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The software company's holdings of Bitcoin are worth about 80% of its current market capitalization.
(Bloomberg) -- The U.K.’s fraud prosecutor opened a probe into Sanjeev Gupta’s GFG Alliance over suspicions of fraud and money laundering in the magnate’s vast industrial empire.The Serious Fraud Office is investigating “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business,” according to a statement. The probe includes the financing arrangements with Greensill Capital UK Ltd. The SFO has been looking at GFG since Greensill’s collapse in March and decided to open a formal probe, according to a person familiar with the investigation.Prosecutors are starting to round in on both Gupta and Greensill, after months of scrutiny from lawmakers and the media over its financing practices. Earlier this week, the U.K. Financial Conduct Authority said it was also investigating Greensill and cooperating with counterparts in other U.K. enforcement and regulatory agencies.It’s also working with German, Australian and Swiss authorities. The FCA and SFO probes are completely separate although inevitably will involve cross-over and information sharing, the person said.Read More: Lex Greensill Says His Investors Knew What They Were BuyingThe investigation comes at a time for Gupta when his fortunes looked to be on the turn in refinancing his businesses after the collapse of Greensill. The metals magnate had agreed terms to new loans for his U.K. steelmaking operations, as well as for one of his Australian units. At the same time, his metals businesses are benefiting from surging steel and aluminum prices.“GFG Alliance will co-operate fully with the investigation,” a GFG spokesperson said. Grant Thornton, Greensill’s administrators, declined to comment.While the SFO has collected billions in fines in recent years from companies with deferred prosecution settlements, its track record in the criminal courts is patchy. Last month a trial into two Serco Group Plc directors collapsed and the agency lost a mammoth case against Barclays Plc bankers in 2020.GFG has come under the microscope after the collapse of Greensill Capital in March revealed it had been a recipient of financing based on expected future invoices, for sales that were merely predicted.What has also come to light is the activities of the tycoon’s trading business Liberty House Group. Four banks stopped working with the company, starting in 2016, after they became concerned about what they perceived to be problems in paperwork provided by Liberty, Bloomberg News reported.Read More: As Gupta Rose From Trader to Tycoon, Several Banks Backed AwayGreensill was Gupta’s largest source of financing before its collapse. The London-based lender supplied billions of dollars in loans to GFG, many of which were packaged and sold onto investors in funds run by Credit Suisse Group AG. Greensill fell into administration after a key insurance partner didn’t renew coverage on loans made to some of its customers, including GFG.Much of the financing extended to GFG by Greensill was from the finance firm’s German banking unit. Germany’s financial watchdog shuttered Bremen-based Greensill Bank AG and asked law enforcement officials to investigate accounting irregularities at the lender in March. The bank was closed after the lender identified problems in how Greensill Bank booked assets tied to Gupta’s companies.The announcement of the probe came a day after former Prime Minister David Cameron was grilled by lawmakers over his employment by Greensill. He defended his intensive lobbying on behalf of the firm as part of a parliamentary inquiry that’s raised questions over private dealings at the top of the British government.(Updates with table after fourth 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.
Traders have been placing more bearish bets on equity derivatives in recent days, data showed on Wednesday, indicating less confidence in U.S. stocks rebounding from a sharp sell-off which has particularly hit high-flying tech names. Investors' tendency to look past minor wobbles in stocks as the S&P 500 rallied about 90% over the past year or so has been a key feature of the equity market since it rebounded from March 2020 pandemic lows and has helped make market pullbacks shallow and brief. The S&P 500 Index was down 1.7%, while the Nasdaq Composite was 2.3% lower.
(Bloomberg) -- Ant Group Co.’s profit rose to $3.4 billion in the December quarter after Chinese regulators thwarted its record initial public offering and told it to scale back its sprawling business.Billionaire Jack Ma’s fintech giant contributed nearly 7.2 billion yuan to Alibaba Group Holding Ltd.’s earnings, a company filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to 21.8 billion yuan ($3.4 billion) in profit, up 50% from 14.5 billion yuan in the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.The tally underscores the earnings powers Ant boasted before authorities demanded China’s largest fintech company fold its financial business into a holding company, curtailing its growth prospects. Regulators have issued a battery of proposals that threaten to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.While Chairman Eric Jing has promised staff that the company will eventually go public, it’s likely to be worth much less than before the crackdown that saw the IPO halted in November. Fidelity Investments halved its valuation estimate for Ant to about $144 billion in February, compared with $295 billion assigned in August.Ant isn’t alone in facing the clampdown. The government imposed wide-ranging restrictions on the financial divisions of 13 companies including Tencent Holdings Ltd. and ByteDance Ltd. Units of JD.com Inc., Meituan and Didi Chuxing were also among companies summoned to a meeting where regulators handed out stricter compliance requirements in April.The company’s affiliate Alibaba reported its first loss in nine years, vowing to hike spending for expansion next year in technology and community commerce.(Updates with Alibaba profit details in last 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.
(Bloomberg) -- Rates traders are boosting bets that the Federal Reserve may be forced to hike interest rates next year, much earlier than policy makers have indicated, after blowout U.S. consumer-price data Wednesday intensified the debate about how hot inflation could run.Eurodollar futures contracts are pricing in more than 80% odds of a quarter-point rate increase by the end of 2022, up from a two-in-three chance at the start of the week. That’s roughly a full year earlier than policy makers have signaled and comes amid growing calls from the likes of former New York Fed President William Dudley, who says the central bank not only needs to raise rates, but should likely do so by much more than investors expect.Treasury yields and market-based expectations also popped higher after the month-over-month inflation reading was the highest since 2009, but the relatively contained magnitude of these moves suggested traders were not yet envisioning runaway inflation for the near term. Breakeven rates up to five years subsequently fell off their New York session highs, while eurodollar futures volumes were back to levels seen at the start of last week.“Inflation fears are not unfounded,” said Shahid Ladha, head of Group-of-10 rates strategy for the Americas at BNP Paribas SA. “Inflation and breakevens should continue to rise. However, in the second half of year, the rate of price gains could trend lower.”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.
Oil prices rose to an eightweek high on Wednesday as U.S. crude exports plunged and on signs of a speedy economic recovery and upbeat forecasts for energy demand.
(Bloomberg) -- A crack in a bridge over the Mississippi River has stranded more than 700 barges, cutting off the biggest route for U.S. agricultural exports when the critical waterway is at its busiest.The route is shut near Memphis while the Tennessee Department of Transportation inspects a large crack in a highway bridge spanning the river, according to the U.S. Coast Guard. A queue has expanded to 47 vessels and 771 barges, with 430 of those heading north and the rest going south, Petty Officer Carlos Galarza of the Coast Guard’s 8th District said Thursday afternoon by email.The Mississippi River is the main artery for U.S. crop exports, with covered barges full of grain and soy floating to terminals along the Gulf of Mexico, while crude oil as well as imported steel also travel through sections of the waterway. Any sustained outage would disrupt shipments out of the Gulf. Corn futures tumbled by the most allowed under CME Group rules partly on speculation that exports would back up.“The river is the jugular for the export market in the Midwest for both corn and beans,” said Colin Hulse, a senior risk management consultant at StoneX in Kansas City. “The length of the blockage is important. If they cannot quickly get movement, then it is a big deal. If it slows or restricts movement for a longer period it can be a big deal as well.”The stoppage along the Mississippi River is the latest calamity to upend the commodities world in recent weeks. Back in March, the Suez Canal was blocked by a giant container ship that got stuck sideways in the vital waterway for almost a week, paralyzing global shipping. And late last week, a cyberattack brought down the largest fuel pipeline in the U.S. for five days, leading to widespread gasoline shortages from Florida to Virginia.A lengthy halt on the Mississippi River could further roil crop markets, where soybeans and corn futures have hit multiyear highs amid adverse weather in Latin America and a buying spree from China. Corn futures fell Thursday by the exchange limit of 40 cents, or 5.6%, to $6.7475 a bushel in Chicago.As a workaround, traders could in theory also send some supplies on trains and divert to ports along the U.S. Pacific Northwest. Few grain and soy buyers were bidding for barges north of the river closure amid uncertainty on when vessel traffic would resume.The crack halting vehicle and waterway traffic is in the truss of the Interstate 40 Hernando DeSoto Bridge, which was found during a routine inspection, according to a Tuesday statement from the Tennessee Department of Transportation.“The timeline is still undetermined” for the waterway reopening, department spokeswoman Nichole Lawrence said Thursday morning by email.The Army Corp of Engineers could figure out a way to keep automotive traffic closed in order for water traffic to resume under the bridge, according to CRU Group analyst Josh Spoores. It may cause bottlenecks, but most consumers already used to waiting months for supplies to ship are probably fine with some added delays, he said.The New Orleans Port Region moved 47% of waterborne agricultural exports in 2017, according to the U.S. Department of Agriculture. The majority of these exports were bulk grains and bulk grain products, such as corn, soybeans, animal feed and rice. The region also supports a significant amount of edible oil exports, such as soybean and corn oils and even attracted 13% of U.S. waterborne frozen poultry exports in 2017.Some traders speculated that, based on past experience, the river might be partially opened for restricted movements while repairs are being done.“My sense is that it is not a big deal for river traffic as it will be a short-term disruption,” said Stephen Nicholson, a senior analyst for grains and oilseeds at Rabobank. “The good news is most of fertilizer has already come up river and soybean exports are at their low point. However, corn exports continue at a strong pace, so we may see a slight delay in corn barges reaching” New Orleans.It may be difficult for exporters to shift much volume to rail, as the capacity to unload trains outside of the New Orleans area is limited, according to Curt Strubhar, vice chairman and risk management consultant at Advance Trading Inc.“There aren’t many rail unloaders South of the issue,” he said, adding that New Orleans “port elevators aren’t equipped to handle a sharply higher share of rail unloads either.”Of agricultural supplies that floated on barges north of Memphis, about 84% was corn and about 13% was soybeans, according to Mike Steenhoek, executive director of the Soy Transportation Coalition, citing USDA data. Overall shipments of corn and soy during the week ended May 8 were 18% higher than a year ago.Agricultural co-operative Growmark’s St. Louis port, which sends corn and soybeans south to New Orleans for export mostly to China and receives fertilizers, will likely close Friday, according to Matt Lurkins, executive director of the firm’s grain division.“Freight was already tight,” Lurkins said in a phone interview. “Then this kind of sent us over the edge.”If the pause drags on, he said, Growmark could send more grain to processors rather than loading it on barges for export.Small volumes of crude and partly refined oil are shipped by barge on the river as well. In February, 2.85 million barrels moved from the Midwest to the Gulf Coast via barge and tanker, according to government data.Imported steel on barges will be delayed as long as traffic is halted. About 25% of imported steel travels through at least a section of the Mississippi River, according to Wood Mackenzie analyst Cicero Machado, though he said newly arriving foreign steel to ports in New Orleans or Mobile, Alabama can be diverted onto rail cars or trucks.The river also is a major artery for steel shipments within the U.S. and delays could become an issue for automakers in the South that depend on high-strength steels produced in the Midwest, he said.“At this stage the big question is: is this going to last?” Machado said. “The issue is not actually in the river, it’s in a bridge over the river -- so perhaps they’re going to find a way to manage the traffic there.”(Adds Coast Guard update in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
USA TODAY answers the most asked questions regarding the Colonial Pipeline cyber attack and what states are struggling to keep gas stations stocked.
The Tesla CEO sent the price of Bitcoin and other cryptocurrencies plummeting. But he may be aiming to turn crypto-mining green in ways that benefit Tesla.
The Walt Disney Co. blew away earnings expectations with a Thursday report, but shares still fell in late trading as the pandemic-fueled growth of its streaming services slowed down.
The Hungarian forint firmed to a three-month high against the euro on Friday, boosted by high short-term interest rates, while other central and eastern European currencies and stocks were mixed. "The forint is firming because the high CPI data fuels rate hike expectations," a Budapest-based trader said. "Also, short-term rates in Hungary are the highest in the region and that gives the forint an advantage among its peers."
The IRS sent out COVID-19 relief checks to nearly 1 million more Americans in the ninth batch of payments made under Biden's American Rescue Plan.
Elon Musk's tweets aside, bitcoin remains vulnerable to rising odds of a Fed Reserve rate hike.
Now that the IRS knows what you earned last year, you may be eligible for more support.
(Bloomberg) -- Investors aren’t yet abandoning the view that inflation pressures will pass, even after the sticker-shock of the U.S. consumer prices report sent tremors across a broad range of assets.Market gauges of inflation expectations pulled back from initial spikes following the data, which showed the biggest monthly increase in core CPI since 1982. U.S. Treasury long-end yields have pulled back well shy of their year-to-date peaks. And U.S. equity indexes snapped three straight days of losses Thursday.This moderation in market moves should reassure policy makers, who maintain that the acceleration in prices is temporary, due largely to supply bottlenecks as producers struggle to catch up with rebounding demand after the pandemic forced so much global activity to shut down.“It is not a question of whether inflation will normalize but when,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. “The pre-pandemic secular trends like globalization, technological efficiencies, demographics should push inflation lower, but how long these distortions continue to push inflation higher is unclear.”Getting their call right on inflation is make or break for investors. Rising costs of living erode the value of their already low-yielding assets over time, and could force central banks to raise interest rates sooner than they’ve led markets to believe.The run-up in prices of real assets, from commodities to housing, highlights the need to have sturdy inflation hedges in place, according to Thomas Poullaouec, head of multi-asset solutions for the Asia-Pacific region at T. Rowe Price.“What they’re telling us is that there are different signs to suggest that higher inflation for longer than the market is pricing is a risk, and we definitely shouldn’t underestimate it,” he said.Poullaouec this year shifted to favor value stocks -- such as financials, industrials and materials and some consumer-related sectors -- over growth assets for the first time in a decade. He sees the economic recovery spurring this rotation, which he says is only half-complete.In fixed income, he is leaning into short-term inflation-linked bonds and bank loans, or even cash, to steer clear of the sort of long-dated, low-yield assets that are most vulnerable to higher borrowing costs.Longer-term measures still don’t suggest price pressures getting out of hand. The rate on the five-year, five-year forward swap contract for CPI is still around 2.5%. Adjusted for the typical gap between CPI and the Fed’s preferred measure -- personal consumption expenditures -- that means longer-run inflation is seen running only modestly above the 2% target despite April’s extraordinary surge in price gains.Even the bearish spike in equities bets -- reflected in the Cboe put-to-call ratio that tracks the volume of options tied to everything from single stocks to indexes -- may be a contrarian signal, according to Chris Murphy, co-head of derivatives strategy at Susquehanna International Group.It was likely affected by a dropoff in call purchases among retail traders, he said, noting that the S&P 500 has posted a median two-week return of around 3% following the 10 highest put-call readings over the past 12 years.Credit Traders Bet on Central Banks Keeping Nerve Amid InflationYet rates markets aren’t ignoring inflation risks, which is underscored by the past month’s rise in breakeven rates, a market gauge of the inflation outlook derived from Treasury yields. The five-year rate, which is more influenced by the recent rebound in commodity prices, touched its highest level since 2005 before paring the move.There are some lingering doubts that the Fed will be as tolerant of rising inflation as it has promised.Eurodollars contracts are priced for roughly one 25-basis-point rate hike by the end of next year, and at least three by the end of 2023. The central bank’s latest guidance, from March, suggests policy makers see no increases over that whole period.(Updates prices throughout. An earlier version of this story corrected the job title in the sixth 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.
Shares of Plug Power Inc. surged Friday, after they hydrogen and fuel cell systems company completed its restatement, removing a "shroud of uncertainty" that has been weighing heavily on the stock the past couple months.
(Bloomberg) -- Stock sales are reaping a windfall for the world’s richest shareholders.Corporate insiders including Amazon.com’s Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month long bull market that’s helped boost fortunes to the tune of trillions.U.S. public company insiders offloaded shares worth $24.4 billion this year through the first week of May, with about half sold through trading plans, according to data compiled by Bloomberg. That’s almost as much as the $30 billion total they disposed of in the second half of 2020.Large shareholders frequently sell stock in planned intervals, often through pre-arranged trading programs. Yet the prolonged rally in equities markets has made the value of these disposals, whether planned or opportunistic, strikingly high.There are multiple reasons an investor of any size might be motivated to sell. After the pandemic-defying rally, valuations are increasingly under pressure from rising inflation. Investors are wary the post-Covid recovery could prompt tightening measures from the Federal Reserve. And President Joe Biden’s proposed tax hikes -- including a near doubling of the capital gains rate -- have created uncertainty.Bezos, EllisonWhatever the reason, the sales are flooding the market with yet more liquidity, the consequences of which will ripple through philanthropy, the art market, real estate and other niches.Bezos has sold $6.7 billion worth of Amazon shares this year. While a relative pittance for the world’s richest person, it’s more than two-thirds the value of shares he sold in 2020. Larry Ellison unloaded 7 million Oracle shares in the past week for total proceeds of $552.3 million.Brin, who has signaled that he intends to sell as many as 250,000 Alphabet Inc. shares, has disposed of $163 million worth of stock in recent days, his first sales in more than four years, filings show.Mark Zuckerberg and his charitable foundation, the Chan Zuckerberg Initiative, meanwhile, accelerated their sales of Facebook stock in the fall. Zuckerberg or his charity has divested shares at a near-daily clip since November, for a cumulative total exceeding $1.87 billion.The surging markets have exacerbated the concentration risk of the single-stock-dominated fortunes typical of many tech billionaires, said Thorne Perkin, president of Papamarkou Wellner Asset Management.“From a portfolio-management perspective, it makes sense to spread it around,” he said.Covid EconomyAlso among the biggest sellers are some noteworthy beneficiaries of the Covid economy. Zoom Video Communications founder Eric Yuan and used-car retailer Carvana Co.’s Ernest Garcia II have together received more than $1.75 billion from stock sales since March 2020, according to the Bloomberg Billionaires Index. George Kurtz, chief executive officer of cybersecurity firm CrowdStrike, has sold shares worth at least $250 million over that period.Zoom founder Yuan -- the poster child, in many ways, for the coronavirus economy -- has stepped up his sales this year as the firm’s share price slumped. In 2020, he typically offloaded about 140,000 shares a month through a trading plan, which generated more than $350 million over the course of the year.Since March, he’s sold almost 200,000 shares a month on average, yielding him about $185 million. He also donated more than a third of his stake in the San Jose-based company as part of “typical estate planning practices,” according to a spokesman. Some of the cash from his share sales fund donations to unspecified “humanitarian causes.”(Updates sales figure in 12th 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.
The company that operates America's biggest fuel pipeline has reportedly paid a ransom of nearly $5m (£3.5m) to hackers who shut down the facility last week triggering fuel shortages and price hikes across the East Coast. Colonial Pipeline paid the extortion fee on Friday, Bloomberg reported, despite reports that it had no plans to do so and concerns that paying a ransom simply encourages hackers. The pipeline is not yet back at full force following the cyberattack on Friday, when the criminal gang Darkside locked computers controlling the pipeline. The pipes transport 2.5m barrels a day of diesel, petrol and jet fuel across 5,500 miles of pipelines linking refiners on the Gulf Coast to the eastern and southern US. The shutdown triggered fuel shortages from Virginia to Florida and panic buying, with the national US gasoline price rising above $3 a gallon and jumping as much as 11 cents in a day in some areas.
The Japanese tech investor smashed profit records in its home country, capping a wild year in which it rode roller-coaster stock markets from the lows at the beginning of the pandemic to recent highs.
(Bloomberg) -- Asian stocks slumped Thursday, with the regional benchmark entering a technical correction, as mounting worries over inflation and a resurgence in Covid-19 cases soured investor sentiment.The MSCI Asia Pacific Index slumped 1.8%, taking its loss from a Feb. 17 peak to more than 10% and wiping out its gain for the year. Asian equities tracked losses in American shares after data on Wednesday showed U.S. consumer prices climbed in April by the most since 2009.“We need to kind of price in a more normal interest-rate environment, more normal inflation environment,” said Ken Peng, head of Asia investment strategy at Citigroup Inc.’s private-banking arm. “The shake up could last a while longer. But I’m still not too worried because growth will come back to be the most important element once interest rates normalize.”The selloff in Asia is part of this week’s rout in global equities as an explosive rally in commodity prices threatens to push up inflation. The region is also battling a fresh surge in coronavirus infections in several countries including India, Japan and parts of Southeast Asia, with slow vaccine rollouts and delays in reopening borders compounding concerns for equity investors.Tech stocks, which have been at the forefront of the recent slump, were the biggest drag on the Asian gauge Thursday. While the sector globally is having to contend with higher U.S. bond yields and stretched valuations, sentiment in Asia has also been hurt by regulatory tightening in China.Global LaggardSeasonality also seems to be playing a role. May has historically been the worst month for the MSCI Asia Pacific Index, with the benchmark averaging a 2% decline over the past 10 years, according to data compiled by Bloomberg. It is already down 4.1% so far this month.As a result, regional stocks are sharply underperforming their peers in the U.S. and Europe in 2021 after leading global equity gains last year. While the Asian benchmark is now down 1% year-to-date, the S&P 500 Index and the Stoxx 600 Index are both up more than 9%.“I suppose there’s the worry now we’ve hit something of a short-term peak for equity valuations in Asia,” said Kyle Rodda, an analyst at IG Markets Ltd. in Melbourne.There are a few headwinds sapping the appeal for Asian equities, he said. “Fed tightening is obviously a pressing concern right now -- being, technically speaking, quite EM sensitive, tighter financial conditions globally are a worry. Also, there’s the creeping concern that China’s economy is plateauing, meaning growth in the region is practically discounted.”Chinese shares snapped a two-day winning run on Thursday while stocks in Japan declined for a third day. Markets in Singapore, India, Indonesia, Malaysia and the Philippines were shut for a holiday.In Taiwan, the benchmark stock index extended losses after slumping the most since March last year on Wednesday partly due to concern over tightening of virus-linked restrictions.READ: Taiwan’s Stock Crash Deepens as Traders Unwind Leveraged BetsRecent fund flows suggest interest from global investors in Asian stocks is also lagging that in other regions. Since the beginning of the second quarter, more than $36 billion has flowed into North American and European equity funds compared with just $2 billion into Asian ones, according to a May 7 report from EPFR.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.
Need more relief? The White House says that's up to Speaker Pelosi and company.