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Copper recently touched its lowest price level in more than two years but as supplies of the red metal tighten, analysts think commodities traders could overcome concerns about the economy, prompting prices for the industrial metal to move higher.
A bomb and two illegal valves have damaged sections of Colombia's Transandino pipeline, state-run oil company Ecopetrol said on Saturday. The two valves, installed to steal crude, were placed by unknown persons in the municipality of Barbacoas in southwestern Narino province, near the border with Ecuador, the company said in a statement. The bombing, which dented the pipeline's tubing, occurred overnight in Ricaurte, also in Narino province, the statement added.
With everyone from DoubleLine Capital’s Jeffrey Gundlach to inverted yield curve disciples now forecasting a recession, it must be time to join the crowd and sell stocks, right? Actually, this is exactly the wrong thing to do right now.
(Bloomberg) -- With interest rates on 30-year U.S. debt hitting all-time lows this week, the government is once again considering whether to start borrowing for even longer.The U.S. Treasury Department said Friday that it wants to know what investors think about the government potentially issuing 50-year or 100-year bonds, going way beyond the current three-decade maximum.The government stressed that no decision has yet been made on ultra-long bonds, explaining that it’s looking to “refresh its understanding of market appetite.” The idea was broached before, back in 2017, but was shelved after receiving a less-than-warm reception.“This comes up every now and again,” said Gennadiy Goldberg, U.S. rates strategist at TD Securities. “Every time the takeaway is, there simply isn’t enough demand at that tenor, or at least there hasn’t been in the past.”The announcement follows a plunge in the 30-year yield to a record low this week below 2%, and also comes in the wake of many other nations opting to extend their borrowing profiles with so-called century bonds. Investors have snapped up 100-year bonds issued by the likes of Austria, although the experience of Argentina underscores some of the potential pitfalls of buying such long-maturity debt.The yield on America’s current benchmark 30-year bond spiked to its highs of the day and the curve steepened following the Treasury announcement. The 30-year rate climbed as much as 8 basis points on the day to 2.05%, before ending the session at around 2.03%. The yield spread between the U.S.’s longest-maturity debt and its two-year note widened the most in five weeks on Friday.The Treasury’s group of market consultants, the Treasury Borrowing Advisory Committee, has long been unenthusiastic on the prospect of an ultra-long issue, said Bruno Braizinha, director of U.S. rates research at Bank of America.The challenge for the Treasury would be to offer a yield attractive enough for the typical investor base of pension funds and institutions, while keeping a lid on the cost of borrowing for U.S. taxpayers.By Braizinha’s estimates, the yield on a 50-year issue would be expected to come in around 10-30 basis points above the 30-year rate.(Updates with yield spread in sixth paragraph)\--With assistance from Liz Capo McCormick, Benjamin Purvis and Katherine Greifeld.To contact the reporters on this story: Alexandra Harris in New York at firstname.lastname@example.org;Emily Barrett in New York at email@example.comTo contact the editors responsible for this story: Benjamin Purvis at firstname.lastname@example.org, Nick Baker, Margaret CollinsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Now we know the real reason President Donald Trump has been so keen for the Federal Reserve to lower interest rates. It seems that the nation’s chief executive was mulling a deal out of his previous career as a real estate mogul.
A bad month got worse for General Electric (GE) yesterday when a whistleblower report was released by a forensic accountant alleging that accounting fraud will cause GE to go bankrupt. Shares plunged 11% after the report went public.However, today the stock climbed nearly 10% on the back of news that GE CEO Larry Culp bought $2 million worth of shares after yesterday's drop.William Blair analyst Nicholas Heymann remains unfazed by the bearish report, supporting Culp's huge vote of confidence, as he reiterates an Outperform rating on GE stock. Although Heymann does not have a price target on the stock, his calculations imply an intrinsic value between $14 and $16 per share. He thinks that range “could be a plausible valuation for GE’s shares over the next 12-18 months.” (To watch Heymann’s track record, click here)The report, led by Harry Markopolos, alleges that GE has been overstating its financial strength. The most significant aspect of the report is that it predicts that GE will need to “contribute $18.5 billion in cash and take a $10.5 billion non cash charge to comply with accounting changes that become effective in the first quarter of 2021 for GE’s Long Term Healthcare Reinsurance (LHTR) legacy business.” This goes beyond the $15 billion of cash reserve contributions GE already announced early on in 2018. If these changes were made to GE’s financial statements, GE would be in a financially weak position.Heymann finds it hard to believe that GE, which has been engaged with several regulator reviews of its accounting and financial disclosures for over two years, has fraudulently misrepresented its financial reporting.GE’s CEO raised the company’s full-year guidance in July, so the stock’s disappointing month comes as a surprise to management. In addition to buying shares after the 11% drop yesterday, the CEO called the allegations false and accused the accounting firm of trying to manipulate the share price.The transformation under newly installed CEO Larry Culp will be a long and complex process. Heymann believes that the worst has passed, and GE’s financial health is “gradually beginning to improve.”All in all, Wall Street is pretty evenly split between the bulls, bears, and fence sitters. Based on 14 analysts polled by TipRanks in the last 3 months, 3 rate GE a 'buy', 3 issue a 'hold', while 3 suggest to 'sell' on the stock. The 12-month average price target stands at $9.58, marking a nearly 9% upside from where the stock is currently trading. (See GE’s price targets and analyst ratings on TipRanks)
(Bloomberg) -- General Electric Co.’s biggest plunge in 11 years came at an awkward time for some of Wall Street’s savviest investors, after a recent buying spree by the likes of Renaissance Technologies, Citadel Advisors and Adage Capital Management.Hedge funds added more shares of GE than any other company to their industrial investments in the second quarter, according to an initial analysis of U.S. regulatory filings compiled by Bloomberg Global Data. Their holdings increased by 25% to a total of 199.3 million shares, valued at $2.09 billion at the quarter’s end.While some recent buyers may have sold since then, many of them were probably left holding the bag when Harry Markopolos, who rose to prominence by blowing the whistle on Bernie Madoff, on Thursday accused GE of “accounting fraud.” Markopolos’s report wiped out much of the company’s share gains this year. Chief Executive Officer Larry Culp labeled the analysis “market manipulation -- pure and simple.”While a Friday advance softened the blow, the rout highlights the perils in trying to call a bottom as a company attempts a turnaround from an epic collapse. GE’s market value fell by more than $200 billion in the two years ended Dec. 31 amid weak cash flow, a slump in its power division and two CEO changes. While Culp vowed to improve financial transparency after taking over in October, Markopolos accused GE of masking tens of billions in liabilities.The shares surged 9.7% to $8.79 at the close in New York, the most in six months, with some analysts expressing skepticism over Markopolos’s report. But that didn’t make up for all of GE’s 11% plunge on Thursday, the sharpest one-day drop in 11 years.It’s impossible to know which hedge funds may have sold some or all of their GE holdings before Thursday’s rout, and the firms typically don’t discuss their holdings.Buyers, SellersRenaissance added 38.3 million GE shares in the second quarter, more than doubling its holdings in the company, according to data compiled by Bloomberg. Renaissance is a quantitative fund that makes investing decisions based on mathematical and statistical methods, a representative said, declining to provide additional comment.Citadel’s hedge fund bought about 4.5 million shares during the period, increasing its stake more than sixfold, according to regulatory filings.Adage, which declined to comment, took a new position of 7.24 million GE shares.Not all hedge funds were buyers in the second quarter. Steadfast Capital Management dumped almost all of the 15.3 million GE shares it held as of March 31. The firm didn’t immediately respond to a request for comment. Tocqueville Asset Management, which declined to comment, pared its holdings 37% to 1.7 million shares.This week, prominent buyers swooped in amid the selloff. Hedge fund billionaire Stanley Druckenmiller said he picked up GE shares on Thursday. The implication that Culp and the new management team are engaged in intentional fraud is “outrageous,” he said by email.Culp himself purchased about $2 million in shares Thursday, Boston-based GE said. That followed a $3 million stock purchase earlier this week, which the company called a reflection of “confidence in GE’s long-term strengths and its progress.”‘Impending Losses’Markopolos, who is working with a short seller, said GE will need to increase its insurance reserves for a long-term care portfolio immediately by $18.5 billion in cash -- plus an additional noncash charge of $10.5 billion when new accounting rules take effect. GE also is hiding a loss of more than $9 billion on its holdings in oilfield-services company Baker Hughes, he said.“These impending losses will destroy GE’s balance sheet, debt ratios and likely also violate debt covenants,” Markopolos said in his report.GE defended its accounting in a statement by Culp and board member Leslie Seidman, who chairs the audit committee.“The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit,” Culp said of Markopolos.Seidman said the analysis included “novel interpretations and downright mistakes” about accounting requirements.Hedge-Fund HoldingsFor the analysis of hedge-fund investments, Bloomberg looked at 824 filings for the second quarter, which showed $1.66 trillion in total stock holdings. Industrial-sector investments accounted for $120.5 billion, or 7.2% of the value of the securities listed in the filings. The firms cut their holdings the most in railroad CSX Corp., which has fallen 17% since the end of the period.Several analysts, while cautious about GE’s outlook, defended the company.“Our initial reaction is that we believe that there are sufficient shortcomings in the short report’s assertions and we continue to believe in CEO Larry Culp’s ability to improve the company over time,” Citigroup analyst Andrew Kaplowitz wrote in a note to investors.\--With assistance from Esha Dey.To contact the reporters on this story: Jack Pitcher in New York at email@example.com;Brendan Case in Dallas at firstname.lastname@example.orgTo contact the editors responsible for this story: Brendan Case at email@example.com, Kara Wetzel, John LauermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
What's more wild, the story unfolding with General Electric (NYSE:GE) or the volatility in the stock market?Headline after headline has been wreaking havoc on the broader markets, as volatility remains elevated and as investors try to figure out their next step. Trade war worries, imploding foreign stock markets and recession concerns are engulfing the news flow.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCasual investors will at least like the news from the stock market today, where the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rose 1.25%, the SPDR S&P 500 ETF (NYSEARCA:SPY) climbed 1.48% and the PowerShares QQQ ETF (NASDAQ:QQQ) jumped 1.61%.Amid that calamity, the story unfolding with General Electric is even more interesting. Is GE Stock a Sham or a Buy?General Electric has been under pressure since it reported earnings. For months, readers here have been cognizant of $10.50 range resistance and $9 range support. The breakout never materialized and GE stock quickly sank down to support. * 10 Cheap Dividend Stocks to Load Up On It was an unimpressive showing, but not surprising given the volatility in the broader market and the suspect nature of GE's balance sheet. The most recent quarter showed that General Electric is inching its way out of trouble, but could still have some unknown risks, particularly with Boeing's (NYSE:BA) 737 issues.On Thursday, range support between $9 and $9.25 blew out, as reports began circulating that a whistleblower was sounding the alarm on GE's accounting practices. That whistleblower was Harry Markopolos, who also raised concern over Bernie Madoff before his ponzi scheme was uncovered.GE pushed back, saying it stands behind its financials and that it remains in a strong position of liquidity. GE even went as far as to say that Markopolos is being "compensated by unnamed hedge funds [that] are financially motivated to attempt to generate short selling in a company's stock."Wow, dramatic.It doesn't end there, though. GE CEO Larry Culp refuted the claims even more aggressively, calling it "plain and simple" market manipulation. He then went out and bought 2 million shares of GE stock!Analysts came out to GE's defense on Friday morning, as did the well-known short-seller of Citron Research, Andrew Left. The latter also corroborates GE's stance regarding hedge fund compensation, noting that, "As noted in the disclaimer on his site, Harry is being paid a % of profits from an unnamed hedge fund that is short GE. No credible hedge fund or short seller would ever do this."GE jumped almost 9% in response to Friday's news, (Here's the trade layout). Movers in the Stock Market TodayGE was an obvious mover on the day, but it wasn't the only one.Nvidia (NASDAQ:NVDA) rallied 7.5% on the day, showing some upside momentum after the company beat on earnings and revenue estimates. While the headline numbers look good and many believe in its long-term future, there are still some short-term concerns. Revenue sank 17.3% year-over-year and management expects third-quarter sales of $2.84 billion to $2.96 billion. Expectations were at $2.98 billion.Still, NVDA is on the move higher, which may be good news for bulls should the overall market start to rally too.Deere (NYSE:DE) stock was also on the move higher, climbing over 4% despite missing on bottom-line expectations. Earnings of $2.71 per share missed analysts' expectations by 13 cents. However, revenue of $10.04 billion handedly beat estimates by $660 million despite sinking 2.6% year-over-year.Shares of Palo Alto Networks (NYSE:PANW) were trading well on the day, up several percent before collapsing in the afternoon. PANW ended lower by 7.2% on news that Dave Peranich, EVP of worldwide sales, is leaving his post after three years on the job. Seems like it could be an overreaction, even if he was a top sales exec.Disney's (NYSE:DIS) latest billion-dollar hit is Toy Story 4, the company's fifth billion-dollar film this year. It now holds the record for most such films in a single year, while there is only one other competing film this year to top the nine-figure mark (Spider-Man: Far From Home). Further, the company announced last month that it had broken its prior annual box office record total of $7.61 billion, pulling in $7.67 billion in sales already in 2019.Don't forget, there's Frozen 2 and a Star Wars film still slated for 2019. It's going to be a huge year for Disney.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA and DIS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Stock Market Today: Is GE a Fraud or a Screaming Buy? appeared first on InvestorPlace.
Despite more speculation that recession clouds are gathering, stocks cobbled together impressive gains to close another wild week. I mentioned earlier this week that some of the more important European economies, including Germany, are on the cusp of economic contractions and that are likely to spur the European Central Bank (ECB) into action.That was one catalyst for today's rally: talk that the ECB won't be sitting on the sidelines much longer and will attempt something with monetary policy aimed at perking up the region's sagging economies.Here in the U.S., it still seems like a stretch to say that a recession is imminent, but the University of Michigan Consumer Sentiment Index reading out today could be cause for concern for fans of President Donald Trump. That survey indicates independent and republican voters are growing concerned about the economy and could be apt to rein in spending. That data point was revealed just a day after the president spoke glowingly about the economy and the strength of the American consumer.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cheap Dividend Stocks to Load Up On Even with all the recession chatter, the Nasdaq Composite rallied 1.67% while the S&P 500 climbed 1.44%. The Dow Jones Industrial Average closed the week with a gain of 1.20%. Fun fact, at least for day traders or those that like volatility: the S&P 500 has had intraday moves of at least 1% for nearly three straight trading weeks. Tariff TalkThese days, it's almost possible to discuss stocks, particularly many of the Dow members, with talking about tariffs. Plenty of stocks are more tariff-sensitive than others, and JPMorgan was talking about a few of those names today.Remember that while President Trump backed off some of the tariffs on Chinese goods set to go into effect on Sept. 1, he did not back off all of those levies. And the ones not going into effect next month were not eliminated. Those were merely delayed until mid-December.As for companies likely to be affected by the Sept.1 tariffs, those names include Dow components Dow (NYSE:DOW) and Caterpillar (NYSE:CAT). Somehow, Dow, the chemicals maker, was the second-best performer in the Dow today while industrial machinery maker Caterpillar was a solid gainer as well, adding 0.97%.Regarding Dow members that could be pinched by the December tariffs, assuming those penalties go into effect, JPMorgan includes Apple (NASDAQ:AAPL) and Nike (NYSE:NKE) on that list. However, both stocks closed higher today.The Home Depot (NYSE:HD) has been receiving elevated trade-related mentions, according to JPMorgan. Still, Home Depot is a heavily domestic company and the shares added 0.92% today ahead of next Tuesday's earnings report. Bad Bank Stocks on the DowEach of the Dow's financial services components, including JPMorgan Chase (NYSE:JPM), the largest U.S. bank, closed higher today. I mention this because, yes, banks are being drilled by declining net interest margin expectations at the hands of lower interest rates, but also because recent price action in the sector confirms investors can be confounded by analyst chatter.Just last week, a Wells Fargo analyst said valuations on bank stocks are attractive, but today the same analyst said "there is no way to sugar coat the negative impact of lower interest rates" on banks' net interest margins and per share earnings.As I pointed out a couple of times during financial services earnings season, the net interest margin issued was raised on a slew of bank earnings calls and at this point, should be baked into these stocks. Dow Jones Bottom LineWith all the aforementioned recession chatter swirling, the good news is that the Federal Reserve will not take that talk lightly and it is becoming increasingly likely that there could be another two rate cuts before the end of this year.While that may be good news, the risk is that with rates already so low by historical standards, the effectiveness of more rate reductions may not be up to investors' current expectations. Time will tell on that front, but the near-term path of least resistance would be for trade wars to cease.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Dow Jones Today: A Fantastic Friday appeared first on InvestorPlace.
When folks think of the Berkshire Hathaway (BRK.B) portfolio and its collection of holdings, most of which were selected by Chairman and CEO Warren Buffett, the companies that most readily come to mind are probably American Express (AXP), Coca-Cola (KO) and, more recently, Apple (AAPL).But a deep dive into Berkshire Hathaway's equity holdings reveals a more complicated picture.Berkshire Hathaway held positions in 47 separate stocks as of June 30, according to the most recent regulatory filing (Aug. 14) with the Securities and Exchange Commission - down from 48 in the first quarter of this year, as he dumped USG Corp. (USG). But the portfolio of "Buffett stocks" isn't as diversified as the number might suggest. In some cases, BRK.B holds more than one share class in the same company. Some holdings are so small as to be immaterial leftovers from earlier bets the Oracle of Omaha has yet to completely exit.And perhaps most importantly, Berkshire Hathaway's equity portfolio is actually pretty concentrated. The top six holdings account for almost 70% of the portfolio's total value. The top 10 positions comprise 80%. Banks and airlines, to cite a couple of sectors, carry quite a load in this portfolio. Then there's the fact that several Buffett stocks actually were picked by portfolio managers Todd Combs and Ted Weschler.Here, we examine each and every holding to give investors a better understanding of the entire Berkshire Hathaway portfolio. SEE ALSO: 50 Top Stocks That Billionaires Love
Berkshire Hathaway (BRK.B, $198.31) Chairman and CEO Warren Buffett hasn't found much to his liking in 2019.The Oracle of Omaha bought and sold left and right at the end of 2018. He used the fourth quarter's near-bear market to snap up bargains and exit a few underperforming investments, amassing a total of 17 common-stock trades. But thanks to significantly higher prices across 2019, Buffett has dialed things down, making 10 such moves in Q1 and just six in the three months ended June 30.Nonetheless, we can gleam a few things from what Buffett is doing, so today we will take a look at the most recent changes to Berkshire Hathaway's equity portfolio.The U.S. Securities and Exchange Commission's own rules require Buffett to open up about these moves. All investment managers with more than $100 million in assets must file a Form 13F every quarter to disclose every change in stock ownership. That's an important level of transparency for anyone well-funded enough to significantly impact a stock with their investment. And in this case, it helps people who appreciate Buffett's insights track what he's doing - some investors view a Berkshire buy as an important seal of approval. (Just remember: A few of Berkshire's holdings are influenced or even outright decided by lieutenants Ted Weschler and Todd Combs.)Here's what Warren Buffett's Berkshire Hathaway was buying and selling during the second quarter of 2019, based on the most recent 13F that was filed on Aug. 14. The list includes six changes to the equity portfolio, and a notable seventh investment. SEE ALSO: The Berkshire Hathaway Portfolio: All 47 Buffett Stocks
Sweep accounts are meant to be a convenient place to keep and manage your cash at your broker. But yields are low and heading lower—because these accounts are more about convenience for your broker.
The stock market fell in volatile fashion amid China trade news and the first inverted yield curve since 2007. Walmart, Cisco, Macy's, GE were big movers.
GE CEO Larry Culp bought shares Thursday as they plunged on accounting fraud accusations. But more analysts defended GE accounting.
(Bloomberg) -- When it comes to General Electric Co., two of the nation’s largest mutual fund companies have been going all in on the industrial conglomerate’s latest chief executive, Larry Culp.Fidelity Investments and T. Rowe Price Group Inc. have bulked up on GE stock since Culp was named in October 2018. While neither fund company had much of a stake in GE before he took the helm, the two now rank as its second- and fourth-largest institutional shareholders, respectively, according to regulatory data compiled by Bloomberg.Fidelity, based in Boston, actually began raising its stake in GE during the second quarter of last year, filings show, and by the end of September 2018 the firm held 187 million shares. That figure jumped to 301.4 million shares in the quarter ended December 2018. By the end of June, that stake had risen to 548.7 million shares.At the end of last September, funds run by Baltimore-based T. Rowe Price held 30.8 million GE shares, according to Form 13Fs filed with the U.S. Securities and Exchange Commission. Their combined stake soared to 235.6 million shares during the ensuing quarter, and by June 30 had reached 365.6 million shares.Culp, 56, is a renowned turnaround expert who won Wall Street’s praise for transforming manufacturer Danaher Corp., where he served as CEO from 2001 until 2014. Danaher’s share price rose an average of 14% annually during Culp’s tenure, compared to just 5.5% for the S&P 500, as he grew the company through $22 billion in acquisitions.As Danaher’s two largest shareholders from 2006 through 2015, T. Rowe and Fidelity benefited from Culp’s leadership of the company; Fidelity at one point held an 18% stake in the company. Culp left Danaher in September 2014 and was named to T. Rowe Price’s board about one year later. He continued as a director at the mutual fund company until he took the top job at GE.(Adds details on Culp’s record at Danaher Corp. in two final paragraphs.)To contact the reporter on this story: Miles Weiss in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Alan Mirabella at email@example.com, Melissa KarshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shares of General Electric Company (NYSE: GE ) plummeted Thursday after a short seller report penned by Harry Markopolos emerged that argued the company is engaged in fraud. If the report surfaced two ...