|Bid||108.94 x 1300|
|Ask||108.96 x 800|
|Day's Range||108.17 - 109.31|
|52 Week Range||91.11 - 119.24|
|Beta (3Y Monthly)||1.22|
|PE Ratio (TTM)||11.74|
|Earnings Date||Jul 16, 2019|
|Forward Dividend & Yield||3.20 (2.97%)|
|1y Target Est||118.76|
'[Most] presidents in their heart of hearts want lower rates. That should never be a surprise to anybody,' Dimon tells Yahoo Finance.
Yahoo Finance's Editor-in-Chief Andy Serwer sits down with JPMorgan Chase CEO Jamie Dimon to discuss interest rate cuts, the Federal Reserve and Fed chair Jerome Powell, calling him 'a quality guy,' in this week's Influencers.
"Is there an issue with student debt? There is, but you’ve got to stop the creation of bad debt," Dimon said.
(Bloomberg) -- Bitcoin’s furious run is starting to look more and more like it did at the height of crypto-mania two years ago.The virtual currency surged as much as 18% on Wednesday, topping $13,000 for the first time since January 2018, and bringing its gain since late Friday to about 40%. The digital asset has climbed more than 200% since December, prompting many investors to ignore the 74% drop last year that followed the parabolic 1,400% surge in 2017.“While I understand the excitement for the community that a company like Facebook, backed by other big names, has launched its own coin, this just feels a lot like last time and we all know what happened then,” Craig Erlam, senior market analyst at Oanda Corp. in London wrote in a note. “Perhaps this time the drop off won’t be so bad as we are seeing more mainstream adoption but it may be naive to think that it can’t come crashing down again.”Its relative strength index, a gauge of momentum, is now within a hair’s breadth of the level when the cryptocurrency peaked around $19,500 in 2017. Accelerating gains have raised the stakes for traders as they try to gauge whether this month’s rally has more staying power than the bubble that ended with a $700 billion crypto wipeout in 2018. While bulls have cheered signs of growing interest in virtual currencies from major companies like Facebook Inc. and JPMorgan Chase & Co., skeptics say it’s unclear how those initiatives will ultimately benefit Bitcoin and its peers.A break above the $12,720 level “will allow for a complete retracement of the 2018 bear market,” according to John Kolovos, chief technical strategist at New York-based Macro Risk Advisors, though he noted in comments Tuesday that the rally was “turning more and more impulsive.”The last time Bitcoin rose above $12,000 was in December 2017. It rallied further, eventually reaching as high as $19,511 later in the month, but the surge was followed by a precipitous fall that saw it drop below $6,000 by February. All in all, in December 2017 and January 2018, Bitcoin spent about six weeks above $12,000. (Updates prices. An earlier version corrected attribution in the sixth paragraph.)\--With assistance from Michael Patterson and Cormac Mullen.To contact the reporter on this story: Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Adam Haigh, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Saudi Arabia removed a cap on ownership of publicly traded companies for foreign strategic investors, paving the way for international investors to take controlling stakes in sectors from banking to petrochemicals.The Riyadh-based Capital Market Authority said there are no maximum or minimum limits on the ownership of listed companies for foreign strategic investors, according to a statement on Wednesday after trading hours. The limit was previously 49%. The instructions don’t apply to qualified foreign investors, according to another document on the CMA website.The decision is a milestone for the kingdom, which started opening its market about four years ago when it first allowed foreigners to trade stocks directly. The nation has been pursing plans to diversify its oil-dependent economy since energy prices plummeted, and has identified its equity market as a means to attract foreign cash. MSCI Inc. last month started to include the kingdom’s stocks in its emerging-market index.“Saudi Arabia, increasingly, is open for business, not just for local investors but for international investors,” Capital Market Authority Chairman Mohammed El-Kuwaiz said in a telephone interview from Riyadh on Wednesday. “It is ironic, I would say, that Saudi is rapidly opening up and embracing the world in a period when the rest of the world seems to be closing down.”While the market watchdog has removed the cap, limits by other regulators or a company’s own rules still apply. Some sectors in which authorities still have to approve deals that surpass a pre-established threshold are banking, insurance and telecommunications, El-Kuwaiz said. Such limits don’t prohibit investors from going beyond them, “but require approval for investors to build stakes larger than that threshold. And that applies for both Saudis and non-Saudis,’’ from now on, he explained.Another example is Jabal Omar Development Co., a real-estate developer that doesn’t allow any participation from traders abroad. Its flagship project is located within walking distance from the Grand Mosque in the holy city of Mecca, an area restricted only to Muslims.Two YearsA strategic investor buying a stake in a listed company will need to maintain the holding for at least two years, according to the CMA. For strategic holders that already hold stakes in listed companies, the two-year lock-up period is not pertinent, unless they decide to add shares to their current stake. In that case, they also have to respect the 24 months without selling the shares, the chairman of the CMA said.Removing limitations on strategic foreign ownership could allow international banks to take majority stakes in commercial lenders for the first time since the 1970s, when the government forced foreign lenders to sell majority stakes in their local operations to Saudi nationals. International banks including HSBC Holdings Plc, Royal Bank of Scotland Group Plc, and Credit Agricole SA are still some of the largest foreign strategic investors in listed companies in the country.“Since few strategic investors will gladly invest cash or reputation in ventures controlled by others, this removes a major obstacle to raising foreign investment from 2% to 10% of GDP by 2030,” said Chris Johnson, the managing attorney at Al-Sharif Law in Riyadh. “In earlier days, Citibank and its peers were major players; after being required to divest majority stakes to local partners in the 1970’s many lost interest, to the economy’s detriment.”Saudi Arabia’s stock market is the largest in the Middle East and Africa, with a capitalization of $540 billion, according to data compiled by Bloomberg. The main Tadawul All Share Index has risen 11% this year, beating the advance in emerging market equities by about three percentage points.“We see this as a step forward in ensuring Saudi Arabia’s sustainability as an attractive foreign direct investment destination, an objective that national authorities have strived to achieve,” said Naresh Bilandani, an equities analyst at JPMorgan Chase & Co. in Dubai.(Adds comments from CMA chairman and analysts throughout the story.)To contact the reporters on this story: Filipe Pacheco in Dubai at email@example.com;Matthew Martin in Dubai at firstname.lastname@example.org;Sarah Algethami in Riyadh at email@example.comTo contact the editors responsible for this story: Celeste Perri at firstname.lastname@example.org, Dana El Baltaji, Claudia MaedlerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
On June 25, Jamie Dimon, JPMorgan Chase's (JPM) CEO, said that “we don’t expect a quick resolution at this point” for the US-China trade war. He added that “there are serious trade issues."
(Bloomberg Opinion) -- “This may be the peak before it all falls apart again.”So said Peter Crane, president of Crane Data, on Monday, the first day of the Crane’s Money Fund Symposium, which bills itself as the largest meeting of money-market fund managers and cash investors in the world. He added that he was putting a positive spin on the industry by noting that assets were rising when balances typically fall. The amount of money in government and prime funds has soared in 2019 to more than $3 trillion, the most since the financial crisis, driven by U.S. short-term yields exceeding those of longer-maturing bonds. On its face, the impetus to park money in ultra-safe money-market funds makes a lot of sense. After all, equities are at or near all-time highs, corporate-bond spreads have tightened across the board, and, again, the yield curve is inverted, inevitably raising the specter of a coming recession. In fact, I posited in late March that inversion would most likely accelerate the dash for cash, after noting that during January and February, individual investors bought $39 billion of Treasury bills at auctions, the most since at least 2009. There’s one obvious difference between then and now. Three months ago, the Federal Reserve was firmly on pause, with officials signaling they were in no hurry to move interest rates. Now, the bond markets consider a rate cut in July as a virtual certainty and expect the central bank’s benchmark lending rate to be about 75 basis points lower by the end of the year.Make no mistake: Such steep cuts would most likely roil money-market funds. Crane and others at the industry gathering in Boston are putting on brave faces, but the simple truth is that a return to the post-crisis policy of pinning short-term interest rates near zero would force many investors to withdraw their money and seek higher-yielding alternatives.The problem, of course, is that those other options are few and far between. My Bloomberg Opinion colleague Marcus Ashworth recently wrote about the “madness” of 100-year bonds from Austria that may yield 1.2%. Bloomberg News’s Cameron Crise described the plight of a friend who had plowed money into six-month bills around the start of the year and doesn’t know where to invest the principal now that the rate on those Treasuries is some 50 basis points lower. It was 2.38% as recently as May 30; it’s 2.08% now.It’s true that Treasury yields across the board have moved swiftly lower in recent weeks. The benchmark 10-year yield is back below 2%. The five-year yield, which reached as high as 3.1% in November, is now just 1.72%. And this is happening even though the median projection among Fed officials on their “dot plot” is for unchanged rates in 2019 and one cut in 2020.This divergence in expectations between policy makers and bond traders means the mad grab for yield could only intensify if the Fed follows through with lowering interest rates next month. And if that’s the case, investors would be better off leaving money-market funds now in favor of Treasuries with some duration.Consider the period in 2016 from late January to mid-June, just ahead of the U.K. vote to leave the European Union. In that five-month stretch, the benchmark 10-year yield fell from 2% to about 1.5%, providing a total return of 5.4%. Two-year Treasuries, by contrast, gained just 0.75% and bills (which admittedly had much lower rates at the time) earned only 0.25%, according to ICE Bank of America indexes.That’s hardly an unrealistic scenario for the 10-year Treasury note. At their core, longer-term Treasuries are priced based on investor expectations for the path of short-term interest rates. The Fed raised them to a range of 2.25% to 2.5%, then had to screech to a halt. If they’re unlikely to get back to that level in the next decade, and in fact may stay substantially lower for an extended period of time, then a 2% 10-year yield looks like a bargain.Granted, as Crise points out, it would only take 10-year yields rising to 2.23% to wipe out an entire year’s worth of interest. Still, it’s hard to see exactly what would push them in that direction, and, just as important, what would prevent a wave of dip buyers from swarming in and canceling out the move. For those concerned about market risk, there’s still a chance to buy into high-yielding certificates of deposit. Goldman Sachs Group Inc.’s Marcus, for instance, offers the opportunity to save for as long as six years with an annual percentage yield of 2.95%. Money-market fund managers, meanwhile, still have time to get ahead of what appears to be the start of a period of Fed interest-rate reductions. They’re going to “want to have dry powder,” Mark Cabana, head of U.S. interest rate strategy at Bank of America, said at the symposium on Tuesday, referring to the ability to handle investor withdrawals. The difficult question remains just how far the Fed will go in lowering interest rates. Chair Jerome Powell, in his press conference after the central bank’s latest decision, noted that “an ounce of prevention is worth a pound of cure” in this era of near-zero rates (he used the same phrase in a panel discussion on Tuesday). That could be taken to mean policy makers will act quickly and decisively, and then stop to see how that flows through to the economy and financial system. On the other hand, St. Louis Fed President James Bullard, who dissented at the June meeting in favor of lowering rates, said on Bloomberg TV on Tuesday that the current situation doesn’t call for a 50-basis-point cut.In that case, money-market rates would be lower but hardly decimated. As Alex Roever, head of U.S. rates strategy at JPMorgan Chase & Co., noted to Bloomberg News’s Alex Harris, in 2007 and 2008, when the Fed swiftly took interest rates to near zero, “it wasn’t the fact that they had to cut rates” that damaged the industry, but that “the overall level of rates got so low.”It has been a slow-but-steady comeback from the doldrums for money markets. Historically, according to Roever, the exodus tends to be the same, with outflows starting a year or two after the Fed begins to ease. At the same time, no prior period has had $13 trillion of negative-yielding debt worldwide. Just because there’s already been a rush toward higher yields in the U.S. doesn’t mean it can’t go further when interest-rate cuts begin.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis 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.
JPMorgan Chase & Co. today announced that it will expand the firm’s investment in Detroit’s economic recovery, committing to reach $200 million by the end of 2022. The new data-driven investment builds on the initial progress that helped boost the city’s recovery through the creation of sustainable loan programs for small businesses like the Entrepreneurs of Color Fund and increased access to affordable housing and job training, and targets the gaps in the city’s economic recovery.
(Bloomberg Opinion) -- Monzo has been awarded the ultimate Silicon Valley seal of approval: A $144 million fundraising round led by Y Combinator, the biggest name in startup accelerators. The deal values the British banking app at $2.5 billion, twice what it was worth in the private markets last year. It has been given a license to lose money like never before as it tries to conquer America, the El Dorado for fintech challengers.The company’s attempt to displace the old “out of touch” lenders, and to show that millennials can get as excited about their bank accounts as they do about Instagram, warrants a little skepticism though. It’s unclear how Monzo intends to make a profit or deliver decent returns to its venture capital backers in a low-margin market that’s crammed with upstart rivals and dominated still by the big banks. Regulators are a worry too.Behind Monzo’s brightly-colored debit card, slick smartphone app, and “Investival” crowdfunding events where you can swig beer and eat street food, is a business that looks pretty much like… a bank. Or rather a very tiny one. It has 2 million U.K. customers; the leading British retail lender Lloyds Banking Group Plc has 10 times as many. At the end of February, Monzo had 71.2 million pounds ($90.2 million) of customer deposits, a microdot next to Lloyds’s 400 billion pound balance sheet.Whereas most banks would seek to lend from those deposits to earn a return, Monzo doesn’t really do that. Its most recent accounts show loans making up only about 0.1% of its total assets. It has started to dabble in personal lending, but the bulk of its revenue comes from fees and commissions. Its main loan product is overdrafts, for which it charges up to 15.50 pounds a month. Otherwise, it relies on getting commissions from partner companies, which use Monzo’s app to offer their own products such as savings accounts and switching energy providers. These are cutthroat markets.Regulatory barriers add to the financial pressure: Monzo posted a loss of 30.5 million pounds in its fiscal year ended 2018. Banking license requirements pushed it to raise extra funds in 2017 and new rules are coming in all the time. Britain’s Financial Conduct Authority is cracking down on overdraft charges. No wonder Monzo has started demanding fees for its premium current accounts. The perks may include “swag” like T-shirts, but 72 pounds a year is pricey.Now consider its next target, the U.S. market. A smorgasbord of cheesily-named mobile banks has been operating there for years: Simple, Chime, Varo, etc. They’ve been trying to challenge the egregiously fat fees charged by big incumbent retail banks, which is fair enough. Yet they’ve got nowhere near dislodging the top lenders. For all their flaws, the biggest banks have the most features packed into their mobile apps, according to analysts at Standard & Poor’s. JPMorgan Chase & Co.’s yearly $11.4 billion tech budget could gobble up four Monzos. Is this a market that’s truly ripe for disruption?Startups do have the edge over their bigger rivals in terms of their institutional simplicity. Victor Basta of the boutique investment bank Magister Advisors reckons the compliance demands at big financial firms mean it might take them six months to match what a startup can do in six weeks. But the heft of Wall Street and Europe’s biggest lenders does give them an advantage in the true fight over finance’s future: With Apple Inc., Amazon.com Inc. and Facebook Inc. The tech giants have the cash, scale, data and engineering smarts to make serious incursions into Main Street if they so choose.So Monzo and its ilk will probably find themselves competing with big banks and Big Tech one day. When that happens, they risk becoming roadkill – or street food.To contact the author of this story: Lionel Laurent at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Sustainable Impact investing is gaining traction not only with our clients, but also with the global investment community, observes John Eade, an analyst with Argus Research, a leading independent Wall Street research firm.
(Bloomberg) -- JPMorgan Chase & Co. is seeing interest from clients in the U.S., Europe and Japan on the potential for its prototype digital coin to speed up trading of securities such as bonds.JPM Coin could enable “instant” delivery of bonds on a blockchain platform, said Umar Farooq, head of digital treasury services and blockchain at the U.S. bank. “We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” he said in an interview in Tokyo.Unveiled in February, JPM Coin is pegged to the U.S. dollar and uses the bank’s private blockchain. JPMorgan has been testing the token to enable institutional clients to transfer payments instantly, it said at the time.The idea of using blockchain to speed up trading settlement isn’t new: stock exchanges from Hong Kong, Australia and Canada are among those that are exploring the possibility. The race to develop digital coins reached a new level earlier this month when Facebook Inc. announced plans for a cryptocurrency called Libra, which will be backed by assets including bank deposits.Read why Facebook chose the stablecoin path to cryptoFor bond transactions, JPM Coin would allow traders to instantly deliver the securities in exchange for cash, according to Farooq. The buyer purchases JPM Coins in advance, putting them in their JPMorgan deposit account, while the seller’s bonds are represented by tokens. Computer programs on a blockchain platform then complete the transaction.The time savings could be significant. For now, it usually takes a seller of Japanese government bonds two days to electronically deliver them to the buyer in exchange for cash, said Shuichi Ohsaki, chief rates strategist at Bank of America Merrill Lynch in Tokyo.JPMorgan will probably begin pilot testing JPM Coin with a few clients to see how it helps to quickly transfer money between them, Farooq said. The testing could take place around the end of the year if relevant regulators approve it, he added.To contact the reporters on this story: Takashi Nakamichi in Tokyo at email@example.com;Takako Taniguchi in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Marcus Wright at email@example.com, Russell WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Democratic presidential hopeful Bernie Sanders is proposing canceling the nation’s outstanding $1.6 trillion of student debt and offsetting the cost with a tax on Wall Street transactions.The Vermont senator said Monday that his plan would provide debt relief to some 45 million Americans who have college loans. It would include a 0.5% tax on stock transactions, a 0.1% tax on bond trades and a .005% tax on derivatives transactions.Sanders’s proposal, which comes ahead of this week’s Democratic debates, also would provide states $48 billion annually to eliminate undergraduate tuition and fees at public colleges and universities, a longstanding Sanders campaign promise. Democratic House lawmakers including Representatives Anouilh Omar of Minnesota and Pyramidal Jayapura of Washington will introduce the legislation to their own chamber Monday.Sanders called it a “revolutionary” initiative that would curb student debt and boost the economy by freeing overly indebted consumers to spend on goods and services.“This proposal completely eliminates student debt in this country and ends the absurdity of sentencing an entire generation, a millennial generation, to a lifetime of debt for the crime of doing the right thing,” Sanders said.The proposal represents the latest attempt by Democrats to tame what some economists and bankers have deemed a growing threat to U.S. economic growth. Relentless tuition hikes and cutbacks in government spending have propelled student debt loads to triple since 2007, eclipsing car loans and credit cards as Americans’ second-largest source of household debt behind home mortgages. That’s prompted policy makers such as Federal Reserve Chairman Jerome Powell and executives such as JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon to worry aloud that young Americans’ indebtedness is hurting the property market and overall economy.Sanders’s plan relies on a proposed tax that has been repeatedly rejected by Wall Street and Washington on the grounds that it would stifle growth. Taxing financial transactions “is effectively a sales tax on investors,” Kenneth E. Bent sen Jr., chief executive officer of the Securities Industry and Financial Markets Association, said in an online commentary published this month. “Such a tax never raises anywhere close to the revenue promised, while wreaking havoc for investors and markets,” Bentsen said.Coming DebatesSanders has been amplifying his embrace of government-centered solutions to policy problems in advance of the Democratic presidential debates Wednesday and Thursday in Miami. Two groups of 10 contenders will face off in a state that often helps decide the White House contest.Sanders helped popularize proposals for tuition-free college during his unsuccessful nomination fight against former Secretary of State Hillary Clinton in 2016. A few other Democratic contenders, including Senator Elizabeth Warren of Massachusetts, have put forth proposals to erase past debts. Warren’s plan would cancel $50,000 in student loan debt for every person with household income under $100,000. It also would provide some forgiveness for those with household income between $100,000 and $250,000.Nearly all Democrats have publicly toyed with the idea of either canceling some student debt or increasing government spending to make some public colleges free for some Americans.Read more about the race to 2020More than 1 million Americans annually default on a student loan, U.S. Department of Education data show, and about 1 in 9 borrowers are at least 90 days late on their debt, the highest delinquency rate among any form of household debt, according to the Federal Reserve Bank of New York. The Education Department owns or insures more than 90% of all student debt.Widespread struggles are at least in part a consequence of the fact that virtually anyone can borrow from the U.S. government to pay for college, with effectively little check on their ability to repay. But with joblessness at near record lows, rising wages and a growing national economy, experts question why so many Americans are unable to pay their student loan bills.Sanders’s proposal is meant to highlight his appeal to progressives as he battles frontrunner Joe Biden, the former vice president who’s taking more centrist stands and pointing to past bipartisan work. Sanders is also facing challenges from other progressives among the two dozen Democratic contenders, including Warren, who has been gaining in national and some early primary state polls.Sanders embraced “democratic socialism” in a campaign address this month in Washington. Top Republicans, including Senate Majority Leader Mitch McConnell, have sought to emphasize what they say are “socialist” tendencies of Democratic White House contenders as part of their 2020 campaign strategy.(Adds remarks by Sanders in fourth, fifth paragraphs.)To contact the reporters on this story: Laura Litvan in Washington at firstname.lastname@example.org;Shahien Nasiripour in New York at email@example.comTo contact the editors responsible for this story: Joe Sobczyk at firstname.lastname@example.org, ;Michael J. Moore at email@example.com, Laurie AsséoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
3M (NYSE:MMM) stock price has begun to recover from one of the more significant drops in company history. An earnings miss related to the trade war and speculation about the security of the dividend of 3M stock have hammered the shares.Source: Shutterstock Both factors have added significant risk to a company most regard as stable. Although 3M stock price should recover, unusual risk factors make MMM stock suitable for only income-oriented, risk-tolerant investors. * 7 Top S&P 500 Stocks of 2019 (So Far) Threats to 3M's Dividend Hit 3M stockIn late April, 3M stock price went into free-fall following a massive earnings miss. The stock plunged by about 13% following the announcement. Warnings about the stability of the company's dividend caused MMM stock further pain.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLast month, analyst Stephen Tusa of JPMorgan Chase (NYSE:JPM) kept his "underweight" rating on 3M stock and took his price target on MMM stock down to $143 per share. He also warned that the company could cut its dividend. Tusa's note led to a further decline in 3M stock price over the next month. The drop would take MMM stock from a high of almost $220 per share to a low just above $159 per share.Any time analysts talk about the end of a 60-year streak of dividend increases, it is a serious matter. Such an action could bring years of devastation and stagnation to 3M stock.For now, traders have shrugged off the underweight rating. Just three weeks after hitting its 52-week low, the 3M stock price has risen to nearly $174 per share. 3M Is a ConglomerateIf only scotch tape and post-it notes held this company together, I would be wary of the move higher by 3M stock. However, much like another well-known conglomerate named Johnson & Johnson (NYSE:JNJ), 3M's products extend across several divisions and industries. Health Care, 3M's only division to report revenue growth last quarter, will likely receive a boost from the company's recent $6.7 billion acquisition of Acelity.Still, this diversification does not make 3M stock bulletproof. All one has to do is study the decline of General Electric (NYSE:GE) to know that older industrial conglomerates can face devastation and even fail. I see Tusa's call on the dividend as extreme. However, if the U.S.-China trade war persists long enough, the dividend could be cut. Do Not Forget the Trade War, Culture RiskIt is the trade war that I see as the most significant risk to 3M stock. The Asia-Pacific region, which includes both China and Japan, accounted for 31.3% of 3M's overall revenue in 2018. The trade war has lasted longer than almost anyone thought it would.Investors also need to consider cultural factors that statistics cannot quantify. China's President, Xi Jinping, basically runs China as a dictatorship. While an end to the trade war would benefit both the Chinese people and 3M stock, dictators often act contrary to their people's interest.Another factor involves Chinese culture itself. The Chinese consider saving face quite important. This makes China unlikely to sign a trade deal that will make it appear to be the loser. As a result, not only must U.S. negotiators sign an agreement that works for America, but they must also create an arrangement that at least appears to benefit the Chinese.This creates a conundrum for the owners of 3M stock, as such a deal could happen tomorrow, two years from now, or perhaps never. Still, I see reasons to buy MMM stock for those who can handle risk. The current price-earnings ratio of 3M stock is 18.5, which is below the historical average of 23.2. Moreover, most analysts believe the company's earnings will resume growing next year, although their profit estimates likely factor in an end to the trade war.Further, thanks to the decline of 3M stock price, 3M's dividend yield now stands at about 3.3%. 3M pays out 58.6% of its income in dividends. If that percentage moves closer to 100%, the payout would be endangered. However, 3M has some cushion before it has to resort to ending its streak of payout hikes. Final Thoughts on 3M Stock3M stock carries culture-based risk which investors rarely consider. Consequently, MMM stock best suits investors who can tolerate risk and need income. JPMorgan's Tusa may have exaggerated the threat to 3M's dividend. Nonetheless, the trade war appears unlikely to end soon, and China accounts for a large percentage of 3M's revenues.But complicating an end to the trade war is China itself. Due to 3M's dependence on China, the future of 3M depends heavily on a dictator who's intent on saving face. This factor could make 3M stock riskier than it's ever been.MMM stock pays a generous, growing dividend. It also trades at a low multiple. However, with the future of the stock hanging on geopolitics and Chinese culture, only those willing to deal with those risk factors should buy the shares.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Telecom Stocks to Set on Speed Dial * 6 Stocks to Sell in the Back Half of 2019 * 7 Top S&P 500 Stocks of 2019 (So Far) Compare Brokers The post How Chinese Culture Could Affect the Future of 3M Stock appeared first on InvestorPlace.
As the chip glut has continued, memory chip maker Micron Technology (NASDAQ:MU) has become the cheapest stock on the market. You could buy it for 3 times the previous-12-months earnings as trade looked ready to open for trading June 24 at about $33 per share.Source: Shutterstock But analysts are still not pounding the table for the stock, and for good reason. The company is due to release results for its May quarter on June 25, and it's going to be very, very bad.The latest estimate on revenue is $4.7 billion, down 40% from last May's $7.8 billion. Earnings are estimated at just 75 cents per share, down from last year's $3.10 per share.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut if that's the bottom, you're still looking at a forward price-to-earnings ratio of 8 if you buy today, which is why the average rating on the stock remains overweight. Victim of the Trade WarMicron is a victim of the U.S.-China trade war. Its memory chips are bought by Chinese companies for products that are re-exported to the U.S. This has been the global tech business model for decades now. America has the intellectual property while China has the low-cost labor and gets the environmental damage. * 7 Top S&P 500 Stocks of 2019 (So Far) But this can't continue, for two reasons. Tariffs are the first reason. But China itself is starting to pay its people more and wake up to its own environmental degradation. The game has a sell-by date.It's just ending faster with the tariffs. The launch of a Chinese memory chip pushed Micron shares to new lows. China represented 57% of Micron sales during the good times, last year. It's not just that China is investing heavily in its own memory chip capacity. The glut lets it supply its needs today through Micron competitors like Samsung Electronics (OTCMKTS:SSNLF) and SK Hynix.As a result, JPMorgan Chase (NYSE:JPM) cut their estimates on Micron again last week. But it's so cheap they still have it at overweight, and their low-end 12-month price target of $50 per share is still a 50% gain from today's $33. The Super Cycle for MicronFurther optimism comes from the "super cycle," which was the talk of the town during the boom.Low memory prices mean chips are replacing spinning disks in a host of applications. The main memory drive on my own PC is now chips, which have no moving parts and are thus more reliable. Because chips move data faster than hard drives clouds are using them, the premium paid over hard drives is disappearing. Then there are all those new markets, like intelligent speakers and the "Internet of Things," adding computers to jet engines, refrigerators, and cars.The glut has produced bargains. I bought a 512 GB chip-based hard drive last year for about $150. You can now buy a 1 TB chip drive for under $100.We're in a golden age of memory, one that is going to continue. Bulls insist the present glut will ease. Bank of America (NYSE:BAC) analysts say buy now. The Bottom Line on MU StockIf Micron had initiated a dividend before the glut, even a small one, it would be easy to recommend here. But you're betting entirely on capital gains for profit, and those can be hard to predict.How long will the glut persist? How long will the trade war go on? How much Chinese production will come into the market, and when?It's foolish to give a precise prediction, but my guess is that we're talking months instead of years. An investor in their 40s, with a five-year time horizon, will probably be very happy with a Micron investment made today.Just keep an eye on it. Prices and market conditions fluctuate.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in JPM. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Telecom Stocks to Set on Speed Dial * 6 Stocks to Sell in the Back Half of 2019 * 7 Top S&P 500 Stocks of 2019 (So Far) Compare Brokers The post Micron Technology Is Cheap as Chips, For a While Yet appeared first on InvestorPlace.
The Federal Reserve releases the Dodd-Frank Act supervisory stress test 2019 (DFAST 2019) results which reflect the stability of the banking system.
Italian government debt rallied on Monday after it was revealed that the EU was set to pause its budget crackdown on Rome, potentially de-escalating a stand-off that has sparked investor anxiety about the country’s debt burden. The yield on Italy’s benchmark 10-year bonds, which moves inversely to prices, fell 4 basis points to 2.122 per cent on Monday afternoon, having earlier fallen as low as 2.076 per cent to take it close to the one-year lows it hit last week. that Brussels would hold off on launching a disciplinary process against Italy’s rising debt levels this week, buying time for the populist government in Rome to reach a deal and avoid the possibility of being sanctioned.
(Bloomberg) -- U.S. banks might be happy to stay away from Facebook Inc.’s push into cryptocurrencies. For now.The Libra Association, the governing body for the coin, is in talks with lenders around the world to join its ranks. Banks are mostly keeping their distance after seeing tepid consumer reaction to digital wallets such as Apple Pay and regulatory scrutiny of digital currencies.“If Facebook is able to create mass adoption on this platform, then banks will want in,” David Donovan, who leads the global financial-services consulting practice at Publicis Sapient, said in a phone interview. “There’s a business decision they have to make. Facebook is saying the market is not being served well.”Banks were absent when Facebook announced Libra last week, saying that more than two dozen other companies, including payment networks Visa Inc. and Mastercard Inc., joined the project. The social-media giant said Libra will be backed by fiat currencies to provide payment services to the 1.7 billion people worldwide without easy access to banking.Facebook and its 2.4 billion active users are hard for the largest U.S. banks to ignore -- and Citigroup Inc.’s Michael Corbat has said his firm would consider joining Libra if asked. But it’s not the first time a technology giant promised sweeping changes to the payments world.Apple Inc. introduced Apple Pay in 2014 to much fanfare. Banks spent millions promoting the service and created card rewards tied to customer use of the product. In a sign of how eager they were, banks even gave Apple a cut of the coveted interchange fees they earn from each swipe of a card.But five years in, Apple Pay has struggled to take off. Large retailers including Walmart Inc. have been hesitant to accept the technology. And while consumers spent roughly $3 trillion using digital wallets in 2018, almost two-thirds of that spending occurred in China where apps like Alipay and WeChat Pay dominate commerce, according to a report from Juniper Research.“Advanced payment methods haven’t really taken hold unless they’re mandated,” Tim Spenny, a senior vice president at market researcher Magid who has consulted for Facebook and Visa, said in an interview. For him, the question is: “What is the use case or what is the pain point that would cause people to say ‘Hey, I’m going to put money into a cryptocurrency to start paying for things.’”After years spent trying to promote Apple Pay, U.S. banks turned their attention to tap-to-pay cards, which use the same technology while keeping the familiar card product. It’s a recipe that’s worked for JPMorgan Chase & Co. customers.“There’s a big segment that never used mobile wallets, but the moment they got their contactless cards, they’re starting to tap right away,” Abeer Bhatia, president of card marketing, pricing and innovation for the bank, said in an interview last month. “When they have the choice to use either, they’re overwhelmingly using tap-to-pay.”Banks have been conducting their own experiments with cryptocurrencies, such as JPMorgan’s JPM Coin, which is meant to speed up corporate payments. The largest U.S. lenders have also promoted a new real-time payments service spearheaded by The Clearing House.Regulatory ResponseThere have been cases where startups were assessed for compliance lapses. And Libra’s debut drew attention from regulators, as members of the House Financial Services Committee and the Senate Banking Committee promised hearings on the digital coin and its governance.John Smith, who used to lead the Treasury Department’s Office of Foreign Assets Control, said tech companies and the banks they work with “will be held accountable” if they violate the law.“There’s a view within the fintechs that, ‘We couldn’t possibly do the rules that big banks do because we’re trying to be quick,’” Smith, co-head of Morrison & Foerster’s national security law practice, said Friday at a conference. “There’s going to be a rude awakening.”\--With assistance from Lananh Nguyen, Michelle F. Davis and Kurt Wagner.To contact the reporter on this story: Jenny Surane in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Dan Reichl, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.