The DTCC announced that it expects to be able to shorten the time between when a trade takes place and when it is finalized to one day from two.
While the blank-check deals market reached new heights this week with Grab Holdings' record $40 billion merger, some lawyers and regulatory experts said the exuberance was unlikely to last as the U.S. securities watchdog steps up scrutiny of such deals. Southeast Asia's largest ride-hailing and food delivery firm on Tuesday clinched a merger with special purpose acquisition company, or SPAC, Altimeter Growth Corp, paving the way for a U.S. listing and the biggest-ever blank-check company deal. The blockbuster merger underscores Wall Street's mania for the deals in which listed shells take private companies public, with a record $100 billion raised through initial public offerings (IPOs) in the United States this year.
Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, will list on the Nasdaq on Wednesday, marking a milestone in the journey of virtual currencies from niche technology to mainstream asset. The listing is by far the biggest yet of a cryptocurrency company, with the San Francisco-based firm saying last month that private market transactions had valued the company at around $68 billion this year, versus $5.8 billion in September. It represents the latest breakthrough for acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.
LONDON (Reuters) -Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, will list on the Nasdaq on Wednesday, marking a milestone in the journey of virtual currencies from niche technology to mainstream asset. The listing is by far the biggest yet of a cryptocurrency company, with the San Francisco-based firm saying last month that private market transactions had valued the company at around $68 billion this year, versus $5.8 billion in September. It represents the latest breakthrough for acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.
Key global stock indexes scaled new peaks on Wednesday after upbeat U.S. and European earnings pointed to a strong recovery from the coronavirus pandemic, while the dollar dipped to three-week lows as Treasury yields held below recent highs. U.S. import prices increased more than expected in March, lifted by higher costs for petroleum products and tight supply chains, in the latest data to show inflation is heating up as economies reopen. U.S. Treasury yields ticked up in early trade after tumbling on Tuesday, when U.S. consumer prices data showed that while underlying inflation picked up in March it was not rising wildly as the economy recovered.
After a dull Monday, investors awake this morning to a couple of big news items. That being said, both the consumer price index (CPI) and a pause in the use of Johnson & Johnson’s (NYSE: JNJ) Covid vaccine seem to be having a muted impact on the market. We’ll get to the JNJ vaccine withdrawal, but first a look at CPI: It came in at 0.6% for March, up from 0.4% in February and just a bit above analysts’ average estimate of 0.5%. The fact that it’s up isn’t too surprising considering all the inflation warnings from the Fed lately, but it’s good to see it’s only a little above expectations. That’s in contrast to last Friday’s producer price index, which came in way, way, above expectations. Maybe this will settle inflation fears a bit. The other big news is the U.S. Food and Drug Administration’s (FDA) decision to temporarily pause use of JNJ’s Covid vaccine due to a handful of blood clots. This isn’t great news, obviously, but it’s nothing people need to go crazy over. We had good momentum with vaccinations heading into summer, and this might slow the momentum, but the other two vaccines are still working well. Vaccine Pause Hits Reopening Shares Also, people shouldn’t think of vaccines as a simple product without potential problems. No one knows yet if these blood clots are a game changer for the JNJ vaccine, but it isn’t surprising that a complication got reported, simply because vaccines aren’t widgets. Like any medical product, they’re complex and can have different effects on different people. Hopefully this gets resolved quickly and the JNJ vaccine comes back. It’s a handful of cases (six cases after 6.8 million vaccinations) and the FDA said it acted “out of an abundance of caution.” It’s unclear how long it might take to get to the bottom of this, but the other vaccines were already being used millions of times a day in the U.S., and that continues. The FDA may want to examine more data before allowing JNJ to come back, but in a worst-case scenario it’s off the market for an extended period, putting more pressure on supplies of the other vaccines. The JNJ pause could put some pressure on some of the “reopening” stocks and sectors until things get sorted out. Already this morning we’re seeing shares of airlines, casinos, and cruise lines turning lower in pre-market trading. An FDA press conference scheduled for 10 a.m. ET today might grab Wall Street’s attention. Though reopening shares start the day under pressure, a new JP Morgan Chase & Co. (NYSE: JPM) note suggests the economy could fully reopen by July 4. Whether this JNJ development affects that timeline is unclear, but it’s nice to think JPM might be right. Meanwhile, volatility remains light and Bitcoin is now above $62,000. The Cboe Volatility Index (VIX) is up, but still below 17.5, which is amazing when you remember how long it spent above 50 last year. Unless there’s big news out of the FDA press conference, trading could be pretty slow today as investors await tomorrow’s onslaught of big bank earnings. Summer Of 2020 Revisited? Nope, you’re not on a time machine back to last summer. Those really were NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA) rolling up big gains yesterday while this year’s “reopening” darlings like airlines, energy companies, and entertainment firms took a back seat. This was before today’s JNJ vaccine news, remember. Both NVDA and TSLA rallied on specific news, with TSLA benefiting from an analyst upgrade while NVDA raised its Q1 revenue guidance and introduced several new products, which actually might have weighed on shares of some of its competitors including Intel Corporation (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: AMD). NVDA and TSLA formed the vanguard Monday, but for the most part stocks marched in place as investors seemed to stay on the sidelines waiting for earnings. It all starts tomorrow when we hear from JPMorgan Chase & Co. (NYSE: JPM), Goldman Sachs Group Inc (NYSE: GS), and Wells Fargo & Co (NYSE: WFC). For the first time in a while, the big banks have a tailwind and investors can focus more on traditional bank functions and less on the industry’s efforts to bail out the floodwaters. The 10-year yield is much higher than it was six months ago, so they can make more on the spread and that should go right to the bottom line. Beyond that, trading is an important part of many bank businesses (especially some of the big Wall Street sluggers like JPM and GS), and they possibly saw benefits in their bond trading during Q1 thanks to opportunities there. As always, investors should consider focusing on the separate fortunes of equities and fixed income trading, where there’s often bifurcation. Heading into earnings season, FactSet projected overall S&P 500 Financial Sector (IXM) earnings to rise 78.7% year-over-year in Q1, so things are definitely looking up. In fact, the average Wall Street Financial earnings forecast has risen pretty substantially even from just a month ago. The banking sector has sputtered a bit lately after a great start to the year. Energy also slowed its pace a bit. Some analysts see this as a temporary slowdown while the Treasury market continues to consolidate. If Q1 earnings and coming economic data shape up as strong as many Wall Street watchers are starting to think they will, 10-year yields could start to rise again and lift the so-called “cyclicals” like Financials and Energy that tend to do better in a recovering economy. Pandemic Provides The Backdrop There’s always a caveat, and here’s one: The Covid situation isn’t really retreating much. Average caseloads are still rising despite the great vaccine progress. Even Fed Chairman Jerome Powell expressed caution over the weekend, telling “60 Minutes” that he’s concerned about the recent case spike and its possible impact on the economy. And of course, there was today’s bad news about the JNJ vaccine being paused due to blood clots. If cases keep climbing, watch the other data like hospitalizations and deaths carefully. They tend to be lagging indicators, and if they stay relatively tame it could mean the vaccinations are protecting some of the most vulnerable people. Leaving Covid behind for the moment, FactSet pegs overall S&P 500 earnings to rise 24.5% in Q1, led by Consumer Discretionary, Financials, Materials, and Info Tech. Energy and Industrials are the only sectors analysts see in the red with their Q1 earnings results, and those are also two of the three S&P sectors expected to have falling revenue, too. Typically, analysts get too conservative with their estimates ahead of earnings season, so FactSet factors that in and says it’s more likely actual earnings will rise 28% when all is said and done. That would be the highest earnings growth in more than 10 years. At the high end, FactSet estimated earnings could grow as much as 37.6% in Q1. Margin Call? Not Yet Some people wonder if margins might start eroding, possibly due to rising costs like we saw in the producer price index (PPI) last week. So far, no sign of that. S&P Global expects margins to rise this year and next. Of course, the Fed keeps telling everyone that any price growth we see here is probably temporary, and easy comparisons with soft year-ago inflation could over-dramatize how much things are actually going up. By later in 2021, it might be easier to get a sense not only of how transient or non-transient this inflationary pressure is, but also whether the Biden administration has the ability to push through a corporate tax increase, which is another thing that could potentially hurt margins. CHART OF THE DAY: CAN THE U.S. DOLLAR HANG ON? The U.S. Dollar Index ($DXY—candlestick) has generally remained within its upward channel (yellow lines) since the beginning of the year. Can it maintain this move as it skirts its support level once again? Although $DXY is moving up today, it doesn’t mean it can’t break below the lower channel. It could still go either way—retest the 90 level (blue line), which was the Feb low or break above 92.5 (purple line), the early March high, and resume its move within the channel. Data source: ICE Data Services. Chart source: The thinkorswim® platform. For illustrative purposes only. Past performance does not guarantee future results. The Dollar’s Dilemma: While the U.S. Dollar Index ($DXY) is still trading within its uptrend channel (see chart above) since Jan. of this year, it’s hard to ignore that it is trading close to a critical support level. If it does break below the lower channel, which at the moment sits at around 92.10, we could see $DXY test the 90 level, the low it hit at the end of Feb, or it could continue moving within its upward channel. When it comes to the U.S. dollar, a lot also depends on economic fundamentals such as actions taken by the Fed and other central banks. Are they going to be more dovish or hawkish, relatively speaking? Since the U.S. dollar trades against other currencies, it’s a good idea to know where other central banks stand with respect to interest rate decisions. It can shed some light on global economic growth outlook. Another piece of economic data to keep an eye on this week: retail sales and inflation. Both could have an impact on the U.S. dollar. Bank Earnings, Net Margin, and the Rate Watch: As big banks prepare to open their Q1 books this week, it’s important to focus on recent moves in interest rates. On the face of it, the rise in long rates—particularly when accompanied by dovish talk from the Fed about leaving short rates at the zero bound—is the optimal setup for the banks. And sure enough, over the past three months the yield spread between the 3-month Treasury and the 10-year Treasury widened by over 80 basis points to its highest level in four years—a positive development for an industry that’s business model is centered on borrowing (and paying deposits on) the short end and lending on the long end. But like most things economic, there’s always “the other hand.” A nominal rise in mortgage rates, all else equal, should pad the bottom line of lenders. But when you consider the amount of exuberance in the housing market—think Lennar Corporation (NYSE: LEN), KB Home (NYSE: KBH) and other home builders that have seen shares blow through all-time highs in the middle of a pandemic—it’s possible that rising mortgage rates could eventually eat into the balance sheets of homeowners and small businesses, and to the housing market in general. Anyone who was around for the last recession knows what can happen to banks when a frothy housing market turns south. It’s another reminder to keep a close eye on bank earnings, as banks tend to be tied into the rest of the economy. For now, however, banks head into earnings season with the sun shining brightly. When Things Look Good, People Worry: A couple things to consider here as the market finishes up its “breather” ahead of earnings: First, there’s concern among some analysts that a couple of economic indicators like manufacturing growth and consumer confidence may be at “toppy” levels. Manufacturing, for instance, is at multi-decade highs. While that may be true, you can’t say for sure that there’s anything magical about current numbers just because they match, say, a level not seen since 1984. The numbers don’t know or care what happened back in the first Reagan term. They just do what they do. A fresh University of Michigan sentiment report Friday could give more insight into any perceived “toppiness.” Also, volatility has gotten so low recently, with the VIX finishing below 17 again yesterday, that people are starting to worry it might go up again. This sounds like traditional “wall of worry” talk and another sign that this rally just doesn’t get much respect. TD Ameritrade® commentary for educational purposes only. Member SIPC. Photo by Lukas Krasa on Unsplash See more from BenzingaClick here for options trades from BenzingaBeyond The Banks: Other Major Firms Reporting This Week Include PepsiCo, DeltaInvestors Appear To Be Treading Lightly Ahead Of Bank Earnings Next Week© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Gold fell on Wednesday as an uptick in U.S. Treasury yields weighed on bullion's appeal, while investors awaited speeches by several Federal Reserve officials in the wake of data showing higher inflation. Spot gold fell 0.3% to $1,739.00 per ounce, as of 10:45 a.m. EDT (1445 GMT). The uptick in bond yields seem to be "adding some very light pressure to the (gold) market," said David Meger, director of metals trading at High Ridge Futures.
Russia's Federal Antimonopoly Service (FAS) on Tuesday said it had initiated proceedings against internet giant Yandex over alleged competition law violations on the company's search engine. The state agency told Yandex in February it had created unequal market conditions for general online search services, that it was preferentially promoting its own products and asked it to stop. Yandex asked for extra time to respond to the accusations earlier this month.
Bitcoin has impressively surged to a new record high of $63,500 this morning following a two-month period of consolidation beneath the $60,000 level of resistance.
(Bloomberg) -- The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.”The unspoken message to Ma and his cohorts was the decade of unfettered expansion that created challengers to Facebook Inc. and Google was at an end. Gone are the days when giants like Alibaba, Ant or Tencent could steamroll incumbents in adjacent businesses with their superior financial might and data hoards.“Between the rules for Ant and the $2.8 billion fine for Alibaba, the golden days are over for China’s big tech firms,” said Mark Tanner, founder of Shanghai-based China Skinny. “Even those who haven’t been targeted to the same extreme will be toning down their expansion strategies and adapting many elements of their business to the new bridled environment.”Tech companies are likely to move far more cautiously on acquisitions, over-compensate on getting signoffs from Beijing, and levy lower fees on the domestic internet traffic they dominate. Ant in particular will have to find ways to un-tether China’s largest payments service from its fast-growth consumer lending business and shrink its signature Yu’ebao money market fund -- once the world’s largest.Even companies that have been less scrutinized so far -- like Tencent or Meituan and Pinduoduo Inc. -- are likely to see growth opportunities curtailed.The watershed moment was years in the making. In the early part of the last decade, visionary entrepreneurs like Ma and Tencent co-founder Pony Ma (no relation) created multi-billion dollar empires by up-ending businesses from retail to communications, elevating the lives of hundreds of millions and serving as role models for an increasingly affluent younger generation. But the enormous opportunities coupled with years of hyper-growth also fostered a winner-takes-all land-grab mentality that unnerved the Communist Party.Regulators grew concerned as the likes of Alibaba and Tencent aggressively safeguarded and extended their moats, using data to squeeze out rivals or forcing merchants and content publishers into exclusive arrangements. Their growing influence over every aspect of Chinese life became more apparent as they became the conduits through which many of the country’s 1.3 billion bought and paid for things -- handing over vast amounts of data on spending behavior. Chief among them were Alibaba and Tencent, who became the industry’s kingmakers by investing billions of dollars into hundreds of startups.All that came to a head in 2020 when Ma -- on the verge of ushering in Ant’s record $35 billion IPO -- publicly denigrated out-of-touch regulators and the “old men” of the powerful banking industry.The unprecedented series of regulatory actions since encapsulates how Beijing is now intent on reining in its internet and fintech giants, a broad campaign that’s wiped roughly $200 billion off Alibaba’s valuation since October. The e-commerce giant’s speedy capitulation after a four-month probe underscores its vulnerability to further regulatory action.Chinese titans from Tencent to Meituan are next up in the cross-hairs because they’re the dominant players in their respective fields. Regulators may focus on delivery giant Meituan’s historical practice of forced exclusivity -- particularly as it expands into burgeoning areas like community e-commerce -- while investigating Tencent’s dominant gaming service and whether its messaging platform WeChat excludes competitors, Credit Suisse analysts Kenneth Fong and Ashley Xu wrote Tuesday.“The days of reckless expansion and wild growth are gone forever, and from now on the development of these firms is likely going to be put under strict government control. That’s going to be the case in the foreseeable future,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “Companies will have to face the reality that they need to streamline their non-core businesses and reduce their influence across industries. The cases of Alibaba and Ant will prompt peers to take the initiative to restructure, using them as the reference.”The revamp of Ant -- a sprawling financial titan once worth as much as $320 billion -- is a case in point. In its ruling, the People’s Bank of China said it wanted to “prevent the disorderly expansion of capital” and ensure that all of Ant’s financial business will be regulated under a single holding company.What Bloomberg Intelligence SaysAnt Group’s prospects could wane further after China halts improper linking of Alipay payments with Ant’s other products. New curbs on Yu’ebao also hurts its wealth business. Alipay’s 711 million active users are its potential fintech-product buyers. Ant’s valuation could now be near banks we cover (average 5x forward earnings) compared with over 30x at its IPO attempt.- Francis Chan, analystClick here for the research.Ma’s company will likely have to apply and register to get into any new areas of finance in future -- a potential ordeal given the infamously creaky wheels of Beijing bureaucracy. It faces restrictions in every key business -- from payments and wealth management to credit lending.The company’s most lucrative credit lending arm will be capped based on registered capital. It must fold its Huabei and Jiebei loan units -- which had 1.7 trillion yuan ($260 billion) of outstanding loans between them as of June -- into a new national company that will likely raise more capital to support its operations. And Ant must reduce its Yu’ebao money market wing, which encompasses a self-operated Tianhong Yu’ebao fund that held $183 billion of assets as of the end of 2020, making it one of the largest pools of wealth in the world.Alibaba appears to have got off lightly in comparison. While the $2.8 billion was triple the previous record set by Qualcomm Inc.’s 2015 penalty, it amounts to under 5% of the company’s annual revenue. Far more insidious however is the threat of future action and the dampening effect it will have on Alibaba.The fine came with a plethora of “rectifications” that Alibaba will have to put in place -- such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform. Executives also volunteered to open up Alibaba’s marketplaces more, lower costs for merchants while spending “billions of yuan” to help its clients handle e-commerce.Ant will likewise have to tame its market share grab in payments. Changes to that business, which is fending off Tencent’s WeChat Pay, were among the top priorities regulators outlined. Ant pledged to return the business “to its origin” by focusing on micro-payments and convenience for users.The most amorphous yet dire threat lies in the simple principle implicit in regulators’ pronouncements over the past few days: that Beijing will brook no monopolies that threaten its hold on power.The central bank warned in draft rules released previously that any non-bank payment company with half of the market for online transactions -- or two entities with a combined two-thirds share -- could be subject to antitrust probes. If a monopoly is confirmed, the State Council or cabinet has powers to levy a plethora of penalties, including breaking up the entity.That’s an entrepreneur’s ultimate nightmare.“Everyone is on the regulators’ radar, and it really depends on each one’s reaction next,” Chanson & Co.’s Shen said. “It’s better to take the initiative to self-rectify, rather than having to go through restructuring ordered by the regulators, which may not have your best interests in mind.”(Updates with a graphic of this week’s stock gyrations in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Bitcoin is seen rising towards $70K by May according to several analysts interviewed by CoinDesk.
Fund managers are trimming exposure to Russia and Ukraine on fears that years of tensions could finally erupt into outright war, bringing economic ruin for Ukraine and more sanctions on Russia. "People are very sanguine," said Tim Ash, senior EM sovereign strategist at BlueBay Asset Management. Concerns about an escalation, including the immediate threat of sanctions, were partly assuaged after a phone call on Tuesday between U.S. President Joe Biden and his Russian counterpart Vladimir Putin in which Biden proposed a summit meeting between the pair and stressed U.S. commitment to Ukraine's territorial integrity.
(Bloomberg) -- Just last year, the world’s most valuable startup, ByteDance Ltd., was being squeezed from all sides.The Trump administration wanted the Chinese firm, which owns the ubiquitous TikTok video-sharing platform, to get rid of assets. Beijing was cracking down on tech businesses, and India blacklisted some of its social-media apps.For all the obstacles, ByteDance kept growing. Now its founder, 38-year-old Zhang Yiming, is among the world’s richest people -- a distinction that lately has carried increased risks in China.Shares of the company trade in the private market at a valuation of more than $250 billion, people familiar with the dealings have said. At that level, Zhang, who owns about a quarter of ByteDance, could be worth more than $60 billion, placing him alongside Tencent Holdings Ltd.’s Pony Ma, bottled-water king Zhong Shanshan and members of the Walton and Koch families in the U.S., according to the Bloomberg Billionaires Index.ByteDance, famous for its short-video apps and news aggregator Toutiao, more than doubled revenue last year after expanding beyond its core advertising business into areas such as e-commerce and online gaming. It’s now weighing options for the initial public offering of some businesses.“Zhang is someone who’s known for thinking long-term and not easily dissuaded by short-term setbacks,” said Ma Rui, partner at venture-capital firm Synaptic Ventures. “He is set on building an enduring, global business.”Surging ValuationDuring its last fundraising round, ByteDance reached a $180 billion valuation, a person with knowledge of the matter said. That’s up from $20 billion about three years ago, according to CB Insights. But in the private market, some investors recently were asking for the equivalent of a $350 billion valuation to part with their shares, people familiar have said. The company’s value for private-equity investors is approaching $400 billion, the South China Morning Post reported. That would mean an even bigger fortune for Zhang.ByteDance representatives didn’t respond to requests for comment.It’s a tough time to be wealthy in China as the government seeks to rein in the country’s most powerful corporations and their billionaire founders. Just ask Jack Ma: After opening an antitrust probe, regulators fined Alibaba a record $2.8 billion and the central bank ordered an overhaul of his Ant Group Co. fintech empire so it’d be supervised more like a bank. On Tuesday, China ordered 34 internet companies to rectify their anti-competitive practices in the coming month.While ByteDance hasn’t been singled out as a target, its dominance in social media and war chest for deal-making are sensitive areas the government is looking into.“There are no more silly games in the U.S. with Trump and potential bans or forced asset sales,” said Kirk Boodry, founder of investment research firm Redex Holdings. “But the pressure on tech-share prices and China in particular might make $250 billion a tough sell,” he added, referring to ByteDance’s value in private transactions.Born in the southern Chinese city of Longyan, Zhang, the only son of civil servants, studied programming at Tianjin’s Nankai University, where he built a following on the school’s online forum by fixing classmates’ computers. He joined Microsoft Corp. for a brief stint after graduating, later calling the job so boring he often “worked half of the day and read books in the other half,” according to an interview with Chinese media. He went on to develop several ventures, including a real estate search portal.His breakthrough came in 2012, when working in a four-bedroom apartment in Beijing he created ByteDance’s first hit -- a joke-sharing app later shut down by censors. It then turned to news aggregation before winning over more than 1 billion global users with its short-video platforms TikTok and Chinese twin app, Douyin. In the process, it attracted big-name investors such as SoftBank Group Corp., Sequoia Capital and proprietary-trading firm Susquehanna International Group, making it a rarity among Chinese internet startups that usually get absorbed into the wider ecosystems of Tencent and Alibaba Group Holding Ltd.Novel ConceptOne of Zhang’s earliest supporters, Susquehanna has become ByteDance’s largest outside backer with a 15% stake, according to a Wall Street Journal story in October. The initial bet was made at the start of 2012, when ByteDance’s news app Toutiao was just a concept that Zhang had drawn up on napkins, according to a 2016 blog post by Joan Wang, who led that investment for Susquehanna’s Chinese venture-capital unit.With TikTok facing scrutiny in the U.S. and India, Zhang has put more effort into ByteDance’s nascent and fast-growing Chinese businesses, which range from gaming to education to e-commerce. That helped it increase sales to about $35 billion last year and operating profit to $7 billion, a person familiar with the results said.Investors are eyeing the IPO of some of ByteDance’s businesses after Chinese competitor Kuaishou Technology raised $5.4 billion in February in the biggest internet listing since Uber Technologies Inc., with its market value now nearing $140 billion. Last month, ByteDance hired former Xiaomi Corp. executive Chew Shou Zi as its chief financial officer, filling a long vacant position that will be crucial for its eventual market offering.But for Zhang, it’s not all about immediate payoffs. The affable founder is known for his business philosophy of “delaying satisfactions” as he puts the focus on long-term growth -- a message he stressed again during his spiel to employees at the company’s ninth anniversary celebration last month.“Keep an ordinary mind, that’s something that sounds easy but important to do,” he said. “Put in the plainest words, when hungry, eat, when tired, sleep.”(Adds latest on China crackdown in ninth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
China's market regulator, fresh from fining e-commerce giant Alibaba $2.75 billion, said on Tuesday it warned nearly three dozen internet companies to stop using any banned practices such as forcing vendors to use their platform exclusively. The State Administration for Market Regulation (SAMR) said it summoned 34 companies including Tencent, ByteDance and JD.com for a meeting, where it ordered them to conduct self-inspections within one month, warning of "severe punishment" for any that still violated the rules. In February, China issued new anti-monopoly guidelines targeting internet platforms.
Credit Suisse has identified $2.3 billion worth of loans exposed to financial and litigation uncertainties in its Greensill-linked supply chain finance funds, it told investors on Tuesday. Switzerland's second-biggest bank has been reeling from its exposure to the collapse first of Greensill Capital and then Archegos Capital Management within a month. Its asset management unit was forced last month to shut $10 billion of supply chain finance funds that invested in bonds issued by Greensill after the UK firm lost credit insurance coverage shortly before filing for insolvency.
(Bloomberg) -- Net bullish wagers on rising commodity prices fell to the lowest since December last week, raising questions about the commodity supercycle.Money managers are trimming what had been the largest wager for rising commodity prices in at least a decade as stumbling economic reopening efforts force a reconsideration of the popular recovery trade. A recent bond rout raised worries over inflation and surging bulk shipping rates are seen capping any further upswing.There’s a sense that “we have yet to get rid of the coronavirus, with rising cases and extended lockdowns delaying the expected growth sprint,” said Ole Hansen, head of commodities research at Saxo Bank. “The surge in Treasury yields, a stronger dollar and worries that China may tighten liquidity in order to curb inflation are also contributing factors.”Hedge funds’ net bullish positions on a basket of 20 commodities have decreased for six weeks in a row, according to the latest Commodities Futures Trade Commission and ICE data compiled by Bloomberg. That comes after money managers boosted the figure to the highest in data going back to 2011, while prices in the Bloomberg Commodity Spot Index rose to nearly the highest in eight years in February.Commodities had seen a resurgence in interest early this year as major investment banks flagged the start of a new structural bull cycle -- with some even calling for a supercycle comparable to ones that peaked in the 1970s and early 2000s.The idea was that raw materials would benefit as the world emerged from the pandemic and fiscal stimulus programs would sustain a downtrend in the U.S. dollar, thereby making commodities priced in the greenback more attractive. While a return to normal is anticipated, hiccups in recent months surrounding economic reopening plans are clouding the near-term outlook. Meanwhile, the dollar came back from its lows this year alongside rising bond yields.In the last week, investor outflows were most pronounced for oil, with funds weighing whether demand will be strong enough to absorb returning supply in coming months. OPEC and its allies decided earlier this month to gradually ease unprecedented output curbs from May to July, while further out, the market may see more Iranian supply come back if it returns to a nuclear deal.Adding further pressure, volatility-targeted funds like commodity trading advisers underwent “widespread deleveraging” after global benchmark Brent futures’ briefly jumped above $71 a barrel following an attack on Saudi oil facilities in March, Ryan Fitzmaurice, commodities strategist at Rabobank, said in a note Friday.Now, a squeeze on vessels to carry some commodities around the world is adding another risk for investors to consider. The cost of shipping unpacked commodities like grains and iron ore, known as dry bulk, is up more than 50% this year.The move up in shipping costs “makes it more expensive to move things around, which goes contrary to the idea of a supercycle,” Eddie Tofpik, head of technical analysis and senior markets analyst at ADM Investor Services International Ltd., said at an online event last month.Still, calls remain for commodities to continue their price rebound this year after this period of consolidation.“Commodities remain the best performing asset class of 2021,” Goldman Sachs Group Inc. analysts wrote in a report Friday. “We view this consolidation as nothing more than a fleeting speed bump created by logistical bottlenecks in vaccine roll-outs.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Coinbase's listing on Nasdaq sends a powerful signal of legitimacy to the U.S. crypto community, as well as to the crypto-curious in the traditional financial sector.
Taiwan said on Wednesday its chip companies will adhere to U.S. rules after Washington added seven Chinese supercomputing entities last week to an economic blacklist and after a Taipei-based chipmaker halted orders from one of the entities named. The U.S. Commerce Department said the seven Chinese entities were "involved with building supercomputers used by China's military actors, its destabilizing military modernisation efforts, and/or weapons of mass destruction programs." Companies or others listed on the U.S. Entity List are required to apply for licenses from the Commerce Department that face tough scrutiny when they seek permission to receive items from U.S. suppliers.
With COIN stock opening at $250 per share, it amounts to a $25,000 thank-you note to all Coinbase staffers.
(Bloomberg) -- Hedge funds are snapping up 10-year Treasury futures, and no other maturity, presenting a puzzle. The answer may lie in the collapse of a popular carry trade last year.The highly-leveraged basis trade involved going long cash bonds and selling futures, to profit from the difference between the two, but came asunder in March 2020 when investors stampeded to buy the latter at the peak of coronavirus fears and upended the spread. Now the gap -- the so-called gross basis -- has reversed and favors shorting cash bonds and buying futures.Of course, it’s not quite that simple. In futures markets, the counterparty who is short determines which specific cash bond traders have to deliver, adding another element of risk to the transaction. But with so-called ultra 10-year Treasury futures, there are only two bonds in the delivery pool, limiting that risk compared to other contracts.That could be one reason why leveraged funds have built up net-long positions of almost 230,000 ultra 10-year futures, despite this year’s Treasury market slump, according to the latest data from the Commodity Futures Trading Commission.As for the original strategy -- there are no signs of it returning anytime soon.Supercharged Debt Bets Unravel and Expose Wall Street RiskWhile returns from this year’s trade are much lighter, a play based on 10-year ultra futures is most attractive, according to one trader who asked not to be identified as he isn’t authorized to speak publicly.Cash Bond PressureA sense of how the cheapest-to-deliver 10-year Treasury bond has performed against futures can be seen in the implied repurchase rate for the note. It flipped from positive to negative in the first quarter, indicative of greater selling pressure on cash bonds than futures.“With the sudden and significant rates selloff in late February, Treasuries came under pressure, underperforming futures quite noticeably,” wrote Morgan Stanley’s Kelcie Gerson in a note this week. “On an outright level, futures/cheapest-to-deliver bases reached the widest levels seen since last March/April.”Across the rest of the Treasuries curve, hedge funds hold net short positions, though well below last year’s levels after the collapse of the original basis trade.Read: How a Little Known Trade Upended the U.S. Treasury MarketA gauge of aggregate leveraged fund short futures positions -- which would likely be mirrored by long cash bonds in a basis trade -- has dropped by over $300 billion since last year’s February peak, according to calculations by Bloomberg.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
NEW YORK (Reuters) -Nasdaq on Tuesday set a reference price of $250 per share for Coinbase Global Inc, projecting a value for the largest U.S. cryptocurrency exchange at $49.8 billion ahead of its landmark stock market debut on Wednesday. The reference price is not an offering price for investors to purchase shares, but rather a benchmark for performance when the stock starts trading the exchange on Wednesday. Coinbase shares are set to start trading under the "COIN" symbol.
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