?
    Worth

    Why Is Warren Buffett Ignoring the Coronavirus Market Dip?

    The short-term coronavirus market dip doesn’t seem to interest the Berkshire Hathaway CEO. So, what will he buy next?The post Why Is Warren Buffett Ignoring the Coronavirus Market Dip? appeared first on Worth.

  • Plunging annuity rates: A strategy for new retirees
    MarketWatch

    Plunging annuity rates: A strategy for new retirees

    When she retired all those years ago, her income security needs were pretty simple. Such annuities continue to be offered by insurance companies, but the monthly payouts they generate has collapsed to the lowest levels on record, according to ImmediateAnnuities.com. In 2000, a 65-year old woman with $100,000 in savings could buy an annuity guaranteeing her income of $744 a month.

  • Russia, Saudi to debate oil output cuts as U.S. resists joining
    Reuters

    Russia, Saudi to debate oil output cuts as U.S. resists joining

    OPEC and Russia meet on Thursday to try to agree to record oil output cuts but their efforts to address the slump in prices wrought during the coronavirus pandemic have been complicated by mutual animosity and the reluctance of the United States to join the action. Crude prices have slumped below the cost of production for many producers, including the booming U.S. shale oil industry. U.S. President Donald Trump said last week a deal he had brokered with OPEC leader Saudi Arabia and Russia could lead to cuts of as much as 10-15 million barrels per day or 10-15% of global supplies, an unprecedented reduction.

  • Billionaire Steven Cohen Picks up These 2 Stocks on the Dip
    TipRanks

    Billionaire Steven Cohen Picks up These 2 Stocks on the Dip

    Stocks roared higher on Monday, but one legendary hedge fund manager isn’t breaking out the champagne just yet. Optimism that COVID-19's spread may be slowing powered the market’s impressive rally, with the Dow Jones closing the session up by over 1,600 points. That said, it may be too early to start toasting to the market’s recovery and the end of dramatic volatility.Billionaire Steve Cohen is warning staff of his investment firm, Point72 Asset Management, to stay cautious as stocks rebound from the COVID-19-driven sell-off. “Markets don’t come back in a straight line; after an earthquake there are tremors... We need to continue to be disciplined. We are seeing plenty of opportunities to generate returns, but I don’t want us taking undue risks,” he wrote in an internal note.The Point72 Chairman and CEO has earned a reputation as one of the most successful stock pickers, with his firm relying on a core hedge fund strategy that features stock market investments. Less frequently, Point72, which is based in Stamford, Connecticut, will make plays based on macro trends, placing global wagers on several asset classes at the same time. With Cohen earning an estimated $1.3 billion in 2019 after the firm’s main hedge fund posted a 14.9% gain, it’s no wonder market watchers follow his moves religiously.Taking all of this into consideration, we used TipRanks’ database to take a closer look at two stocks Cohen snapped up recently on the dip. The platform revealed that both Buy-rated tickers have earned the support of some members of the analyst community as well.Calithera Bio (CALA)Calithera Bio uses a onco-metabolism approach that brings a unique perspective to cancer, with it developing small molecule therapies that disrupt cellular metabolic pathways to block tumor growth. While shares have fallen 17% year-to-date to reach $4.74 apiece, this price tag could be an ideal entry point for those looking to get in on the action.This is the stance taken by Steve Cohen. According to a March 13 disclosure, Point72 added a CALA holding to its portfolio, in the shape of 3,240,046 shares. As a result, Cohen’s firm now has a 5% stake in the healthcare company.Weighing in on CALA for Jeffries, analyst Biren Amin sees an opportunity as well. He notes that a significant component of his bullish thesis is its CB-839 candidate. There is a substantial unmet need for successful outcomes in second- and third-line renal cell carcinoma (RCC) as checkpoint inhibitors are designated for first line use. As the candidate has already demonstrated efficacy in RCC, the top-line data readout in the second half of 2020 could serve as a key catalyst. Not to mention Amin estimates peak U.S. sales of $21 million for RCC alone.Adding to the good news, CB-839 could potentially be used to treat non-small-cell lung cancer (NSCLC) patients with KEAP1/NRF2 mutations. “With no currently approved therapies for this patient sub-group, CB-839 has the potential to be first-to-market in this 13,000 patient population (recall, KRAS G12c is ~14,000 NSCLC)…We estimate peak U.S. sales for CB-839 of $204 million (risk adj) for KEAP1/ NRF2 mutant NSCLC,” Amin commented.With the analyst pointing out that its two arginase inhibitors in development, INCB001158 as part of a collaboration with Incyte and CB-280, stand to drive additional upside, it makes sense that Amin takes a bullish approach.All in all, the five-star analyst puts a Buy rating on Calithera shares along with a $6 price target. Should the target be met, a twelve-month gain of 27% could be in store. (To watch Amin’s track record, click here)Like the Jeffries analyst, the rest of the Street is bullish on CALA. 4 Buy ratings compared to no Holds or Sells add up to a Strong Buy consensus rating. At $6.67, the average price target is more aggressive than Amin’s and implies upside potential of 41%. (See Calithera stock analysis on TipRanks)Syros Pharmaceuticals (SYRS)With the goal of taking control of gene expression, Syros develops small molecules to help improve the lives of patients. March definitely wasn’t its month, but some members of the Street believe its long-term growth prospects are strong.Cohen falls into this category. Made public on April 2, Point72 pulled the trigger on this healthcare stock. Acquiring a new holding, its purchase of 2.3 million shares puts the firm’s total stake in SYRS at 5.1%.Turning now to the analyst community, Roth Capital’s Zegbeh Jallah told investors that SYRS’s fourth quarter earnings results demonstrate the company’s potential. “We believe that Syros has made steady progress over 2019, and we look forward to the multiple data readouts expected during, particularly the readout of SY-1425 in r/r AML which should be a major catalyst. Cash and cash equivalents are expected to be sufficient to fund operations beyond major catalysts, and into 2022,” he explained.During the quarter, the company released data for its lead candidate, SY-1425, a selective RARα agonist currently in a Phase 2 clinical study in patients with acute myeloid leukemia (AML). The therapy was not only able to show a 62% CR/CRi rate and an 82% rate of transfusion independence, but it also produced a fast onset of action, was tolerable as a combination with Azacitidine and validated the biomarker strategy for patient selection.“The focus will likely be on response durability, which will probably be extrapolated to gauge the potential for durable responses in the r/r AML setting, for which Syros hopes to pursue an accelerated regulatory pathway,” Jallah added.On top of this, proof-of-concept data from the Phase 2 study of SY-1425 and Aza in r/r AML, which is slated for release in the fourth quarter of 2020, could drive significant growth for the company. Jallah is also watching out for an update on initial PK/PD and safety data from the Phase 1 study of SY-5609, its first oral and noncovalent CDK7 inhibitor.Bearing this in mind, Jallah has high hopes for SYRS. Along with a Buy rating, the analyst left a $17 price target on the stock, indicating 146% upside potential. (To watch Jallah’s track record, click here)Looking at the consensus breakdown, opinions are split evenly down the middle. With 2 Buys and 2 Holds received in the last three months, the word on the Street is that SYRS is a Moderate Buy. Based on the $9.33 average price target, the upside potential comes in at 35%. (See Syros stock analysis on TipRanks)

  • Goldman analyst who predicted the coronavirus would kill the bull market says ‘risk to the downside is greater’ despite Dow’s recent rally
    MarketWatch

    Goldman analyst who predicted the coronavirus would kill the bull market says ‘risk to the downside is greater’ despite Dow’s recent rally

    David Kostin says bullishness for the stocks don’t necessarily signify an all -clear sign for investors looking for a path higher for a coronavirus-stricken market.

  • MarketWatch

    Cruise stocks rally to extend recent rocket ride; Instinet analyst sees 'turning point' in Q1 2021

    Shares of cruise operators rallied again Wednesday, with Royal Caribbean Cruises Ltd. leading the way higher in afternoon trading. Royal Caribbean's stock ran up 10.4%, after rocketing 37.6% the over the previous two days; Carnival Corp. shares surged 5.0 after soaring 41.8% over the previous three sessions; and Norwegian Cruise Line Holdings Ltd.'s stock hiked up 4.6% after shooting 31.1% higher the previous three sessions. The gains comes as the S&P 500 rallies 3.0%. Instinet analyst Harry Curtis said based on his new cash burn and recovery forecasts for the cruise industry through 2023, he believes all three companies have enough liquidity and borrowing capacity to survive near-zero revenue through the first quarter of 2021. "Many times we've been asked about bankruptcy, and we believe it to be low," Curtis wrote in a note to clients. He expects a "modest" recovery for the industry to begin in the second half of 2020, with the first quarter of 2021 the possible "turning point." Curtis said there may be 70% to 90% upside in the stocks over the next three years.

  • Why one fund manager sees a wealth bubble putting the property and stock market at risk
    MarketWatch

    Why one fund manager sees a wealth bubble putting the property and stock market at risk

    Niels Jensen, the founder and chief investment officer of London-based investment adviser Absolute Return Partners, said in a monthly letter to investors that wealth has been running too far ahead of the underlying economy for some time.

  • The Stock Market Has Become One Big Value Trap
    Bloomberg

    The Stock Market Has Become One Big Value Trap

    (Bloomberg Opinion) -- Watching equities rally strongly for a second consecutive day, pushing the S&P 500 Index at one point to its highest level since March 11, it was hard not to be reminded of one of the most famous lines in movie history, or at least among fans of the Star Wars franchise. In 1983’s “Return of the Jedi,” the rebel alliance mobilizes its forces to destroy the Death Star during the Battle of Endor. But the rebels get ambushed, prompting Admiral Gial Ackbar to shout “It’s a trap!” And, just like that, equities gave up all their gains on Tuesday to post a slight decline.At its highest point on Tuesday, the S&P 500 was up 23% to 2,757 compared with last month’s closing low of 2,237 on March 23. The two main reasons given to explain the rebound are optimism that officials may be getting ahead of the curve in the battle to contain the coronavirus pandemic and what looks to be deeply discounted valuations on stocks following the fastest drop into a bear market in history. It remains to be seen whether Covid-19 is coming under control. When it comes to valuations, though, the optimists may well have fallen into a trap. A value trap is a well-known phenomenon in markets. It happens when a security or asset appears inexpensive relative to any number of metrics. The trap springs when the price of the security or asset continues to languish or drop even further. Indeed, stocks did look cheap, with the S&P 500 going from trading at close to 20 times this year’s estimated earnings down to 14 on March 13, which was the lowest since early 2013, according to data compiled by Bloomberg. But that was before analysts starting cutting their 2020 profit estimates, dropping them to $152 a share from $175 at the end of January. As a result, stocks no longer look so cheap, with the S&P 500’s price-to-forecasted earnings multiple jumping up to a not-very-inexpensive 18 times. The problem is that many analysts have held off slashing their profit estimates, deciding to wait until they hear from company executives when the first-quarter earnings reporting season begins in a few weeks. In other words, get ready for earnings estimates to fall even further, which should weigh on sentiment and valuations.Bloomberg News reports that Keith Parker, UBS AG’s head of equity strategy, calculates that many firms hadn’t updated their forecasts on individual company earnings for weeks. That means the existing data covering the next 12 months are probably underestimating the scope of the decline in S&P 500 profits by a factor of 2. The 2008 bear market had a number of false starts, with the S&P 500 rallying about 18% between late October and early November, and 24% between late November and early January, before tumbling again by about 25% before finally bottoming at a 13-year low in March 2009.DEBT RULES THE WORLDGovernments globally are stepping up their debt issuance to raise cash to support their economies during the coronavirus pandemic. There’s no shortage of market participants who expect all this money flowing into the system will set the stage for a sharp rebound in global growth once the crisis passes. Perhaps they should review a famous paper written a decade ago by economists Carmen Reinhart, Vincent Reinhart and Kenneth Rogoff that argued economies with high debt potentially face “massive” losses of output lasting more than a decade, even if interest rates remain low. What’s concerning is that debt issuance showed no sign of slowing before the pandemic. The Institute of International Finance issued a report Tuesday saying that the mountain of global debt across all sectors rose by more than $10 trillion in 2019 to exceed $255 trillion. That tops 322% of global gross domestic product, rising from 282% at the onset of the 2008 financial crisis. The IFF estimates that if global economic activity contracts 3%, debt would exceed 342% of GDP this year based on net government borrowing for 2019. The question is whether all this government borrowing will begin to crowd out private borrowers, sending interest rates soaring for all but the safest debt. That would be another reason to not expect a sharp economic rebound.AN EMERGING-MARKET TRAGEDYEmerging markets have accounted for a greater percentage of the global economy over the last decade, and that’s before considering the tremendous growth in China. What’s concerning for investors is that their health-care systems continue to lag behind those in developed markets, raising questions about their ability to handle the coronavirus pandemic. Among the top 25 health systems in the world as measured by the Johns Hopkins Global Health Security Index, only four are in emerging-market economies: Thailand at six, Malaysia at 18, Brazil at 22 and Argentina at 24. “As bad as the coronavirus crisis is likely to be in the world’s wealthiest nations, the public health and economic blow to less affluent ones, often referred to as ‘developing countries,’ could be drastically worse,” the analysts at Eurasia Group wrote in a note to clients. “They have less testing capability, fewer hospital beds, and lower stocks of ventilators and other specialized equipment. There are also far fewer doctors per capita.” Eurasia adds that while governments and central banks in the rich world can unleash stimulus packages that run into the trillions of dollars, developing countries have much less financial firepower, and their borrowing costs are also higher. Investors have already pulled $90 billion out of emerging markets since mid-January, helping to push the MSCI Emerging Markets FX Index down 5.67% for the year, raising problems such as faster inflation that can accompany a weakening currency.THE WRONG KIND OF INFLATIONThe market for raw materials hasn’t been spared from the coronavirus pandemic, with the Bloomberg Commodity Index falling about 22% in 2020, dropping to its lowest level since the 1970s. But the commodities market is wide, and not all sectors move in lockstep. Prices are rising for rice and wheat, which account for about a third of the world’s calories, according to Bloomberg News. The increased costs are a double whammy for a global population that faces a worldwide recession, with many either already out of work or soon to be. In Nigeria, for example, the cost of rice in retail markets soared more than 30% in the last four days of March alone. According to Bloomberg News, it’s unclear whether the price increases are the result of a trickle-down effect from grain futures or local logistical choke points or panic buying, or some combination of those factors. Elsewhere, export prices for rice from Thailand, the world’s second-biggest shipper, are at a six-year high. Wheat futures in Chicago, the global benchmark, shot up more than 8% in March, while Canadian durum, the type of grain used in pasta and couscous, is at the highest since August 2017. Bloomberg News points out that staple-crop prices have a long history of fueling political instability. During the spikes of 2011 and 2008, there were food riots in more than 30 nations across Africa, Asia and the Middle East.TEA LEAVESWhat were they thinking? Market participants will find out Wednesday when the minutes of the Federal Reserve’s emergency meeting on March 15 will be released. To refresh, that’s when the central bank slashed its benchmark interest rate by a full percentage point to near zero and promised to boost its bond holdings by at least $700 billion, the first of several moves announced by the Fed in the weeks that followed to support the financial system during the coronavirus pandemic. Although the minutes will be dated, Bloomberg Economics notes that they will “provide some context of policy makers’ thinking at the onset of the crisis.” More specifically, the minutes may shed some light on whether Fed officials anticipated the depth and breadth of the shock from shutting the economy down or whether they were taken by surprise like the government.DON’T MISS This Stock Market Swoon Differs From All Others: Aaron Brown Stocks Rally Suggests Turning Point in Virus Fight: John Authers Banks Need to Put Dividends on Hold: Narayana Kocherlakota Europe’s Debate Over Coronabonds Can Wait for Later: Clive Crook Emerging Markets Are Peering Over the Precipice: Marcus AshworthThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S.News & World Report

    7 Best Value Stocks to Buy in 2020

    The 2010s were dominated by growth stocks, and when the year 2020 rolled around, many investors felt that it was time for value stocks to take the lead. Theoretically, a bear market would be the perfect time for value stocks to outperform growth, but year-to-date, many value names have underperformed their growth-minded peers; cheaply priced energy companies, in particular, continued getting cheaper as oil prices fell, and every sector has been hit by the pandemic. Albemarle is a specialty chemical company that is one of the world's largest and lowest-cost lithium producers.

  • Zoom Video Stock Rally Cools As Google Bans Video App For Employees
    Investor's Business Daily

    Zoom Video Stock Rally Cools As Google Bans Video App For Employees

    Google banned its employees from using video calling software from Zoom Video. The move by Google, which also offers video-calling apps of its own, cooled a Zoom stock rally.