BLK - BlackRock, Inc.

NYSE - NYSE Delayed Price. Currency in USD
444.39
+0.41 (+0.09%)
At close: 4:03PM EDT
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Previous Close443.98
Open446.16
Bid436.14 x 1000
Ask0.00 x 800
Day's Range441.82 - 447.13
52 Week Range360.79 - 487.45
Volume1,234,461
Avg. Volume568,207
Market Cap69.12B
Beta (3Y Monthly)1.45
PE Ratio (TTM)16.90
EPS (TTM)26.30
Earnings DateOct 14, 2019 - Oct 18, 2019
Forward Dividend & Yield13.20 (2.97%)
Ex-Dividend Date2019-09-04
1y Target Est524.46
Trade prices are not sourced from all markets
  • Financial Times

    Buzz around factor investing in fixed income is growing

    An Edhec-Risk Institute survey found that in Europe, exposure to government bonds rose from 13 per cent to 66 per cent between 2006 and 2019, while corporate bonds increased from 6 per cent to 68 per cent in the same period. Drilling down, Edhec’s research, to be published on Monday at an ETF Stream conference, found that about three-fifths of the institutions it surveyed focused on three factors integral to the credit risk market: carry/level of the yield curve, credit and slope of the yield curve.

  • Financial Times

    Capital and BlackRock under fire for backing Brazil’s JBS

    Two of the largest asset managers have been censured for holding stakes in a company accused of facilitating deforestation, as pressure grows on big investors to push companies to commit to clearer environmental goals in the wake of the crisis in the Amazon rainforest. The Amazon has been hit by more than 74,000 wildfires this year, up more than 80 per cent on the same period in 2018. Many of the fires are seasonal, but some of the blame has been directed at cattle ranchers, who, emboldened by Brazilian president Jair Bolsonaro’s anti-conservationist rhetoric, have been using fires to clear land.

  • Financial Times

    BlackRock executive warns Brexit will hinder global business model 

    New York-based BlackRock, which manages more money than any other investment group in Europe, has taken steps to prepare for Britain’s divorce from the EU, including setting up a hub in Paris and seeking additional regulatory licences in Amsterdam. “[BlackRock] is built on a global business model.

  • A Long-Despised and Risky Economic Doctrine Is Now a Hot Idea
    Bloomberg

    A Long-Despised and Risky Economic Doctrine Is Now a Hot Idea

    (Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. It’s like a design competition. Hardly anyone thinks central banks can fix a stalling world economy with their current tools. So some of the biggest names in finance are trying to invent new ones.The proposals so far -- including recent entries by billionaire Ray Dalio and monetary policy maven Stanley Fischer -- have one thing in common: They foresee the once all-powerful central bankers taking a more junior role, and collaborating with governments.That type of stimulus used to be taboo, in part because it risks eroding the independence from politics that monetary policy makers prize -- and President Donald Trump is already threatening. History is littered with cautionary tales in which blurring the lines between central bank and Treasury coffers led to runaway inflation.But right now, deflation is the big threat. An emerging consensus says the next downturn may need to be fought with direct and permanent injections of cash –- often called “helicopter money’’ -– and that central banks can’t deliver it alone.‘Pushing on a String’The monetary policy makers can encourage private actors to spend or invest, by making it cheaper to borrow. By historical standards, though, interest rates are near rock-bottom already and the credit cards of households and businesses are pretty maxed out. In the low-rates era, it’s mostly been governments doing the borrowing.What’s resurfacing is “the old idea of monetary policy sometimes pushing on a string,’’ Lawrence Summers, a former U.S. Treasury secretary and now Harvard University professor, told Bloomberg Television recently. “We’ve got to think much harder, for economic stabilization, about mechanisms that involve spurring demand directly.’’That’s code for involving fiscal policy. Via their budgets, governments don’t have to push the string –- they can open the taps, spending directly into the economy or boosting the purchasing power of consumers or companies by cutting taxes.The new thinking says central banks can get in on this act too –- an idea, known in the jargon as fiscal-monetary cooperation, that economists are now trying to flesh out. It could solve problems, and maybe create some new ones, on both sides.Governments have been criticized -- often by those overseeing monetary policy -- for being slow to deliver fiscal support, which typically needs approval by hundreds of lawmakers who may worry about adding to national debts. Central banks can act faster.The banks would get their hands on some powerful new instruments. But they’d likely have to accept that independence from politicians –- jealously guarded, especially in the age of Trump’s frequent attacks on the Federal Reserve and its chairman Jerome Powell -– has limits.Where to draw those boundaries is the preoccupation of a recent paper published by BlackRock Inc. and co-written by Fischer, the Fed’s former vice-chair. It argues that monetary stimulus has run out of road as a way to boost economies, while fiscal policy hasn’t been “pulling its weight.’’One solution is to combine them –- for example, by letting central banks create money to finance government budget deficits. The challenge, say the BlackRock authors, is to encase such “historically unusual’’ measures in explicit rules -- so that central bankers retain their independence, and can apply the brakes if government spending gets out of control.Their proposal involves an emergency fiscal fund that central banks could activate when inflation is dangerously below-target and there’s no room to cut rates. The money-tap would shut off automatically once prices are back on track.‘A New Realm’The details differ, but plenty of others have reached similar conclusions about what central bankers could do next -– provided they have government authorization.“When you have the next downturn, QE isn’t going to be as effective, interest rates aren’t going to be effective,’’ Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, told Bloomberg TV.“Then you need fiscal policies and debt monetization,’’ he said. “We’re going to enter a new realm.’’Modern Monetary Theory, a school that says government spending and taxes are better tools to steer the economy than interest rates, has also been gaining support. MMT is relaxed about monetary financing of budget deficits, and doesn’t see it as much different from selling bonds.Along with the lack of monetary ammunition, one reason behind the big rethink may be deepening inequality, especially after 2008’s financial crisis.As central banks shifted from setting rates to seemingly propping up financial assets, they became more vulnerable to the charges that their policies helped the rich most, and went beyond their remits.A new book by financial commentator Frances Coppola, titled “The Case For People’s Quantitative Easing,” calls for newly minted central-bank money to be funneled straight into the bank accounts of households or small businesses. That kind of stimulus will deliver more growth and better distribution, she argues -- as well as addressing challenges like ageing populations and automation.Helicopter Money: A Reading ListPaul McCulley on how he learned to stop worryingDalio on how the future may look a bit like MMTBlanchard/Summers on why it’s time to rethinkSome MMT economists respond to their criticsJordi Gali on effects of money-backed fiscal stimulusThomas Palley on why independence is a ‘rigged debate’‘Certainly Higher’Another driver of change is that the doctrine of central-bank independence was forged in an era of surging prices. But rich countries now face the opposite problem: deflationary forces. At one point this year, more than $17 trillion of debt -- mostly in Europe and Japan -- was yielding less than zero.Italian economist Guido Tabellini says that backdrop has forced him to change his views. A professor of economics at Bocconi University, Tabellini co-wrote a paper on central bank independence in the 1990s, when the European Central Bank was being created.“The benefit of monetary-fiscal policy coordination is certainly higher now,’’ he said, and there’s a case for easing the curbs on financing government debt -- which can be done without sacrificing central-bank independence.What Bloomberg’s Economists Say...Click here to read a proposal by Jamie Rush, chief European economist for Bloomberg Economics, for fiscal-monetary coordination in the U.K.“Helicopter money is not a free lunch,” Rush writes. “But it might still be the best value meal going when the next crisis hits.”“Exactly how the money gets into the helicopter is likely to be less important than how it is dropped. But, if there are benefits to explicit monetary financing of deficits they are likely to stem from policy coordination.”It’s not as if there’s been no cooperation in the past decade.After the 2008 crash, central banks routinely worked with governments. Sometimes they pushed against the boundaries of their mandates –- like when the ECB’s Mario Draghi put a central-bank backstop behind government debt, by promising to do “whatever it takes’’ to save the euro.Collaborate -- Or Fight?But if the post-crisis environment has strengthened the theoretical case for working together, in practice it’s often led to unusually fraught relations between politicians and technocrats.Trump’s onslaught against Powell, and Bank of England chief Mark Carney’s disagreements with pro-Brexit politicians like Prime Minister Boris Johnson, are just two examples.It’s in Japan that collaboration has been taken furthest.The Bank of Japan has been a key player in Prime Minister Shinzo Abe’s plan to reflate the economy with a mix of monetary stimulus and fiscal spending. It now holds 43% of the national debt, which is the world’s largest.‘Like It or Not...’In theory, that debt hasn’t been monetized. In reality, most analysts think it has, and the sky hasn’t fallen in.“The market does not expect the government of Japan to ever be able to repay this debt,’’ Bank of America-Merrill Lynch strategist Athanasios Vamvakidis wrote in a July report. “The BOJ may as well make it explicit.’’Japan was the first country to cut interest rates to zero, and the first to try quantitative easing. Given its close working relations with the government, the BOJ may provide a blueprint for the latest ideas about central banking too“Central bank independence increasingly looks like a brief historical episode that peaked around the turn of the century,’’ said Joachim Fels, global economic adviser at Pacific Investment Management Co. “Like it or not, get used to the new normal of dependent central banks.’’To contact the reporters on this story: Enda Curran in Hong Kong at ecurran8@bloomberg.net;Ben Holland in Washington at bholland1@bloomberg.netTo contact the editor responsible for this story: Simon Kennedy at skennedy4@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • MarketWatch

    BlackRock's bond guru says 'Fed needs to let the balance sheet grow'

    Rick Rieder, global chief investment officer of fixed income at BlackRock, said the Federal Reserve "needs to let the balance sheet grow" to prevent a recurrence of this week's spike in the overnight repurchasing rate. The so-called repo rate is the amount hedge funds and banks have to pay to borrow funds for a single day. Rieder made his comments at the CNBC Institutional Investor Delivering Alpha conference on Thursday. Investors say a larger portfolio by the central bank would boost bank reserves and alleviate the lack of cash in funding markets. At a Wednesday news conference, Fed Chairman Jerome Powell said: "[It's] certainly possible that we will need to resume the organic growth of the balance sheet earlier than we thought. That's always been a possibility, and it certainly is now." Rieder said that the "tightness of financing markets is very important, people don't appreciate that." "The fact that [the surge in repo rates] played out aggressively as it did, it pushed the Fed to act," he said.

  • Wachtell Lipton: Stakes for Corporate Stewardship Have Never Been Higher
    CorpGov.com

    Wachtell Lipton: Stakes for Corporate Stewardship Have Never Been Higher

    As many American companies grow to the size countries, their social responsibility has increased in tandem, but they are conflicted by an ongoing pressure to put shareholder returns first. “Reflecting their unprecedented scale, U.S. corporations have been blamed for accelerating environmental degradation and aggravating disparities in income and wealth,” Wachtell, Lipton, Rosen & Katz wrote […]

  • Financial Times

    ‘Green-friendly’ ETFs hold shares in groups with coal operations

    Two exchange traded funds explicitly marketed as excluding fossil fuels are holding thousands of shares in mining and energy companies with significant coal operations, raising questions about fund managers’ marketing practices and the responsibility of regulators to clear confusion around what investments should count as green. One of the funds — the SPDR MSCI EAFE Fossil Fuel Reserves Free ETF — contains more than 3,000 shares of RWE, a German energy company that runs seven coal-fired power plants, including one in Aberthaw, Wales. The other fund — the SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF — owns nearly 50,000 shares of Vale, a Brazilian mining company that produces 22m tonnes of coal ore, and 7,500 shares of Sasol, a South African miner which operates six coal mines.

  • Investors With $35 Trillion Want Government Action on Climate
    Bloomberg

    Investors With $35 Trillion Want Government Action on Climate

    (Bloomberg) -- More than 500 investors with $35 trillion of assets calling on governments to take more action to combat climate change.The request from a number of investor groups ahead of next week’s United Nations Climate Summit in New York adds to a growing chorus for increased efforts on tackling global warming. On Wednesday, another group of investment managers who oversee $16 trillion called on companies to implement anti-deforestation policies for their supply chains. Other investors have worked together to push companies directly to tackle climate-related risks.“Climate change is such a critical issue for investors’ portfolios and there are so many risks associated with it and also huge opportunities,” said Stephanie Pfeifer, chief executive officer of the London-based Institutional Investors Group on Climate Change, one of the groups that signed a joint letter to leaders. “The right kinds of policies will help direct capital in an appropriate way so we are able to tackle the issue of climate change from an environmental perspective, but also safeguard portfolios.”Rising temperatures has massive implications for investors. Clean energy investment is set to hit $2.6 trillion this decade, according to research by BloombergNEF, and that might not be close to enough to reduce the risks to the environment. The world must invest $2.4 trillion in clean energy every year through 2035 and cut the use of coal-fired power to almost nothing by 2050 to avoid catastrophic damage from climate change, scientists for the UN reported last year.That kind of shift in capital flows toward new energy technologies means investors want more clarity from governments about regulation and other policies that will guide the transition.The signatories to the letter, which include Legal & General Investment Management, Deutsche Bank AG’s DWS and BNP Paribas Asset Management, request more initiatives to achieve the goals of the Paris climate agreement and to set deadlines for the phasing out of fossil-fuel subsidies and coal plant use.They also want stricter rules on corporate reporting of climate risks as recommended by the Task Force on Climate-Related Financial Disclosures. That task force was founded and is chaired by Michael R. Bloomberg, the majority owner of Bloomberg LP.To contact the reporter on this story: William Mathis in London at wmathis2@bloomberg.netTo contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Andrew ReiersonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Guggenheim's Minerd Rues Bond Market's Rate-Cut Gulf With Dots

    (Bloomberg) -- The gap between the bond market’s expectations for further rate cuts and the Federal Open Market Committee’s reluctance to signal more to come still has to be bridged, according to Scott Minerd, chief investment officer of Guggenheim Partners, which manages more than $209 billion.“I’m disappointed by what the Fed has come out with because the market is priced for more action,” Minerd said in a Bloomberg Television interview Wednesday. Minerd had been looking for a 50 basis point rate cut before the Fed’s two-day meeting in Washington.The Federal Reserve’s second straight rate cut left policy makers divided on the need for further action. St. Louis Fed President James Bullard voted for a half-point cut at this meeting. Meanwhile, traders still see another quarter-point move from the Fed by year-end. Wednesday’s announcement, along with Chairman Jerome Powell’s press conference, sent front-end Treasury yields higher and caused the curve to sharply flatten.“The market will have to move” further unless the Fed starts signaling before its October meeting that it would be willing to consider a third rate rate cut, he said.This week’s turmoil in repo markets is raising long-term questions, including the underlying premise of monetary policy that’s based on pegging the fed funds rate to a number, Minerd said. “When you get to the point where the market is sending you a signal, saying there’s not enough liquidity in the system, you have to make a choice between providing more liquidity and expanding the balance sheet, and saying no.”\--With assistance from Scarlet Fu and Tom Keene.To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Debarati RoyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Every U.S. Grid Is Getting a Lot Greener, Except the One That Matters
    Bloomberg

    Every U.S. Grid Is Getting a Lot Greener, Except the One That Matters

    (Bloomberg) -- Every major U.S. electricity grid is getting significantly greener.Except for the massive one serving 65 million Americans.That’s just as problematic as it sounds for the policymakers, power providers and climate activists looking to wean Americans off fossil fuels. While members of other systems move quickly to add solar and wind to their mixes and slash carbon emissions, the network that keeps the lights on from Chicago to Washington has effectively doubled down on natural gas.In the past two years, it has boosted the amount of power generated with gas by 11,131 megawatts. And developers are planning 34,507 megawatts more. Meanwhile, solar and wind account for 1% of the grid’s installed capacity. “How do you manage the gas build-out with more states boosting renewables targets?” asked Toby Shea, a New York-based analyst at Moody’s Investors Service. “There’s already an overbuild of gas.”It’s not that there’s no interest in the renewable trend in the 13 states connected to what’s called the PJM Interconnection. In fact, it has been inundated with applications from renewable developers — 67,000 megawatts of wind and solar in total, from 684 projects.But there’s also this economic reality: PJM crisscrosses a section of the U.S. that’s home to some of the world’s most abundant natural gas reserves. As fast as the cost of wind and solar energy has been dropping, gas in some of these parts is cheaper.The hundreds of cities, counties, states and utilities linked to PJM have different and often competing goals and interests. Some are keen on getting greener, and the continued gas build-out threatens those ambitions.But the rush to make electricity without carbon emissions could put the gas plants in a bind. The potent brew of falling costs for emissions-free renewables could jeopardize facilities that are built to last for decades. They could end up as expensive bit players, filling in only during extreme weather or when the wind or sun aren’t cooperating.By 2035, it will be more expensive to run 90% of the gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the Rocky Mountain Institute, a nonprofit supporter of cleaner energy. It will happen so quickly, the institute says, that plants will become uneconomical before their owners finish paying for them.More than half of U.S. states — including New Jersey, which is in PJM — have required renewables in their electrical blends. This group includes California, which aims to get all of its electricity from emission-free sources by 2045. Even oil-mad Texas is favoring clean power, because wind and solar are so cheap in the Lone Star State. There’s little debate, though, that natural gas is still needed. A Texas heat wave that drove its grid to the brink of blackouts last month was a reminder of how essential the fuel remains. Even in California, gas continues to provide round-the-clock power.“We just can’t turn that gas off today,” said Joseph Fiordaliso, president of the New Jersey Board of Public Utilities. “The infrastructure was built years ago. We have to build the infrastructure for wind.”As a grid, PJM is most focused on providing reliability at the lowest cost, said Stu Bresler, its senior vice president of markets and planning. In other words, just because projects are in the queue — gas-fired, wind or solar — doesn’t mean they’ll come to fruition.There is, however, a $70 billion offshore wind market forming off the Atlantic coast. And while renewable energy is still a fraction of PJM’s grid today, Bresler said, ``It’s still growing, and we're going to continue to see penetrations of solar and wind’’ as some states work to meet their renewable energy goals. He also pointed out that renewable energy makes up a larger share of the actual power generated in PJM -- as much as 5%. It makes sense, considering solar and wind farms have essentially zero fuel costs and can produce cheaper than other resources. The gas-fired bet once seemed pragmatic. Appalachia needed new electricity to replace gigawatts of retiring coal-fired power and nuclear reactors. The cheap shale reserves were right there.  Meanwhile, the region isn’t endowed with the sunshine of California or the constant breezes of Texas.  ``PJM doesn’t have the advantage geographically when it comes to wind and solar,’’ Bresler said.Private equity responded by pouring in tens of billions of dollars to build a new gas-fired fleet.Several of the nuclear plants are now being subsidized to stay online. As for gas, the threats posed by renewables prompted Devin McDermott, a commodities strategist at Morgan Stanley, to write a recent research note that he titled, “Could natural gas be a bridge to nowhere?”His question takes the premise that has underpinned the boom and flips it on its head: What if grids need new gas plants for only half of their lives? The economics do seem to be changing. In Texas, a gas plant built in this decade went bankrupt in 2017, in part because it struggled to compete with the state’s cheapest power sources: renewables.Among the half-dozen competitive power markets in the U.S., PJM is a big draw for investors, thanks to its size, capacity payments granted through an annual auction and the proximity to shale formations, said Mark Florian, head of the global energy and power infrastructure team at BlackRock Inc.Ravina Advani, head of energy, natural resources and renewables at BNP Paribas SA, estimated that there will be $6 billion of debt financings supporting new gas-fired plants in PJM by mid-2020.Last year’s auction was a boon for developers. More than $8 billion in supplier payments were granted for the year starting in June 2021. But the next auction, originally scheduled for May and then for August, won’t be held until a federal agency decides how to balance the competing interests of states and power generators in PJM’s territory.Backers of gas-fired units are “taking a lot of risk going into this type of market, when it’s already oversupplied and with renewables coming,” said Moody’s Shea. “It’s just a matter of time.”  (Updates with comments from senior vice president at PJM starting in 13th paragraph)\--With assistance from Dave Merrill, Christopher Cannon, Hannah Recht and David R Baker.To contact the authors of this story: Brian Eckhouse in New York at beckhouse@bloomberg.netNaureen Malik in New York at nmalik28@bloomberg.netTo contact the editor responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Simon CaseyReg GaleAnne ReifenbergFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 5 Predictable Guru Stocks
    GuruFocus.com

    5 Predictable Guru Stocks

    Booking Holdings tops the list Continue reading...

  • Bloomberg

    State Street to Battle BlackRock, DWS With New Sustainable Funds

    (Bloomberg) -- State Street Corp. is almost doubling its line-up of socially-responsible exchange-traded funds as it looks to compete with the likes of BlackRock Inc. and Deutsche Bank AG’s DWS Group in the burgeoning market for values-oriented investing.The Boston-based asset manager plans to create five ETFs that will focus on companies with better environmental, social and governance characteristics, according to regulatory filings Tuesday. The funds will track indexes provided by Bloomberg LP, the parent company of Bloomberg News, which distributes and develops fixed-income and equity benchmarks.Responsible investing is catching more airtime and investment dollars as a swath of asset managers start low-cost funds. BlackRock, the world’s largest issuer of ETFs, built out a series of iShares funds in 2018 for investors to use as core holdings in their portfolios. And BlackRock and DWS separately worked with Finnish pension insurer Ilmarinen to start the cheapest ESG stock ETFs in the U.S. earlier this year.“Coming in relatively late to the party could be a challenge,” said Todd Rosenbluth, director of ETF research at CFRA Research. “The adoption of ESG assets in the ETF wrapper is a generational shift,” he said, adding “it’s still the early innings but there are firms that have a head start.”Read more: Green Finance Is Now $31 Trillion and GrowingState Street’s new strategies will invest in corporate bonds and large companies that issue high dividends, or have a growth or value tilt, the documents show. The firm already runs a handful of clean energy and ESG-focused funds, including the SPDR SSGA Gender Diversity Index ETF, known as SHE.It’s easy to see why State Street wants to increase its presence in this space. DWS’s Xtrackers MSCI USA ESG Leaders Equity ETF -- the third-largest U.S. ESG ETF with $1.5 billion -- took in $123 million last week, data compiled by Bloomberg show. Meanwhile, BlackRock’s $1.2 billion iShares ESG MSCI USA ETF has added more than $800 million this month, although at least $140 million of that looks to have moved over from its iShares MSCI USA ESG Select fund, the data show.But critics argue that the proliferation of sustainable funds masks a more complex reality: Since corporate virtuousness is subjective, some ESG-labeled products include fossil-fuel refiners, cigarette makers and other companies that may give investors pause.Mistakes can also cause trouble for these products. Vanguard Group Inc. apologized to investors last month after its largest socially-responsible ETF bought shares of a gun maker following an error by its index provider, FTSE Russell.\--With assistance from Tom Lagerman.To contact the reporter on this story: Annie Massa in New York at amassa12@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Rachel Evans, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • GlobeNewswire

    BlackRock® Canada Announces September Cash Distributions for the iShares® ETFs

    TORONTO, Sept. 18, 2019 -- BlackRock Asset Management Canada Limited (“BlackRock Canada”), an indirect, wholly-owned subsidiary of BlackRock, Inc. (NYSE: BLK), today announced.

  • Business Wire

    BlackRock Real Assets’ Global Renewable Power Sells Stake in Iowa Wind Projects to Greenbacker

    BlackRock Real Assets’ (“BlackRock”) Global Renewable Power (“GRP”) platform has reached an agreement with Greenbacker Renewable Energy Company (“Greenbacker”) for the sale of its controlling interest in the 42.5 MW Elk (“Elk”) and 37.5 MW Bethel (“Hawkeye”) operating wind energy facilities in Iowa. The transaction marks another exit for the GRP platform and is its second bilateral transaction with Greenbacker this year.

  • Bloomberg

    BlackRock, Vanguard Accused of Opposing Shareholder Efforts on Climate

    (Bloomberg) -- BlackRock Inc. and the Vanguard Group, the two largest asset managers, are falling short as shareholders in combating the risks of climate change, according to nonprofit group Majority Action.The group examined the proxy voting of 25 of the top global asset managers to assess their role in pressuring U.S. energy, utility and auto companies to cut greenhouse gas emissions and disclose their lobbying activities. BlackRock and Vanguard overwhelmingly favored directors proposed by companies, according to the group’s report on Tuesday. The firms also voted against at least 16 climate-related shareholder proposals in which their support would have given the measures majority support.As the threats from global warming have intensified, some large asset managers voted more assertively to urge the companies to reduce their carbon footprint. BNP Paribas SA and Pacific Investment Management Co. led the way, voting in favor of almost all the 41 climate-change resolutions examined. They ranged from calling for the adoption of greenhouse gas emission targets to more disclosure of political and lobbying activities.BlackRock and Vanguard were much less likely to back the resolutions, with both supporting less than 15% of them.“If they don’t change course, then BlackRock is going to go down in history as one of the few actors that actually had the power to move the needle on climate change and protect long-term shareholder value but actively chooses not to,” said Eli Kasargod-Staub, executive director at Majority Action, which works with shareholders on corporate accountability and is funded by foundations.Meeting With CompaniesBlackRock said that it supports shareholder proposals to enhance the value of its clients’ investments. “But not all shareholder proposals are created equal, and it would be wrong to equate good governance with voting against management without regard for a proposal’s impact,” spokesman Farrell Denby said in a statement.Vanguard said in response that it regularly meets with companies and that this engagement, in addition to shareholder voting, can lead to meaningful changes. In this proxy year, Vanguard engaged with about 250 companies in carbon intensive industries and their disclosure and governance on climate change was often discussed, said spokeswoman Carolyn Wegemann.BlackRock and Vanguard broke with Climate Action 100+, a group of money managers overseeing more than $33 trillion, during this proxy season. The firms voted against all three of the U.S. shareholder proposals backed by Climate Action, which works to pressure the largest emitters of greenhouse gases to align themselves with the Paris Agreement goals. BlackRock and Vanguard aren’t members of the group.One Climate Action-backed resolution called for an independent board chair at Exxon Mobil Corp. because it hasn’t set business-wide greenhouse gas emissions targets or disclosed emissions associated with the use of its products. It would have passed if BlackRock and Vanguard had supported it, the report said.Pimco’s BackingResolutions at General Motors Co. and Ford Motor Co. said the automakers should improve disclosure about their lobbying efforts on climate change after a trade group lobbied the Trump administration to weaken fuel economy standards. Pimco and Legal & General Investment Management Ltd. voted for all three proposals.Read more: Big Money Is Fed Up With Just Talking About the Climate RisksBehemoths in index investing, BlackRock and Vanguard have long argued that their efforts to address climate change center on continued engagement with management of the companies they own. The firms are among the largest owners of most U.S. companies because of their passive funds, which buy and sell assets based on their inclusion in an index.BlackRock said it is holding more in-person meetings about climate risks, according to its most recent stewardship report. The firm engaged 207 companies globally on the topic of climate risk in the past year, Denby said.Both firms also offer funds designed to have positive environmental, social and governance traits. They say these offerings provide investors choice, and the opportunity to reward responsible public companies.To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Saijel Kishan in New York at skishan@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Vincent Bielski, Josh FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • BlackRock iShares: What ETF Titan Brings To Smart Beta Investing
    Investor's Business Daily

    BlackRock iShares: What ETF Titan Brings To Smart Beta Investing

    Smart beta investing is becoming more popular among investors in this market environment, with iShares Edge MSCI Min Vol USA seeing a big jump in assets.

  • Financial Times

    BlackRock and Amundi win Nest private credit mandates

    BlackRock and Amundi have beaten competition from more than 30 rival investment managers to win the first two private credit mandates awarded by Nest, the UK state-backed pension scheme.  BlackRock will ...

  • Moody's

    Crockett Cogeneration, LP -- Moody's has upgraded Crockett Cogeneration, LP's senior secured notes to Caa1 from Caa3, outlook revised to positive from negative

    Moody's Investors Service ("Moody's") has upgraded Crockett Cogeneration, LP's (Crockett or the Project) senior secured notes to Caa1 from Caa3. The upgrade to Caa1 and the outlook revision to positive reflects Pacific Gas & Electric Company's (PG&E) proposed plan of reorganization that incorporates PG&E assuming its power purchase agreements (PPA). PG&E's bankruptcy and the risk of PPA rejection in bankruptcy has been the primary risk constraining Crockett's credit quality since the project derives most of its operating cash flow from its PPA with PG&E and the proposed plan would ensure that PG&E honors its obligation to the project.

  • The 10 Best Index Funds to Buy and Hold
    InvestorPlace

    The 10 Best Index Funds to Buy and Hold

    [Editor's note: "The 10 Best Index Funds to Buy and Hold" was previously published in August 2019. It has since been updated to include the most relevant information available.]Index funds are responsible for saving investors like you and me untold billions of dollars in fees over the past couple of decades. They've also spared us countless headaches. (I don't know about you, but I'm glad I don't have to pick specific stocks to buy to get exposure to utilities or play the growth in India's middle class.) And the best index funds … well, they've made us a lot of money, which is the point of it all.But index funds are also contributing to an issue that could blow up in our faces.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe push into index funds has intensified to the point that some experts believe it's not only driving the market higher, but it's causing a valuation bubble. In short, if you buy into any fund (index or not), the fund must invest that money into more stocks -- and all that buying is distorting valuations. The danger, then, is that when that bubble pops, many supposedly safe index funds will feel the pain worse than other parts of the market.The lesson here is that the best index funds to buy for the foreseeable future aren't all going to look the same. * Millennials Drive Big Investing Trends Some top index fund picks will be so buy-and-hold-oriented that you won't need to worry about the bubble popping in a year or two or three because you plan on holding for 20 years, maybe 30. Some of the best picks for next year will only be worth buying into for tactical trades of a week or two at a time.So the following is a list of the best index funds for everyone -- from long-term retirement-minded investors to click-happy day traders. And this includes a few funds that I either hold currently or have traded in the past.In no particular order … iShares Core S&P 500 ETF (IVV)Type: Large-Cap Equity Expenses: 0.04%, or $4 annually for every $10,000 invested.Every year, I take a look at the best index funds for investors, and the Vanguard S&P 500 ETF (NYSEARCA:VOO) is always at the top of my list.The argument is typically the same, and consists of two parts: * The S&P 500 Index is one of the best chances you have at solid investment performance. That's because most equity funds fail to beat the market, most hedge funds fail to beat the market, and, to quote Innovative Advisory Group, "individual investors as a group have no idea what they are doing." So if beating the market is so darned hard, just invest "in the market" and get the market's actual return. The VOO and two other exchange-traded funds allow you to do that. * The VOO is the cheapest way to invest in the S&P 500.But that second point has changed.In trying to position itself for advisers who may want to suggest the lowest-cost offerings, iShares parent BlackRock, Inc. (NYSE:BLK) lowered the fees on 15 of its Core-branded ETFs, including the S&P 500-tracking iShares Core S&P 500 ETF (NYSEARCA:IVV).Previously, the IVV charged seven basis points. It's better than the SPDR S&P 500 ETF's (NYSEARCA:SPY) 0.09%, but still above VOO's 0.03%. Now, though, IVV falls closest to the cellar at just 0.04% in annual fees. Thus, the recommendation stands. Buy the market for as cheap as you can, and right now, that's the IVV.And that note of caution? If the valuation bubble does pop, the S&P 500 and its components very well could be hit harder than many other blue-chip stocks outside the index. If you only have a few years left in your investment horizon, you should acknowledge this and invest (and monitor) accordingly. If your investment horizon is measured in decades, buy and never look back.Learn more about iShares' IVV here iShares Core S&P Mid-Cap ETF (IJH)Type: Mid-Cap Equity Expenses: 0.07%As I just said, it's difficult to beat the market. But the iShares Core S&P Mid-Cap ETF (NYSEARCA:IJH) is awfully, awfully darn good at it. From a total performance perspective, the IJH has beaten the IVV over a 15-year period.Source: Rachel Kramer via FlickrAnd yet, very few people talk about the IJH, just as very few people talk about the companies that make it tick, such as veterinary supplier Idexx Laboratories, Inc. (NASDAQ:IDXX).So … what's the deal?Mid-cap companies are frequently referred to as the market's "sweet spot." That's because, as Hennessy Funds describes in a whitepaper (PDF), they typically feature much more robust long-term growth potential than their large-cap brethren, but more financial stability, access to capital and managerial experience than their small-cap counterparts. * Millennials Drive Big Investing Trends The result:"Using standard deviation as a statistical measure of historical volatility, investors in mid-cap stocks have consistently been rewarded with lower risk relative to small-cap investors over the 1, 3, 5, 10, 15 and 20 years ended December 31, 2015. While mid-caps have historically exhibited higher standard deviation than large-caps, investors were compensated for this higher volatility with higher returns for the 10, 15 and 20 year periods."Ben Johnson, CFA, director of global ETF research for Morningstar, points out that "an investment in a dedicated mid-cap fund reduces the likelihood of overlap with existing large-cap allocations and stands to improve overall portfolio diversification."In other words, IJH is an outstanding fund, but don't consider it an S&P 500 replacement -- consider it an S&P 500 complement.Invest in both.Learn more about IJH here SPDR S&P Bank ETF (KBE)Type: Industry (Banking) Expenses: 0.35%Bank stocks have done very, very well in 2019, with solid year-to-date performances in stocks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) (up 19% and 32% respectively) leading the broad Financial Select Sector SPDR Fund (NYSEARCA:XLF) to a 17% gain since the start of 2019. This makes the SPDR S&P Bank ETF (NYSEARCA:KBE) especially attractive.Source: Mike Mozart via FlickrSince the end of Oct. 2016, the KBE has gained over 25% on the belief Trump will tear down Wall Street regulations, creating an environment that's much more conducive to bank profits.That was confirmed in late 2016, when Trump confirmed Steve Mnuchin as his pick for Treasury Department secretary, and Mnuchin was quick to say that "(stripping) back parts of Dodd-Frank that prevent banks from lending" was top on his list of priorities.Mnuchin said something else telling -- namely, that regional banks were the "engine of growth to small- and medium-sized businesses." I got a call from Chris Johnson of JRG Investment Group after that, and he quipped, "It's like he stared into the camera and winked at every regional bank and said, 'You're going to make money again.'"While XLF does hold banks, it also holds insurers and other types of financials. KBE is a more focused collection of dozens of banks, including national brands like Bank of America and smaller regionals like Montana-based Glacier Bancorp, Inc. (NASDAQ:GBCI), which is less than $3.5 billion by market cap. These stocks will not only benefit from any anti-regulation action but also future interest rate hikes.Learn more about SPDR's KBE here PowerShares Aerospace & Defense Portfolio (PPA)Type: Sector (Defense) Expenses: 0.60%The PowerShares Aerospace & Defense Portfolio (NYSEARCA:PPA) is one of two ideal ways to play the defense space broadly. The other is the iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA), and frankly, I think it's a toss-up between the pair. It just depends on what you're looking for.Source: Shutterstock Both are heavy in many of the same stocks, such as Boeing Co (NYSE:BA) and United Technologies Corporation (NYSE:UTX). The price advantage goes to the iShares fund, which is cheaper by 0.2 percentage points. However, PPA is a better choice if you're looking for more diversification. * Millennials Drive Big Investing Trends Defense stocks are clobbering the market, including more than doubling the S&P 500 since Trump got elected. This isn't a hidden trade. Frankly, I think new money should consider waiting for the next sizable market dip to knock some of the froth off before buying either of these ETFs.But defense will rule for the foreseeable future. Thus, PPA and ITA will, too.Learn more about PowerShares' PPA here. Global X SuperDividend Emerging Markets ETF (SDEM)Type: Emerging-Market Dividend Expenses: 0.65%The next four funds are dedicated yield plays, and we're starting with a pretty young (and aggressive) ETF -- the Global X SuperDividend Emerging Markets ETF (NYSEARCA:SDEM). But there are a few sound theories that could make this one of the best international plays.Source: Shutterstock Trump is widely considered to be a net negative for emerging markets because of his anti-trade, pro-U.S. rhetoric. But as Paul J. Lim and Carolyn Bigda at Fortune point out, the recent reactionary drought in EM stocks has brought their price-to-earnings ratios below their long-term average.The duo points out a number of other drivers, including … * Stimulated U.S. economic growth would benefit emerging markets who export to the West. * Commodity price pressure has eased, helping the many materials plays in EMs. * Higher oil prices should reduce the number of loan defaults in oil and gas, which will lift some of the worries about emerging markets' financial companies.All of that stands to benefit the SDEM, which has 23% of its holdings i nenergy and basic materials ) as its two heaviest sectors and invests heavily in commodity-focused markets including Brazil and Russia.SDEM does pose a bit of risk by intentionally investing in some of the highest yielders across a number of emerging markets -- as we all know, dividends can suggest financial stability, but excessively high dividends can be a symptom of troubled companies.But Global X views the high dividends as another factor of value (the reason yields are high is because the stocks are underappreciated), and it does mitigate this risk by equally weighting its 50 holdings upon every rebalancing.SDEM's monthly dividend yields 6.58%. That's still excellent for an emerging-markets fund, and the icing on the cake if the potential for an EM rebound is realized.Learn more about SDEM here PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD)Type: U.S. Dividend Expenses: 0.3%If you're looking for dividend stocks without quite so much risk, the PowerShares S&P 500 High Dividend Low Volatility Portfolio (NYSEARCA:SPHD) is literally designed to provide you with just that.Source: Shutterstock The SPHD has a portfolio that seeks out dividends, not in risky emerging markets, but in the most stable high-yield blue chips the S&P 500 has to offer. To do this, the index takes the 75 highest-yielding constituents of the index, with a maximum of 10 stocks in any one particular sector, then takes the 51 stocks with the lowest 12-month volatility from the group.The result is a mostly boring group of stocks that are heavy in utilities (14%), energy (14%) and real estate (24%). * Millennials Drive Big Investing Trends The fund also uses a modified market cap-weighting scheme that provides a ton of balance. Even top holdings Iron Mountain (NYSE:IRM) and Macerich (NYSE:MAC) are just 3% of the fund apiece.The main purpose of a fund like SPHD is to create even returns and strong income -- something more in line of protection against a down market. But it has even managed to clobber SPY (and numerous dividend ETFs) in the past.SPHD is young, but it looks like one of the best index funds on the market.Learn more about SPHD here SPDR Bloomberg Barclays High Yield Bond ETF (JNK)Type: Junk Bond Expenses: 0.4%In late 2014, I picked the SPDR Bloomberg Barclays High-Yield Bond ETF (NYSEARCA:JNK) as one of the best index funds to buy for 2015, and JNK responded by dropping 13% that year and recovering to "only" a 9.8% decline in 2016. But this year, however, JNK is actually up 9%.That reflects the general idea behind buying JNK -- even in difficult times for junk bonds, a heavy yield can do a lot to offset capital losses, and then some.Invesco released a report showing that high-yield bonds like those held in JNK actually perform well in rising-rate environments (PDF). It starts:"Since 1987, there have been 16 quarters where yields on the 5-year Treasury note rose by 70 basis points or more. During 11 of those quarters high yield bonds demonstrated positive returns; during the five quarters where high yield bond returns were not positive, the asset class rebounded the following quarter."There's a number of reasons for this, such as an expanding economy normally being a boon for corporate debt service (lowering default rates), a lower relative duration rate of junk bonds and the boosting of returns via prepayment penalties by companies anxious to reduce or eliminate their debt before rates increase.Meanwhile, near-zero rates have helped keep down the rates on junk bonds, so right now JNK is yielding nearly 5.6% despite offering some of its lowest nominal payouts since inception in late 2007. Expect that to rise along with interest rates in coming years, which will provide outstanding annual returns from income alone to anyone with a long investment horizon.Learn more about SPDR's JNK here VanEck Vectors Preferred Securities ex Financials ETF (PFXF)Type: Preferred Stock Expenses: 0.4%*Another less-ballyhooed asset geared toward high income is preferred stocks. They're called "preferred" because the dividends on them actually take preference over common stock dividends.Source: Shutterstock Preferreds must be paid before commons are, and in the case of a suspension, many preferred stocks demand that the company pay all missed dividends in arrears before resuming dividends to common shares.And the "stocks" part of the moniker is a little misleading too, because they actually have a lot in common with bonds: * While preferred stock technically is equity, it typically doesn't include voting rights (like bonds). * Also, rather than a dividend that may fluctuate from payout to payout like a stock, preferreds have one fixed, usually high, payout amount that's assigned when the stock is issued (like bonds). * While common stock technically can register capital gains and losses, they tend to trade close to the par value assigned at issuance, which often is $25. So they might trade at a little discount or a little premium, but they don't fluctuate a lot. In other words: They have low volatility. * Millennials Drive Big Investing Trends While I have long been (and still am) invested in the iShares U.S. Preferred Stock ETF (NYSEARCA:PFF), my recommendation is the VanEck Vectors Preferred Securities ex Financials ETF (NYSEARCA:PFXF).The real draw of PFXF is its low 0.4% expense ratio, low volatility and 5.4% yield -- the best combination of the three in the space.*Includes an 8-basis-point fee waiverLearn more about VanEck's PFXF here Direxion Daily S&P Biotech Bull 3x Shares (LABU)Type: Leveraged Industry (Biotech) Expenses: 1.13%*While I'm long both pharmaceuticals via the Health Care Select Sector SPDR Fund (NYSEARCA:XLV) and biotechs via the SPDR S&P Biotech ETF (NYSEARCA:XBI), I think the best healthcare opportunity will be found by traders who tango with the Direxion Daily S&P Biotech Bull 3x Shares (NYSEARCA:LABU).Source: Shutterstock The LABU is a 3x leveraged index fund that aims to provide triple the daily returns of the S&P Biotechnology Select Industry Index -- the same index upon which XBI is based. Note the term "daily returns" -- the longer you hold onto leveraged funds, the more your returns can skew from the movement of the index.I think biotechs could still be in for a bumpy ride, as popular outcry over sky-high drug pricing isn't going away. Moreover, there's still the issue of pharmacy benefits managers (PBMs) increasingly siphoning pharmaceutical and biotechs' profits. But aggressive traders will get the most bang for their buck trying to play dips with tools like LABU, while fiscal hermit crabs like myself are content to sit in XBI and enjoy the uneven crawl higher.*Includes 12-basis-point fee waiver.Learn more about Direxion's LABU here Direxion Daily Gold Miners Index Bull and Bear 3x Shares (NUGT/DUST)Type: Leveraged Industry (Gold Mining) Expenses: 0.94%/1.04%*The last of the best index funds are actually a pair of funds that you can use to trade gold. (Sort of.)Source: Shutterstock The Direxion Daily Gold Miners Index Bull 3x Shares (NYSEARCA:NUGT) and Direxion Daily Gold Miners Index Bear 3x Shares (NYSEARCA:DUST) are actually leveraged plays on the NYSE Arca Gold Miners Index -- an index of gold mining companies that powers the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX).Why gold miners?Gold miners have certain all-in costs of mining gold, and so they move heavily based on the price of the commodity. In fact, they tend to be more volatile than gold itself. Just take the first half of 2016, in which the SPDR Gold Trust (ETF) (NYSEARCA:GLD) returned a robust 25%. GDX doubled in that same time frame. And NUGT? NUGT returned 420% -- so, more than quadruple the GDX. * Millennials Drive Big Investing Trends But if you timed the play wrong, you were sunk. If you bought NUGT in May and held through the end of the month, you were down 40% to GDX's 14%.I have no doubt that 2019 will continue to provide a number of big drivers (in either direction) for gold, from U.S. dollar movements to interest rate moves to renewed Brexit fears. NUGT and DUST are two lucrative ways to profit off those trends.Just handle with care.*Includes a 9-basis-point fee waiver for NUGT and a 2-basis-point fee waiver for DUST.Learn more about NUGT & DUST hereAs of this writing, Kyle Woodley did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post The 10 Best Index Funds to Buy and Hold appeared first on InvestorPlace.

  • MoneyShow

    Banking Bets from a Leading Value Manager

    We think stocks are extraordinarily attractive today as investor sentiment is quite bearish, corporate balance sheets and income statements are in good shape, valuations are more reasonable and a 1.5% 10-year Treasury yield is no match for the current 2% yield of the S&P; 500, notes John Buckingham, a value-oriented money manager and editor of The Prudent Speculator.

  • GlobeNewswire

    RBC iShares Expands its Smart Beta Lineup with the addition of Five Single Factor ETFs

    TORONTO, Sept. 10, 2019 -- Today, RBC iShares expanded its Smart Beta lineup with the launch of five U.S. single factor exchange traded funds (“ETF”); each ETF offers exposure.

  • Bond Bonanza Gives Traders a Chance to Tidy Up
    Bloomberg

    Bond Bonanza Gives Traders a Chance to Tidy Up

    (Bloomberg Opinion) -- The U.S. bond market is having a September to remember as far as debt sales are concerned. Investors ought to use this borrowing binge to their advantage.Investment-grade companies issued some $74 billion of debt last week, a record for any comparable period since at least 1972, and it looks as if an additional $35 billion is on the way in the coming days. More than $11 billion of asset-backed securities and commercial- and residential-mortgage debt is being pitched to investors, Bloomberg News’s Adam Tempkin reported. The leveraged-loan market has 12 bank meetings lined up, and a high-yield deal or two seems likely.Much of the focus of this borrowing spree has been on the companies themselves, and rightly so. After all, it’s not every day that a company like Deere & Co. can set a record for the lowest-yielding 30-year investment-grade corporate debt, or Apple Inc. issues long bonds despite holding more than $200 billion of cash and investment securities. As I’ve written before, companies’ decision-making is fairly simple: They see low yields, and they sell bonds. However, this should also be a time for investors to get introspective. Even with the wide swing in benchmark U.S. yields, spreads in corporate credit markets have remained remarkably steady. Since the start of August, yields have declined about 50 basis points on the 30-year Treasury and 40 points on the 10-year. Yet during that same period, the average investment-grade spread is up only 10 basis points. It’s roughly the same in the high-yield market, where spreads are below their 2019 average. Leveraged-loan prices have barely budged in recent weeks.In other words, there’s still time to clean up bond portfolios heading into the final months of 2019. I imagine it can be hard for investors to deviate from their strategies, considering the staggering total-return figures across debt markets this year. But looking at the gains in the context of recent history starts to paint a clearer picture:U.S. investment-grade corporate bonds: 13.7% (on pace for highest since 2009) U.S. high-yield bonds: 11.3% (highest since 2016) U.S. Treasuries: 8.4% (highest since 2011) U.S. leveraged loans: 6.4% (highest since 2016) U.S. mortgage-backed securities: 5.5% (highest since 2014) U.S. asset-backed securities: 4.3% (highest since 2011)Clearly, speculative-grade securities aren’t flying quite as high as they might initially appear. By contrast, the fact that the asset-backed securities index, stuffed with triple-A rated obligations, is quietly having its best year in recent memory indicates investors’ preference for higher-quality bonds.Of course, the blistering rally in investment-grade corporate bonds can’t be separated from the huge increase in negative-yielding debt worldwide. Its proliferation has created a conundrum for investors in Europe and Japan because even 10-year Treasuries yield less than zero after hedging for currency risk. But in both regions, the yield turns positive by picking up an average U.S. corporate bond. Tetsuo Ishihara, a U.S. macro strategist at Mizuho Securities USA who has his finger on the pulse of the Japanese markets, said in a recent report that he had heard “retail consensus in Japan is that the US 30y is heading to 0%” over the next several years. As a result, “US IG is also a target for both retail and wholesale.”Back in the U.S., some big money managers are advocating the “up in quality” trade (or, at least, voicing concerns about riskier securities). In a Financial Times Q&A about negative-yielding debt — with questions like “Is there a bubble in the bond market?” and “Will there be a damaging crash?” — JPMorgan Asset Management’s Bob Michele stressed that “Investors should improve the credit quality of their holdings and concentrate primarily on positive yielding investment grade rated bonds.” BlackRock Inc.’s Rick Rieder said the riskiest areas and those offering the least value are “loan markets, especially in sectors where credit quality and covenants are weak.” Daniel Ivascyn, group chief investment officer at Pacific Investment Management Co., answered the same question by pointing to parts of the credit markets with deteriorating fundamentals and investor protections.None of this is to say that riskier debt will deliver imminent losses. In fact, high-quality sovereign debt was the big loser on Monday, with yields rising on Treasuries and German bunds ahead of a potentially hawkish European Central Bank meeting and amid speculation that Germany is considering a “shadow budget” to bolster public investments, providing a much-needed fiscal boost to its economy.The slow-but-steady economic growth since the financial crisis, combined with ever-accommodating central banks, has made reaching for yield the obvious trade. Sure, some energy companies crashed and burned along the way, and retailers have floundered, with discount merchandise chain Fred’s filing for Chapter 11 bankruptcy protection on Monday and Forever 21 Inc. perhaps up next. Yet by and large, companies have endured during the longest expansion on record, aided by low interest rates. Fixed-income investors have been rewarded handsomely along the way. The reasons to believe that trend can’t last are beginning to pile up. There’s the yield curve, of course, which has been inverted for just about all of the past three months. But notably, as Shawn Donnan wrote for Bloomberg Businessweek, recession is becoming a reality in at least some corners of America, like manufacturing and agriculture. U.S. consumers have been a resilient part of the recovery, but as Komal Sri-Kumar noted in a Bloomberg Opinion column last week, their spending habits are hardly a leading indicator. And their outlook for the economy is slumping.Bond investors, who clearly fear nothing more than a liquidity crunch during a rush to the exits, probably shouldn’t wait to see whether recession fears were overblown or warranted. This month’s supply offers a convenient opportunity for them to tidy up their holdings and position for a time when making money in fixed income isn’t quite so easy. To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Citigroup Says Gold May Top Record
    Bloomberg

    Citigroup Says Gold May Top Record

    (Bloomberg) -- Gold prices may rally to a record above $2,000 an ounce in the next two years, according to Citigroup Inc., which gave a laundry list of positive drivers including rising risks of a global recession and the likelihood that the Federal Reserve will reduce U.S. interest rates to zero.“We expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,” analysts including Aakash Doshi said in a note received Sept. 10. That would exceed the record of $1,921.17 set in 2011.Low or lower-for-longer nominal and real interest rates; global recession risks -- exacerbated by U.S.-China trade tensions; and heightened geopolitical rifts are “combining to buttress a bullish gold market environment,” the bank said. Also, “in affinity to our U.S. rates research colleagues, we believe the Fed will ultimately end up cutting rates all the way to zero,” the analysts wrote.Gold hit a six-year high this month as central banks ease policy to address the slowdown in growth amid the trade war. This week, investors expect the European Central Bank to unleash more stimulus, while next week the Fed is seen cutting rates again. That’s helped to drive flows into bullion-backed exchange-traded funds as investors track the trajectory of the U.S. economy.Market Signals“For now, the U.S. consumer and potential growth story is holding up,” Citi said in the note. However, “we remain more concerned about market signals -- three-month to 10-year yield curve inversion -- and leading indicators that are weakening at the fastest pace since the Great Recession,” it said.Spot gold traded at $1,491.34 an ounce on Tuesday, up 16% this year after rising for the past four months. Citi said that it had upgraded its baseline forecasts for gold on the Comex by $125 to $1,575 an ounce for the fourth quarter, and by about 14% to $1,675 for 2020.In July, U.S. monetary policy makers reduced borrowing costs for the first time in more than a decade, and they are widely expected to do so again at their Sept. 17-18 meeting. BNP Paribas SA, which is also bullish on the outlook for bullion, said it expects four quarter-point reductions over the coming year.Citi’s outlook did come with caveats, including a hawkish turn from the Fed or a breakthrough in trade talks, although that’s not its base case. “A surprise trade deal coupled with a sharp upturn in global manufacturing data would probably suggest a peak for gold at the $1,550 an ounce level for this cycle.”(Updates price in sixth paragraph)To contact the reporter on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.netTo contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Jake Lloyd-SmithFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • BlackRock Gold ETF Assets Jump to Record in Bet on Metal’s Rally
    Bloomberg

    BlackRock Gold ETF Assets Jump to Record in Bet on Metal’s Rally

    (Bloomberg) -- Exchange-traded fund investors appear to have few doubts about the direction of gold.Holdings in BlackRock’s iShares Gold Trust, the second-largest bullion-backed ETF, rose to a record on Friday, even as prices of the metal posted a second straight weekly loss. The pile-in came as data showed U.S. payrolls grew at a slower pace in August, fueling haven demand and expectations for monetary easing. Lower rates are a boon for gold, which doesn’t offer a yield.While gold prices have wavered after four straight monthly gains as investors await fresh catalysts, forecasts for the Federal Reserve to resume rate cuts as soon as this month are underpinning the longer-term outlook for the metal, according to Bob Haberkorn at RJ O’Brien & Associates LLC. Investors poured $96.1 million into the iShares fund last week for a 13th straight weekly increase, the longest such streak since February 2013.“It’s showing you the broader sentiment of the market, where gold’s going higher, people are looking for rates to get closer to zero, and that’s where you get more flow into ETFs,” Haberkorn, a senior market strategist, said by phone from Chicago. “Overall, whether they’re institutional, they’re retail, individual investors, there is a lot of looking-for-safety out here.”The Fed will lower rates by a full percentage point between now and January to counter a steep slowdown in the U.S. economy, Deutsche Bank AG economists said in a note Friday. A majority of traders and analysts surveyed by Bloomberg remained bullish on the metal, and money managers boosted their net-bullish positioning to a record, according to U.S. government data released on Sept. 6.Spot gold slipped 0.5% to $1,499.13 an ounce on Monday.To contact the reporter on this story: Justina Vasquez in New York at jvasquez57@bloomberg.netTo contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Institutional Holdings in MPC, VLO, PSX, and HFC
    Market Realist

    Institutional Holdings in MPC, VLO, PSX, and HFC

    Institutional holdings in Valero Energy, Marathon Petroleum, Phillips 66, and HollyFrontier stand above 70%. HollyFrontier has the highest holding of 89%.