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(Bloomberg) -- Credit Suisse Group AG is still feeling the effects in bond markets of two major missteps this year.The lender on Monday issued its first euro and sterling notes since the collapse of Greensill Capital and Archegos Capital Management. While the sales left demand for the bank’s debt in no doubt -- orders passed a combined 4.7 billion euros-equivalent ($5.7 billion) -- they also highlighted increases in the bank’s funding costs since March.Credit analysts and investors said that some of the bank’s senior debt is carrying a premium of at least 10 basis points more than it would have without the twin crises. The cost of insuring its bonds against default also remains elevated versus competitor UBS Group AG.“It reflects the weaker credit view, with potential compensation of investors still to come as well as serious questions around risk management,” said Bjorn Norrman, an investment manager at Aegon Asset Management.Credit Suisse declined to comment on its recent sales. The 1.5 billion-euro and 750 million-pound notes on Monday followed a $3.25 billion 11-year note last week.The bank emerged as the biggest loser among global investment banks as family office Archegos imploded in March, wiping out a year of profit. It’s since taken steps to reassure investors and overhaul the business, including a $2 billion capital raise, but has struggled to contain a string of senior banker defections.An investigation by the Swiss financial regulator into the bank’s risk management is “likely to hang over” the bank’s debt in the short term, said Tom Kinmonth, an ABN Amro credit analyst. He pointed to Danske Bank AS, the subject of multiple investigations into money laundering in both the U.S. and Europe.“In these type of cases, for example like at Danske Bank, it takes time for a bank to settle the cases, to rebuild its reputation and to re-convince investors of its new governance structure,” Kinmonth said.Still, he retains a positive view of the bank and thinks its credit spreads “will make up this lost ground over this year.” Some of the bank’s dollar bonds, including a $2 billion 1.305% senior note sold in January, have already retraced some of their widening since late March.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China Mobile Ltd., the country’s largest wireless carrier, has announced a plan to list in Shanghai after being removed from the New York Stock Exchange due to an investment ban ordered by former U.S. President Donald Trump.The proposal approved by the state-owned firm’s board would see it issue as many as 965 million shares, it said in a Hong Kong exchange filing late Monday. The company will seek sign-off from shareholders, and will submit applications to the China Securities Regulatory Commission and the Shanghai Stock Exchange.The proceeds will be used for the development of 5G mobile networks and new infrastructure for cloud resources as well as research and development for next-generation information technology, the statement showed.China Mobile shares in Hong Kong rose as much as 4.8% on Tuesday, their biggest intraday move since March 1.Bloomberg News reported on the company’s listing plan earlier this month, citing people familiar with the matter.The NYSE suspended trading in China Mobile shares in January, along with the country’s two other major state-owned operators, China Telecom Corp. and China Unicom Hong Kong Ltd. China Telecom is also seeking a share sale in Shanghai, while China Unicom already trades in the city as China United Network Communications Ltd. All three have listings in Hong Kong.The New York de-listings followed an order barring U.S. investments in Chinese companies that the Trump administration deemed a threat to national security. With no sign of a change in course under President Joe Biden, the telecom giants are looking back home for capital to fund their spending on 5G networks. They spent $27 billion last year in China in the world’s largest 5G expansion.Earlier this month, the three carriers said they expected the NYSE to proceed with the firms’ delisting after attempts to have the decision overturned failed.Chinese authorities have said the three firms’ removal from U.S. markets would have a limited impact on the carriers. The affected shares are worth less than 20 billion yuan ($3.1 billion) and account for 2.2% of the total issued by each company, the CSRC said in January.Still, the three companies combined lost more than $30 billion in market value in the final weeks of 2020 as investors withdrew following Trump’s order in November.China Mobile and China Telecom shares have both performed well in Hong Kong in 2021, climbing 10% and 19%, respectively as of Monday. China Unicom shares have declined 0.2% since the start of the year.In March, China Mobile said its net income rose 1.1% to 107.8 billion yuan last year, bouncing back from a 9.5% drop in 2019. The improvement came as the company accelerated implementation of 5G networks. It also announced a full-year dividend of HK$3.29 ($0.42) a share.(Updates with Hong Kong share price in fourth paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- iFast Corp., an online brokerage that’s been Singapore’s best-performing stock over the past year, is betting on China and a retail-trading frenzy to help it grow assets by more than fivefold by 2028.Although the firm’s Chinese operations are loss-making, Chief Executive Officer Lim Chung Chun said the nation is poised to become the wealth-management platform’s fastest-growing market and is key to the group’s goal of reaching S$100 billion ($75 billion) of assets under administration by 2028. Investors have bought into that vision, with iFast shares soaring more than 550% in the past 12 months -- beating all members of the FTSE ST All-Share Index.“The potential of the China market is immense, and the kind of losses we are generating today are a very manageable amount considering the size of the market,” Lim said in an interview. iFast’s shares rose 5.5% on Tuesday.Singapore-based iFast has benefited from a surge in retail trading by stuck-at-home investors trying their hands at equities, which helped the firm more than double net income last year. But to achieve the S$100-billion goal, first stated in 2018, assets will need to expand at a compounded annual rate of 27% through 2028, Lim said. That compares with an annualized rate of 34% the past two years.“The group continues to be in investment mode which it expects will help reap benefits at a later stage,” Krishna Guha, an analyst at Jefferies Financial Group LLC, wrote in a note last month, referring to iFast’s China business.iFast has good “growth momentum” in China, Lim said, though it reported S$4.9 million in losses in that market last year. The CEO said there is “no timeline for breaking even.”iFast, which counts Singapore as its biggest market, initiated private-fund management in China this past February. The broker relies on other businesses including financial advisers and internet firms to sell its funds in the large Chinese market, Lim said, adding that about 80 such companies are being used to make those connections.The broker remains focused on expansion. In addition to being registered as a private-fund manager in China, iFast also won a contract for Hong Kong’s pension fund platform and started stockbroking activities in Malaysia over the past year. It’s also applying as part of a consortium for a digital-banking license in Malaysia -- though the firm lost out on getting one in Singapore last year.Even after the market-leading rally the past year, iFast shares are poised for further gains, according to analysts who cover the stock. All five of them have a buy rating and their consensus price target implies a gain of about 23% more over the next 12 months, compared with an estimated 13% rise in the broader FTSE gauge, according to data compiled by Bloomberg.(Updates prices throughout.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Microsoft said it had received a concern in the latter half of 2019 that Gates "had sought to initiate an intimate relationship with a company employee in the year 2000," a Microsoft spokesman said in a statement. The Wall Street Journal reported on Sunday that Microsoft's board had decided that Gates' involvement with the female employee was inappropriate and he needed to step down in 2020, citing people familiar with the matter.
Today’s API report is expected to show U.S. crude inventories to have risen by 1.6 million barrels last week, according to a Reuters poll.
(Bloomberg) -- AT&T Inc. fell the most in more than a year as investors digested plans for a smaller dividend payout from the phone giant following the planned merger of its WarnerMedia division with Discovery Inc.Shares of AT&T fell as much as 7.9% Tuesday in New York, the steepest intraday decline since March 2020. The stock had gained 9.1% so far this year through Monday’s close. Discovery shares fell less than 1% Tuesday to $33.80.Without the cash flow from WarnerMedia, AT&T said Monday that it will lower its dividend payout ratio to 43% of cash flow. That translates into to about $9 billion annually, down from $15 billion before, according to Colby Synesael, an analyst with Cowen & Co. As part of the deal, AT&T shareholders will own 71% of the combined media company while Discovery investors will get 29%. The parties value the new entity at $130 billion, including debt.“I thought market was OK with that, but apparently not,” Synesael said. “Seems like it took a day for people to do the math.”Cable pioneer John Malone, who has long controlled Discovery, issued a statement Tuesday reiterating that he backs the deal. “I am delighted to fully support this transaction, without asking for or receiving a premium for my high-vote shares,” Malone said. “I believe we are creating real value for shareholders and a legacy investment for my grandkids.”The idea to create a new media giant, which is expected to have a name in the coming days, started with a text from Discovery Chief Executive Officer David Zaslav to his AT&T counterpart, John Stankey.Their discussions coalesced into a merger of media properties combining AT&T’s HBO, Warner Bros. and TNT with a roster of Discovery channels, including the Food Network, and reality-TV shows like “Deadliest Catch” and “Naked and Afraid.”“This is a major reset of the chessboard,” said Todd Lowenstein, chief equity strategist with the Private Bank at Union Bank. “Markets seem unwilling to render a favorable verdict at this point.”(Updates with Malone statement in fifth paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- U.S. stocks declined for a second day with losses steepening in the final 15 minutes of trading as investors weighed the rush to reopen the economy against inflationary pressure from a rise in commodity prices.All three of the main U.S. equity benchmarks closed lower after megacap technology stocks including Amazon.com Inc., Microsoft Corp. and Alphabet Inc. erased earlier gains. Nine of the main 11 S&P 500 industry groups declined, with energy stocks leading losses as oil prices dropped amid a report that significant progress has been made to revive the U.S.-Iran nuclear deal. AT&T Inc. plunged the most in the benchmark gauge after the company said it plans to spin off its media operations. Walmart Inc. rallied the most in six weeks after boosting its profit outlook. Stocks have been volatile after touching a record in early May as investors assessed economic growth prospects against a Covid-19 resurgence in countries including India. Minutes from the latest Federal Reserve meeting, due Wednesday, may offer clues on inflation pressure and hints of a timeline for tapering stimulus. Fed Vice Chair Richard Clarida said Monday that the weak U.S. jobs report showed the economy had not yet reached the threshold to warrant scaling back asset purchases. Inflation concerns intensified last week when the government reported the fastest increase in consumer prices since 2008 and commodities from iron ore to Brent crude rose to multiyear highs.“The market has been trying to process a very unusual economic environment and a confluence of factors that it has not faced for a long time,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “It’s a new set of circumstances for markets, so we’ve had more churn over the last couple of weeks. I personally would say that the stock market has absorbed it all extremely well because there’s still a high conviction view on earnings being strong.”Global investor sentiment is “unambiguously bullish,” Bank of America Corp. strategists led by Michael Hartnett said, citing the firm’s latest fund manager survey. Inflation topped the list of the biggest tail risks, followed by a bond market taper tantrum and asset bubbles, while Covid-19 was only in fourth place.“The fact that inflation and interest rates are on the way up, I think we have to recognize that returns overall in the U.S. equity market from this point will be very modest and perhaps volatile compared to what we have enjoyed especially over the last 12 to 15 months,” Abby Joseph Cohen, senior investment strategist at Goldman Sachs Group Inc., said in an interview on Bloomberg TV. “What appeals to me is that investors are acting like investors again. There is less emphasis on momentum and there’s more emphasis on relative valuation and which of the companies that have the strongest cash flow growth and are investing that cash flow growth.”West Texas Intermediate crude extended declines after the BBC Persian news channel, citing Russian diplomat Mikhail Ulyanov, reported that a major announcement may be made on Wednesday regarding talks to broker an agreement between Iran and the U.S. and revive the 2015 nuclear deal. A return to the accord could allow for the removal of U.S. sanctions on Iran’s crude exports and bring more supply to the market.Elsewhere, Bitcoin fell to the lowest since February after the People’s Bank of China reiterated that the digital tokens cannot be used as a form of payment. Coinbase Global Inc. fell after Monday’s drop below the reference price used in its April direct listing.Here are some key events this week:The Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflationEIA crude oil inventory report WednesdaySt. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic to speak at separate events WednesdayIMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde speak at the Vienna Economic Dialogue ThursdayAustralia unemployment rate ThursdayEuro-area finance ministers and central bank chiefs hold an informal meeting. A larger group of EU finance ministers and central bank chiefs will meet May 22These are some of the main moves in markets:StocksThe S&P 500 fell 0.9% as of 4:07 p.m. New York timeThe Nasdaq 100 fell 0.7%The Dow Jones Industrial Average fell 0.8%The MSCI World index was little changedCurrenciesThe Bloomberg Dollar Spot Index fell 0.3%The euro rose 0.6% to $1.2226The British pound rose 0.4% to $1.4187The Japanese yen rose 0.3% to 108.92 per dollarBondsThe yield on 10-year Treasuries was little changed at 1.64%Germany’s 10-year yield advanced one basis point to -0.10%Britain’s 10-year yield was little changed at 0.87%CommoditiesWest Texas Intermediate crude fell 1.2% to $65 a barrelGold futures rose 0.1% to $1,870 an ounceMore stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Stocks dipped on Tuesday, with the Nasdaq erasing earlier gains to join the S&P 500 and Dow in the red.
(Bloomberg) -- The European Union’s final bond sales for its regional jobs program failed to live up to the hype of previous editions, a concerning sign for its landmark borrowing spree that’s due to start in the second half of the year.Investors placed 88.7 billion euros ($108 billion) of orders for eight- and 25-year securities tied to the SURE social program, little more than a third of the record set for a dual-tranche issue last year. It comes as yields across the region climb as investors prepare for European Central Bank to scale back its bond purchases in the face of growing inflationary pressures. The bloc is ready to start sales for its 800 billion-euro recovery fund by July.It marks a stark turnaround for one of the hottest new triple-A rated bond markets in town. When the EU launched the securities last year, Europe was still firmly in the throes of lockdowns, the ECB was committed to pumping money into debt markets and investor demand for the securities was enormous. Now, with economies reopening and consumer prices expected to accelerate, they’re becoming a less attractive asset.“We had been used to some very strong demand for the EU bonds,” said Jens Peter Sorensen, chief analyst at Danske Bank AS. “Why buy today, if you can buy cheaper tomorrow? That’s becoming a self-fulfilling prophecy.”The bloc is set to become a major issuer of bonds in the coming years, potentially creating a debt market akin to the size of Spain’s. The securities have also been touted as a one-day rival to U.S. Treasuries, given the current scarcity of German bonds -- the region’s haven asset -- and the risks associated with holding riskier peripheral debt.In another sign of waning demand, the yield on 10-year SURE bonds has climbed more than 40 basis points since they were issued in October. That mirrors moves elsewhere in Europe, with German 10-year bond yields climbing to their highest level since 2019 last week.Goldman Sachs Group Inc. expects them to breach 0% for the first time since 2019 this year. Italian 10-year bond yields rose to the highest level since July on Monday as investors speculated an economic growth rebound could mean less central bank support.“The first few EU SURE syndications were a smashing success in terms of demand,” said Martin van Vliet, a strategist at Robeco. “There will be structural demand for triple AAA paper such as the EU, so the recovery fund issuance will be digested, but we’re not sure demand will be as astronomical.”The Commission announced Monday that it would use an auction system operated by France’s central bank to issue debt later in the year, relying on syndications in the meantime. Sales are expected to average around 150 billion euros per year for the duration of the program, though all member states need to ratify the recovery program for funds to start flowing.Still, EU bonds will outperform “core” European sovereign peers because investors face a serious shortage of notes in both the short- and long-term, Commerzbank AG analysts wrote in a note to clients last month. Any attempt to extend the size of the package is likely to be politically difficult, they argue.The EU mandated Deutsche Bank AG, LBBW, Morgan Stanley, Natixis SA and NatWest Markets for the sale of SURE bonds. Commerzbank expects the EU will sell as much as 15 billion euros of bonds. The sale of eight-year securities was given a price of two basis points below midswaps, while the 25-year was marked at 17 basis points above.“Over the last couple of weeks things have definitely turned more challenging,” said Christoph Rieger, head of fixed-rate strategy at Commerzbank. “Lower ECB buying may require somewhat higher premiums.”(Updates to include final demand from first paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
AT&T's stock is the biggest loser in the S&P 500 on Tuesday. Its valuation depends on how much credit investors give the combined WarnerMedia/Discovery for its future streaming efforts.
USD/CAD settled below 1.2100 and is testing the support at 1.2080.
‘Will she still be able to use our daughter as a tax deduction? My concern is also with the coming child tax credit this summer.’
At MAPsignals, we see the investing-world through the lens of stocks: specifically, outliers.
Learn the basic structure of a 401(k) and why it may not be enough to sustain you during retirement.
A paper that my colleague Anqi Chen and I wrote last year — “How Much Taxes Will Retirees Owe on Their Retirement Income?” — keeps hitting the “top 10” list on a major listserv for social sciences research. As people approach retirement, they tend to add up their financial resources — Social Security benefits, defined benefit pensions, defined contribution balances, and other assets. The question we look at is just how large the tax burden is for the typical retired household and for households at different income levels.
The Biden administration has announced payments will be starting this week.
AT&T investors are on the run after the company shocked Wall Street by unloading its WarnerMedia division to Discovery.
Experienced hands look to be buying the dip as a key bitcoin price indicator suggests the pullback may be coming to an end.
Raoul Pal tells bitcoin investors that current volatility is to be expected, but big things are around the corner.
Amid the slump sweeping across crypto assets Tuesday, investors were turning their attention to a meme asset, SafeMoon, that has garnered increased attention was recently drawing fresh looks after comments made by Barstool Sports founder Dave Portnoy on Twitter.