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.
Grab’s record-breaking deal to merge with a special purpose acquisition company (SPAC) will raise an eye-popping $4.5 billion in cash. A quick recap: Singapore-based Grab is poised to have a market value of around $39.6 billion after it combines with a SPAC called Altimeter Growth. Altimeter is basically a $500 million pot of money listed on Nasdaq that was looking for a target to merge with (which is why SPACS are sometimes called “blank check” companies).
(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.
World stock markets extended a five-day run of fresh highs on Thursday, fueled by upbeat earnings and strong U.S. economic data that herald a solid recovery ahead, while Russian markets tumbled at the prospect of the harshest U.S. sanctions in years. Major stock indexes posted record highs, including MSCI's global benchmark, Europe's broad STOXX 600 , the Dow Industrials and the U.S. benchmark S&P 500, as bonds yields tumbled. The 10-year U.S. Treasury note slid below 1.6% to yield 1.563%, a fall of 7.4 basis points that helped spur renewed buying of big tech stocks in the biggest single-day decline in the benchmark's yield in almost three months.
(Bloomberg) -- The physical crude market in Asia has been reinvigorated amid a rise in buying by a Chinese mega-refiner as well as some Japanese oil companies, boding well for improved consumption.Rongsheng Petrochemical Co. came to the market early this month to snap up about 7 million barrels of Middle Eastern varieties for June-July delivery. That’s up from 5 million barrels bought in March, and puts it on course for the biggest monthly purchase since October, according to data compiled by Bloomberg. In addition, spot differentials of Russia’s ESPO cargoes have started off stronger, trading $1 above the last reported deal.The pick-up in activity across the key Asian market comes amid a flurry of signs that global oil consumption is improving as economies including the U.S. shake off the impact of the pandemic. This week, both the International Energy Agency and Organization of Petroleum Exporting Countries issued positive outlooks, even as the cartel and its allies plan to ease supply curbs. So far in 2021, Brent futures have soared 30%, and last traded near $67 a barrel.In Asia, traders had been waiting for further signs of improved demand across the region after buying of spot cargoes by China was muted in March, weakening the overall Asian physical market. That retreat of Chinese buyers coincided with its bigger intake of U.S.-sanctioned Iranian crude, and as higher prices and the backwardated market structure incentivized local de-stocking.While the spot crude purchases of China’s smaller independent refiners will be observed in the coming days, the nation is clearly leading the global recovery in oil consumption. Its refineries processed near-record volumes of crude last month, contributing toward record economic growth in the first quarter.See also: China’s March Apparent Oil Demand Rises 22.5% Y/yRongsheng’s Singapore unit purchased 6 million barrels of Abu Dhabi’s Murban and Upper Zakum, along with a further 1 million barrels of Qatar’s Al-Shaheen for delivery to Zhoushan, according to traders who asked not to be identified.Rongsheng is not alone, with Japanese refiners also out early to secure Middle Eastern supplies. In addition, other processors such as Thailand’s PTT Pcl and Japan’s Fuji Oil Co. issued tenders on Friday to purchase sour grades from the Persian Gulf, of which results will most likely surface next week.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) -- Bank of America Corp.’s traders and investment bankers joined their Wall Street rivals in capitalizing on the stock market’s wild ride this year, but that wasn’t enough to satisfy investors also looking for more lending activity.Shares fell as much as 4.2% Thursday -- their biggest intraday decline in five months -- after the company reported a decline in loan balances and its executives said higher costs from the pandemic would persist for longer than expected.“Like all banks, BofA is waiting for loan growth, which was weak this quarter,” said Alison Williams, a Bloomberg Intelligence analyst. “Higher expenses are likely a disappointment.”The company’s stock slid even after it reported a 17% surge in revenue from sales and trading in the first quarter, a bigger jump than expected, while equity underwriting fees more than tripled. The results echo blockbuster profits at JPMorgan Chase & Co. and Goldman Sachs Group Inc., which benefited from increased trading amid stock-market volatility and a flurry of activity by blank-check companies.As the Covid-19 pandemic drags on, U.S. banking giants have remained resilient. Their Wall Street operations picked up the slack for other divisions, bringing in deal fees and activity from clients who were reacting to financial-market gyrations. Main Street units fared worse, as millions of Americans lost their jobs and businesses were shuttered. But there are some indications that consumers are starting to spend again as the vaccine rollout and stimulus efforts help the economic revival pick up steam.“We see an accelerating recovery” that has “gained momentum and continues to be supported by fiscal monetary policies,” Chief Executive Officer Brian Moynihan told analysts on a conference call. “We remain highly focused on capturing loan growth as the economy expands and continues to recover.”Bank of America’s fixed-income traders delivered a 22% climb in revenue, while its stock desks saw a 10% increase. The overall jump didn’t reach the blowout numbers that JPMorgan and Goldman Sachs announced Wednesday, but the bank’s total haul of $5.1 billion beat analysts’ $4.37 billion forecast.Investment-banking fees climbed more than 60% to a record $2.25 billion, led by a surge in equity-underwriting fees to $900 million.The bank’s net interest income, or revenue from customer loan payments minus what the company pays depositors, decreased 16% to $10.2 billion. Loans in the consumer banking unit dropped 8%.“We believe 4Q 2021 NII could rise as much as $1 billion from this quarter’s level,” Chief Financial Officer Paul Donofrio told analysts.Noninterest expenses rose 15% to $15.5 billion, driven by costs linked to the coronavirus, compensation changes and charges for shrinking the bank’s real estate footprint.“Obviously we’re sitting here in the middle of a pandemic with a lot of Covid expenses that have been a little more sticky than we had all hoped, but they’re going to come out -- there’s no question about that,” said Donofrio, who fielded several analyst questions about costs during the earnings call.The bank joined rivals in releasing reserves as the worst-case pandemic scenarios didn’t play out. It released $2.7 billion from its stockpile last quarter after stashing away more than $11 billion last year to cover loans likely to sour. Reserves will probably decline in coming quarters as the economy gets back on track and uncertainty eases, Donofrio told reporters on an earlier conference call.Client balances in the Merrill Lynch Wealth Management business surged 32% to a record $2.9 trillion, while assets under management jumped 36% to $1.1 trillion.Also in the first-quarter results:Net income rose to $8.05 billion from $4.01 billion a year earlier. It exceeded the $6.25 billion estimate of 13 analysts. Per-share earnings of 86 cents beat analysts’ 66-cent forecast.Total revenue increased slightly to $22.8 billion.Bank of America also said Thursday that it plans to boost its capital returns once restrictions from the Federal Reserve are lifted. The bank’s board authorized $25 billion of stock buybacks over time.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 has given domestic and international banks permission to import large amounts of gold into the country, five sources familiar with the matter said, potentially helping to support gold prices after a months-long decline. China is the world's biggest gold consumer, gobbling up hundreds of tonnes worth tens of billions of dollars each year, but its imports plunged as the coronavirus spread and local demand dried up. With China's economy rebounding strongly since the second half of last year, its appetite for gold jewellery, bars and coins has also recovered, and since January domestic prices have been higher than global benchmark rates, making it profitable to import bullion.
Bitcoin fell early on Friday, after Turkey’s central bank decided to ban cryptocurrency payments from the end of the month.
(Bloomberg) -- Applovin Corp. fell more than 18% in its trading debut after the mobile apps company and KKR & Co. raised $2 billion in an initial public offering.The shares, priced in the IPO at $80, closed at $65.20 in New York Thursday, giving the company a market value of about $23 billion based on the outstanding shares listed in its filings with the U.S. Securities and Exchange Commission.The company sold 22.5 million shares and investor KKR sold 2.5 million shares on Wednesday at the midpoint of a marketed range of $75 to $85.Co-founder and Chief Executive Officer Adam Foroughi, President and Chief Financial Officer Herald Chen and KKR will have 93.4% of the voting power, according to the company’s filings. Their Class B shares will have 20 votes each, while the shares sold in the IPO will have one vote apiece.‘Milestone’ Day“Today is a milestone. It gave us access to funding to go reinvest back in our business,” Foroughi said in an interview before trading began. “We’re much more interested in where we land three to five years down the road than we are where we are going to trade today.”He compared Applovin’s machine-learning focus to enable content creators to that of Netflix.“We’re entirely focused on that tech enablement platform,” he said. “However, we’ve invested in these creators.”The Palo Alto, California-based company has scaled up and diversified, partly through acquisitions.Machine ZoneApplovin announced in May that it was acquiring game-maker Machine Zone Inc., which people familiar with the matter said was valued in the deal at about $500 million. This year, it bought Berlin-based Adjust in a deal that valued the maker of tools to measure the performances of apps at close to $1 billion, Bloomberg reported.Applovin reported a net loss of $126 million on $1.45 billion in revenue in 2020, due to operating losses, according to its filings. That compared with net income of $119 million on revenue of $994 million the previous year.The offering was led by Morgan Stanley, JPMorgan Chase & Co., KKR, Bank of America Corp. and Citigroup Inc. Applovin’s shares are trading on the Nasdaq under the symbol APP.(Updates with closing share price 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.
It’s not a good sign that wide divergences between the Dow Jones Industrial Average (DJIA) and the Nasdaq Composite Index (COMP) have become almost commonplace. Consider the number of trading sessions in which there is at least one percentage point spread between the returns of these two indices. On Tuesday, the Nasdaq rose 1.1% while the Dow fell 0.2%.
Citibank has hinted there won't be any possible layoff and closure of physical branches in the countries it is exiting.
China's GDP expanded by a dizzying 18.3% in the first three months of 2021 from a year earlier, sealing its status as COVID-19's "first in, first out" economy. It was the only major economy that showed an increase in gross domestic product (GDP) last year after successfully controlling the spread of the coronavirus pandemic at home. HOW BIG IS CHINA'S FIRST-QUARTER GDP GROWTH EXACTLY?
The IRS sent out COVID-19 relief checks to nearly 2M more Americans, including over 700,000 'plus-up' payments for people eligible for more money.
The IRS commissioner says the child credit payments will arrive on time after all.
Coinbase is the first of many crypto startups to go public. But, as crypto continues to eat traditional finance, will those listings matter?
(Bloomberg) -- The chief executive officer of AMC Entertainment Holdings Inc. said the movie-theater chain is once again “under attack” from short sellers after skirting bankruptcy during the Covid-19 pandemic.The volume of short sales -- bets that the stock will go down -- rose about 50% in March to 73.8 million shares, CEO Adam Aron said in a discussion with the social-media finance commentator Trey Collins. In a wide-ranging interview, he also touched on a proposal to raise new equity and praised the meme investors who bid the stock up to more than $20 a share in January.The shares have since retreated from that lofty level. But they rose as much as 9.4% on Thursday after Aron said he has no immediate plans to issue any of the 500 million new shares the company is asking shareholders to authorize. The company won’t seek to sell those shares in 2021 but rather in the coming years. Aron is seeking to carry out a long-term growth plan that could silence AMC’s doubters.“There are strategies we have that are very good for AMC, to come out of this pandemic, to rebuild this company,” Aron said. “But not only get back to where we were, I’d like to keep going. And I’d like to grow this company even more so.”Shirting CollapseAron also reflected on the difficult stretch the theater chain endured. In 2019, revenue averaged $450 million a month. It slumped virtually to zero a little over a year ago, after the pandemic forced theaters to close. The chain was weeks away from running out of cash at least five times, and has since restructured its finances, banking enough cash to last through most of 2021.Other theaters have succumbed to the Covid-19-struggle. ArcLight Cinemas and Pacific Theatres, two jointly owned California movie-theater chains, announced plans this week to close permanently, underscoring the still-tenuous state of the industry.If short-term funding needs arise, AMC has a prior authorization to sell 43 million new shares. Aron said that’s enough to get the company through the pandemic, but limits its growth opportunities. If investors at the May 4 annual meeting approve the plan for additional stock, he’ll gain flexibility to buy back debt at a discount or acquire another chain at an attractive price, which would counteract any dilution.The theater chain has about 450 million shares outstanding now, according to data compiled by Bloomberg. Aron’s remarks were included in a regulatory filing Thursday.Praise for TradersAron, who has long been known as outspoken, also praised the internet investors who see themselves as fighting against “conventional” market participants, like short sellers who profit when stock prices decline. He connected with Collins, who offers online investment commentary under the username Trey’s Trades, after his 30-year-old son saw a tweet that Collins had sent to his nearly 50,000 followers, known as “apes.”“My hat’s off to you,” Aron said. “I’m well aware that you have been talking about AMC a lot over the last few months and you have, you know, hundreds of thousands of subscribers, tens and tens of thousands of people watching your shows on the YouTube channel,” Aron said.“I actually work for you,” he said, “and for that reason it’s a special reason for me to engage with all of you.”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.
Lawmakers and advocacy groups are pushing the president to take immediate action.
Federal tax returns are due May 17, but many people still need to pay their first quarter 2021 estimated tax payments April 15. Plus more tax tips.
The investment comes a little over a week after Grayscale confirmed that it would convert GBTC into an ETF.
(Bloomberg) -- New York State collected $3 billion more tax revenue in the last fiscal year than projected by Governor Andrew Cuomo two months ago, boosted by strong personal income tax receipts, state Comptroller Thomas DiNapoli said.However, collections for the budget year ending March 31 were $82.4 billion, which is $513.3 million lower than the prior year, as social distancing and lockdowns due to the coronavirus depressed sales tax revenue.“The state’s year-end financial position was significantly better than anticipated,” DiNapoli said in a statement Thursday. “We face a long road to recovery, and the state’s economy still faces serious challenges, both in the short-term and long-term.”States from California to New Jersey avoided dire predictions of fiscal collapse as the federal government pumped $3 trillion into the economy last year through enhanced unemployment benefits, small business loans and direct payments to individuals and families. The surging U.S. stock market and Wall Street’s most profitable year since 2009 boosted capital gains tax revenue in New York, New Jersey and Connecticut.And the federal money will continue to flow. New York state and its localities are slated to get almost $24 billion from President Joe Biden’s $1.9 trillion stimulus package. The Empire State passed a $212 billion budget for the fiscal year beginning April 1, almost $20 billion more than Cuomo proposed in his executive budget. Despite the federal largess, New York raised taxes on the richest residents by $2.8 billion.“State policymakers must ensure that spending commitments are in line with recurring revenue sources,” DiNapoli said.Personal income tax collections totaled $55 billion last year, exceeding the prior year by $1.3 billion. Consumption and use taxes, which include sales tax receipts, totaled $16.1 billion, a 10.6% decline from the prior year. Business tax collections were $203.4 million lower.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.