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Citibank has hinted there won't be any possible layoff and closure of physical branches in the countries it is exiting.
Warren Buffett's famous economic measurement shows Orman might be onto something.
The S&P 500 and the Dow hit record highs on Thursday as easing inflation concerns boosted demand for richly valued technology stocks, while upbeat earnings reports and strong March retail sales raised hopes of a broader economic rebound. The S&P information technology and communication services indexes, which include Apple Inc, Microsoft Corp and Facebook Inc, led gains after underperforming last month.
(Bloomberg) -- A senior Bank of Japan official played down the potential for China’s digital yuan to threaten the dollar’s position as the world’s main reserve currency.“The dollar’s status as the key global currency won’t change so easily,” said Kazushige Kamiyama, head of the BOJ’s payment systems department and the person in charge of looking into a virtual Japanese currency. “In fact, the dollar’s advantage may strengthen further if the U.S. goes with digitalization.”A report earlier this week showed the Biden administration is increasing its scrutiny of China’s progress toward a digital yuan amid concern it could kick off a long-term bid to displace the dollar.The People’s Bank of China has moved closer to becoming the first major central bank to launch a virtual currency, rolling out a trial for consumers and businesses in cities across the country.The PBOC has been working on a digital currency since 2014 and its moves have heightened interest among central banks and policy makers, while the spread of cryptocurrencies has added to a sense that competitors to regular cash could change how the financial sector operates.The pandemic has also accelerated the use of cashless payments, even in Japan where banknotes and coins are still used in a majority of transactions.Kamiyama said the BOJ had no specific plans for a pilot test at this point, but he denied that the central bank was lagging its peers.“The BOJ isn’t behind” in the study of a digital currency, Kamiyama said.The BOJ started the first phase of its own technical experiments on digital currencies last week and is participating in group studies on them with the Bank for International Settlements and six major central banks including the Federal Reserve and the European Central Bank.The group in October said the introduction of digital currencies shouldn’t undermine the stability of the current financial system.“No single digital currency from a central bank is likely to conquer the world as long as everyone continues to work on improving their settlement systems,” Kamiyama said.(Updates with more comments from Kamiyama)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.
Incoming Petrobras CEO Joaquim Silva e Luna, an army veteran with no oil experience, has endorsed four career executives to head up key company divisions rather than bringing in more outsiders, people with knowledge of the matter said on Thursday. The board of directors of Petroleo Brasileiro SA, as Brazil's state-controlled company is formally known, meets on Friday to vote on the new division heads, the company said. Brazil's president, Jair Bolsonaro, announced the 71-year-old Luna would take the helm of Petrobras in a Facebook post in February.
An HSBC representative said the bank has “limited appetite to facilitate products or securities that derive their value from virtual currencies.”
(Bloomberg) -- Coinbase Global Inc. got a jump start on its first day of trading from the retail crowd. And the early enthusiasts likely walked away with a few bruises.Day traders purchased a net $57 million of the cryptocurrency exchange’s shares during its debut Wednesday on the Nasdaq Stock Market, according to data from VandaTrack. That total accounted for 7% of the $822 million individual investors spent on all U.S. stocks and exchange-traded funds on the day, and made Coinbase the fifth-most popular debut with the demographic since 2017.They didn’t wait long to jump in.Nearly a third of all retail dollars spent on Coinbase Wednesday poured in during the first 20 minutes of trading as the shares soared by 13% from the opening price of $381 to an intraday high of $429.54. Retail buying tapered off as the initial euphoria waned and the shares paired their gains to finish the day below the opening trade price.Coinbase gained as much as 6.4% in early trading Thursday on news of a $246 million investment from Cathie Wood’s Ark Investment Management and positive analyst coverage, though the shares remained below their opening price.Tayo Kuku, a 27-year old photographer based in Washington, D.C., is among the cohort of investors who bought in. But within 10 minutes of purchasing the stock at $394 and a few conversations with his friends who are also buyers, it “made me realize that I probably didn’t make the best decision jumping in that quickly,” he said.“I obviously knew the risk of jumping in on a company as soon as it went public, but it just seemed like an obvious investment considering cryptocurrency has been the ‘next big thing’ for young investors like me.”Fortunately for Kuku, he managed to sell at a profit at $415. Though he left unscathed, he still plans to “keep an eye out and may possibly dip my feet back in in the next few weeks.”The debut of the first cryptocurrency exchange to list on a U.S. public market was widely hailed as ushering in a new era for the oft-mocked asset class. That drew the attention of retail traders who piled in at a level not seen since the debut of Rocket Cos., the parent of the mortgage giant founded by billionaire Dan Gilbert, making it the fifth most- popular new listing among the group since 2017.“It is pretty surprising to see such strong buying,” said Viraj Patel, global macro strategist at Vanda Research. “There was obviously a lot of hype around this and certainly Coinbase will be almost the best proxy for trading the crypto theme in the coming years.”On Fidelity’s platform Coinbase was the most traded stock on the day. More than 148,000 shares changed hands there, nearly nine times more than runner-up Tesla Inc., according to data from the brokerage.“What is fascinating about Coinbase is this is the first way in which individuals can take part in this new market for cryptocurrencies without being subject themselves to the volatility those currencies have,” Michael Wolf, the chief executive officer and co-founder of Activate, a technology consulting firm, said on Bloomberg Television. “We are going to see that Coinbase is going to be held widely -- at this market cap, it’s going to be held by index funds. It will allow small investors as well as individuals to take part in this entire move toward cryptocurrencies.”But for all the fanfare, Coinbase wasn’t the top pick of at-home traders on Wednesday. That honor went to the ProShares UltraPro QQQ exchange-traded fund (ticker TQQQ), a three times levered tracker of the Nasdaq 100 Index, which saw $72 million of net retail buying on the day despite plunging by 3.5%.(Updates for Thursday trading in the fifth 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.
WASHINGTON (Reuters) -The U.S. Treasury Department on Friday said Vietnam, Switzerland and Taiwan tripped its thresholds for possible currency manipulation under a 2015 U.S. trade law, but refrained from formally branding them as manipulators under a separate law. In the first semi-annual foreign exchange report issued by Treasury Secretary Janet Yellen, the Treasury said it will commence "enhanced engagement" with Taiwan and continue such talks with Vietnam and Switzerland after the Trump administration labeled the latter two as manipulators in December.
A sharp drop in Treasury yields in the face of strong U.S. economic data is surprising market participants who expected the reflation-driven bond selloff of the first quarter to continue. U.S. Treasury yields notched their biggest drop since Nov. 12 on Thursday, even as March retail sales data came in much better than expected and jobless claims fell. All told, the yield on the benchmark 10-year U.S. Treasury has fallen nearly 20 basis points in April, reversing some of the dramatic rise in February and March and boosting a rally in growth and technology shares that has helped send markets to fresh records.
Property purchases in China funded through bank loans fraudulently obtained by speculators are fuelling already red-hot real estate markets in its biggest cities and beginning to alarm regulators. Four tier-1 Chinese cities, including Shenzhen and Shanghai, have reported since March that a probe by financial regulators found that 877.8 million yuan ($134.21 million) of bank loans were improperly used for property purchases.
(Bloomberg) -- JPMorgan Chase & Co. sold $13 billion of bonds Thursday, the largest deal ever by a bank, taking advantage of some of the cheapest borrowing costs in years to boost its capital after the Federal Reserve let pandemic relief measures lapse.The deal, which followed the bank’s best quarter ever, hit the market as corporate borrowers continue to see heavy demand for debt that provides a decent premium over Treasuries. Order books grew to about $26 billion, allowing JPMorgan to trim the interest on the debt from the relatively high spreads it initially offered, according to a person with knowledge of the matter.The jumbo offering may have been related to recent changes in regulatory relief for banks, according to Bloomberg Intelligence analyst Arnold Kakuda.Treasuries liquidity disappeared in March 2020. In response, the Fed told banks they didn’t have to factor in Treasuries or deposits when calculating their supplementary leverage ratios, which tells them how much capital to set aside to back up their holdings. That exemption went away two weeks ago.Banks were left in the position of needing to sell Treasuries or add capital, and JPMorgan’s sale of unsecured debt will help it meet total loss-absorbing capacity, or TLAC, requirements, and put the ratio back in balance, Kakuda said.The bank signaled Wednesday that it would do something. “We have levers to manage SLR and we will,” Chief Financial Officer Jennifer Piepszak told analysts on a quarterly earnings call. The company declined to comment further on Thursday.Including today’s sale, JPMorgan has raised $22 billion in the U.S. dollar investment-grade bond market this year, more than any other major U.S. bank, according to data compiled by Bloomberg.“Banks are always going to be hefty issuers, which lends a certain opportunism to tapping the markets especially when funding is still so cheap,” said Jesse Rosenthal, a senior analyst at CreditSights.The longest portion of the five-part offering, a 31-year security, will yield 107 basis points above Treasuries, according to the person, who asked not to be identified discussing a private transaction. The sale follows strong first-quarter earnings, including a 15% increase in fixed-income, currency and commodity trading revenue and a $5.2 billion release from its credit reserves. Rival Goldman Sachs Group Inc. also sold bonds Thursday.The previous largest bond sale by a bank also came from JPMorgan, a $10 billion offering in April 2020, the Bloomberg-compiled data show. JPMorgan is the sole bookrunner of the sale, and the proceeds are marked for general corporate purposes.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.
Euro zone politicians, courts and policy hawks will pose a stiff challenge this year to the ECB's resolve to pin down the bloc's borrowing costs, precisely at a time when higher U.S. Treasury yields are tempting investors away from European markets. The European Central Bank has held sovereign debt yields low through bond purchases, and recently increased buying in its 1.85 trillion-euro ($2.22 trillion) emergency stimulus scheme, known as PEPP. And it is no longer battling alone to support the euro economy, as the pandemic induced governments to spend more and to create an 800 billion-euro Recovery Fund, seeded by joint European Union borrowing.
Bitcoin takes a breather as billionaire investor Mike Novogratz warns of market correction.
Morgan Stanley lost nearly $1 billion from the collapse of family office Archegos Capital Management, the bank said on Friday, muddying its 150% jump in first-quarter profit that was powered by a boom in trading and deal-making. Morgan Stanley was one of several banks that had exposure to Archegos, which defaulted on margin calls late last month and triggered a fire sale of stocks across Wall Street. Morgan Stanley lost $644 million by selling stocks it held related to Archegos' positions, and another $267 million trying to "derisk" them, Morgan Stanley Chief Executive James Gorman said on a call with analysts.
(Bloomberg) -- China’s economy strengthened in the first quarter of the year as consumer spending rose more than expected, putting it on course to join the U.S. as twin engines for a global recovery in 2021.Gross domestic product climbed 18.3% in the first quarter from a year earlier, largely in line with the 18.5% predicted in a Bloomberg survey of economists, though that record-breaking figure was mainly due to comparisons with a year ago when much of the economy was shut due to coronavirus. Retail sales beat expectations while industrial output growth moderated.The latest data puts China on course to grow well above its annual target of more than 6%, supporting the view that China and the U.S., where economists predict 6.2% growth, will both outperform other major nations this year. China’s recovery hasn’t yet plateaued after it became the first major economy to contain the spread of coronavirus and return to growth, with GDP rising 0.6% in the first three months of 2021 from the previous quarter.How Much of China’s GDP Was Made in America?: Daniel MossThe recovery last year was led by strong investment in real estate and infrastructure spurring demand for industrial goods, while overseas orders for medical goods and electronic devices fueled exports. Consumer spending had lagged, but the latest figures showed a turnaround. Retail sales growth was 6.3% in March when calculated on a two-year average growth basis -- which removes distortions created by last year’s lockdowns -- up sharply from the rates seen last year.“We are seeing a bit more balanced recovery in the Chinese economy,” Wang Tao, chief China economist at UBS AG, said in an interview with Bloomberg TV. “That early pickup in construction industry is going to give way to more household consumption,” she added. Consumer spending at restaurants and sales of discretionary goods such as jewelry, alcohol and tobacco led the growth of retail sales in March.The economy was also boosted by a jump in investment from overseas. Inbound investment into China rose almost 40% to $45 billion in the first three months of 2021, according to data from the Ministry of Commerce released Thursday. That was the highest for that period in comparable data back to 2002.Markets were choppy following the data release but ended the day little changed, with the benchmark CSI 300 Index paring an earlier loss of as much as 0.6% to finish up 0.35% for the day. The yield on benchmark 10-year sovereign debt fell slightly to 3.16%. The onshore yuan was unchanged on the day at 6.5226 per dollar.Broadening out the recovery remains a work in progress with growth in the first quarter still reliant on the property sector. Fixed-asset investment in real estate rose 7.6% on a two-year average growth basis and infrastructure spending increased roughly in-line with pre-pandemic rates. Quarterly steel production of 271 million tons suggests that annual output is on course to top 1 billion tons for the second year running.What Bloomberg Economics Says...The undershoot in GDP growth relative to expectations and lopsided nature of the recovery do not warrant any economy-wide shift in monetary policy, in our view.Looking forward, production is poised to start peaking, while demand should pick up further. This should add more balance in what looks to be a steady recovery ahead.Chang Shu, chief Asia economistFor full report, click hereAlthough Beijing has promised “no sharp turns” in monetary and fiscal support this year, some prominent economists have warned that premature tightening could still put the recovery at risk. The central bank has asked banks to curtail loan growth in coming months as it seeks to control credit to curb asset bubbles. Alongside the investment data, data showing home prices grew at the fastest pace in seven months in March will likely prompt more action by Chinese policy makers to rein in the sector.“Considering the robust recovery, we certainly do not expect Beijing to step up easing measures, but it is also unlikely to make a sharp shift in its policy stance,” Nomura economists led by Lu Ting wrote in a note. Authorities have learned lessons from a “forceful deleveraging campaign” in 2017-18, which led to bond defaults, a stock market selloff and weaker growth, they said.The statistics bureau said Friday inflation is expected to remain in a moderate range this year, and while rising commodity costs could boost domestic prices, there’s no basis for prices in upstream sectors to rise significantly.“The economy is far from overheating,” said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong Ltd. “The consumer sector doesn’t have a solid basis for overheating, and I don’t think the central bank will take a faster turn for monetary policy.”Bloomberg Economics forecasts global GDP growth of 6.9% in 2021, rapid enough to bring output substantially back onto its pre-Covid path. Data released Thursday showed the U.S. economy’s comeback is firing on all cylinders, with retail sales exceeding pre-pandemic levels in all categories except restaurants. Production at U.S. factories increased in March by the most in eight months.China has rapidly accelerated its vaccination campaign over the past month in a move that should help bolster spending on services. A recovery in major economies fueled by vaccine roll-outs and the Biden administration’s massive fiscal stimulus is expected to sustain rapid growth in Chinese exports this year.Economists have upgraded their forecasts for China’s growth in recent days: Bloomberg Economics expects 9.3% expansion, ING Groep NV economist Iris Pang predicts 8.6% and Nomura sees 8.9%.“We expect the economy to continue to gain momentum in the second quarter, with a rotation in terms of the drivers of growth compared to last year,” said Louis Kuijs, head of Asia Economics at Oxford Economics Ltd. in Hong Kong. “Less generous fiscal and monetary policy will weigh on infrastructure and real estate investment, while improved profitability and confidence should buoy corporate investment and consumption.”(Updates with foreign investment data.)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.
Ferrari is making good progress on a shortlist of "very strong" candidates to be the Italian luxury carmaker's next chief executive, Chairman John Elkann told shareholders at a general meeting on Thursday. Former CEO Louis Camilleri stepped down in December, citing personal reasons, after being in the role for nearly two and a half years, just as the company was rolling out new hybrid models and getting ready for its first ever SUV, called 'Purosangue' (Thoroughbred). "The new CEO and the senior management team will share Ferrari’s exciting future with you during our (capital markets day) in 2022, which will also be a year of important new product launches and particularly the Purosangue which is turning out to be something truly special," Elkann said.
(Bloomberg) -- Zimbabwe is considering penalizing domestic banks, telecommunications operators and other businesses over what the government describes as profiteering off the hard currency it makes available at auctions.Lenders could face fines and suspensions, while companies that charge a premium for foreign exchange may be banned from participating in the auctions, central bank Governor John Mangudya said in a phone interview from the capital, Harare.“All the malpractices will be targeted,” he said. “There’s no need to chase foreign currency as if it will run out.”President Emmerson Mnangagwa on Monday threatened unspecified actions against “sharks in the financial sector,” according to the state-owned Herald newspaper, which said unidentified entities are profiteering at the public’s expense. The president’s comments were made during a wide-ranging interview he gave to state-owned television that will be aired on April 17 on the eve of Independence Day celebrations, the paper said.Exchange ClosedMnangagwa has previously issued warnings to private companies he blames for undermining his efforts to turn around an economy plagued by annual inflation of 241% and foreign-currency shortages.Last year, his government closed the Zimbabwe Stock Exchange for five weeks and singled out the largest mobile operator, Econet Wireless Zimbabwe Ltd., for undermining the nation’s currency through its mobile-money service. Econet denied the allegations.The impending action is an attempt to prevent manipulation of the foreign-currency auction system, according to the Herald. The system has provided over $800 million to companies since its introduction in June, though high demand for U.S. dollars by importers means that there is only a limited supply.Monetary authorities met with the Bankers Association of Zimbabwe on April 12 to discuss “due diligence and know-your-customer requirements” in order to ensure economic stability, Mangudya said.Ralph Watungwa, president of the Banker’s Association of Zimbabwe, didn’t immediately answer two calls to his mobile phone seeking comment.Zimbabwe reintroduced its own currency in 2019 after a 10-year hiatus and has been battling bouts of high inflation and shortages of everything from foreign currency to food. The local unit, which was pegged at parity to the U.S. dollar as recently as February 2019, has plunged to 84 per U.S. dollar.The gap between the official exchange rate and parallel market has widened by 36%, with a U.S. dollar selling for 115 Zimbabwean dollars on the streets of Harare.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The US banking group will shut down its retail operations in countries including China and India.
(Bloomberg) -- Coinbase Global Inc. fluctuated for a third day, with its shares failing to draw the level of investor enthusiasm seen after Wednesday’s direct listing,The stock rose as much as 2.3% to trade at $330 at 9:50 a.m. in New York after initially churning between gains and losses. Coinbase came back after another bullish review from Wall Street analysts, and despite weakness for cryptocurrencies including Bitcoin.The biggest U.S. cryptocurrency exchange, with a market value of roughly $65 billion, boasts a price more than 30% higher than the reference price of $250 at offering. But its first-day strength, when shares soared as high as $429.54 in the first few minutes of trading, was fleeting.Loop Capital Markets analyst Kenneth Hill became the latest analyst to advise clients to buy shares of the exchange, highlighting “lots of runway” for the company ahead of a “takeoff.” Hill is the fifth analyst to rate the shares at a buy; however, his $394 12-month price target is the lowest on Wall Street.Skeptics have warned of risks ranging from growing competition to Bitcoin’s volatility, but some investors see opportunity. Cathie Wood’s funds have snapped up about $352 million worth of shares over two days and there are expectations for the company to become a staple in money managers’ portfolios.“Coinbase’s market valuation may seem excessive to some given the prospects of increased competition in digital wallets business, which should rapidly eat into Coinbase’s sweet profit margins,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in emailed comments. “On the other hand, the competition is not here yet, while large trading volumes continue boosting Coinbase’s revenues for the moment.”All five of the analysts that cover the company rate it at a buy, with an average price target of $521, implying shares have another 60% to run from Thursday’s close, data compiled by Bloomberg show.DA Davidson analyst Gil Luria raised the firm’s price target to a Street-high of $650 and touted the company’s “regulatory-friendly” approach to the nascent market.Bitcoin fell as much as 5.3% to $60,063, after coming close to hitting $65,000 per token earlier this week.(Updates share movement 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.
ANKARA (Reuters) -Bitcoin tumbled more than 4% on Friday after Turkey's central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible "irreparable" damage and transaction risks. In legislation published in the Official Gazette, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, to pay for goods and services. The decision could stall Turkey's crypto market, which has gained momentum in recent months as investors joined the global rally in bitcoin, seeking to hedge against lira depreciation and inflation that topped 16% last month.