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(Bloomberg) -- It’s the curse of a strengthening economy. With bond yields rising, chasing recent winners in the stock market has morphed from a slam-dunk strategy to a historically painful one.High-flyers from Tesla Inc. to Zillow Group Inc. and Chewy Inc. tumbled this week as the spike in rates put pressure on richly valued companies. Along with cannabis plays and solar stocks, these poster children for market froth are enduring losses that exceed 20% from recent highs, meeting one definition of a bear market.Thrust to the top have been oil producers and banks, laggards during last year’s lockdown that are coming back to life on hopes of an economic recovery. While winners and losers have to some degree offset each other, limiting damage in the broad bull market that has its one-year anniversary approaching, the violent rotation speaks to the agony of faulty stock picking, which right now means standing in the way of the reflation trade.“There’s probably more investors that still need to make that rotation,” said Tony Bedikian, head of global markets at Citizens Bank. “We’ve had such a strong run-up in many of these tech sectors. As the economy reopens and somewhat normalizes, that rotation will continue.”Down another 11% this week, shares of Tesla have lost almost one third of their market value since peaking in January. Star manager Cathie Wood’s Ark Innovation ETF, which counts Tesla as its top holding, shed 10% over past five days, wiping out all its 2021 gains that at one point swelled to 26%.Zillow, whose growing popularity in the online home listing market earned the company record profits during the fourth quarter, dropped 16% for its worst week since last April. Chewy, an online pet retailer whose shares tripled last year, slumped 18%, the biggest weekly decline on record.As oil rebounded, clean energy lost favor. An ETF tracking solar stocks suffered its worst week in a year, falling 14%.The pain from the reversal of fate is demonstrated by a Dow Jones market-neutral index that buys the past year’s winning stocks while selling losers at the same time. Down four weeks in a row, the momentum gauge has extended its decline from its August peak to 29%, the largest continual drawdown since 2009.At the center of the unwind are software and internet stocks, many of them newly minted companies whose role in stay-at-home commerce made them the only businesses generating earnings growth last year. Now, as profits are roaring back for everyone from automakers to banks, the allure of the safety trade is losing some luster. The tech-heavy Nasdaq 100, which surged 48% in 2020, this week briefly fell into a correction of 10%.“Clearly, with the emergence of real post-pandemic economic growth, investors are re-allocating capital,” said Andrew Ross, a managing member of Confluence Global Capital. “It’s totally reasonable that as the economy reopens, interest rates will rise further and that growth stock multiples will contract further. They are kind of toxic -- they became bond proxies.”Thanks to gains from energy and financial shares, the S&P 500 fared better. Up for the first week in three, the benchmark has avoided a 5% pullback from a peak for four months. The Dow Jones Industrial Average performed the best, adding almost 2% over five days.A key driver of stock performance is valuation. The more expensive a stock is, the worse it’s doing. Going by price-sales ratios, the top quintile of Russell 3000 shares dropped 5.1% on average over the week, compared with a gain of 3.6% for the cheapest cohort, data compiled by Bloomberg shows.“Pick whatever your prototypical momentum stock is -- the long-term earnings picture hasn’t changed in the last few weeks. What’s changed is the 10-year” yield, said John Porter, head of equities at Mellon Investments. “Those higher-growth, long-duration assets are the ones most sensitive to changes in interest rates.”To Anastasia Amoroso, global investment strategist at JPMorgan Private Bank, while the selloff in these darling stocks may feel unpleasant, it’s a healthy process for the market to squeeze out excesses.“Parts of the market like some tech names, as much as we like these, we have to admit there were some exuberance in those sectors,” she said in an interview on Bloomberg Television. “Those are some of the sectors we like the most but it was really hard to add to the sectors when we were looking at some of those eye-popping multiples.”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) -- Elon Musk set records last year for one of the fastest streaks of wealth accumulation in history. The reversal is underway, and it’s steep.The Tesla Inc. chief executive officer lost $27 billion since Monday as shares of the automaker tumbled in the selloff of tech stocks. His $156.9 billion net worth still places him No. 2 on the Bloomberg Billionaires Index, but he’s now almost $20 billion behind Jeff Bezos, who he topped just last week as world’s richest person.Musk’s tumble only underscores the hard-to-fathom velocity of his ascent. Tesla shares soared 743% in 2020, boosting the value of his stake and unlocking billions of dollars in options through his historic “moonshot” compensation package.His gains accelerated into the new year. In January, he unseated Bezos as the world’s richest person. Musk’s fortune peaked later that month at $210 billion, according to the index, a ranking of the world’s 500 wealthiest people.Consistent quarterly profits, the election of President Joe Biden with his embrace of clean technologies and enthusiasm from retail investors fueled the company’s rise, but for some, its swelling valuation was emblematic of an unsustainable frothiness in tech. The Nasdaq 100 Index fell for the third straight week on Friday, its longest streak of declines since September.Bitcoin InvestmentMusk’s fortune hasn’t been solely subject to the forces buffeting the tech industry. His net worth has risen and slumped recently in tandem with the price of Bitcoin. Tesla disclosed last month it had added $1.5 billion of the cryptocurrency to its balance sheet. Musk’s fortune took a $15 billion hit two weeks later after he mused on twitter that the prices of Bitcoin and other cryptocurrencies “do seem high.”Extreme volatility has roiled many of the world’s biggest fortunes this year. Asia’s once-richest person, Chinese bottled-water tycoon Zhong Shanshan, relinquished the title to Indian billionaire Mukesh Ambani last month after losing more than $22 billion in a matter of days.Read more: Ambani Again Richest Asian as China’s Zhong Down $22 BillionQuicken Loans Inc. Chairman Dan Gilbert’s net worth surged by $25 billion on Monday after his mortgage lender Rocket Cos. was said to be the next target of Reddit day traders. His fortune has since fallen by almost $24 billion. Alphabet Inc. co-founders Sergey Brin and Larry Page are among the biggest gainers on the index this year. They’ve each added more than $13 billion to their fortunes since Jan. 1.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.
Gold fell to its lowest in nine months on Friday after better-than-expected U.S. employment data bolstered the dollar and U.S. Treasury yields, putting bullion on course for its third straight weekly decline. Spot gold was down 0.1% at $1,695.22 by 11:50 a.m. ET (1650 GMT), after falling to its lowest since June 8 at $1,686.40 in the session. "This optimism in regards to the economy moving forward continues to drive bond yields higher and that certainly has been taking the wind out of the sails of many commodity markets, including gold," said David Meger, director of metals trading at High Ridge Futures.
The rollercoster ride in bitcoin since the start of the year has not dampened wealth manager Jim Paulsen's enthusiasm for the cryptocurrency. Yet Paulsen, chief investment officer for Leuthold Group, which manages $1 billion, cannot own bitcoin in client portfolios due to regulatory constraints. The promise of an asset class that behaves differently than stocks or bonds is leaving portfolio and wealth managers scrambling own cryptocurrencies if they can.
U.S. stocks slumped in volatile trading on Friday with the tech-heavy Nasdaq heading for its worst week since March 2020, as fears over rising borrowing costs offset optimism about a strong economic rebound following blowout monthly jobs report. The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626% after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters. "Investors are still trying to figure what they want in a battle between continued easy fiscal policies or an actual economical recovery which would require higher rates and they haven't made that decision yet," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.
Stocks turned negative after the Labor Department's February jobs report handily exceeded expectations, reaffirming the building momentum in the economic recovery, but also stoking a rise in Treasury yields and concerns over an economic overheating.
Gold starts the session on the bearish side of the 50% to 61.8% retracement zone of last year’s trading range.
As U.S. technology shares stumble, investors are debating whether the decline is an opportunity to scoop up bargains or a sign of more pain to come for stocks that have led markets higher for years. The Nasdaq Composite, an index heavily populated by tech and growth names, has slumped 8.3% since its Feb 12 closing record, over three times the decline for the S&P 500. Drops in popular growth stocks have been even steeper, with Tesla shares off 27% and Peloton down 32%.
(Bloomberg) -- Oil rallied to the highest in nearly two years in New York after OPEC+ shocked markets with a decision to keep supply limited as the global economy starts to recover from a pandemic-driven slump.U.S. benchmark crude futures topped $66 a barrel on Friday, while its global counterpart Brent neared the key $70 level. The producer alliance’s supply curbs and the rollout of Covid-19 vaccines have aided a stellar rebound for crude from the depths of the coronavirus-related fallout. OPEC+’s surprise decision on Thursday to keep output steady in April boosted prices further and led to strength in the market’s structure. Major banks upgraded price forecasts, with some calls for oil reaching north of $100 next year.“In some ways, even more important than the lack of oil was the message that came with it: They’re not really worried about price, not worried about tightening,” said Paul Horsnell, head of commodities research at Standard Chartered Plc. “The door is wide open to prices beyond $70.”Crude has soared more than 30% so far this year with OPEC+’s output restraint holding the market over until a full-fledged comeback in consumption. The group’s latest decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported.“Overall, this was the most bullish outcome we could have expected,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients.Saudi Arabia’s bold and unexpected gamble to restrain production is founded upon its view that this time around higher prices will not lead to a big increase in output by American shale drillers. Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview after the meeting that shale companies were now more focused on dividends.Oil’s rebound this year stands to intensify the debate about a potential resurgence in inflation, and complicate the task facing the Federal Reserve as it supports the U.S. recovery. The Treasury market is already looking for signs of faster price gains, with yields rising rapidly. Meanwhile, U.S. employers added more jobs than forecast in February.See also: Here’s What Top Banks Are Saying About the Saudi-Led Oil ShockGoldman Sachs Group Inc. raised its Brent forecasts by $5 a barrel and now sees the global crude benchmark at $80 in the third quarter. JPMorgan increased its Brent projection by $2 to $3 a barrel and Australia & New Zealand Banking Group Ltd. boosted its three-month target to $70. Citigroup Inc. said crude could top $70 before the end of this month.Change CourseOil rising to these levels will likely increase strains within OPEC+ as some members will want to pump more to relieve under-pressure economies, Citi said in a note. Top importers such as China and India would also not be happy and the alliance is likely to change course at its next meeting, it said.The lack of fresh supply was reflected in oil’s futures curve. Brent’s prompt timespread widened to 68 cents in backwardation -- a bullish structure where near-dated prices are higher than later-dated ones -- from 54 cents Thursday. Gauges further along the oil futures curve also surged.A closely watched measure in the oil-options market -- West Texas Intermediate’s skew on the nearest contract -- turned positive Friday for the first time in more than a year, signaling traders are willing to pay more for protection against rising crude prices.“We’ve whittled down inventories and the daily supply is significantly lower than before this agreement started,” said Michael Hiley, head of over-the-counter energy trading at New York-based LPS Futures. “Saudi has done what they said they were going to do and kept supply off the market.”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) -- More than a third of Australian homeowners are planning to sell in the next five years, according to a report by Westpac Banking Corp., as they look to cash in on a booming market driven by low mortgage rates and an improving economy.The report showed 35% of households surveyed were considering selling, more than double the amount seen prior to the pandemic. More than one in ten were already in the process of putting their property on the market, or planning to do so in the next twelve months.“It is absolutely a seller’s market at the moment,” Matt Hassan, a senior economist at Westpac, said in a media release. “The research suggests the situation will rebalance in coming months as more sellers come onto the market, however demand is still expected to remain strong, driving a sustained lift in prices this year and next.”Australia’s housing market in February posted its biggest monthly price gain in 17 years, dispelling fears of a Covid-induced downturn. Economists think the gains can continue: Goldman Sachs Group Inc. said Friday that prices will rise 10% this year, fueled by low interest rates and improved sentiment, although the bank also noted there are risks ahead including a potentially more hawkish Reserve Bank.The Westpac report also pointed to lingering caution, with 51% of respondents saying they’re actively holding off from listing their property straight away, while 66% said high moving costs were a big barrier to selling.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.
A wave of electric vehicle related companies are flooding the public markets this year. This follows a slew of companies which went public last year.
A firm hired to monitor Texas' power markets says the region's grid manager overpriced electricity over two days during last month's energy crisis, resulting in $16 billion in overcharges.
(Bloomberg) -- Aggreko Plc, one of the world’s biggest suppliers of portable power generators, accepted a 2.3 billion-pound ($3.2 billion) bid from a private equity consortium.TDR Capital and I Squared Capital agreed to buy the business for 880 pence per share in cash, London-listed Aggreko said in a statement. The price represents a 39% premium to Aggreko’s closing price on Feb. 4, the day before their interest was first reported. The stock rose 1.8% to 905 pence shortly after the open of regular trading Friday.Aggreko offers rentals of power, heating and cooling equipment to clients in the energy, refining, construction and events industries. It has provided generators to the Glastonbury Festival, Britain’s marquee music event, as well as the 2018 Winter Olympic Games in South Korea.Bloomberg News reported Thursday that the private equity firms were nearing a firm offer for Aggreko following weeks of negotiations. Platinum Equity has also made a preliminary approach to Aggreko, though its interest was seen as less likely to translate into a deal, people with knowledge of the matter said.TDR and I Squared’s offer for Aggreko is in-line with expectations and unlikely to see competing bids, Andrew Nussey, a Peel Hunt analyst, wrote in a note. The acquisition is expected to be completed in the summer of this year.Bargain HuntingPrivate equity firms have been hunting for bargains among listed companies in the U.K. Blackstone Group Inc. and Global Infrastructure Partners teamed up last month on a deal to buy Signature Aviation Plc, an operator of private-jet bases, for $4.7 billion. Allied Universal Security Services LLC, which is backed by Warburg Pincus, has offered to take over British security firm G4S Plc for 3.8 billion pounds.TDR has been particularly active. It completed an acquisition last month of a controlling stake in Walmart’s U.K. grocery arm, Asda Group Ltd., together with Britain’s Issa brothers. In February, it approached Arrow Global Group Plc about a potential takeover bid valuing the London-listed alternative investment group at more than 540 million pounds.Morgan Stanley, Barclays Plc, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. are advising the private equity consortium. Aggreko is working with Centerview Partners, Citigroup Inc. and Jefferies Financial Group Inc.Barclays, Bank of America, Deutsche Bank, Goldman Sachs and Banco Santander SA are helping arrange debt to fund the transaction.(Updates with shares trading in the 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.
(Bloomberg) -- Saudi Arabia just made a high-stakes wager that the glory days of U.S. shale, which transformed the global energy map in the last decade, are never coming back.By keeping a tight grip on supply at Thursday’s meeting of the OPEC+ alliance of oil producers, Saudi Energy Minister Prince Abdulaziz bin Salman showed he’s focused on boosting prices -- and confident that this time around it won’t encourage American producers to surge back and steal market share.“‘Drill, baby, drill’ is gone for ever,” said Prince Abdulaziz, who’s orchestrated the revival of the oil market after last year’s catastrophic collapse.His swagger comes mixed with a good dose of diplomatic tension: Russia, Saudi Arabia’s most important OPEC+ partner, has tried to convince Riyadh for several months to increase output, fearing that rising oil prices would ultimately awaken rival shale producers. The Saudis are certain the American industry has reformed itself.If the prince is right, OPEC+ will be able to both push prices higher now and recover market share later without worrying that rivals in Texas, Oklahoma and North Dakota will flood the market. But if Riyadh has miscalculated -- and it’s got shale wrong before -- the danger will be lower prices and production down the line.The Saudis have so far convinced their allies the strategy will work. After a quick virtual meeting on Thursday, OPEC+ agreed to prolong its production cuts, defying expectations of an output hike. Russia, however, secured an exemption for itself and Kazakhstan, and will increase output marginally in April.Brent crude jumped 5% to a one-year high of almost $68 a barrel after the decision. Front-month futures extended gains on Friday and a raft of banks updated their price forecasts, including Goldman Sachs Group Inc., which increased its estimates by $5 -- to $75 next quarter and $80 in the following three months.“This is an incredibly bold move on the part of OPEC+ to extend the oil price rally,” said KPMG Global Energy Sector Leader Regina Mayor.If history is a guide, however, trouble may be brewing. The OPEC+ coalition, which groups Saudi Arabia, Russia and almost two dozen other oil producers, has in the past underestimated its American rivals, who year after year produced more than most expected. From a low point of less than 7 million barrels a day in 2007, the U.S.’s total petroleum output more than doubled to hit an all-time high of almost 18 million barrels a day by early 2020, forcing the cartel to cede market share.Risky Move“This is a risky take,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said Friday in a Bloomberg Television interview. While U.S. oil companies probably won’t raise output this year, in 2022 “there’s nothing really stopping them, especially the small and mid-cap producers.”Sen sees prices hitting $70 a barrel as soon as next week, $80 by the end of the year and a possible climb to $100 in 2022.For now, U.S. total oil output remains constrained, hovering at 16 million barrels due to the impact of last year’s slump, which briefly saw benchmark prices trade below zero.Under pressure from shareholders, shale producers have promised restraint, putting profits before the growth they relentlessly pursued during the boom years. Although drilling has risen from the lows of 2020, it’s well below previous levels. In addition, President Joe Biden is trying to temper the worst excesses of the industry, including the indiscriminate natural gas flaring that’s a byproduct of shale’s success.Under a different oil minister, Saudi Arabia attacked shale producers in 2014 and 2015, flooding the market and forcing prices lower -- a strategy that ultimately failed. Prince Abdulaziz is doing the opposite, because oil higher prices will eventually benefit shale producers. Yet, he’s convinced the industry won’t repeat its past excesses.“Shale companies are now more focused on dividends,” Prince Abdulaziz told Bloomberg News in an interview after the OPEC+ meeting, saying that the kingdom wished the American industry well. “We’ve never had any issue with shale oil. It’s the shale companies which are themselves changing. They have had their fair share of adventure and now they are listening to the call of their shareholders.”Shale executives agree with him -- at least for now.“A couple years ago it was ‘drill, baby, drill,’” John Hess, the head of Hess Corp., said in Houston earlier this week. “Now, it’s ‘show me the money.’”Ryan Lance, the chief executive officer of ConocoPhillips, echoed the sentiment: “I hope there’s discipline in the system. The worst thing that can happen right now is U.S. producers start growing rapidly again.”As the industry cuts spending to pay shareholders fatter dividends, there’s not much left to finance increased production. Even Big Oil is scaling down its ambitions in shale. Exxon Mobil Corp. had been running 55 oil rigs in the Permian basin that straddles West Texas and southeast New Mexico, part of an effort to boost output to 1 million barrels a day by 2025. After tightening its belt, the U.S. oil giant is running just 10 rigs, and has cut its 2025 output target by nearly a third to 700,000 barrels a day.Yet, there are also signs that higher oil prices may ultimately reactivate the U.S. shale industry. With benchmark West Texas Intermediate now changing hands above $60 a barrel, some companies believe they may be able to both grow and keep shareholders happy. EOG Resources Inc., the largest producer in the Permian, has announced a big spending increase for next year. And others are following suit.But the reaction of the stock market made Prince Abdulaziz’s case: investors punished EOG for spending more on drilling, marking down its shares relative to more disciplined rivals.(Updates with comments from Energy Aspects in 10th, 11th paragraphs.)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.
Federal Reserve Chair Jerome Powell disappointed some traders by offering few signs that the central bank might expand monetary stimulus.
(Bloomberg) -- Back in 2017, when Turkey’s economy was booming faster than China’s, Renaissance Capital’s Charles Robertson predicted that it would not end well. Less than a year later, the lira crashed under an overheating economy and ballooning debt.Now, Robertson expects a repeat of that cycle within the next two years.The rally in Turkish assets made the lira the best-performing currency since a shakeup at the central bank and finance ministry in November. The gains were backed by some investors betting that President Recep Tayyip Erdogan would allow the new team to pursue conventional monetary policy after several years of failed attempts to suppress inflation while keeping interest rates low. The lira halted three days of declines on Friday, climbing after central bank Governor Naci Agbal pledged policies to permanently tame price growth.Robertson, the London-based global chief economist at Renaissance, is not convinced. Here are some of his views from an interview on Wednesday:Boom-and-Bust Cycle“My current scenario is that we go back to another boom-and-bust cycle, with interest-rate cuts in the second half of this year leading to strong credit growth in 2022, just ahead of the presidential election in 2023, and then we get another crash.”Is This Time Different?“We have seen so many times that Erdogan was persuaded that he has to do something. Each time, the cost has become higher and the gains have become more short-lived. You look at interest rates globally today and look where Turkey is. Every other mainstream emerging market has interest rates below 5% now, except Turkey.“I don’t have high trust that Erdogan has learned his lesson. His comments just a week ago again suggests that, yes, he is being responsible for now, but as soon as he gets the chance and certainly ahead of the elections in 2023, you would expect Turkey to go on the credit-growth model again.”Facing Choices“Once again Turkey has got a choice. It still has a very cheap currency; it can go down an export-led model that will support its current account and bring in the dollars and euros that can be used for investment. I’d love to see the central bank be able to take inflation under control permanently through a long period of high interest rates and at the same time a cheap currency helping exports and helping re-balance Turkey’s economy away from consumption. That would be the better long term story for Turkey, but less exciting for growth. It is kind of a growth scenario of probably 3% or 4% a year, not 6% or 7% for a few years and then a crash.”Controlling Inflation“The markets will have to see the proof in sustained positive real interest rates over time. Right now, we don’t even have positive interest rates: the central-bank rate is roughly the same as inflation. The markets can accept that inflation is going to calm down thanks to the hikes we have seen. But what the central bank has to do is to keep real rates on a forward-looking base high, and the only way they can prove to the market that they are doing that is by doing it.”Shorter Cycles“I suspect that the boom and bust cycles have to be short now, like a year or two. They can’t do a five-year boom. Yes you can borrow for a bit but you blow up yourself pretty quickly. (In the past) banks had sufficient deposits to lend out, but now they don’t. If they want to lend, a great deal of money is borrowed from abroad, and that then starts to ramp up the external debt quickly and then markets get worried (and) the lira starts to come under pressure quite quickly.”Hawkish Talk“I don’t think there is anything they can do now. There is nothing verbal they can say, and actually hiking rates too much would be a mistake because it is not necessary for the economy. I think inflation is going to come down; it would be silly to hike rates more now. The best they can do is to show over years the model has changed.”Outlook for the Lira“My guess is that the lira is going to be around 7 per dollar by June because the central bank will continue to be responsible throughout the first half of 2021, and my assumption is that by December we’ll see pressure from Erdogan to cut rates. And we will be at the beginning of the market losing faith again in the central bank’s credibility.”Developing-World Models“Egypt is still paying really high real rates today because it has taken so long to prove to the market that Egypt is changing. It has been costly for Egypt, and it will be quite costly for Turkey to prove this too. Turkey has to provide to foreign and domestic investors a good positive real return on bonds at least for two to three years before the markets will believe the model has changed.”What to Buy“For bond investors, I think it has been a decent trade since November but you put your money there for a few months. It is a bit like riding Bitcoin; a few months in you make a decent return and you get out because you can’t have that much confidence in the longer term. I think the Turkish lira bonds are good value now, but I would be selling them perhaps first half of next year. The question I would have in the second half of this year: when do I sell?”To Be Sure“I’d love to be wrong, for the sake of the Turks and their savings and their relative standing in the world. Turkey has an opportunity to change. Turkey is a well-developed industrial economy with a good, educated work force. It could be a solid -- perhaps the best -- growth story in the European time zone for the next 10 years with the right policies.”(Updates with lira and central bank comments in third 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) -- Dip buyers drove a rebound in stocks after an earlier bout of selling pushed the Nasdaq 100 down 10% from a record.All major groups in the S&P 500 advanced, while the tech-heavy gauge climbed more than 1.5% as giants Amazon.com Inc. and Apple Inc. erased their losses. Robinhood Markets Inc., the trading platform behind the boom-and-bust swing in GameStop Corp.’s shares, has chosen the Nasdaq for its eventual initial public offering, according to a news report. Earlier Friday, equities retreated as U.S. jobs data topped estimates, fueling anxiety the economy could run too hot and kick up inflation. Benchmark 10-year yields stabilized after hitting 1.6%.Friday’s turnaround in financial markets wiped out the S&P 500’s drop for the week. The intense volatility of the past few days was a test to stock bulls who see the recent spike in Treasury yields as an indication of brighter prospects for the economy and corporate profits. While concern over equity valuations have emerged, several analysts say that as long as data continue to improve, any selloff would present dip-buying opportunities.“Many investors are going to be buying these dips here, capital continues to be pouring into equities,” said Tony Bedikian, head of global markets at Citizens Bank. Bond yields are still “incredibly low, so equity yields are still very attractive to investors,” he added.U.S. Treasury yields have been rising because of a much stronger economic outlook and are not a cause for worry -- or a call to policy action -- said Federal Reserve Bank of St. Louis President James Bullard. His remarks follow Chairman Jerome Powell’s Thursday caution that rising yields had caught his eye and he would be “concerned by disorderly conditions in markets or persistent tightening in financial conditions.”“As a central banker I am always concerned if there is disorderly trading or something that looks panicky,” Bullard said Friday in an interview with Wharton Business Radio. “That would catch my attention. But I think we are not at that point.”These are some of the main moves in markets:StocksThe S&P 500 rose 1.9% at 4 p.m. New York time.The Stoxx Europe 600 Index slid 0.8%.The MSCI Asia Pacific Index fell 0.6%.The MSCI Emerging Market Index decreased 0.6%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.4%.The euro dipped 0.4% to $1.1917.The Japanese yen depreciated 0.4% to 108.36 per dollar.BondsThe yield on 10-year Treasuries rose less than one basis point to 1.57%.Germany’s 10-year yield climbed one basis point to -0.30%.Britain’s 10-year yield increased three basis points to 0.756%.CommoditiesWest Texas Intermediate crude climbed 3.9% to $66.29 a barrel.Gold rose 0.1% to $1,698.65 an ounce.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.
Contractors, freelancers, and sole proprietors in the US can now access considerably larger loans from the Paycheck Protection Program (PPP), following a new rule issued by the Small Business Administration (SBA) on Wednesday. The rule allows entrepreneurs without employees to calculate their loan eligibility using gross income rather than net income, making the loans far more generous, especially for businesses with little or no profit.
It's full steam ahead for Kanye West's apparel line at Gap.
Warren Buffett and Cathie Wood are polar opposites when it comes to investing. The former is a stock-picking legend with a history of skepticism of hyped-up technology concerns, while the latter seemingly can’t get enough of them. Each have cult followings—Buffett’s flock to see him at the company’s annual meeting, while Wood’s show their adoration on Twitter and TikTok.