Futures rose Sunday. The choppy market rally is riskier for active investors than the coronavirus stock market crash. AMD, Nvidia, Amazon and Microsoft are stocks to watch.
Wells Fargo's news will stun millions of small business owners and nonprofits that had planned to file applications for the SBA Paycheck Protection Program this week.
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.
What should you do with your stimulus check? Robert Kiyosaki, the best-selling author of “Rich Dad, Poor Dad,” offered a bit of advice to his 1.3 million followers on Twitter for when that cash finally arrives.
(Bloomberg) -- Jamie Dimon said the coronavirus pandemic will lead to a major economic downturn and stress mirroring the meltdown that nearly brought down the U.S. financial system in 2008.“At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” the chief executive officer of JPMorgan Chase & Co. said Monday in his annual letter to shareholders. “Our bank cannot be immune to the effects of this kind of stress.”The 23-page letter, his shortest since 2008, came less than a week after Dimon told staff he’d returned to work after undergoing emergency heart surgery. It was his first public commentary about the coronavirus since the bank’s investor day on Feb. 25. At the time, the outbreak still seemed a distant threat, with fewer than 60 cases in the U.S. and none in New York.Dimon, the only current CEO who steered a major U.S. bank through the financial crisis, said JPMorgan’s earnings will be “down meaningfully” this year, though the bank is “unlikely” to cut its dividend. Such a move would only result from “extreme prudence,” he said, adding that JPMorgan will give more details on the impact when it reports first-quarter earnings later this month.The 64-year-old CEO outlined initiatives his bank is taking to support employees, businesses and the community, but refrained from offering long opinions about public policy that marked previous missives.Read more: What to Know About Recessions as World Heads Into One: QuickTakeHe said 180,000, or about 70%, of the firm’s employees are working from home, and the bank is giving payments of $1,000 to those whose jobs don’t allow them to work remotely.JPMorgan has been waiving fees for some loans, allowing customers to defer payments on mortgages and auto loans, and removing minimum payment requirements on credit cards. It’s also extended $950 million in new loans to small businesses over the past 60 days, and is planning to lend an additional $150 billion to clients across the world.Regulatory ReviewAfter the crisis, “we should use the opportunity to closely review the economic response and determine whether any additional regulatory changes are warranted to improve our financial and economic system,” Dimon wrote. “There will be a time and place for that -- but not now.”Dimon has become a spokesman for Wall Street thanks to his frequent public appearances, outspoken nature and nearly 15-year tenure at the biggest and most profitable bank in America. His absence while he recovered from surgery was felt across the industry as policy makers grappled with dire warnings about the economic effects of the pandemic and governments stepped up efforts to keep millions of people at home to stem the spread of the highly contagious virus.Dimon was more pessimistic about prospects for the economy than some industry figures were when the scale of the crisis was first becoming clear. A month ago, as stock markets were sliding, former Goldman Sachs Group Inc. CEO Lloyd Blankfein said in a tweet to “expect quick recovery when health threat recedes.” He said the economy “will avoid systemic damage” that takes years to work through.‘Forever Lost’Dimon said JPMorgan has been working closely with the government during the crisis, but the bank “will not request any regulatory relief” for itself. Still, regulators could change capital and liquidity requirements to help more capital flow through the system, he said.“Some rules can improperly prevent healthy, well-capitalized banks from lending freely in times of stress,” Dimon said. “This can hurt customers as the crisis deepens. Leaving high-quality, available liquidity undeployed in times of need is an opportunity forever lost.”He applauded recent actions by U.S. Department of Treasury and the Federal Reserve, which he said helped mitigate the economic impact of the virus.Shares of JPMorgan rose 6.3% to $89.36 at 9:48 a.m. in New York, more than the 4.1% gain in the S&P 500 index, which rallied after virus hot spots New York, Italy and Spain posted improvements in death rates over the weekend. JPMorgan’s stock has tumbled 36% this year, less than the 43% slump in the KBW index of bank stocks.Until last year, Dimon’s annual missives had gradually gotten longer, more than tripling in length since he took over as CEO at the end of 2005. He writes the letters himself, but drafts are reviewed and edited by the bank’s legal, accounting, compliance, public-relations and government-affairs teams before they’re published.Other HighlightsJPMorgan has been stress-testing the impact that adverse scenarios, such as a jump in unemployment to 10% and a 50% drop in the stock market, would have on the bank. The firm’s $48 billion in pretax earnings last year would enable it to remain profitable even if revenue fell 20% and credit costs rise $20 billion from 2019, he said.Companies have drawn more than $50 billion of their revolvers -- more than they did during the global financial crisis -- to shore up liquidity, Dimon said. In March, the firm provided more than $25 billion of new credit extensions to companies that requested it.Dimon said people could return to work more quickly if governments made tests widely available to determine who has recovered from the disease. “The country was not adequately prepared for this pandemic,” he said. “Done right, a disciplined transition would maximize the health of Americans and minimize the time, extent and suffering caused by the economic downturn.”(Updates with share price in 14th paragraph, bullet points at end.)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.
A smaller U.S. auto insurer, American Family Insurance in Madison, Wisconsin, also said on Monday that it would return a total of $200 million to auto insurance customers beginning in mid-April. “There are very few silver linings out there, but auto insurance companies are definitely one of them,” said Piper Sandler analyst Paul Newsome about coronavirus. Fewer accidents generally lead to a lower claim frequency and Newsome expects insurance companies with large auto portfolios, such as Progressive Corp <PGR.N>, Travelers Companies Inc <TRV.N> and Allstate, to post good first quarter results.
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.
Luckin Coffee <LK.O> Chairman Charles Zhengyao Lu and Chief Executive Jenny Zhiya Qian have handed over shares in the embattled Chinese coffee chain to lenders after a company controlled by Lu's family defaulted on a $518 million margin loan, one of the banks said on Monday. The default comes after Luckin, a major rival to Starbucks in China, said last week that much of its 2019 sales were fabricated, sending its shares plunging as much as 82% in U.S. trading and sparking an investigation by China's securities regulator. The other banks on the loan are Morgan Stanley <MS.N>, Credit Suisse <CSGN.S>, Haitong, CICC and Barclays <BARC.L>, according to people familiar with the matter.
Investors say there’s no one chart that will signal when the stock-market bottom is in. But technical analyst Chris Kimble is keeping his eye on a commodity index that is testing a very important level of support.
The government has introduced several temporary changes that could help people shore up their finances and manage their retirement accounts.
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.
After dozens of companies suspended or cut their dividends in recent weeks amid the coronavirus-driven business slowdown, some analysts believe dozens more are vulnerable across a variety of sectors in the days ahead.
Carnival shares climbed after a Saudi investment fund bought an 8.2% stake, valued at nearly $370 million, in the cruise line.
(Bloomberg Opinion) -- In documents published alongside Carnival Corp.’s $6.25 billion debt and equity offering last week, the beleaguered cruise ship operator showed why it might not keep much of that cash for long.Carnival held $4.7 billion in customer deposits at the end of February for trips that passengers paid for in advance but hadn’t yet taken. Because their cruises have been cancelled amid the coronavirus outbreak, many customers will want their money back. As such, Carnival could soon find itself short of cash again.Carnival’s predicament is shared by hundreds of travel, airline, sports, education and entertainment businesses — all of which depend on advanced payment from customers to fund their operations. People probably don’t realize it, but when they pay for a ticket months in advance they’re effectively extending these companies an interest-free loan. The world’s airlines might have to repay $35 billion in customer cash during the next three months, according to industry body IATA; the largest of these companies each held close to $5 billion in customer advance payments at the end of December, corporate filings show. What happens to this customer money is a hugely important question that could determine whether businesses will remain solvent or will need a government bailout. Tour operator Tui AG, for example, secured a 1.8 billion-euro ($1.9 billion) rescue loan from the German government last month, even though it had taken in about 2.9 billion euros of advance payments from customers — it had spent much of this cash.There are sound reasons why companies should be allowed to hold onto customer money: Taxpayers would foot a rescue bill, which doesn’t seem very fair when it’s estimated that just 15% of Brits take 70% of the country’s international flights. By pulling their cash out now — rather than waiting for rescheduled holidays, flights and events, or accepting a credit voucher to book a future alternative — customers’ risk destabilizing businesses that they admire and depend upon. But it’s essential too that customer money is adequately protected and people who urgently need their money back, such as those who’ve recently lost their jobs, can get it.That’s why there’s such disagreement around the travel industry’s preferred solution to the problem: the credit voucher. Like the airlines, Carnival hopes that people will accept these to put toward a future trip in lieu of cash. So far about 45% of customers have chosen this option. But the travel industry is worried that this voluntary uptake isn’t enough. Hence it is furiously lobbying governments to allow companies to insist on making the vouchers non-optional.This would require the suspension of consumer protection laws. While governments like Germany and the Netherlands are sympathetic to their domestic companies’ plight and are encouraging the use of vouchers, the European Union and the U.S. have held firm, saying that if customers want their money back, they should get it. They worry that if a company goes bust, customers with vouchers would join a long queue of unsecured creditors.In theory, European holidaymakers’ prepayments are protected if a tour operator becomes insolvent. But when Thomas Cook collapsed last year, the Air Travel Trust Fund that’s used to repay U.K. customers was drained of most of its cash. Similarly, Thomas Cook’s insurance didn’t adequately protect German customers; German taxpayers ended up refunding those customers. There are other ways for consumers to get their money back if a company goes bust. Some travel insurance policies will pay out for an insolvency, as will credit-card processors. Still, the safest way to protect your money is to not allow a distressed company to keep the cash in the first place.In the hope that governments will come round to their point of view, some airlines have reportedly been complicating the refund process for customers. By stonewalling, they’re able to keep the cash a bit longer but at the cost of alienating customers and travel agents. A much better approach is to offer customers an incentive to take the voucher option. Finnair Oyj customers can get vouchers worth 10% more than their cancelled booking.To make sure holidaymakers can get their money back when needed or are protected in the event of a company’s collapse, governments also need financial safety nets and insolvency guarantees. Germany has proposed something like this, without providing details. It also plans a hardship clause for customers that can’t afford to accept a voucher. As an alternative, governments might consider a travel emergency fund to cover reimbursement of flights and other services so businesses don’t immediately have to foot the bill. By taking a voucher, customers can help prevent scores of unnecessary insolvencies. But they mustn’t be punished for showing a little love. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.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.
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.
Brokerage Credit Suisse downgraded Zoom Video Communications Inc's stock to "underperform" from "neutral". "While implied new customer growth may seem undemanding compared to recently disclosed 20x participant growth, we expect much of the recent surge will prove ephemeral, and/or comes from free users or education, which are very difficult to monetize," Credit Suisse analysts wrote in a note. Last week, at least two U.S. state attorneys had sought information from Zoom following multiple reports that questioned its privacy and security.
Get ready for some incredible price moves in the metals markets and congrats to all the Gold and Silver bugs out there. Our analysis says our patience and accumulation of physical metals will soon pay off in a big way.
SeaWorld Entertainment's chief executive has resigned only five months into his job, becoming the third leader of the theme park company to depart in just over two years, according to a company filing released Monday. Sergio Rivera cited his disagreement with the board of directors' involvement in decision-making at the company, according to a filing with the U.S. Securities and Exchange Commission. The spread of the novel coronavirus has paralyzed the theme park industry.
Shares of Carnival Corp. soared 18% on heavy volume Monday, after the Saudi Arabia-based sovereign wealth fund The Public Investment Fund disclosed that it has acquired a 43.5 million shares, or an 8.2% stake, in the cruise operator. The filing said the shares were acquired as of March 26. That would make the fund Carnival's third-largest shareholder, based on an analysis of FactSet data. The fund was not listed among the top 20 stake holders prior to the filing, according to FactSet. The stock's trading volume swelled to 85.1 million shares in midday trading, already more than the full-day average of 61.2 million shares. Carnival's stock has tumbled 80% year to date, and closed last Thursday at the lowest price since April 1993. Meanwhile, shares of Royal Caribbean Cruises Ltd. have dropped 79% year to date and Norwegian Cruise Line Holdings Ltd. have plummeted 84%, while the S&P 500 has dropped 19%.
Financial pain for U.S. households triggered by the coronavirus pandemic is starting to show, according to a new survey.
Crude oil prices fell Monday as an OPEC+ meeting was delayed as Russia and Saudi Arabia continue to debate output cuts amid their oil price war.
Shares of Carnival, the largest cruise operator, and its peers were making a strong showing Monday morning amid a broad market rally.
Every time a door shuts, another window of opportunity opens, the old saying sort of goes. At least that is how one analyst currently sees the situation for Amarin (AMRN), the maker of high triglycerides treatment, Vascepa.The biotech was assaulted last week on two fronts. First, the company lost a patent trial against two generic drug makers seeking to sell their own versions of Vascepa. The negative verdict was swiftly followed by a massive sell-off, sending the stock tumbling by 70% in one trading session.But all hope is not lost yet, says Cowen’s Ken Cacciatore. The verdict against Amarin pertains only to the US market, which now means the international market, and predominantly Europe, are where Vascepa’s commercial opportunities lie. The marketing authorization application for Vascepa is expected to be decided by the European Marketing Agency (EMA) in 4Q20.With this in mind, Cacciatore thinks there is only one way to go: “With the European commercial decision approaching – and given our belief in the size & durability of the EU opportunity which could reach $1.5-2B and is protected to 2033 – we believe a sale (not a license) makes most sense. And to ensure that the optionality of a potential U.S. patent appeal reversal is retained, we believe a CVR could realize that value. A sale & CVR simply makes the most sense.”A CVR occurs when one company acquires another and gives existing shareholders certain benefits in proportion to the number of shares they already own. In this case, because there is still the possibility the verdict can be overturned in the US and lead to “potential significant value,” such a scenario properly protects shareholders.Warming to the theme, Cacciatore adds another argument for a CVR: “A potential global commercial player would not only have the infrastructure to commercialize in Europe, but they could also quickly leverage Vascepa in the U.S. over the remaining 12 months before the appeal is decided.”“The bottom-line,” Cacciatore concludes, is that the current trading level still provides an “exceptionally compelling opportunity.” As a results, Cacciatore reiterates an Outperform rating on Amarin shares alongside an $8.00 price target, which implies about 60% from current levels. (To watch Cacciatore's track record, click here)Overall, Wall Street is torn between the bullish camp and the analysts who opt to hedge their bets on the drug maker. Based on 11 analysts tracked in the last 3 months, 6 rate Amarin stock a Buy, while 5 say Hold. That said, at $21.14, the average price target puts the upside potential at 329%. (See Amarin stock analysis on TipRanks)To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
(Bloomberg) -- Wayfair Inc. soared as much as 51% after the online home-goods retailer said first-quarter net revenue growth would at least meet its forecast and that the sharp sales increase at the end of March has continued into April.The shares posted their biggest intraday jump ever Monday, climbing as high as $76.47.In a business update, the company said the gross revenue growth rate more than doubled toward the end of last month, and that demand has been seen across most home goods categories in all of its markets. The outlook gave it some breathing room after Wayfair said just last week that the coronavirus was resulting in disruptions to its supply chain.Meanwhile, the company also announced it’s raising capital through a convertible notes offering, led by Great Hill Partners and Charlesbank Capital Partners. The Spruce House Partnership, one of Wayfair’s largest shareholders, also participated.Jefferies analyst Jonathan Matuszewski said Wayfair’s update shows that the company’s “pureplay e-comm business model is taking share in an environment where about 80% of the category is closed for business, its largest online competitor is focused elsewhere and consumers are spending on their homes.” The analyst, who rates the stock buy and has a price target of $89, said the convertible offering “provides additional cushioning” if a sustained economic slowdown materializes over in the coming months.Matuszewski also highlighted the revenue trends from January through early March. “Growth of slightly below 20% sits above the high-end of management’s guidance for 15-17%,” he said, adding that recent efforts to streamline workflows and prioritize high return-on- investment initiatives “may be bearing early fruit.”Wayfair led home-good peers higher Monday and is the top performer in the Bloomberg Intelligence North America Home Products Stores & Other Specialty Retail Index. The stock is down about 23% this year, compared with the 46% plunge for the index.Wayfair will report results for the first quarter ended March 31 in early May. The stock has 14 buy ratings, 13 holds, and 5 sells, with an average 12-month price target on the shares of $74.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.
Mortgage rates slide, as risk aversion and a slide in applications weigh. A 3rd weekly decline could be on the cards as COVID-19 hits the labor market.