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Infographic: Permanent Changes in Behavior and Expectations Beyond COVID-19 Vaccine Rollout
Curbside Pickup Shines as the “Most Helpful New Thing,” While Over 64% Of People Planning on getting the Vaccine Will Eliminate Travel Through the End of the Year
9h ago
Yahoo Finance
Medical school graduate sees nearly all of his $440,000 in student loans discharged
A medical graduate who had about $440,000 in student debt saw 98% of his loans cancelled by a bankruptcy court in California, according to a recent filing.
1d ago
Reuters
Brazil regulator approves 5G spectrum auction rules, no Huawei ban
Brazil's telecoms regulator Anatel has approved rules for a spectrum auction for fifth-generation networks this year without any curbs on China's Huawei Technologies Co as an equipment supplier. Telecom companies will also be required to build stand-alone networks with the latest versions of 5G technology to be operating in state capital cities by July 30 next year, which will involve heavier investments that they had wanted. Right-wing Brazilian President Jair Bolsonaro last year criticized the Chinese company and was under pressure from the Trump Administration to ban Huawei from the country's fifth-generation technology market on security concerns.
23h ago
Bloomberg
China Trucking Startup Files Confidentially for U.S. IPO
(Bloomberg) -- China’s Uber-like startup Full Truck Alliance has confidentially filed for an initial public offering that could raise at least $1 billion as soon as this year, according to people familiar with the matter.The startup backed by Tencent Holdings Ltd. handed in its IPO filing in the U.S. recently, the people said, requesting not to be named because the matter is private. Full Truck Alliance is working with Morgan Stanley and China International Capital Corp. on its American debut after eking out a slim 2020 profit thanks to a pandemic-era shipping surge, people familiar have said.The company, known as Manbang in Chinese, was aiming to raise $1 billion to $2 billion in the IPO, people familiar said in January. A representative for Full Truck Alliance didn’t respond to an emailed request and text message seeking comment.Manbang, backed by SoftBank Group Corp., faces stiffening competition as smaller rivals try to win a slice of an evolving market. Giants from car-hailing leader Didi Chuxing Technology Co. to Alibaba Group Holding Ltd. are now introducing technology to try and streamline the shipping process, connecting merchants with truckers and delivery firms.Formed by a merger between China’s two largest truck-sharing platforms -- Huochebang and Yunmanman -- Manbang has attracted a roster of backers including Alphabet Inc.’s CapitalG, Sequoia Capital China, Fidelity International and Jack Ma’s Yunfeng Capital. Manbang last raised $1.7 billion from investors including SoftBank and Tencent at a $12 billion valuation. It aimed to use the cash to expand into same-city deliveries, deepening a network now focused on ferrying goods between urban centers.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.
14h ago
Yahoo Finance
Warren Buffett gave me a single piece of advice I'll 'treasure forever': Billionaire Thomas Tull
Billionaire Thomas Tull — who runs a holding company Tulco modeled in part after Buffett's — described a piece of advice from Buffett that 'impacted' his decision-making.
9h ago
Yahoo Finance
Huawei USA security chief calls for Biden to ease sanctions: We’ve been significantly hurt
Chinese telecommunications giant Huawei called for direct dialogue with the Biden administration Thursday, as it looks to turn around dwindling sales depressed by U.S. sanctions on the company.
7h ago
Bloomberg
Whispers of $100 Oil Return as Crude Shakes Off Covid’s Clasp
(Bloomberg) -- While oil’s dizzying collapse is still fresh for many traders, rumblings are starting to emerge that by the end of next year prices could once again top $100 a barrel.Azerbaijan’s Socar Trading SA predicts global benchmark Brent could hit triple digits in the next 18 to 24 months, and Bank of America sees potential spikes above $100 over the next few years on improving fundamentals and global stimulus. Speculators are also getting in on the action, increasing bets in the options market that oil will reach the vaunted level by December 2022.The views are ultra bullish, but they highlight increased confidence in the oil market after Brent rallied more than 200% after hitting an 18-year low during the pandemic. Demand has bounced back in key Asian markets, while OPEC+ is withholding barrels and a lack of investment is keeping shale supplies at bay. Goldman Sachs Group Inc. this week lifted its third-quarter forecast by $10 to $75 a barrel.Option bets on oil prices rising above $100 for the December 2022 Brent contract have jumped in recent days, with open interest on the calls rising from 500 to 3,950 in the past week. Front-month futures in London rose 2.6% on Wednesday to close at $67.04, the highest since January 2020.The $100 mark occupies a special place in the mind of many traders, as oil hovered around that level for several years in the early part of last decade as strong demand from emerging markets enticed drillers into ever more expensive locales, from deep ocean beds to Canada’s remote tar sands.That era ended in 2014, when U.S. shale firms proved they could pump massive amounts at far lower costs. But while the vaunted price level has been out of the market’s reach since then, it hasn’t been out of traders’ minds. It was just a little more than two years ago that major trading houses made $100 projections that ended up falling far short.Forecasts for $100 are far from the current consensus. The median analyst forecast compiled by Bloomberg has Brent staying below $65 a barrel through 2025. And there are plenty of reasons to be skeptical of such a resurgence. For one, the OPEC cuts that have limited supply are artificial, and the cartel has enough spare capacity to meet any shortfall should demand rocket following a worldwide recovery from the pandemic, according to Bloomberg Intelligence.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.
2d ago
Bloomberg
Stock Market Hits Rate Pain Threshold Goldman Sachs Warned About
(Bloomberg) -- Just a few days ago, equity bulls were saying that they weren’t too worried about rising bond yields. Rates were still low, they explained, and as long as the pace of increases was orderly, stocks would be fine.Thursday’s market turmoil may put an end to that argument.As 10-year Treasury yields added as much as 10 basis points, their total increase for February reached 40 points. That’s more than the 36-point threshold that Goldman Sachs Group Inc. strategists warned could cause trouble for stocks.Bonds tumbled in early afternoon amid a sudden wave of selling after demand cratered at the Treasury’s 7-year note auction. Equities reacted with a net of 1,739 stocks on a down tick at one point, the second-biggest selling bout this year. Highly-valued shares such as Tesla Inc. led the retreat, while the Nasdaq 100 plunged as much as 3.7%.Equity bulls had been brushing aside the risk of higher yields, saying it’s a vote of confidence in the economic recovery that bodes well for corporate earnings. But the rout in fixed income may signal some market adjustments where stocks can’t be spared. In a note earlier this month, Goldman strategists including Ryan Hammond and David Kostin said that stocks typically fall on average in a given month when rates increase by two or more standard deviations, which is 36 basis points in today’s terms.“This is analogous to a flash crash in Treasuries,” said Arthur Hogan, chief market strategist at National Securities Corp. “We’re finally seeing yields react to what’s likely to be better economic activity.”“When it happens at a ferocious pace,” he added, “then you have a disarray in the markets” because everyone is “making the assumption that this never stops.”Read more: Convexity Hedging Haunts Markets Already Reeling From Bond RoutFunds that rebalance on a monthly basis such as pensions may have contributed to the equity selloff while better-than-expected data on jobless claims added to investor angst over inflation and government stimulus, according to Larry Weiss, head of equity trading at Instinet LLC in New York.“It can create a bit of trepidation two ways: inflation, which the Fed chair has dismissed, but also support for the argument against a large, broad stimulus package,” Weiss said. “So it’s a general risk reduction, similar to what we saw at the end of January.”U.S. pension funds that rebalance on a monthly basis will need to sell about $16 billion of domestic stocks to return to prior asset allocation levels following the latest equity rally, according to estimates from Credit Suisse. The S&P 500 has advanced 5.6% this month versus a loss of 1.5% in the Bloomberg Barclays U.S. Aggregate Bond Index.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.
1d ago
Bloomberg
In a Flash, U.S. Yields Hit 1.6%, Wreaking Havoc in Markets
(Bloomberg) -- After weeks of grumbling, the world’s biggest bond market spoke loud and clear Thursday -- growth and inflation are moving higher. The message wreaked havoc across risk assets.Benchmark 10-year Treasury yields catapulted to the highest in more than a year at over 1.6% and traders yanked forward their opinion of how soon the Federal Reserve will be forced to tighten policy. Equities tumbled, as higher borrowing costs put pressure on soaring valuations. Even Treasury Secretary Janet Yellen felt the sting, with record low demand for a fresh round of government debt.Speculation is building that a year of emergency stimulus is not only working, but has left some areas of the economy at risk of one day overheating. Locked in the same patterns for months by the Covid-19 crisis, markets now appear to have begun a long-awaited process of repricing themselves, as trillions of dollars of federal spending and positive vaccine results boost odds developed countries will heal faster than central bankers expected.“The economy is already recovering and a lot of people think that this stimulus proposed is much more than what’s needed,” said John Carey, portfolio manager at Amundi Asset Management U.S. “You put too many coals on the fire and we build the fire to a very intense level. People start to think the Fed won’t be able to keep rates where they are.”After holding at historically low levels since April, the jump in Treasury yields -- even if it bespeaks economic health -- is inevitably a jarring spectacle for traders, forcing them to reconsider positions in multiple markets. Megacap tech names -- previously the bull market’s darlings -- led the plunge on Thursday, with the Nasdaq 100 sinking almost 4% as the rise in rates made it harder to justify valuations that are higher than any time since the dot-com bubble.The bond selloff stalled in Asia hours on Friday, as markets paused for breath, following the whirlwind session which saw rising yields overwhelm areas of equities that tend to benefit from higher rates. The KBW Bank Index -- which climbed to its highest level since 2007 on Wednesday -- dropped by 2.7% amid the carnage. Energy and utility shares in the S&P 500 also fell at least 1%.Currency markets were jolted as well. The Bloomberg Dollar Index rallied 0.7% Thursday, the most since September, while historically volatile emerging market currencies slid. The South African rand, Turkish lira and Mexican peso led the drop in emerging markets, falling at least 2%.The impact of lockstep moves in bonds and stocks can be seen in sophisticated portfolio strategies such as risk parity, which try to balance exposure across assets, according to Wells Fargo Investment Institute. The $1.2 billion The RPAR Risk Parity exchange-traded fund (ticker RPAR) dropped as much as 2.7% -- its biggest decline since March 18, 2020, in the height of the pandemic rout.“Right now those rates are increasing at a pace that may be unsettling to strategies such as risk parity, and the fixed income volatility is spilling over into other assets,” said Sameer Samana, Wells Fargo Investment Institute’s senior global market strategist. “Until the speed at which rates are rising slows, we may need to mentally prepare ourselves for more days like this.”Breakeven inflation rates -- bond trader projections for where they see annual consumer price inflation averaging over the decade -- are at multiyear peaks. At about 2.2%, it is up sharply from last year, when it fell as low as 0.47% in March.“We are in uncharted territory where we are likely to experience a global economic rebound with a global surge in inflation never experienced before,” said Bryce Doty, portfolio manager at Sit Fixed Income Advisors. “No one knows how it will play out.”While the U.S. unemployment rate clocks in at a still-elevated 6.3%, that’s below the 6.5% level that policymakers had forecast last June. A string of economic data as kept Citigroup Inc.’s Economic Surprise Index in solidly positive territory since last June, including retail and housing reports that have handily topped forecasts.For now, Fed Chairman Jerome Powell and his colleagues insist their best course of action is to hold interest rates low to ensure the recovery takes hold. Powell told the Senate Banking Committee Tuesday that the recent run-up in bond yields that has unsettled the stock market “a statement of confidence” in a robust economic outlook.On Thursday, as bond yields were exploding, Atlanta Fed President Raphael Bostic said “the economy can run pretty hot without seeing significant spikes in inflation.”While that may be true, financial markets are relentlessly forward looking -- and see the risks that come with a potential overheating. For now, the most obvious manifestation of that is the bond-market selloff, with investment firms including BlackRock Inc.’s research arm and Aberdeen Standard Investments retreating from government debt.“When the bond market wants to run, it’s going to run much faster than any central banker, and that again is on full display,” said Peter Boockvar, chief investment officer for Bleakley Advisory Group. “Also, be careful what you wish for. Don’t spend all your waking hours trying to artificially suppress interest rates and then root for higher inflation because when the market thinks that inflation will come, it will run you over.”(Updates sixth paragraph to show bonds stalled in Asia.)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.
17h ago
Bloomberg
Oil Hits Highest in More Than a Year With Global Supply Draining
(Bloomberg) -- Oil climbed to the highest in more than a year amid optimism of swiftly depleting global oil inventories.Futures in New York closed 0.5% higher on Thursday. The oil futures curve continues to signal a tighter market. U.S. crude inventories are near the lowest levels in about a year, while exports of five key crudes in the North Sea fields are seen slumping in April. As a result, crude timespreads are strengthening in a bullish structure known as backwardation.“Looking forward in the market, we’re seeing a significant backwardation, which signals that there is an anticipation of an easing of virus restrictions coming,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy. “The market is looking toward more normal inventories heading into the summer, if we don’t see a flooding of markets.”U.S. crude futures are up nearly 22% in February with expectations of shrinking supplies and as economies worldwide begin to reopen, signaling a further rebound in consumption. Still, the market is facing a possible supply increase in April from OPEC+. The producer group meets next week to discuss its strategy with key members differing on the path forward.See also: North Sea Oil Field Work to Cut Supply From Already Tight Market“By the summer, leisure travelers who haven’t been able to travel who are now vaccinated,” will be driving an uptick in demand, said Jay Hatfield, CEO at InfraCap in New York. “Supply is not going to respond like it has in the past,” with U.S. production likely remaining restrained.Shale explorers reported almost 6 million barrels of combined oil-output losses during the freeze last week. Occidental Petroleum Corp. and Pioneer Natural Resources Co., two of the largest producers in the Permian Basin, alone had a combined loss of about 3.8 million barrels, according to Bloomberg News calculations based on fourth-quarter earnings reports and calls. Meanwhile, refineries along the U.S. Gulf Coast are in the process of restarting, though some plants are facing lengthy repairs to key processing units.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.
1d ago
Bloomberg
A $50 Billion Unwind Fueled Treasuries’ Rout. It Has Room to Run
(Bloomberg) -- A chaotic selloff in the Treasuries market was spurred by a massive exodus from popular trades, heightened by liquidity concerns that could inflict more pain in coming days.The exodus happened at a time when traders were already worried about the imminent disappearance of a support beam for the market -- a regulatory exemption that has allowed banks to accumulate more U.S. bonds.Treasury futures open interest across a range of maturities sank by a huge amount Thursday: the equivalent of $50 billion of 10-year notes. It didn’t help that this coincided with the Treasury Department selling $62 billion of seven-year notes, an auction that proved to be a disaster.The month ahead could be rocky, too. Back in April, the Federal Reserve tweaked its rules to exempt Treasuries from banks’ supplementary leverage ratios -- allowing them to expand their balance sheets with U.S. debt. But that relief ends March 31 and what happens next is something of a mystery.“It wasn’t an orderly selloff and certainly didn’t appear to be driven by any obvious fundamental continuation or extension of the reflation thesis,” wrote NatWest Markets strategist Blake Gwinn in a note to clients. A number of more technical factors were in the mix, against a backdrop of a good-old-fashioned buyers strike, he said. Here’s a look at some of the factors driving Thursday’s moves:The ProtagonistThe main protagonist in the bond market was the five-year Treasury note, a maturity often associated with long-term Fed rate expectations, where yields closed 22 basis point higher on the day. The so-called butterfly-spread index -- a measure of how the note is performing against its two- and 10-year peers -- jumped 24 basis points, the worst daily performance for the sector since 2002.The selling was triggered after a U.S. auction of seven-year bonds saw record low demand. The bid-to-cover ratio -- a gauge of investor interest -- came in at 2.04, well below the recent average of 2.35. That sent five-year yields surging through 0.75%, a crucial technical level watched by investors as a signal that any bond selloff could worsen.Unwind RushThe yield spike sent traders scurrying to manage their positions, in particular those linked to the popular reflation trade. Bets on a steeper yield curve were hit as the curve flattened thanks to heavy losses in shorter-dated bonds.Preliminary open interest in Treasury futures across the curve -- a measure of outstanding positions -- collapsed by an amount equivalent to $50 billion in benchmark 10-year notes. While there may be some muddiness to the data given potential contract rolls, it does suggest a significant unwind of positions.The selloff paused in Asia trading hours and remained calm during Friday in New York. Some Asian traders said they had worked through New York hours right through much of Friday.The 10-basis-point spike and subsequent retreat in benchmark Treasuries when they touched 1.5% also suggests some traders were hit with stop-losses on their long positions.Fundamental DecouplingThe bond market’s divergence from a fundamental backdrop was most evident at the shorter-end of the curve. Eurodollar contracts -- which are priced off Libor -- collapsed in record volumes as traders repriced their expectations for the path of Fed rates with few obvious catalysts.Markets now see a Fed hike by March 2023 compared to mid-2023 previously, and have priced in rates over 50 basis points higher by 2024.But in remarks this week, Fed Chairman Jerome Powell offered reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base. While Fed Vice Chair Richard Clarida expressed cautious optimism on the outlook, he said it would “take some time” to restore the economy to pre-pandemic levels.“Today’s market dynamics look to have been fueled by technical factors and the Fed may want to let the dust settle before it judges whether there is anything really problematic here,” said Evercore ISI’s Krishna Guha and Ernie Tedeschi. “But a change of tone at least seems warranted in our view and possibly more.”Liquidity DroughtA lack of bond market liquidity, just when traders needed it most, can also be at fault.“We think that a steep decline in market depth contributed to the outsized moves in yields,” wrote JPMorgan Chase & Co. strategist Jay Barry in a note to clients. Barry showed how the share of high-frequency traders in the Treasury market -- which has been on an increasing trend -- tends to retreat rapidly as volatility spikes.U.S. 3-month 10-year swaption volatility -- a gauge of price swings in the rates market -- jumped to highest in over a year on Thursday, having risen steadily all month.“Given the natural feedback loop between volatility and liquidity, it’s likely that a steep decline in depth contributed to the outsized moves in yields,” added Barry.Regulatory PurgatoryBond traders were already on edge as they waited for Fed guidance ahead of next month’s expiry of a regulation that has encouraged banks to buy Treasuries. Neither Powell nor Randal Quarles, the vice chair for supervision, gave an answer as to whether the measure would be extended, which likely helped extend a clearing of positions in the swaps market.Credit Suisse strategist Zoltan Pozsar said clarity on this situation is one of the things needed to calm long-term Treasury yields.No matter what the Fed decides, “both would offer clarity and direction to the rates market,” he said.(Updates with concerns from first 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.
7h ago
FX Empire
Bitcoin: Buying The Pullback?
When something is obvious in the markets, often it is not a high probability opportunity. The recent 10K point retrace in Bitcoin should not have surprised anyone who has been watching my video analysis on this site. I have been warning about buying into a 5th Wave impulse because usually at this point in the road map, the party is pretty much over. The ironic thing is that often this is when a market looks its strongest.
2d ago
Bloomberg
Saudi Wealth Fund’s Lucid Windfall Will Make Up for Tesla Exit
(Bloomberg) -- The second time proved the charm for Saudi Arabia’s foray into electric vehicles.The kingdom’s main sovereign wealth fund is sitting on paper gains of over 30-fold from its investment in Lucid Motors Inc., with the value of its stake set to rise as part of a deal to take the company public.The result is a boost for the $400 billion Public Investment Fund after missing out on an epic rally in Tesla Inc. shares when it sold much of its 5% stake in the industry leader at the end of 2019.The PIF, as the fund is known, will hold a stake of 62% in Lucid once the acquisition of the automaker by special purpose acquisition vehicle Churchill Capital IV is complete. The holding would be valued at about $32 billion, based on the current share price of Church Capital IV.The deal would represent a jackpot for the PIF, which invested $1 billion in Lucid in 2018 and is expected to provide an additional $600 million in funding for the company before the SPAC deal is completed. It also participated in a $2.5 billion private investment in public equity, or PIPE, the largest of its kind on record for a SPAC deal.Under the leadership of Yasir Al-Rumayyan, the PIF has shifted investment priorities from holdings in state-owned companies to building up stakes in companies such as Uber Technologies Inc. and Jio Platforms Ltd., the digital services business controlled by Indian billionaire Mukesh Ambani.The fund’s returns on investment increased from about 3% between 2014 and 2016 to 8% from 2018 to 2020, according to the PIF website. It has more than doubled its assets in the five years since Crown Prince Mohammed bin Salman has been chairman.The investments are part of a strategy that aims to boost returns from the kingdom’s wealth while diversifying the Saudi economy and creating jobs.Bloomberg News reported in January that Lucid was in talks with the PIF to potentially build a factory near the Red Sea city of Jeddah, although the automaker’s CEO, Peter Rawlinson, said on Tuesday there were no imminent plans to build a factory in the kingdom.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.
2d ago
Quartz
Huawei CFO Meng Wanzhou’s extradition fight moves to yet another jurisdiction
The daughter of Huawei's founder lost a similar case in the UK just days ago. She is fighting a US extradition request from Canada.
12h ago
Bloomberg
Tencent-Backed WeDoctor’s Hong Kong IPO Looms With Valuation Near $7 Billion
(Bloomberg) -- WeDoctor is planning to file for an initial public offering in Hong Kong as soon as next month after fetching a valuation of $6.8 billion in its latest funding round, according to people familiar with the matter.The Tencent Holdings Ltd.-backed company raised about $400 million in a pre-IPO round from investors including Sequoia Capital China and Millennium Management LLC at the end of last year, the people said. The company is in the process of hiring joint global coordinators, paving the way for a filing in as early as March, said the people, requesting not to be named because the matter is private.Jeff Chen rejoined the company as chief strategy officer looking after capital markets and the listing process following a stint at Singapore’s Fullerton Healthcare Corp., they added.WeDoctor is part of a growing contingent of technology giants trying to transform China’s health-care system. In preparation for the listing, the Hangzhou-based company is splitting its business into two parts, with plans to list its health-care services operations, which include online and on-the-ground consulting, people familiar have said.Its more sensitive data business that handles personal medical records will be spun off and kept private to comply with regulatory demands.WeDoctor declined to comment on its fundraising and IPO plans in an emailed statement. It declined to comment on behalf of Chen. Sequoia Capital China declined to comment in an email. A New York-based spokesman for Millennium didn’t immediately respond to an email seeking comment late Wednesday local time.Citigroup Inc., JPMorgan Chase & Co. and CMB International Securities Ltd. are arranging the share sale, which was initially targeted for the end of last year. WeDoctor was seeking to raise $500 million to $1 billion through its listing at the time. The company is now in the process of hiring joint global coordinators, the people said.The medical platform’s operations span insurance policies, medical supplies, online appointment-booking and clinics. The national health-care operator, which covers more than 95% of the population, is working with the firm to provide insurance-covered health care.WeDoctor operated 16 facilities and 30 online internet hospitals, connecting 7,600 hospitals and 250,000 physicians as of October. It was valued at about $5.5 billion in a 2018 funding round.Chen was former CSO at WeDoctor before he joined Fullerton Health as chief innovation officer and head of capital markets, according to an announcement in February 2019. WeDoctor’s chief financial officer departed the company late last year.(Updates with Sequoia, Millennium investment 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.
2d ago
Bloomberg
Hong Kong’s Richest Property Tycoon Plans U.S. SPAC
(Bloomberg) -- Li Ka-shing, Hong Kong’s richest property tycoon, is planning to raise funds for dealmaking by listing a special purpose acquisition company in the U.S., people with knowledge of the matter said.A company backed by Li’s family is working with advisers on the potential SPAC initial public offering, according to the people, who asked not to be identified because the information is private. They are considering seeking around $400 million, though the exact terms haven’t been finalized, the people said.The blank-check company could file registration documents with the U.S. Securities and Exchange Commission as soon as this week, the people said.Li is lionized by the public in Hong Kong, where he’s been nicknamed “Superman” for his investing prowess. The 92-year-old businessman became famous for his well-timed bets on everything from real estate to social media as he built a corporate empire spanning 50 countries.His family controls CK Hutchison Holdings Ltd., a $29 billion conglomerate that owns one of the world’s biggest port operators and has telecommunications, retail and infrastructure operations across Asia and Europe. They also run CK Asset Holdings Ltd., which is one of Hong Kong’s largest developers and also has investments in hotels, utilities and aircraft leasing. Both companies are now led by Li’s elder son, Victor.Li’s younger son, Richard, has already raised about $900 million via two U.S.-listed SPACs with tech mogul Peter Thiel. Richard is considering setting up a third blank-check company, Bloomberg News reported last week.No final decisions have been made, and details of the transaction could change, the people said. Representatives for Li didn’t immediately respond to emailed queries.(Adds details about Richard Li’s SPAC plans in 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.
2d ago
Bloomberg
New Zealand Government Forces Central Bank to Include Housing In Rate Setting
(Bloomberg) -- New Zealand’s government will require the central bank to take account of rampant house prices when it sets interest rates, a change that may restrict its ability to run loose monetary policy.The Reserve Bank’s remit will be amended so that the bank considers “the impact on housing when making monetary and financial policy decisions,” Finance Minister Grant Robertson said in a statement Thursday in Wellington. The New Zealand dollar jumped to its highest since 2017 as investors ramped up bets on higher interest rates.The government is under political pressure to cool an overheating housing market, which has been fueled by record-low borrowing costs after the RBNZ responded to the coronavirus pandemic by slashing its cash rate and embarking on quantitative easing. Governor Adrian Orr pushed back against Robertson’s proposal when it was first made last year, saying that forcing the bank to consider house prices when setting rates could lead to below-target employment and inflation.“The more objectives you’ve got, the more complicated it can be to meet all those objectives,” said Nick Tuffley, chief economist at ASB Bank in Auckland. “Inflation and employment is what they will focus on, but they have to think harder about how their decisions impact on the housing market.”The kiwi dollar jumped about a third of a U.S. cent to 74.55 cents, its highest since August 2017. Bond yields and swap rates also rose on news of the changed remit, which comes into force on March 1. Investors are now pricing a 30% chance of a rate hike in November, even though the RBNZ yesterday sought to damp bets on tighter policy and said it could cut rates further if needed.Robertson ‘In Charge’“The market is saying no more rate cuts, so push the kiwi higher,” said Jason Wong, currency strategist at Bank of New Zealand in Wellington. “The RBNZ has shown its independence by saying ‘we don’t like this measure,’ but they are going to have to live with it because the finance minister’s in charge.”Robertson said today that the RBNZ’s objectives and mandate remain the same, which is to maintain price stability, support full employment and promote a sound and stable financial system.But a change to the Monetary Policy Committee’s remit will force it to “assess the effect of its monetary policy decisions on the government’s policy.” A clause has been added stating that the government’s policy “is to support more sustainable house prices, including by dampening investor demand for existing housing stock, which would improve affordability for first-home buyers.”“The committee retains autonomy over whether and how its decisions take account of potential housing consequences, but it will need to explain regularly how it has sought to assess the impacts on housing outcomes,” Robertson said.Robertson also issued a direction under the Reserve Bank Act requiring the bank to have regard to government policy on housing in relation to its financial policy functions.In a statement Thursday, the RBNZ said it “welcomes the direction it has received today from the Minister of Finance.” It said changes to financial stability policy are “in tune with our recent advice.”The bank acknowledged the change to its monetary policy remit but noted its targets “remain unchanged.”“The adjustments increase the focus on understanding and communicating the impact of the bank’s decisions on house price sustainability,” Orr said in the statement. “We have a long-standing commitment to transparency about our policy actions and approaches, and this will continue.”Soaring house prices have raised concerns that first-time buyers are being locked out of the market. Much of the surge has been attributed to investors taking advantage of low interest rates.The RBNZ, which predicts prices will rise 22% in the year through June, is reinstating mortgage lending restrictions and will tighten them further for investors from May 1.Orr in December recommended that the bank be required to address the issue of rapid house-price inflation via financial policy, and requested it be allowed to add debt-to-income ratios to its macro-prudential toolkit.Robertson said today he has asked the RBNZ to provide advice on interest-only mortgages and debt-to-income ratios. He would want the latter to apply only to investors, he said.“Today’s announcement is just the first step as the government considers broader advice about how to cool the housing market,” Robertson said. “We know the rapid increases we have seen in recent months are not sustainable, which has meant many first-home buyers are struggling to access the market. We’ll be making further announcements in the coming weeks on other policy responses.”(Includes chart)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.
2d ago
Yahoo Finance
CEO of Bill Gates-backed EV battery startup expects major breakthrough in 2021
QuantumScape founder Jagdeep Singh chats with Yahoo Finance Live on what his company has on tap this year.
1d ago
Bloomberg
Treasury Yields Surge Past 1.6%, Sounding Alarm for Risk Assets
(Bloomberg) -- Yields on U.S. government debt blew past another set of closely watched levels, with a key part of the Treasury curve surging past an inflection point that’s seen as potentially squelching global speculative euphoria.Yields took off with startling speed on Thursday, with the rate on 10-year Treasuries at one point reaching 1.61%, the highest in a year. In a telltale warning sign for some strategists, the 5-year Treasury yield soared convincingly above 0.75%, a crucial level that was expected to exacerbate selling, as traders pulled forward bets on when the Federal Reserve will start lifting policy rates. The 10-year U.S. real yield -- which strips out inflation and is seen as a pure read on growth prospects -- climbed as much as 25 basis points to a level last seen in June.The latest leg in this frenetic fixed-income tumble came on a sudden wave of selling after demand cratered at the Treasury’s 7-year note auction Thursday. Yields globally are now at levels last seen before the coronavirus spread worldwide. Central banks have attempted to soothe markets, with European Central Bank chief economist Philip Lane saying the institution can buy bonds flexibly and Fed Chair Jerome Powell calling the recent run-up in yields “a statement of confidence” in the economic outlook. While higher real rates signal growth is gaining traction, investors are becoming uneasy over the sustainability of the recovery as borrowing costs hurtle upwards.The 5-year note leading the rout “is a warning signal that the rates selloff is going beyond a repricing towards a convexity move,” said Peter Chatwell, a Mizuho International Plc strategist. “This is something which we think is inconsistent with Fed dovish rhetoric on rates.”Convexity FuelAdding to the bond slump are forced sellers in the $7 trillion mortgage-backed bond market, who are likely unloading the long-maturity Treasury bonds they hold or adjusting derivatives positions to compensate for the unexpected jump in duration on their mortgage portfolios. It’s a phenomenon known as convexity hedging, and the extra selling has a history of exacerbating upward moves in Treasury yields -- including during major “convexity events” in 1994 and 2003.Convexity Hedging Haunts Markets Already Reeling From Bond RoutThe 5-year note is of particular interest to many in the $21 trillion Treasuries market. Earlier this week, tepid demand in an auction of five-year notes brought into focus this key part of the curve, which also reflects medium-term expectations for Fed policy. Then on Thursday, a measure of demand for a $62 billion auction of 7-year Treasury notes came in at a record low.The rout comes as investors continue to reprice expectations for Fed hikes as the vaccine rollout and the prospect of additional stimulus foster a rosier outlook for the economy. Yields on 2- and 5-year yields are more influenced by the starting point and speed of normalization, said Bank of America Corp. rates strategist Ralph Axel.“Everything that we see keeps pushing us into sooner, faster, more in terms of removing accommodation,” Axel said.With five-year yields taking flight, some investors appeared to get squeezed out of bets on a steeper yield curve, which has been a winner for weeks amid the global reflation trade. The spread between 5- and 30-year rates collapsed by roughly 15 basis points, the most since March.The surge in yields is hurting riskier assets. Emerging-market currencies such as the South African rand and Mexican peso sold off sharply against the dollar, and the S&P 500 Index dropped 2.5%.In Europe, peripheral countries have led a bond sell-off, with Italy’s 10-year yield spread over Germany climbing back above 100 basis points. Core debt wasn’t spared, with yields on France’s benchmark debt turning positive for the first time since June.Officials’ DisquietEconomic leaders are making clear their disquiet. Apart from ECB’s Lane, Executive Board Member Isabel Schnabel weighed in, saying in an interview published Thursday that the central bank has a close eye on financial markets because a sudden rise in real rates could pull the rug out from under the economic recovery.Elsewhere, the Bank of Korea warned it will intervene in the market if borrowing costs jump, while Australia’s central bank resumed buying bonds to enforce its yield target. The Reserve Bank of New Zealand on Wednesday promised a prolonged period of stimulus even as the economic outlook there brightens.“You have to look at real yields,” Christian Nolting, chief investment officer at Deutsche Bank Wealth Management, said in a Bloomberg Radio interview. “If real yields are really rising and rising fast, that in the past has always been an issue for stocks.”(Updates levels throughout.)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.
1d ago
Bloomberg
Norway’s $1.3 Trillion Fund Blacklists 15 Companies on Ethical Grounds
(Bloomberg) -- Norway’s $1.3 trillion wealth fund expects to keep its existing fossil-fuel holdings as the world’s biggest sovereign investor bets it can bring about change from within the industry to fight carbon emissions.“We have no further plans to exit fossil fuels,” Chief Governance and Compliance Officer Carine Smith Ihenacho said on Thursday, after the fund published details of 15 companies it blacklisted in 2020. “Part of the assessments that were made was precisely that we should be owners of larger, integrated energy companies, and contribute as owners in order for them to meet the transition to a low-carbon society in a good way.”The Oslo-based fund generated $123 billion in returns last year, marking its second-best performance ever thanks in large part to tech stocks. Some of its biggest losses, however, were tied to holdings of oil companies and exiting stocks focused on oil exploration and production. Meanwhile, Chief Executive Nicolai Tangen has made clear he wants to focus more on sustainability to fight everything from pollution to corruption and sexism.The fund said the 15 stocks it excluded from its portfolio last year were singled out based on ethical considerations ranging from human rights violations to severe environmental damage. It exited another 32 firms due to its assessment of basic environmental, social and governance risks, it said, without naming the companies.Built from Norway’s North Sea oil and gas riches, the fund holds about 1.5% of all listed companies globally.The fund invested in 225 companies in the oil and gas sector last year, down from 311 in 2019. Royal Dutch Shell Plc and BP Plc were among the worst-performing investments, it said.Net ZeroWhile the fund wants the companies it invests in to have clear targets for emissions reductions, it hasn’t explicitly asked them to reach net zero emissions by 2050, according to Ihenacho. The companies’ goals still have to be compatible with the Paris Agreement, with the fund focusing on their planned path toward the targets, she said in an interview.“Our expectations are well anchored towards zero in 2050,” Ihenacho said. “What’s important to us is to understand how the companies think they will get there. One thing is to say that there should be zero in 2050. We are concerned with the short-term and medium-term and long-term goals. We believe this is just as important.”Asked about a recent adoption of portfolio-warming metrics by the French insurer and investor Axa SA, Ihenacho said that rising temperatures “is just one” of the target figures the fund includes in its assessment of climate risks.Read more: ‘Portfolio Warming’ Is the New Climate Anxiety for Fund ManagersHere’s the full list of 2020 exclusions:AGL Energy LtdAnglo American PlcGlencore PlcRWE AGSasol LtdElSewedy Electric CoVale SACanadian Natural Resources LimitedCenovus Energy IncImperial Oil LimitedSuncor Energy IncCentrais Eletricas Brasileiras SAFormosa Chemicals & Fibre CorpFormosa Taffeta Co LtdPage Industries LtdEarlier exclusions of Drax Group Plc, AECOM and Texwinca Holdings Ltd were revoked, while four companies including BHP Group Ltd were placed on an observation list.(Updates with comments from seventh 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.
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