David Einhorn says that regulators are asleep on the Wall Street beat and that anomalies in the market are increasingly being ignored.
Stock futures traded slightly higher Monday evening after falling during the regular session, with technology stocks underperforming and dragging the Nasdaq lower as inflation concerns persisted.
Shares of Kraft Heinz are now trading at a 52-week high following praise from Warren Buffett.
The European Commission wants to propose in 2023 a more unified way of taxing companies in the European Union, hoping that such rules, which have failed to win support in the past, will stand a better chance if they follow global OECD solutions expected this year. The Commission will present a plan on Tuesday including this proposal and other measures for adjusting the EU's business taxation to make it more up to date with the modern world, where cross-border business, often carried out via the Internet, is commonplace. The deal is aimed at stopping governments competing with each other through lowering tax rates to attract investment and at creating a way to tax profits in countries where the customers are rather than where a company sets up its office for tax purposes.
The crypto car drove to the dump Monday as most blockchain assets fell.
(Bloomberg) -- Indonesian online travel company Tiket.com is exploring going public through a merger with a special purpose acquisition company as it seeks to expand its business, according to people with knowledge of the matter.The startup is in talks with COVA Acquisition Corp. for a deal that would value the combined entity at about $2 billion, according to the people, who asked not to be identified because the talks are private. Goldman Sachs Group Inc. is advising Jakarta-based Tiket, which is valued at more than $1 billion and owned by diversified Indonesian conglomerate Djarum Group, they said.The startup may also pursue a traditional initial public offering, a merger or an acquisition to expand, the people said. Negotiations between the two firms aren’t finalized and it’s possible discussions may not result in a deal, they said.Tiket joins a slew of Southeast Asian internet companies considering SPAC listings or initial public offerings to fuel growth as online commerce gains popularity in the region. Indonesian rival Traveloka is in advanced talks to go public through merging with Bridgetown Holdings Ltd., a blank-check firm backed by billionaire Richard Li and Peter Thiel.As part of the deal, Tiket could raise about $200 million in a so-called private investment in public equity, or PIPE, that often accompanies a SPAC merger, the people said. Representatives of Tiket, Goldman and COVA Acquisition declined to comment.Tiket.com was founded in 2011, a year before Traveloka. Djarum acquired Tiket in 2017 and put it under the leadership of Chief Executive Officer George Hendrata, previously Djarum’s director of business development and diversification. Tiket’s platform lets consumers buy tickets for flights, trains as well as concerts and other events. Users can also book hotel and rental cars in Indonesia. It has a network of more than 90 airlines, 2.8 million hotels and other lodgings, and more than 400 corporate partners.Tiket’s sales of plane tickets and hotel bookings surged more than 300% in the first three months of 2021 compared with the second quarter of 2020, when business was hurt by the onset of the coronavirus pandemic, according to the company’s press release in April.Djarum is led by Michael Bambang Hartono and his younger brother Robert Budi Hartono, who inherited a clove cigarette manufacturing business from their father Oei Wie Gwan upon his death in 1963. They grew the business into a diversified conglomerate including PT Bank Central Asia, whose market capitalization of about $55 billion makes it Indonesia’s most valuable company. Budi Hartono is the richest Indonesian with a net worth of $16 billion, while Michael has a net worth of $15 billion, according to the Bloomberg Billionaires Index.Luminar Backer’s $300 Million SPAC Seeks Southeast Asia TargetCOVA Acquisition is led by Jun Hong Heng, the founder of San Francisco-based Crescent Cove Advisors LP, which backs high-growth technology, media and telecommunications ventures in the U.S. and Southeast Asia. Crescent Cove was one of the earliest and largest investors in Luminar, a driverless-car startup founded by entrepreneur Austin Russell.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Tesla has dominated the EV sector in recent yeas, but this “second wave” of electric vehicles could benefit 2 stocks that are not EV manufacturers
(Bloomberg) -- Stanley Druckenmiller said last week that pretty much anyone could make money in the markets right now and that he was up 17% this year.The latest regulatory filing from his Duquesne Family Office shows some of the ways he’s done this and what he’s betting on going forward.The investor, worth $10.4 billion according to the Bloomberg Billionaires Index, took a new $154.6 million position in Citigroup Inc., and a smaller stake in JPMorgan Chase & Co., a bet that could benefit from rising rates.Duquesne also amassed a $69.7 million stake in online travel company Booking Holdings Inc. and boosted its holdings of Starbucks Corp. and Expedia Group Inc. -- a nod to the rapidly vaccinated U.S. and a potential return to more travel and work from the office.Overall, the firm disclosed on Monday $3.9 billion of U.S. equity holdings in the 13F filing, a slight increase from the prior quarter.Druckenmiller made some sizable trades involving consumer businesses inordinately impacted by the pandemic. He liquidated stakes in Walt Disney Co. and cruise liner Carnival Corp. Duquesne also trimmed its holdings in used-car retailer Carvana Co. and miner Freeport-McMoRan Inc., which is up 70% this year.Extremely PrivateFamily offices, the closely held investment vehicles of the ultra-wealthy, are often impenetrably discreet. The 13F filings are required by the Securities and Exchange Commission of money managers overseeing more than $100 million in U.S. equities and must be filed within 45 days of the end of each quarter.Only a handful of family offices out of the thousands operating globally file the forms. Most are too small or farm their equity investments out to external money managers. Some, such as Bill Hwang’s Archegos Capital Management, buy securities through swap arrangements with banks, which keeps their holdings hidden. Hwang’s family office, which blew up at the end of March, never filed a 13F.For those required to file the forms, they offer a glimpse into the investment strategies of some of the world’s wealthiest people.Soros Fund Management, for instance, revealed on Friday it snapped up shares of ViacomCBS Inc., Baidu Inc., Vipshop Holdings Ltd. and Tencent Music Entertainment Group. The investment firm, which oversees $27 billion, didn’t hold the shares prior to Archegos’s implosion, said a person familiar with the fund’s trading.Iconiq, WildcatBlue Pool Capital, which manages part of the fortunes of Alibaba Group Holding Ltd. co-founders Joe Tsai and Jack Ma, increased its investments in U.S. tech giants and trimmed exposure to health-care stocks in the first quarter, according to its latest filing.The Hong Kong-based firm took new positions in Uber Technologies Inc. and Twitter Inc. and added to its bets on Microsoft Corp. and Facebook Inc. In total the seven-year old firm disclosed it held 31 U.S. stocks worth a combined $446 million at the end of the quarter.Bluecrest Capital Management, the investment firm of billionaire trader Michael Platt, disclosed it held $3.8 billion of U.S. equities, a jump of more than $400 million from the prior period. The firm’s largest new positions were NRG Energy Inc., China Biologic Products Holdings and blank check firm Churchill Capital Corp VII.Iconiq Capital, the San Francisco-based multifamily office that has managed money for high-profile Silicon Valley billionaires like Sheryl Sandberg, Mark Zuckerberg and Reid Hoffman, reported that the value of its disclosed holdings surged 121% from the previous quarter, to $8.9 billion.Iconiq boosted its biggest position, in cloud-computing company Snowflake Inc., and revealed holdings of Roblox Corp. and Twilio Inc. Its Snowflake stake now makes up the vast majority of the total value of Iconiq’s disclosed portfolio.Another family office betting on Snowflake was David Bonderman’s Wildcat Capital Management, which disclosed $819 million of U.S. equities at the end of the quarter.The firm, which shares its name with the location of a home Bonderman owned near Aspen, Colorado, revealed a new position in South Korea’s Coupang Inc., which went public in March. Its largest holdings remain Skillz Inc. and Costar Group Inc.(Adds detail on Bluecrest Capital Management in 13th paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Michael Burry, the investor who rose to fame for making billions off bets against mortgage securities during the financial crisis, has placed a sizable wager against Elon Musk’s Tesla Inc.Burry’s Scion Asset Management owned bearish puts against 800,100 shares of the electric-car maker as of March 31, according to a regulatory filing Monday. The puts give Scion the right to sell Tesla shares on or before an unidentified date in the future.Tesla shares closed at an all-time high of $883.09 on Jan. 26, after a yearlong rally jolted the stock higher by almost 700%. It had lost a quarter of its value by the end of March, and is down 35% from its peak as of the close Monday.The bet against Tesla isn’t Burry’s first. He said in a since-deleted tweet in early December that his firm was short shares of the EV maker. The hedge fund manager also advised Musk to sell shares to raise capital while his stock, then on a torrid run from the pandemic lows, was at what Burry called “ridiculous” levels.Tesla earned record profit in the first quarter, sidestepped an industry chip shortage, improved its manufacturing and even made money off Bitcoin, its earnings results showed in late April. Yet shares fell in a sign of the lofty expectations the company now contends with. Among the quibbles from analysts: Tesla didn’t offer a specific estimate for vehicle deliveries in 2021.It’s impossible to know when Burry’s Scion made the bets against Tesla, at what price the puts are in the money and how much the firm paid for them. The filing, a quarterly rundown of holdings required of hedge funds of a certain size, said the position was worth $534 million -- an amount likely derived by multiplying Tesla’s share price on March 31 by the number of shares Scion bet against.“Tesla is down 14% since the end of the first quarter, so on balance, these puts have been profitable, though it’s impossible to know for sure,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “He’s expressing the type of skepticism that many have on Tesla. I would have to believe that he accumulated various Tesla options at various strikes, and some of them probably have expired.”Burry was played by Christian Bale in the film version of Michael Lewis’s best-selling account of the 2008 financial crisis, “The Big Short.”(Updates with quote in seventh paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Stocks fell on Monday, resuming last week's declines as investors' concerns around rising inflation persisted.
(Bloomberg) -- Elon Musk continued to whipsaw the price of Bitcoin, briefly sending it to the lowest since February after implying in a Twitter exchange Sunday that Tesla Inc. may sell or has sold its cryptocurrency holdings.Bitcoin slid below $45,000 for the first time in almost three months after the billionaire owner of the electric-car maker seemed to agree with a Twitter post that said Tesla should divest what at one point was a $1.5 billion stake in the largest cryptocurrency. It traded at $45,270 as of 5:51 p.m. in New York, down about $4,000 from where it ended Friday.The online commentary was the latest from the mercurial billionaire in a week of public statements that have roiled digital tokens. He lopped nearly $10,000 off the price of Bitcoin in hours last Wednesday after saying Tesla wouldn’t take it for cars. A few days earlier, he hosted “Saturday Night Live” and joked that Dogecoin, a token he had previously promoted, was a “hustle,” denting its price. Days later he tweeted he was working with Doge developers to improve its transaction efficiency.Musk’s disclosure in early February that Tesla used $1.5 billion of its nearly $20 billion in corporate cash to buy Bitcoin sent the token’s price to record and lent legitimacy to electronic currencies, which have become more of a mainstream asset in recent years despite some skepticism.His latest dustup with Bitcoin started with a tweet from a person using the handle @CryptoWhale, which said, “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him...”The Tesla chief executive officer responded, “Indeed.”The twitter account @CryptoWhale, which calls itself a “crypto analyst” in its bio, also publishes a Medium blog on market and crypto trends.Musk has spent hours Sunday hitting back at several different users on Twitter who criticized his change of stance on Bitcoin last week, a move he said was sparked by environmental concerns over the power demands to process Bitcoin transactions. He said at the time that the company wouldn’t be selling any Bitcoin it holds.An outspoken supporter of cryptocurrencies with cult-like following on social media, Musk holds immense sway with his market-moving tweets. He has been touting Dogecoin and significantly elevated the profile of the coin, which started as a joke and now ranks the 5th largest by market value.Dogecoin is down 9.6% in the last 24 hours, trading at 47 cents late Sunday afternoon, according to data from CoinMarketCap.com.Tesla didn’t immediately respond to an email seeking comment on Musk’s tweet on Sunday.Read More: Elon Musk Just Reopened an Old Wound in the Bitcoin WorldMusk’s Sunday social-media escapades were the latest chapter in one of the zaniest weeks in a crypto world famous for its wildness. For die hards, the renewed slumps in Bitcoin and other tokens have done nothing to deter crypto enthusiasts who say digital coins could many times their current value if they transform the financial system.“We’re looking at the long-term and so these blips, they don’t faze us,” Emilie Choi, president and chief operating officer of crypto exchange Coinbase Global Inc., said last week on Bloomberg TV about the wild swings prevalent in the market. “You’re looking for the long-term opportunity and you kind of buckle up and go for it.”Seat belts were needed by anyone watching the crypto world in the past eight days. Aside from Musk’s antics that sent Doge and Bitcoin on wild rides, a host of other developments pushed around prices.Tether, the world’s largest stablecoin, disclosed a reserves breakdown that showed a large portion in unspecified commercial paper. Steve Cohen’s Point72 Asset Management announced that it would begin trading cryptocurrencies. And a longstanding critique of the space reared its head again: illicit usage.It was reported that the owners of the Colonial Pipeline paid a $5 million ransom in untraceable digital currencies to hackers that attacked its infrastructure, while Bloomberg also reported that Binance Holdings Ltd., the world’s biggest cryptocurrency exchange, was under investigation by the Justice Department and Internal Revenue Service in relation to possible money-laundering and tax offenses.But, “for many crypto assets such as Bitcoin and Ethereum, the long-term story has not changed,” said Simon Peters, an analyst at multi-asset investment platform eToro. “This emerging asset class continues to revolutionize many aspects of financial services, and while nothing goes up in a straight line, the long-term fundamentals for crypto assets remain as solid as ever.”Bitcoin was already swinging wildly on the weekend before Musk tweeted. The two days tend to be particularly volatile for cryptocurrencies, which -- unlike most traditional assets -- trade around the clock every day of the week. Bitcoin’s average swing on Saturdays and Sundays so far this year comes in at 4.95%.That type of volatility is owing to a few factors: Bitcoin’s held by relatively few people, meaning that price swings can be magnified during low-volume periods. And, the market remains hugely fragmented with dozens of platforms operating under different standards. That means cryptocurrencies lack a centralized market structure akin to that of traditional assets.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.
(Bloomberg) -- It’s a Wall Street nightmare. You score hundreds of millions of dollars on a trade and you just can’t get paid.That’s what Goldman Sachs Group Inc. faces in a transaction pitting its traders against Mexico’s dominant power company, championed by none other than President Andres Manuel Lopez Obrador, according to people with knowledge of the matter. At issue: roughly $400 million the Wall Street bank believes it’s owed from a natural-gas trade that went wild when a deep freeze hit Texas in February.In private discussions with Goldman Sachs, state-owned utility Comision Federal de Electricidad has blamed rogue traders, ejected staff and even hinted that the side lacking financial sophistication in the trade was, perhaps, the Wall Street bank, the people said.If the impasse continues to escalate, it risks dragging the bank into a political blowup.The freakishly cold storm that battered the central U.S. set off sweeping blackouts as ice formed on wind turbines and some pipelines froze, forcing oil and gas wells to shut. As power suppliers and traders struggled to track down fuel to meet obligations, prices skyrocketed. The surge benefited companies that happened to be on the right side of trades, but their ability to collect depends on what happens to gas suppliers, power generators and utility customers, some of whom have filed price-gouging lawsuits.The cost of paying Goldman Sachs could ultimately come from Mexican households, many of whom were left without power in the winter -- not so much because of local malfunctions but because authorities in Texas cut off fuel exports when their own lightly regulated system failed. It’s little surprise then that officials south of the border are reluctant to write a check to a giant U.S. bank.Yet anybody who bails on such a bet risks becoming persona non grata on Wall Street, complicating their future access. On the other side, Goldman’s leaders have to consider how angry they want to make the government of Mexico, a market where the firm has been expanding.The descriptions of the dispute and the underlying transaction between Goldman and a CFE subsidiary were provided by people with knowledge of the matter, who asked not to be identified publicly discussing the talks. A representative for Goldman Sachs didn’t comment for this story.The bank and CFE are heading into arbitration over the matter, a spokeswoman for the utility told a Whatsapp chat room with journalists on Monday, noting “the CFE considers that it has solid and sufficient arguments.”On the face of it, it was a routine natural-gas contract. Goldman had entered into the arrangement with CFE International, an arm of CFE. The investment bank’s obligations were tied to a monthly index of gas prices, while the CFE unit would be exposed to daily rates at certain hubs, such as the Waha hub in West Texas.The daily price there surged by nearly 100 times, whereas the monthly price was left largely unchanged, leaving the CFE subsidiary on the hook for an unusually large amount. But instead of the contract getting settled in the Wall Street firm’s favor, the situation has devolved into an acrimonious spat.The Mexican utility has argued that the traders who initiated the deal at its subsidiary weren’t authorized to do so, and some of them have since left, the people said. CFE has also argued it shouldn’t have to fulfill the contract because of the unforeseeable, extreme price action. And it has asserted that Goldman failed to strike a rock-solid contract because it didn’t get an explicit nod from the parent company as a guarantor on the trade, undermining the bank’s ability to extract the money.For Goldman, the dispute boils down to a contractual obligation that its counterparty is duty-bound to fulfill, even if the debt resulted from unforeseen disaster. The bank has also privately argued that such a trade was routinely carried out between the two sides and that the subsidiary even represented in documentation that it had a guarantee from the parent company, a person close to Goldman said. Chat logs during the deal indicate that CFE’s subsidiary was seeking approvals on various aspects of the trade from its parent, the person said.It’s unclear how and when Goldman will be able to realize the money it insists it’s owed, especially as CFE becomes a central part of the Mexican president’s campaign to reshape the domestic energy market.Read More: Mexico Blames U.S. as Energy Crisis Spills Across the BorderSince winning in a landslide in 2018, Lopez Obrador has sought to roll back energy reforms by his predecessor and has said he wants to turn CFE back into an economic champion. He’s broadly blamed private companies for fleecing the nation in deals hatched with corrupt officials, and he’s taken particular issue with gas contracts that he says unfairly benefited businesses at the expense of the state utility.“We are going to continue to comply with the commitment not to increase the price of electricity, even with speculation and the increases in gas prices that are taking place in Texas and the United States,” he said during his morning press conference on Feb. 18.(Updates with comment from CFE spokeswoman in ninth paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Wall Street stocks ended lower on Monday, weighed down by tech shares as signs of growing inflation worried investors about the potential for tighter monetary policy. Of the 11 major S&P sectors that declined, technology and communication services were among the biggest losers. "What is causing the decline, no surprise to anybody, is the worry about inflation and interest rates," said Sam Stovall, chief investment strategist at CFRA Research in New York.
(Bloomberg) -- The surge in commodities prices is failing to trigger some of the traditional responses in bonds and currencies.Unlike recent commodities rallies in 2008 and 2011, yields on Treasuries and currencies of major exporters like Australia have barely budged. Likewise, the Federal Reserve’s favored measure of inflation expectations has disconnected from moves in raw materials.The biggest buffer: Central bank credibility. Led by the Federal Reserve, policy makers have consistently doubled down on lower-for-longer rates and projections for “transitory” inflation. That’s left investors wary to bet against commitments to keep policy loose for the foreseeable future.“The big change this time around is central bank policy,” said Kerry Craig, global market strategist at JPMorgan Asset Management in Melbourne. Ultra-easy monetary policy is now “weighing down currencies that would have naturally risen a lot more during a cycle where commodity prices are rising.”The Australian and New Zealand dollars -- two major currencies whose fates usually rely heavily on trends in commodities consumed by China’s booming economy -- are indisputable laggards. Each has increased less than 0.3% over the past three months.The Canadian dollar, meanwhile, has surged more than 5% as the central bank signaled it may dial back stimulus. The loonie’s rapid rise could give way to pressure on officials to slow development and curb capital inflows, as is usually the case during commodities booms in Canada.Last week, both the U.S. consumer and producer price index reports surprised to the upside, adding fuel to the global inflation debate on the heels of strong Chinese producer price data. Yet the market reaction was relatively muted after the PPI figures -- with 5-year and 10-year yields easing alongside a weaker greenback.The Fed’s own new “common inflation expectations” gauge, which aggregates a range of such measures, is hovering around 2%, a level that officials want to see overshot for some time.Meanwhile, prices have accelerated for materials as disparate as copper, cotton, rubber and lumber, as well as semiconductors, amid supply disruptions and surging demand.The disparity is a sign of the times amid an evolution -- perhaps revolution -- of central banking. The Fed’s commitment to run the economy hot has rattled markets in part because it means abandoning what has long been a core of their strategy: to act preemptively to curb inflation.In this brave new world, market participants are still grappling with whether to trust that officials will act before price surges get out of control and do more harm than good -- balanced against the full-employment mandate.That message is getting through to traders of the Australian and New Zealand currencies, while for others, hints of monetary policy tightening are giving reason to pile in.“The Bank of Canada and Norges Bank are the only central banks in the developed world to give an unambiguous signal that they’re contemplating withdrawing monetary accommodation,” said Stephen Miller, Sydney-based investment consultant at GSFM, a unit of Canada’s CI Financial Corp. “The RBA has been so aggressively beating the drum on keeping the pedal to the metal that it’s worked in terms of keeping the Aussie lower despite iron ore prices soaring.”A closer look at breakeven rates offers further evidence that investors largely aren’t acting on any inflation worries. The U.S. 10-year breakeven, which has jumped to an eight-year high, isn’t sending a clear runaway-inflation message when viewed against long-term trends.If potential for runaway inflation were the trigger, the spot and forward breakeven curves would be upward-sloping, Cornerstone Macro analysts, led by ex-Fed official Roberto Perli, said in a May 11 report. Yet both are inverted, implying a market bet that inflation is temporary.To be sure, some of the usual correlations have broken down due to other pandemic-related worries. The Philippine peso, which usually moves in inverse with oil prices, is relatively stable given that inflation is damped by weak economic growth. That relationship underscores the central banking mantra these days that growth and employment should remain a greater focus than prices.Looking ahead, persistence in materials prices and further hints of wage gains could start to sway the Fed’s message -- and build momentum for investors to respond.“Recent record highs in metal prices are probably just the beginning,” Howie Lee, an economist at Oversea-Chinese Banking Corp., said in a May 11 report. Chinese demand and green-economy investment should keep iron ore and copper, especially, on the upswing, he said.(Updates currency data in fifth, sixth paragraphs and second chart.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Mobile payments company Square Inc. is looking to sell its first high-yield bonds in what would be one of the biggest debut junk deals to hit the market this year.Square, which is run by Twitter Chief Executive Officer Jack Dorsey, is offering $2 billion of notes to fund potential acquisitions, capital expenditures and other investments, according to people with the knowledge of the matter. Early pricing discussions are in the low-to-mid 3% range for the five-year portion, and for a yield in the high-3% to 4% range on the 10-year debt, according to the people, who asked not to be identified discussing a private transaction.A representative for Goldman Sachs Group Inc, which is managing the bond sale, declined to comment. A representative for the company didn’t immediately respond to requests for comment.About 50 companies have sold U.S. dollar debut junk deals in what has been a relentless year of first-time offerings, according to data compiled by Bloomberg. Among them have been speculative-grade borrowers that had only taken on loan financing before, seeking cheap borrowing costs amid a seemingly insatiable investor appetite for higher-yielding assets.Read more: Debut junk-bond issuers emerge from loan-only roots to refinanceSquare is the latest recognizable name to tap the market for the first time, and would be the second-largest of 2021 following Organon & Co.’s deal in April. Clog-maker Crocs Inc., and cloud-based sofware company Twilio Inc. made their debuts earlier this year, while others such as Hawaiian Airlines Inc. have been able to boost the size of offerings in a sign of hearty demand.The bond is rated two notches below investment grade by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings. Square had roughly $6 billion of cash on its balance sheet as of March, according to Moody’s, which assigned the company a stable outlook.Square’s first-quarter sales more than tripled after surging Bitcoin purchases helped the company collect a record amount in transaction fees. The recent rout in the cryptocurrency has dented the company’s shares, but Dorsey remains committed to the coin. He said earlier this month that Bitcoin changes everything “for the better” and that Square would forever work to improve it.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- U.S. stocks fell for the first time in three sessions and the dollar weakened as investors mulled risks to the economic outlook including inflation and a spike in Covid-19 cases in parts of the world.Technology and communication services led the benchmark S&P 500 into the red, while energy shares rose. Apple and Microsoft weighed on the tech-heavy Nasdaq 100. Semiconductor stocks continued to be under pressure, with the Philadelphia Semiconductor Index dropping as low as 10% from a peak in early April.“Investors should brace for further bouts of volatility, driven by inflation data along with other risks, such as setbacks in curbing the pandemic,” wrote UBS Global Wealth Management’s Chief Investment Officer Mark Haefele. “But we don’t see inflation concerns ending the rally in stocks, which we expect to be led by cyclical parts of the market as the global economic reopening broadens.”Oil edged up as rising optimism around a demand recovery in regions such as the U.S. offset Covid-19 flare-ups in parts of Asia.Bitcoin tumbled to as low as $42,133 before stabilizing after a volatile weekend that saw Tesla Inc. Chief Executive Elon Musk whipsaw prices with a series of tweets that touched on the energy usage of the cryptocurrency and whether he was selling. Coinbase Global Inc. fell to a record low and below the reference price used in its April direct listing. Gold climbed to the highest in more than three months.Federal Reserve Vice Chair Richard Clarida said during a webinar that weaker-than-expected April payroll report shows “we have not made substantial further progress” on the central bank’s goals for employment and inflation laid out as thresholds to begin scaling back the central bank’s massive monthly bond purchases.Concerns that policy makers may have to pull back support sooner than expected to quell rising inflation have weighed on global equities. Investors this week will parse the minutes from the Federal Open Market Committee’s latest meeting for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases.“Expect this volatility to continue as the market searches for direction,” said Mike Loukas, chief executive officer at TrueMark Investments. “The release of the Fed minutes on Wednesday will be interesting. With earnings season almost over, inflation will continue to hold center stage.”Elsewhere, the Stoxx Europe 600 Index edged lower and stocks in Asia were mixed.Click here for MLIV’s Question of the Day: How Far Can East-West Stocks Divergence Go?Here are some key events this week:Reserve Bank of Australia publishes minutes of its latest meeting TuesdayThe Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflationThese are some of the main moves in markets:StocksThe S&P 500 fell 0.3% as of 4 p.m. New York timeThe Nasdaq 100 fell 0.6%The Dow Jones Industrial Average fell 0.2%The MSCI World index was little changedCurrenciesThe Bloomberg Dollar Spot Index fell 0.2%, falling for the third straight day, the longest losing streak since May 10The euro rose 0.1% to $1.2158The British pound rose 0.3% to $1.4142The Japanese yen rose 0.2% to 109.17 per dollarBondsThe yield on 10-year Treasuries advanced one basis point to 1.64%Germany’s 10-year yield advanced one basis point to the highest in about two yearsBritain’s 10-year yield was little changed at 0.86%CommoditiesWest Texas Intermediate crude rose 1.5% to $66 a barrelGold futures rose 1.6%, the most since May 7More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Delving deeper into the global oil and gas outlook suggests that it's peak oil supply, not peak oil demand, that's likely to start dominating headlines as the years roll on
(Bloomberg) -- Global banks are losing share in the $186 billion lending market for Chinese borrowers offshore, falling behind local rivals boosting their presence just as the nation’s corporate sector recovers from the pandemic.Their portion of such lending has steadily dropped over the past decade, hitting 37% so far this year to May 17, well below the 11-year average of 51%, according to Bloomberg-compiled data. Last year the share fell to 29%, the lowest since at least 2010. Taking over the slack are local lenders led by Bank of China Ltd., which has made the most offshore loans in the country for at least the last three years.The increased prominence of Chinese banks in the offshore loan market reflects the growth in general of the lenders as the economy expands. Industrial & Commercial Bank of China Ltd. has seen its total assets more than double in the past decade to $5.1 trillion in 2020, making it the world’s largest bank by that measure, and the holdings of its big three state-owned rivals have also ballooned at a similar pace.For foreign banks, the increased competition from their Chinese rivals could lead to shrinking profit margins on deals, said Gary Ng, economist at Natixis SA in Hong Kong.Deals in China’s offshore loans, which are non-yuan debt clubbed or syndicated in Asia excluding China for the nation’s borrowers, have grown eightfold to $44.7 billion last year from $5.2 billion in 2010, Bloomberg-compiled data show. Bankers expect mergers and acquisitions to help drive such borrowings this year as the global economy recovers from the pandemic. The rebound in China is also likely to extend into the second quarter, according to Bloomberg economist Chang Shu.A look at the share of China offshore loans among the top global banks highlights their retreat. Standard Chartered Plc’s portion fell to 5% last year from 9% in 2010 while HSBC Holdings Plc dropped to 3% from 6% in the same period. Market leader Bank of China’s share climbed to about 8% from 2% in the period.Spokespeople at Standard Chartered and HSBC declined to comment. There was no immediate reply from Bank of China to an email seeking comment.Some international lenders are already reducing staff for the loans or exiting the market completely. Australia’s Westpac Banking Corp. said it aims to close its mainland China and Hong Kong branches next year, subject to local regulatory approval.“For a lot of international banks, the competitive pressure on margins and terms may not meet their returns hurdle, making it less appealing for them to participate,” according to Augusto King, co-head of Asia debt capital markets - loans and bonds at MUFG Securities Asia.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Neptune Energy Group Ltd., the oil and gas explorer backed by Carlyle Group Inc. and CVC Capital Partners, is working with financial adviser Rothschild & Co. to explore potential options including an initial public offering, according to people familiar with the matter.The company, formed in 2015, could be valued at more than $5 billion in a listing, the people said, asking not to be identified as the matter is private. It’s also studying alternative strategic options such as merging with another exploration firm, but no final decisions have been made and deliberations are at an early stage, they said.Neptune and Rothschild declined to comment. An IPO would be one of the largest listings of a pure-play oil and gas explorer and producer in several years. While investor appetite for such offerings has revived in 2021, energy firms in Europe are yet to raise significant capital from them. Wintershall Dea GmbH -- BASF SE’s oil and gas venture with billionaire Mikhail Fridman -- has said it plans to list, while another IPO candidate, Chrysaor Holdings Ltd., agreed to merge with Premier Oil Plc last year.Neptune was founded by former Centrica Plc boss Sam Laidlaw with backing from the private equity firms and sovereign wealth fund China Investment Corp. It has grown mostly through acquisitions, snapping up a swath of fields when it bought the exploration and production arm of Engie SA in 2017. It also purchased a 20% stake in the East Sepinggan area off Indonesia from Eni SpA. The company said previously that it expected to list in 2020 or 2021.Neptune is focused on the North Sea, North Africa and Southeast Asia. The company posted first-quarter underlying operating profit of $171.9 million, up 11% from a year earlier. It pumped 125,000 barrels of oil equivalent a day in the period, a figure it sees rising by about 30,000 barrels a day in 2021 following acquisitions in Germany and the U.K. and the expected startup of its Duva field in Norway later this year.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Berkshire Hathaway Inc has sold nearly all of its holdings in Wells Fargo & Co, as Warren Buffett abandoned a more than 31-year-old investment that had been among his most successful before the bank was felled by scandals for mistreating customers. In a regulatory filing on Monday, Berkshire said it owned just $26.4 million of shares in the fourth-largest U.S. bank as of March 31, down from around $32 billion in January 2018.Berkshire began investing in San Francisco-based Wells Fargo in 1989, and spent at least $12.7 billion on its shares, building a 10% stake.The bank's reputation was shattered by revelations that employees facing aggressive sales goals opened millions of unwanted accounts, charged unnecessary mortgage fees and forced drivers to buy car insurance they did not need.
(Bloomberg) -- Chilean copper mining is facing its biggest regulatory threat since the industry took off more than three decades ago.Triggered by the worst social unrest in a generation, Chile just elected an assembly that places the writing of a new constitution largely in the hands of the left wing, with the ruling coalition falling well short of the numbers needed to exercise veto powers. After the weekend vote, the nation’s stocks, bonds and currency tumbled, while copper futures rose.The makeup of the constitutional assembly leaves miners like BHP Group and Anglo American Plc vulnerable to tougher rules surrounding water, glaciers, mineral and community rights. The government’s crushing defeat may also add momentum to a bill that would create one of the heaviest tax burdens in global copper mining.“Looking at how the distribution of the assembly came out, it’s clear there will be a search for mechanisms to redistribute more mining profits to society, and there will be more environmental requirements regarding an industry that people sometimes think -- often in a simplistic way -- is very profitable and polluting,” said Alejandra Fernandez, metals and mining director at Fitch Ratings Inc.The new constitution may include language that tightens guidelines for mining concessions and their environmental impacts, Fernandez said. Talks probably will center around water becoming a national good for public use, which points to revised property rights and increased penalties for misuse, she said. Every year, the mining industry uses enough water to supply 75% of the country’s need, according to McKinsey & Co.Still, miners have already started working on their carbon footprints and community engagement. Government agency Cochilco projects the industry will meet more of its water requirements through desalination in coming years, and companies are switching to renewable power and starting to turn to green hydrogen as a way of replacing diesel.The potential legislative and regulatory changes come amid a metals rally that has spurred record earnings. For proponents of a bill to tax copper sales at rates as high as 75% when prices surpass $4 a pound, companies should be handing over more of the metal windfall to rectify Chile’s lingering economic and social imbalances.While bumper profits would take the edge off tighter regulations for producers, sky-high metal prices also help explain the increase in resource nationalism, especially coming at a time when the pandemic is exacerbating inequalities in developing nations.Despite social and political tensions, the potential for negotiation remains, according to Verisk Maplecroft analyst Mariano Machado. Different factions may seek modifications to the mining royalty bill in exchange for changing water rights, for example.“Nobody has enough credit to lead this process, but at the same time nobody has enough credit to block it,” Machado said. “Old-school politics and new politics have to keep forging a relationship.”The headwinds facing Chilean mines are also part of the bullish story for copper. The metal has doubled in value in the past year partly because of concerns that supply won’t be able to meet growing demand for the raw materials needed in the clean-energy transformation.Massive porphyry deposits and huge inflows of foreign investment since the country’s return to democracy have made Chile the world’s dominant supplier.But Chile’s ore quality has fallen steadily in recent years. That means more volume has to be mined, and more money invested, to produce the same amount of metal. State-owned Codelco, formed by nationalized U.S. mines in the 1970s, is spending tens of billions of dollars just to prevent its output from falling.To be sure, the constitutional process will last a year and foreign mining companies have stability agreements that protect them from tax changes through at least 2023. But while the debate lasts, they may be reluctant to pull the trigger on big new projects.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.