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)
It’s a Monday but there is optimism in the air. Tentative signs that the coronavirus spread may be slowing have encouraged investors.
With the decline in workplace pension plans, the responsibility to save for retirement falls squarely on the shoulders of employees. Here are the average 401(k) balance by age range as of the second quarter of 2019, according to data released by Fidelity Investments.
Doctors are seeing an upward trend in annual income, especially when they specialize. But there are other factors at work when it comes to physicians' incomes.
(Bloomberg) -- Results from a study of Gilead Sciences Inc.’s experimental Covid-19 medicine are top-of-mind for Wall Street as cases surpass 1.35 million and deaths approach 76,000.With a potential vaccine more than a year away, Gilead’s antiviral remdesivir offers one of the nearest-term hopes for a treatment in the pandemic that’s sweeping across the globe and putting many countries, including most of the U.S., on lockdown. Results from late-stage studies out of China are expected this month with results from U.S. trials following in May.After the company’s valuation surged more than $20 billion from late January to early March, some Wall Street analysts are cautioning there may not be much more room for shares to gain. The stock has traded sideways since hitting a two-year high on March 6.“We see a highly negatively skewed risk/reward,” Barclays analysts led by Carter Gould warned ahead of the April data. They rate Gilead underweight.Barclays is assigning a 20% chance that the two studies out of China --- one in patients with mild to moderate symptoms and another in the severely ill -- will succeed. Even if the pair hit the mark, Gilead’s gains could lead to a sell-off on “the commercial realities facing remdesivir,” the analysts said. That could include a complex manufacturing process and the difficulties pricing and selling a drug for a global pandemic.Shares of Gilead fell as much as 5.4% on Tuesday, the biggest intraday drop in almost two weeks as the broader market rallied.Covid-19 patients in the placebo-controlled studies are likely getting treated after the virus has already reached the height of its powers in the body, instead of before when a treatment could potentially be more effective, Barclays said. If the two studies fail, Gilead shares could fall back to the low-$60 range where they traded before the crisis.Wall Street investors have been scrambling to position themselves ahead of the data. Gilead appeared not only as a top long pick for investors in 2020 but also among the top short picks in a JPMorgan Chase & Co. buy-side survey. Options data suggest the stock could swing 17% in either direction by May 1.Bearish bets against Gilead peaked at $1.97 billion on March 19, according to data from financial analytics firm S3 Partners. The stock was ripe for a short squeeze two weeks ago but that’s no longer the case, S3’s Ihor Dusaniwsky said Monday. Gilead is still one of the top three largest short stories in the biotech sector with $1.77 billion, or 1.8% of its float, shorted as of Monday, he said.Even the bulls have doubts about the upcoming data. Evercore ISI analyst Umer Raffat, who has an outperform rating on the stock, said he expects the study in severely ill patients “may underwhelm,” though he said remdesivir could help those who received the drug early enough in their course of treatment. Optimism that Gilead has started ramping up production because it knows the medicine works is also unfounded, he said, noting management confirmed they haven’t seen results from the Chinese trials.For antivirals, “it is NOT about the overall trial result,” Raffat said. “All that matters is being able to identify the time point post-infection until which you can initiate an antiviral and expect efficacy.”(Updates with shares in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investing in a company that pays you no matter how the market performs sounds like exactly what investors need right now, and recent market volatility means that many dividend aristocrats are cheaper than they've been in years. Here are 10 cheap dividend aristocrats to buy -- each one is well-positioned to survive a recession while paying you a healthy dividend. In the 2019 fiscal year, 66% of General Dynamics' consolidated revenue came from the U.S. government.
More than $38 billion in loans already have been approved by the U.S. Small Business Administration under the Paycheck Protection Program.
Chinese coffee chain super-brand Luckin Coffee has been in the spotlight the past week after the company revealed in an SEC filing that it has undertaken an internal investigation into an alleged $300 million fraud on the part of its former COO. The stock is down another 15% today as investors continue to comprehend the company’s disclosure and its positioning in the competitive Chinese coffee market, where the company displaced Starbucks as the retail and delivery leader in just a few short years. On Monday, Goldman Sachs Group Inc. said a group of lenders is putting 76.3 million of Luckin’s American depositary shares up for sale, after an entity controlled by Luckin Chairman Charles Zhengyao Lu defaulted on the terms of a $518 million margin loan.
The recent rallies in the markets could be a 'bear-market trap' says chief market strategist from Miller Tabak.
There was no question T-Mobile CEO John Legere would see a big payoff for closing the company’s acquisition of Sprint – the question was how big it would be.
The world’s ultrarich are probably not the first financial victims your thoughts go out to as the coronavirus wreaks havoc on the global economy. China’s mercurial stock markets help explain this group of outliers. “China has been the relative winner, with its stock markets weathering the virus better than its U.S. and European counterparts,” said Rupert Hoogewerf, Hurun Report chairman and chief researcher.
We are two years into a fixed-rate mortgage deal with a 2.1 per cent rate. Although there will be rates on offer that can undercut the current deal there will be some crucial elements in deciding whether a remortgage is a sensible option.
(Bloomberg) -- Gold prices that usually move in lockstep are diverging again, reviving fears of impending turmoil just a couple of weeks after the last bout of panic.An ounce of bullion sold in New York was as much as $50 more expensive than in London Tuesday, compared with just a few dollars in normal times. The price spread is seen as a measure of the cost to swap futures contracts into gold in its physical form.A similar discrepancy occurred about two weeks ago, as the coronavirus crisis disrupted supply chains and caused flight cancellations, leading to worries over a gold-bar shortage in New York just before April futures contracts became deliverable.In the end, banks including JPMorgan Chase & Co. made more gold available and exchange inventories swelled to levels that were more than enough to cover any demands for delivery.The resumption in price divergence shows, however, that investors may be still worried about supply disruptions even though delivery for the current most-active futures contract -- June -- isn’t due anytime soon.“It is all supply logistics,” said Jon Deane, chief executive officer of InfiniGold Pty Ltd. “When more refineries come back online in a couple of weeks I’d expect it to come back in line, at least back to a more normalized level. A lot of refineries are just not producing a product, or at reduced capacity right now due to COVID-19.”Indeed, three major plants in the Swiss canton of Ticino, Europe’s biggest gold-refining hub, have said they’ve received permission from local authorities to run their factories at a limited rate. They were shut for almost two weeks because of the virus outbreak.Gold futures for June on the Comex traded little changed at $1,693.80 an ounce by 10:57 a.m. in New York, while spot bullion in London was at $1,652.50.The cost to swap gold futures to physical products is still high, which suggests that the market remains tight, according to Stephen Innes, chief global markets strategist at AxiCorp Ltd. A key thing to watch is whether that begins to ease as the Swiss refineries start running again.To be sure, there’s plenty of bullion available at the moment as part of Comex inventories.Total deliverable stockpiles in Comex warehouses were 4.1 million ounces on Monday, compared with 1.8 million toward the end of March.What’s more, overall total stockpiles on the Comex were at a record 16 million ounces, according to bourse data. That includes bars of different sizes eligible for a new contract launched this week. Almost 12 million of those inventories meets exchange requirements to potentially become deliverable.Still, traders say there’s too much risk and they’d rather stay away from the market altogether at the moment, which is also exacerbating the price divergence.“You have a bunch of shell-shocked market makers who are literally hiding under their desks and do not and possibly can not make markets in any size, shape or form,” said David Govett, head of precious metals trading at Marex Spectron. “Hence we have the lack of liquidity, the small volumes and the wide spreads.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
There is a significant chance the global economy experiences “a vicious spiral, which is typical of recessions, between weak final demand, weaker labor markets, falling profits, weak credits markets and low oil prices.”
For his first Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Eric Yuan, founder and CEO of Zoom Video Communications Inc. , an online meetings provider that has come under scrutiny for recent security issues. Yuan said over the past few weeks Zoom has experienced a surge in new users. Yuan said only in rare cases should meeting traffic go through China.
For the third time in the past 20 years, the market has thrown investors, particularly retirees, a wicked curveball. Regardless, this is a retiree’s worst nightmare. It’s the dreaded “sequence of returns” risk—by retiring just when the market has tanked, retirees could lock in lower income for years.
Lone Pine Capital sold all its holdings in the Chinese coffee chain after Luckin said it found up to $310 million in fabricated transactions. Lone Pine had been one of Luckin’s largest shareholders.
Not many S&P; 500 investors outran the coronavirus. But a few S&P; 500 stocks are not only higher this year — analysts think they have more room to run.
China's Ucar Inc, in which Luckin Coffee <LK.O> Chairman Charles Zhengyao Lu is the biggest shareholder, suspended trading of its shares on Tuesday after regulators questioned the car service provider about how the alleged fraud at Luckin would impact it. Ucar, in which Lu is chairman and CEO, said in a statement late on Monday that the company applied to halt trading in its shares to avoid abnormal price fluctuations and protect investor interest amid media reports on the company. Chinese media reports have linked the firm with Luckin, which said last week an internal investigation revealed sales fabrication of about 2.2 billion yuan ($310.80 million).
If you are looking for gains in airline stocks, stick with high-quality companies, such as Delta and United, and avoid American and Spirit, analyst says.
Are you ready to find some deals in the stock markets? The S&P 500 skyrocketed 7% yesterday, marking a strong trading session in what appears to be a true rally. Judging by the market charts, it looks like stocks bottomed out on March 23.Bob Doll, chief equity strategist at Nuveen, noted, "The stock market will bottom before the economy does, The stock market may have bottomed at 2,192 on the S&P."It’s a situation that gives investors an incentive to buy. We’re not in a true bull market – not by a long shot – but the recent bear has pushed prices down and the current rally is opening up the prospects of gains. All that remains is finding the right stocks to buy.And this brings us to penny stocks. After seeing heavy losses in March, investors are short of cash. Penny stocks are the natural fit; priced below $5, they offer an easy point of entry.Sure, there could be a very good reason these tickers are so affordable, but should there be even minor share price appreciation, massive percentage gains could materialize, along with hefty profits for investors.We’ve dipped into the TipRanks database, and found three penny stocks with Strong Buy consensus ratings and better than 50% upside potential over the next 12 months. Let's take a closer look.Zix Corporation (ZIXI)We start in the tech sector, where Zix, a small-cap cybersecurity company specializes in providing safety for emails. Zix’s products allow data encryption and loss prevention for mobile applications. The company boasts over 20,000 customers, and a cloud app that is used by 30% of US banks.ZIXI shares ended 2019 on a mixed note, but a solid product and strong yoy growth were the main story. Company earnings and revenue both missed the forecasts, although did better year-over-year. EPS, at 9 cents, matched the year-ago quarter, while the top line revenue of $50.4 million was significantly higher than 4Q18’s $18.5 million.Zix’s product is popular, and that underlies the review by Northland Securities analyst Nehal Chokshi. He writes, “ZIXI already has ~22% market share. We view this as an ideal market share as it demonstrates the company has an established selling motion, but has significant opportunity to drive share gains within what should be a fast-growing market…”Chokshi reiterates his Buy rating on the stock, and his $8 price target implies an impressive 100% upside potential. (To watch Chokshi’s track record, click here)Craig-Hallum’s Chad Bennett agrees that Zix is a buying proposition. He specifically points out the company’s ability to withstand the current recessionary forces unleashed by the COVID-19 pandemic. Bennett says of the stock, “Ultimately, we believe the company can be resilient in a recessionary environment. Email and security are mission-critical to a business’s operations… ZIXI’s contracts are on one- to three-year terms, so assuming a two-year average contract length, only 1/8 of ZIXI’s customers are up for renewal each quarter. We believe that the ZIXI-side of the business will be resilient in the current environment…”Bennett gives ZIXI shares a $9 price target, indicating a 125% upside, fully supporting his Buy rating. (To watch Bennett’s track record, click here)All in all, Zix supports its Strong Buy analyst consensus rating with a unanimous 4 Buy reviews. Shares are priced low, at just $4.01, and the $10.25 average price target suggests room for a hefty 155% upside potential in the coming 12 months. (See Zix stock analysis on TipRanks)Plug Power, Inc. (PLUG)With our next stock, we move into the arena of reusable energy. Plug Power is a designer and manufacturer of hydrogen fuel cells, a technology with the potential to replace conventional batteries – giving it a certain allure in the alt-fuel automotive sector. The biggest advantage of hydrogen fuel cells over batteries is the ability to run at a constant power output, avoiding the power drop that batteries experience when their charge runs low.Plug Power boasts an agreement with the USPS, and provides power cells for a fleet of electric mail delivery vehicles in Maryland. Earlier this year, Plug introduced a 125-kilowatt engine for trucks and off-road heavy-duty equipment.Plug Power is on track to achieve its goal of $1 billion in revenue by 2024, and has provided guidance toward $300 million in billings for the current year. Plug boasts a heavy order load, and needs to meet a 90% order backlog, based on new orders from established customers.In line with the company’s busy year ahead, H.C. Wainwright, analyst Amit Dayal put a Buy rating on the stock and raised his price target to $6.00 (from $4.00). His new target implies an upside of 63%. (To watch Dayal’s track record, click here)Dayal commented: “We are updating our outlook for the company and have revised our estimates upwards. With respect to 2024 outlook, we remain relatively conservative in projecting net revenues of $759.0M vs. management’s goal of $1.0B in gross billings. In line with this, we have revised our operating expense estimates for 2020 to $84.2M, compared to $76.7M previously. With this level of topline execution, and higher insourcing of MEAs contributing to margin improvements, we believe the company should start demonstrating consistent EBITDA improvements over the next few years."Also bullish is 5-star Oppenheimer analyst Colin Rusch. Rusch sees Plug as an advancing technology, with a handle on the technical issues it needs to resolve, and says of the company, “We believe PLUG continues to progress on its technology roadmap, which targets 25% cost reduction, 50% increase in MEA durability, and 25% improved power density by 2023/2024. We believe these efforts will help expand its addressable market opportunity…” Rusch’s Buy rating, like Dayal’s, is backed by a $6 price target. (To watch Rusch’s track record, click here)Overall, the hydrogen fuel-cell maker is without question a Wall Street favorite, considering TipRanks analytics indicate Plug Power as a Strong Buy. Out of 7 analysts tracked in the last 3 months, 6 are bullish on Plug stock while only 1 remains sidelined. With a return potential of 51%, the stock's consensus target price stands at $5.57 (See Plug Power stock analysis on TipRanks)Orbcomm, Inc. (ORBC)Our final stock today, Orbcomm, is a wireless messaging company with a network of 31 satellites along with ground-based infrastructure. Customers can communicate, control, monitor, and track linked fixed and mobile assets worldwide. The company’s network is deeply connected to the Internet of Things and machine-to-machine niches, and Orbcomm boasts over 2 million billable subscribers. The service is available in 130 countries.ORBC reported a loss of 3 cents per share in Q4, which actually beat the estimated 5-cent loss by 40%. Revenues, at $69.7 million, came in just under the forecast, but grew 5% year-over-year. Orbcomm had the bad timing to release this quarterly report just a week after the bottom fell out of the market in February; the stock has lost 50% so far this year, badly underperforming the overall markets.That said, Orbcomm still presents investors with growing revenues – and now, a very low point of entry to the stock. In addition, many of ORBC’s customers are in the grocery sector, where accurate tracking of delivery vehicles is essential, giving the company a valuable niche in an essential sector – a clear advantage when much of the economy is shut down in an attempt to mitigate the spread of the coronavirus epidemic.Michael Latimore, 4-star analyst with Northland Securities, notes another important factor in Orbcomm’s position -- the company’s solid foundation of parts and supplies. Latimore writes, “ORBC has enough inventory to last four months. Most of its manufacturing is done in Mexico and Germany. These plants could shut down for 1-3 months, but so far so good. China seems to be getting back to work, which helps with standard components like wired cables.”Latimore sets a $6 price target on this stock, implying a fantastic upside of 185%, and gives ORBC a Buy rating. (To watch Latimore’s track record, click here)Overall, a unanimous 3 Buy ratings give Orbcomm a Strong Buy from the analyst consensus. The stock has an average price target of $7.17, which suggests a massive 241% potential upside from the current share price of just $2.10. (See Orbcomm stock analysis on TipRanks)
(Bloomberg) -- On April 2, the day that Coronavirus infections around the globe hit 1 million, managers inside JPMorgan Chase & Co. were emailing their latest plans for staffing New York-area trading floors amid the deadly pandemic.One worker on the sales team noticed a colleague wasn’t on the list and asked where he’d be.“Corona Town, U.S.A.,” the person wrote back. Then one of the bank’s credit-trading leaders, Nicholas Adragna, weighed in: “The trading desk will be in the office unless they have a medical condition with a dr’s note.”More than 100 employees were on the message chain seen by Bloomberg, and some were horrified. It came soon after an outbreak of Covid-19 inside JPMorgan’s Madison Avenue headquarters, in which at least 16 people tested positive on a single trading floor. Some employees complain they’re getting conflicting messages from middle and senior managers about coming into offices, where billions of dollars of profit are at stake, and that they would rather follow the advice of government officials to hunker down at home.“We’ve stated many times that anyone who doesn’t feel comfortable coming into the office doesn’t have to,” said Brian Marchiony, a spokesman for JPMorgan. “We have never had a policy requiring, or even requesting, a doctor’s note.”Those tensions aren’t limited to JPMorgan. While Wall Street firms have told most employees to work remotely, a number of traders and bankers who set up at home say they have been getting phone calls and messages from managers urging them to return to offices, some of which recently saw infections.Small and large firms are trying to maintain enough on-site staffing to ensure swift trading. It’s the finance industry’s version of an issue spanning the U.S., where “essential” workers feel they have to choose between keeping their jobs and risking their lives.Trading DelugeSome investment banks have publicly touted the degree to which they are able to let employees work remotely, with Goldman Sachs Group Inc. recently announcing that only one of every 50 workers was on site. But most trading divisions require additional staffing on high-speed office terminals to handle the deluge of customer orders as markets swing. Bank of America Corp. has said it has about one in 20 trading employees in the office. At JPMorgan it’s about one in five in trading.Around the same time that JPMorgan bond-trading executives were emailing each other, Jason Sippel, the bank’s global head of equities trading, held a conference call with his subordinates. He said the trading division isn’t as effective when too many people are working remotely but that it’s trying to be respectful of people’s circumstances, according to a person who heard the call.Still, the situation on Wall Street contrasts with the pressures on tellers and call-center personnel to show up in consumer banking operations even though they earn less. And outside the financial industry, the situation is even harsher, with about 10 million people filing for unemployment benefits in just two weeks, and workers at companies such as Amazon.com Inc. airing grievances over safety conditions.Traders have long been known to work through illness, but in the past few weeks those attitudes have shifted as news stations showed refrigerated trucks outside New York hospitals, medical tents in Central Park and public health officials begging people to stay home.One trading executive at a major New York brokerage said he wanted to be the last person on his staff to stay at the office. Just before he left for home last month, he was exposed at work to the virus. He eventually developed a cough. Now outside New York, he has been working in solitude and staying up until 1 a.m. He recently got tested but still hadn’t received his results as April began.Inside BGC Partners, an affiliate of Cantor Fitzgerald, workers received a memo marked “important” last month notifying them that no government orders were stopping them from showing up. “We remain open,” the memo said. “Driving to the offices and using mass transit are permitted in order to travel to and from our office.” Some BGC employees privately complained they felt pressured to keep coming downtown -- even as other memos laid out the option of working from home. A BGC spokesman declined to comment.Still, two people at the firm who fell ill said they had no complaints. One credited managers for sending his entire desk home after the first person got sick. Another said he kept working in isolation until his symptoms were too severe, and that managers then gave him ample time off to recover.Skeleton CrewsMost big banks announced similar strategies for preventing the spread of the virus at work: They assigned skeleton crews to trading floors and so-called disaster recovery sites, and sent the rest home. But within days, traders in offices privately complained about colleagues continuing to cluster around them. Some said they waited weeks for technicians to physically separate rows of specialized terminals.A JPMorgan trader in London said he was initially sent to the basement of the firm’s 19th-century building along the Thames, where scores of colleagues nervously worked side by side. The conditions improved when back-office staff were allowed to leave. He said he, too, has since been told he needs a doctor’s note to work from home.Inside Natixis SA’s New York office, nerves frayed after the French bank sent traders to a recovery site outside the city so cramped that social distancing was impossible, one person said. The firm later ditched the plan and sent people home, where employees received an important email from a top executive: “Highly Confidential: Covid 19 - Staff Infection List.”Workers who clicked the attachment realized it was an anti-phishing test on behalf of the compliance team and that they had failed it. Many were furious, the person said.“Natixis strongly rejects any suggestion that it has put its employees at risk,” said Daniel Wilson, a Natixis spokesman in Paris, adding that all investment banking employees in the Americas have been working from home since mid-March. “We have taken rigorous measures in the U.S., as elsewhere, to protect our employees’ health and help slow the propagation of the virus.”‘Push Everyone’Market swings can generate big profits and losses for banks, and most executives agree it’s easier to navigate the turmoil from trading floors, where connections are faster and communication is easier.On March 26, the fourth day of New York’s statewide lockdown, JPMorgan’s Adragna dashed off a note to his subordinates. Troy Rohrbaugh, the bank’s global head of markets, “continues to want to push everyone to get back into the office,” Adragna said.A record had just been shattered in the investment-grade credit market, as U.S. companies raced to issue billions of dollars in bonds to bolster their financing. Adragna’s team had traded more than $3 billion of bonds that day and, the reasoning was, that wouldn’t have been possible if they’d been working from home.“With the amount of issuance trading we can really separate ourselves and do a great job for customers by being in the office,” Adragna wrote. “Let’s attack and use this as an opportunity to differentiate ourselves both internally and externally. LET’S GO.”JPMorgan’s spokesman disputed the notion that Rohrbaugh would push anyone to come into the office and said the markets chief has reiterated on his regular calls that anyone who doesn’t feel comfortable coming into the office doesn’t have to.Elsewhere within the industry, middle managers have cajoled reluctant employees by suggesting that their presence is needed to comply with regulatory pressure to more closely monitor traders’ dealings. It isn’t clear which watchdogs are making such requests.The Securities and Exchange Commission and Financial Industry Regulatory Authority haven’t been pressing banks to increase on-site staffing in recent weeks, officials said. In a public notice last month, Finra said people would need to telework and that it would let firms improvise systems “reasonably designed” to supervise them.Working from home has received mixed reviews from bankers and traders. Some of them grimace at the technical difficulties and chafe at the awkwardness of working among family. Others are enjoying the time being close to loved ones, or finding other reasons to embrace it.One senior trader at Goldman Sachs said she’s been writing emails while sitting on a yoga ball, and doing pull-ups on bathroom breaks. When she has to go back in the office, she said, she’ll miss doing burpees, a type of squat thrust, while listening to conference calls.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Texas billionaire Tilman Fertitta is looking to raise more debt to keep his casino and restaurant empire afloat through year-end if the Covid-19 shutdown persists. The offering is ending a near one-month drought in the market for risky corporate loans.The businessman is offering potential lenders an interest rate of at least 15% to participate in a new $250 million loan for his Golden Nugget casinos and hundreds of restaurants under the Landry’s Inc. umbrella that have been ravaged by the coronavirus, according to people with knowledge of the matter.The loan, which matures in October 2023 and is being arranged by Jefferies Financial Group Inc., is one of many levers Fertitta is pulling to shore up liquidity. The pandemic has brought the travel and leisure industry to a near standstill, leaving Fertitta’s businesses shuttered and burning cash while tens of thousands of his employees have been furloughed.The company has already drawn $300 million of existing credit lines in full and Fertitta is injecting $50 million of his own cash into the business, said one of the people, who asked not to be named because the details are confidential.Read more: Texas billionaire who levered restaurant empire hit on all sidesBased on initial discussions with investors, the loan is being offered at a spread of 14 percentage points over the benchmark London interbank offered rate and at a discount of about 96 cents on the dollar, the people said. That puts the all-in yield above 15%. The spread is the highest ever seen in the U.S. leveraged loan market excluding companies in bankruptcy, according to data compiled by Bloomberg.Fertitta sees the new loan as an expensive insurance policy in the event that none of these businesses can reopen before the end of the year, the same person said.Representatives for Fertitta’s companies and Jefferies did not immediately respond to requests for comment.The leveraged loan market has been slower to recover from the recent turmoil than the high-yield bond market, which reopened last week to borrowers seeking to replenish credit lines and to improve liquidity.While the restart is good news for companies that need cash, the cost of borrowing has soared. Only two months ago, sentiment in the credit market was so robust that debt investors allowed Fertitta to take a $200 million dividend out of the company, doubling the size initially targeted. That debt cost Fertitta only 2.5 percentage points over Libor.Read more: Leveraged loan thaw comes at highest borrowing cost on recordThe Landry’s loan is similar to a junk bond in that it may not be repaid for two years, the people said. It will be on an equal footing to Golden Nugget’s existing term loan but has a first-priority claim on some online gaming assets, one of the people said.(Updates with details on equity injection and revolver draw starting in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The top financial officer at department store giant Macy's Inc., which has been hard hit by the outbreak of COVID-19, is stepping down after less than two years on the job.
DEEP DIVE The COVID-19 pandemic has taken the U.S. economy from near-record-low unemployment to mass layoffs and firings. It’s too soon to predict a rebound, but there are quality companies available now at discounted prices, setting up money-making opportunities for patient investors.