(Bloomberg) -- Europe’s vaccine campaign may be beset with delays, communication blunders and missteps, but in markets at least investors are united in wagering that the pandemic is on the way out.Stocks in the region have vaulted back to records, and the euro capped its best week against the dollar so far this year. A big turnaround in projected profits for corporate Europe shows a brewing recovery in the investment and consumption cycle.Analysts are ratcheting up estimates for European miners, banks, auto makers and oil producers -- all industries set to boom as the global economy roars back to health. Upgrades now outnumber downgrades by most in over a decade, according to data from Citigroup Inc.Whether all that enthusiasm is justified will become clearer this month, when earnings season kicks off. Behind the bullish shift in markets is a belief that Europe will be successful in immunizing the bulk of its population within a few months, and evidence that the U.S. and Asia are on a solid path of recovery.From food giant Nestle SA to luxury powerhouse LVMH Moet Hennessy Louis Vuitton SE, investors are counting on Europe’s flagship names to reap windfall profits as consumers around the world come out of lockdown ready to spend.“The market rightly anticipates accelerating earnings growth,” said Olga Bitel, global strategist at William Blair Investment Management. “The difference this time is magnitude. Specifically, the U.S. and Europe are likely to experience the mother of all recoveries over the next several years.”The gains across European markets show sentiment is turning positive after a delayed start to immunizations and mistrust over the AstraZeneca Plc vaccine’s side effects. Now, signs are emerging that Europe’s vaccine campaign might be getting back on track.France met its goal of inoculating 10 million people a week ahead of schedule and Germany has doubled its pace of vaccinations. Germany’s export-led economy is also getting a boost from the wider economic recovery, helping lift inflation expectations. The country’s 10-year breakeven rate is at 1.35%, near the highest since 2014.Granted, European markets still look sleepy compared with elsewhere. The euro isn’t far from its five-month low against the dollar, and there’s no sign of a speculative frenzy bubbling up anywhere in equities. Instead, the investment case for Europe is often one about valuation discounts.The region has been so battered, whether from the pandemic, bureaucratic infighting, vaccine delays or fiscal restraint, that it doesn’t take much to spark a turnaround. And at a time when China and the U.S. are booming, bulls believe Europe can ride the momentum too.To bet on the comeback story, JPMorgan Chase & Co.’s equity derivatives team has told clients to buy calls on the Euro Stoxx 50 and sell them on the S&P 500. The bank’s strategists tout Europe’s cyclical bent and relative cheapness as all reasons why stocks can keep outperforming.Despite that optimism, there’s plenty evidence that Europe’s recovery is still on shaky ground. Concern over rare blood clots linked to AstraZeneca shot has held back vaccination efforts. There’s also growing alarm about a potentially long delay before money from Europe’s 750 billion-euro ($892 billion) recovery fund reaches crisis-hit countries.For now, all eyes are on consumer spending. In the U.K., shops, gyms and hairdressers reopen on Monday, and the summer months will be a litmus test if shoppers are ready to splash out on holidays and new clothes.Airlines and mall owners have already soared from investors betting normal life can quickly return. Bonds of EasyJet Plc and U.K. property manager Hammerson Plc are among the best performers in Europe this year.Bond Investors Are Already Betting on Return to Normal Life“As long as the vaccine rollout continues to progress, we would expect to see consumers start to spend,” said Niall Gallagher, an investment director of European equities at GAM.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.
China's competition watchdog is adding staff and other resources as it ramps up efforts to crack down on anti-competitive behaviour, especially among the country's powerful companies, people with knowledge of the matter told Reuters. Beijing's plan to bulk up the State Administration for Market Regulation (SAMR) comes as China revamps its competition law with proposed amendments including a sharp increase in fines and expanded criteria for judging a company's control of a market. On Saturday, the watchdog slapped a record $2.75 billion fine on Alibaba after an antimonopoly probe found the e-commerce giant had abused its dominant market position for several years.
(Bloomberg) -- Melvin Capital Management, the once high-flying hedge fund that lost billions of dollars after its bearish wagers were caught up in a Reddit-fueled rally, saw its first-quarter decline extend to 49%.The fund slid 7% last month, reversing a gain of almost 22% the month before, according to people with knowledge of the matter. In January, the fund dropped 53%.The firm, founded by Gabe Plotkin, was among several that took heavy losses after retail traders banded together to push stocks including GameStop Corp. to new heights. Plotkin, who had been short the company, then took a $2.75 billion investment from Citadel, Point72 Asset Management and others.Plotkin in February was called by Congress to testify about the debacle. He told lawmakers that the hedge fund industry will adapt to avoid the kinds of market dynamics that led to his fund’s losses.A spokesman for the firm declined to comment.Another firm caught in the cross hairs of the GameStop saga, Maplelane Capital, which lost 45% in January, is starting to recover.The fund rose 6.5% in February and 2.1% in March, according to people familiar with the matter, and ended the first quarter with a loss of 39.5%. The fund benefited from its long and short wagers on technology and consumer-focused companies, one of the people said.Maplelane has made money in 14 of the past 15 months, one of the people said.The $3 billion New York-based firm, run by Leon Shaulov and Rob Crespi, declined to comment.Overall, the hedge fund industry struggled to make money last month amid higher equity market volatility. The average fund was about flat in March and gained 2.2% in the first quarter, according to Hedge Fund Research Inc. The S&P 500 index rose 4.2% in March and 6.2% for the quarter, with dividends reinvested.Lone Pine Capital, Tiger Global Management and Whale Rock Capital Management, which often focus on tech wagers, posted dismal March returns.Meanwhile, Glenview Capital, which ended 2020 with a 9.5% gain despite steep losses earlier in the year, soared 25% in its flagship fund through March thanks to successful wagers on health care stocks, including DXC Technology Co., Cigna Corp., AmerisourceBergen Corp. and McKesson Corp.Here’s how other hedge funds fared in March and in the first quarter, according to people familiar. Representatives for the firms declined to comment.(Adds Congressional testimony in fourth paragraph. An earlier version corrected Hudson Bay’s strategy in the 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.
(Bloomberg) -- Real estate data firm CoreLogic Inc. is set to sell the largest acquisition-related loan in over a year as borrowers continue to take advantage of insatiable demand from yield-starved investors.CoreLogic, known in the real estate industry for its home-price indexes, plans to sell a $4 billion offering to help finance its buyout by Stone Point Capital and Insight Capital. It’s the largest acquisition-related loan since Zayo Group Holdings Inc. issued a $4.75 billion deal in February 2020. CoreLogic’s loan commitment deadline is among about a dozen due next week while two lender meetings are on deck.Acquisition financing is booming and expected to gather steam as the economic outlook brightens. Apollo Global Management sold $4.1 billion in bonds and loans to help finance its acquisition of arts and crafts retailer Michaels Cos. this week.SCIH Salt Holdings Inc. will be marketing $1.8 billion in senior secured junk bonds to help finance its Morton Salt acquisition and to complete others. Nineteen junk-rated companies have raked in nearly $15 billion just this week, according to data compiled by Bloomberg.Barclays predicts total junk bond and leveraged loan supply will reachabout $860 billion this year -- far exceeding the 2013 record of roughly $700 billion -- as firms look to refinance obligations in the face of rising Treasury yields that could push borrowing costs higher in the months ahead.Bank EarningsBlue-chip companies may price as much as $25 billion of new bonds next week, according to an informal survey of underwriters. One company elected to stand down Thursday and is expected to wait until next week before reemerging.The biggest Wall Street banks will kick off quarterly earnings, which can be a harbinger for investment-grade issuance. JPMorgan Chase & Co., Goldman Sachs Group Inc., and Wells Fargo & Co. report on Wednesday, while Citigroup Inc. and Bank of America Corp. on Thursday. Morgan Stanley will announce results on Friday.While U.S. banks’ balance sheets remain flush with deposits, loan growth is likely to remain soft in first half of 2021, according to CreditSights analysts Jesse Rosenthal and Peter Simon. They expect banks to be asked for details on the Archegos Capital Management fund blowup and risk management for the prime brokerage business generally.The implosion of Bill Hwang’s hedge fund highlighted how strong most of the financial companies’ balance sheets are, according to Anders Persson, chief investment officer of global fixed income at Nuveen.Non-bank borrowers free to sell bonds after reporting earnings next week include PepsiCo Inc., Delta Air Lines Inc. and Alcoa Corp.In the distressed debt world, a number of expiration and forbearance deadlines are set for the week, starting with Voyager Aviation Holdings LLC, which faces an early tender deadline for its proposed debt exchange on Monday. Two days later, Washington Prime Group Inc.’s forbearance expires after the mall operator missed payments on its notes.GTT Communications Inc.’s forbearance deadline with lenders, which has been pushed off for weeks, is currently set to expire on Thursday. Transocean Inc. has a coupon payment on its 2031 unsecured notes due that same day. KKR & Co.’s Envision Healthcare Corp. also has a coupon due for its notes due 2026.Event NotePlease click here to register for the first ever Bloomberg News private credit event where we’ll be tackling what’s next for the $890 billion asset class post-pandemic with guests from Ares Management, Neuberger Berman, Tikehau Capital and CDPQ at 11 am ET on April 13.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.
As the president mulls Democrat calls to cancel up to $50,000 in federally-backed student loan debt via executive order, a new analysis shows how $10,000 in forgiveness would affect borrowers in each U.S. state.
Berkshire Hathaway Inc reversed course on Friday and told an activist group it could present a shareholder proposal remotely for the company's May 1 annual meeting, in line with renewed guidance from the U.S. securities regulator. Warren Buffett's insurance and investment company traditionally draws thousands to its extravagant annual meeting in Omaha but, like many top U.S. corporations during the coronavirus pandemic, had asked investors to log in to the meeting remotely instead of attending in person. The shift to online has stymied many activist investor groups whose shareholder resolutions often animate the meetings, however.
Exxon Mobil Corp. (NYSE:XOM) is not going to lower its dividend no matter what it costs the company. That point came out loud and clear from the company’s latest earnings conference call. This means that XOM stock will continue to have a “strong” dividend yield of about 6.15%. It’s worth at least 32% more, or $74.63 per share, based on its historical dividend yield. Source: Harry Green / Shutterstock.com For the past two years (8 quarters) Exxon has paid 87 cents per share in quarterly dividends. That works out to $3.48 per share each year. Exxon clearly intends to maintain that dividend. Therefore, at today’s price (April 9) of $55.87, the dividend yield is very healthy at 6.2%. Target Price Based on Historicals Moreover, based on the company’s historical dividend yield, this is much higher than its average. For example, Morningstar reports that over the past 5 years, its trailing 5-year dividend yield has been 4.96% (almost 5%).InvestorPlace - Stock Market News, Stock Advice & Trading Tips We can use this to estimate the normalized target value for XOM stock. For example, if we divide the dividend per share of $3.48 by the average yield of 4.96%, the result is a target price of $70.16 per share. This represents a potential gain of $14.29 or about 26% more based on today’s price of $55.87. 7 Infrastructure Stocks Excited For The $2 Trillion Biden Plan We can do the same thing with the company’s earnings-per-share (EPS). Applying Morningstar’s 5-year avg. price-to-earnings (P/E) ratio of 25.62 times (over the last 5 years) to Exxon’s EPS for this year ($2.87) produces a target price of $73.53. That is over 30% above today’s price. Similarly using the Morningstar forward P/E average of 21.75 times Exxon’s $3.88 EPS for 2022 produces a target price of $84.39. Now we have three different price targets based on dividend yield and price-to-earnings. To round things out we can also derive a price based on its historical price-to-sales. Morningstar says this is 1.25 times over the last five years. Analysts predict sales of $245.5 billion for 2021, so the price target works out to $306.875 billion. This is 29.7% above Exxon’s existing market cap of $236.5 billion. In other words, XOM stock is worth nearly 30% more or $72.46 per share. That means that, on average, XOM stock is worth about 34% higher, or $75.14 per share. These ratios are based on earnings and sales estimates provided by Seeking Alpha on their Earnings tab for Exxon Mobil stock. The estimates can vary depending on which aggregation service is used. But this gives you an idea that XOM stock is undervalued based on its historical metrics. One thing to note is that although the $3.48 dividend exceeds the forecast earnings of $2.87 this year (2021). But next year analysts predict EPS of $3.88 per share, which will cover the dividend, assuming oil and gas prices stay high. Moreover, management said on the fourth-quarter 2020 conference call that cash flow from operations should cover the dividend payments this year. This coincides with their intention to maintain a “strong” dividend, mentioned 10 times on the conference call. What To Do With XOM Stock Most analysts have higher price targets for Exxon stock, but not by much. For example, TipRanks.com says that 18 analysts have an average price target of just $60.68. Similarly, Yahoo! Finance says that 25 analysts believe on average XOM stock is worth $61.18. However, Marketbeat.com reports that 24 analysts have a lower target of $52.73, whereas Seeking Alpha says that 27 analysts have an average target of $61.36. Click to EnlargeSource: Mark R. Hake, CFA You can see in the table on the right that the median analyst price target is $60.63, or 7.1% above today’s price. So, on the one hand, this is much lower than my price target using historical metrics. But on the other hand, keep in mind that my price target could take several years to achieve, whereas most analysts are just looking out one year. For example, if my 34% higher price target takes two years, the average annual return will be just 16% each year on a compounded basis. Moreover, the dividend yield is 6.15%. Therefore the total return, even if the analysts’ target price pans out will be 13.25% (i.e., 7.1% price gain plus 6.15% dividend yield). My target price produces an expected return of 21.95% (i.e., 14.8% gain plus 6.15% yield). Any way that you look at it, XOM stock looks like a good bargain here, assuming oil stays high and the stock returns to its normal historical value metrics. On the date of publication, Mark R. Hake did not hold a long or short position in any of the securities in this article. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post Exxon Mobil Will Keep Paying Its Dividend, And May Be Worth 30% More appeared first on InvestorPlace.
Daily Journal Chairman Charlie Munger says a new investment in Chinese internet giant Alibaba is part of a move into stocks because returns on Treasury bills are so low.
The president is being urged to roll more direct aid money into his infrastructure bill.
Cash and carry traders seek to profit from the spread between bitcoin's price in futures and spot markets.
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As trade and investment have grown between China and Nigeria, so has lending, leading to an increased focus on the balance of the bilateral relationship.
A handful of retailers and apparel makers have encountered a backlash in China in recent weeks, and more could soon be in the same boat.
Cowen and company in their latest report said they continue to believe that Delta Airlines will report a loss this year unless there is a significant recovery of international and corporate traffic in the second half, which seems highly unlikely amid the fourth wave of coronavirus infections.
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Avelo Airlines, a startup budget carrier, will inaugurate service on April 28 from its base at Hollywood Burbank Airport in California. What’s Happening: The start-up airline will offer nonstop service to smaller airports in 11 West Coast locations, using 189-seat Boeing 737-800 aircraft accommodating 189 seats. To launch its service, Avelo is offering a promotion with one-way fares beginning at $19. “After more than 20 years of steadily shrinking consumer choice, the American flying public wants and deserves more options and lower fares,” said Avelo Founder and CEO Andrew Levy, former chief financial officer at United Airlines Holdings Inc (NYSE: UAL) and former president, chief financial officer and chief operating officer at Allegiant Travel Company (NASDAQ: ALGT). Related Link: French Government Gives .7B Infusion To Ailing Air France: What You Need To Know Why It Matters: Avelo is the second start-up U.S. carrier launching this year, joining Breeze Airways as a newcomer to the skies. Avelo is also entering an industry that is more than eager to move beyond the financial trauma created by the COVID-19 pandemic. Several major carriers have announced new routes and the resumption of pandemic-paused services, and two companies — Frontier Airlines and Sun Country Airlines — have also announced plans for initial public offerings. Related Link: American Airlines Flight Encounters UFO Over New Mexico (Photo courtesy Avelo Airlines) See more from BenzingaClick here for options trades from BenzingaDMX, Rapper With Troubled Life, Dies At 50Wall Street Crime And Punishment: Joseph P. Kennedy, The Crooked Dynasty Patriarch© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
NEW YORK (Reuters) -A federal judge on Friday ruled against Amazon.com Inc as the company defends against New York Attorney General Letitia James' lawsuit claiming it prioritized profit over worker safety during the COVID-19 pandemic at two New York City warehouses. U.S. District Judge Jed Rakoff in Manhattan granted James' request to return her lawsuit to a New York state court, and rejected Amazon's bid to move it to Brooklyn federal court, where the online retailer had sued James to stop her from suing.
The latest noises coming out from China suggest XPeng (XPEV) is keen to produce its own chips in-house. According to Chinese news outlet 36kr, using a small team of less than 10 engineers, the Chinese EV maker is developing its own autonomous driving chip. The production started a few months ago and is taking place in both the US and China. Xia Heng, XPeng’s Co-President and Chief Technology & Operation Advisor Benny Katibian, whose prior jobs include leading the tech dept at Qualcomm's ADAS team, are at the helm of the new project. “Industry sources indicate XPeng is actively recruiting chip engineers,” said Deutsche Bank’s Edison Yu, who believes this suggests “there are plans to grow this effort moving forward.” “In our view,” Yu further noted, “We do not expect any near-term changes as both XPILOT 3.5 and 4.0 will use Nvidia chips (Xavier and Orin), but believe similar to Tesla/NIO, XPeng wants to ultimately use a custom designed chip purpose built to train its neural net (to use in XPILOT 5.0) rather than a general purpose chip, in order to maximize performance/ efficiency and lower cost.” Yu thinks local rival Nio, is “likely” fast at work on a similar project after poaching Xiaomi's chip division manager. Looking at the wider picture, Yu believes it is all part of an effort by the industry/government to lower the dependence on foreign chips. Earlier this year, backed by BYD and Great Wall Motor, Horizon Robotics raised $900 million in a Series C round. The 5-year-old, local start-up was recently selected by SAIC (GM and VW’s main JV Chinese partner) to supply its ADAS/AD chipset. Horizon is targeting the shipment of 1 million chips this year and Yu believes it is a good example of the local industry’s chip manufacturing ambitions. To this end, Yu rates XPEV shares a Buy along with a $48 price target. The implication for investors? Upside of 39%. (To watch Yu’s track record, click here) XPEV stock has a resounding “yes” on Wall Street. 6 Buys and 1 Hold assigned in the last three months add up to a Strong Buy analyst consensus. At $49.50, the average price target implies upside potential of 43.5%. (See XPEV stock analysis on TipRanks) To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Bitcoin (BTC) is up 116% from the year's low of $27,734 on Jan. 4. It crossed the $60,000 mark for the first time on March 13, hitting a record $61,781.83 on Bitstamp exchange, just after U.S. President Joe Biden signed his $1.9 trillion fiscal stimulus package into law. Justin d'Anethan, sales manager at digital asset company Diginex in Hong Kong, said investors had turned their attention to stock markets and other cryptocurrencies in the past couple of weeks, leaving Bitcoin idling in the upper 50-thousand dollar levels.