Yahoo Finance’s Alexis Christoforous and Aarthi Swaminathan discuss Afterpay’s Stripe partnership with Nick Molnar, Afterpay Co-CEO.
Yahoo Finance’s Alexis Christoforous and Aarthi Swaminathan discuss Afterpay’s Stripe partnership with Nick Molnar, Afterpay Co-CEO.
The deputy governor said bitcoin and stablecoins were investment options and not currency during the Boao Forum on Sunday.
(Bloomberg) -- U.S. stocks retreated from an all-time high as investors awaited the heart of the earnings season and more economic data later in the week. The dollar fell.Technology shares dragged down the S&P 500, which posted its biggest drop in almost four weeks. Tesla Inc. contributed the most to the decline as one of its electric cars that “no one” appeared to be driving crashed and killed two passengers. Small caps underperformed, with more than three-quarters of the stocks in the Russell 2000 closing lower. Copper prices surged to a seven-week high on prospects for strong demand and a pickup in inflation as economies rebound.In the U.S., the economic calendar is light this week until Thursday, with reports on unemployment claims and home sales among those scheduled for release. Robust economic data helped push stocks to another record last week despite concerns surrounding the spread of Covid-19 variants. Traders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace. United Airlines Holdings Inc. and International Business Machines Corp. are among those with reports after the closing bell on Monday.“With a deluge of earnings activity this week from across industries, we may be in a bit of a holding pattern until investors digest any beats or misses on that front,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “Bottom line is that short-term volatility is typical when we’re knocking around market highs as traders look to uncover value.”For Matt Maley, chief market strategist for Miller Tabak + Co., the sharp drop in Bitcoin over the weekend is having an impact on trading as well.“Whenever a headline-grabbing asset sees a big decline at a time when the broad market stands at an expensive level, it usually has a negative impact on the stock market, even if it’s only short-lived,” he wrote.Here are some key events to watch this week:Apple’s first product unveiling of the year on Tuesday.Reserve Bank of Australia releases minutes of its policy meeting on Tuesday.EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data.These are some of the main moves in markets:StocksThe S&P 500 fell 0.5% as of 4:03 p.m. New York timeThe Nasdaq 100 fell 1%The Dow Jones Industrial Average fell 0.3%The Russell 2000 Index fell 1.4%The MSCI World index fell 0.3%CurrenciesThe Bloomberg Dollar Spot Index fell 0.4%The euro rose 0.5% to 1.2037The British pound rose 1.1% to 1.3986The Japanese yen rose 0.6% to 108.17 per dollarBondsThe yield on 10-year Treasuries advanced 2.1 basis points to 1.601%Germany’s 10-year yield advanced 2.8 basis points to 0.235%Britain’s 10-year yield declined 0.9 basis points to 0.755%CommoditiesWest Texas Intermediate crude rose 0.5% to $63 a barrelGold futures fell 0.5% to $1,771/oz(An earlier story misstated the copper price move in the second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Mainland China is third behind the Bahamas and Cambodia in a ranking of the maturity of central banks’ retail digital currency projects, according to a report from PwC.More than 60 central banks are now exploring digital currencies, with retail projects more active in emerging economies given the importance of financial inclusion, while interbank or wholesale applications tend to be more predominant in advanced economies, the report said.The Bahamas and Cambodia take top marks in retail because their projects are already live, while China is still in the test phase. Only 23% of retail projects have reached implementation stage, while nearly 70% of wholesale projects are running pilot programs, according to the report.“CBDCs will contribute significantly to the modernization of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure,” PwC said. “They will generate numerous opportunities for further digitization in both corporates and financial institutions, as their integration in payment and financial infrastructure progresses.”Read More: Central Banks Edge Toward Money’s Next Frontier in Digital WorldCentral bank efforts at digital currencies accelerated first after Bitcoin became more popular and then once the Facebook Inc.-backed Libra project, now named Diem, was announced.With China in the testing phase on its digital yuan, other countries have accelerated their efforts. Jurisdictions like Sweden and the European Union are starting to make some headway. The Federal Reserve, though, has signaled it’s in little rush to get a digital dollar off the ground.Digital YuanChina’s efforts to create a digital yuan are aimed at domestic use and its goal for internationalizing its currency is not to replace the dollar, a senior official from its central bank said Sunday.As for interbank or wholesale projects, Thailand and Hong Kong SAR tied for the top ranking, according to the PwC report. They’re followed by Singapore, Canada and the U.K.The report also said more than 88% of CBDC projects at pilot or production phase use blockchain as the underlying technology. While it isn’t always necessary for such projects, it helps offer secure transfer of ownership, transparent audit trails and increasing interoperability with other digital assets, the report said.“The general public will be one of the biggest beneficiaries of CBDCs as it will give them access for the first time to a digital form of central bank money,” said Henri Arslanian, global crypto leader at PwC. “And that is a big milestone in the evolution of money.”(Updates headline.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
China has imposed a sweeping restructuring plan on Jack Ma's Ant Group, the fintech conglomerate whose record $37 billion IPO was derailed by regulators in November, that will see the group become a financial holdings company among other things. Ant, valued at around $315 billion at its IPO pricing, is also exploring options for founder Ma to divest his stake and give up control, as meetings with regulators signalled the move could help draw a line under Beijing's scrutiny of its business, Reuters exclusively reported on Saturday. Brokerage Jefferies estimated in a report last week that Ant will need 13.4-20.1 billion yuan ($2-$3 billion) of capital to meet the minimum capital adequacy ratio for consumer finance companies.
This is the first sign the Bank of England exploring the launch of a CBDC following the release of a discussion paper in March 2020.
(Bloomberg) -- Toshiba Corp. said a potential acquisition offer from CVC Capital Partners has stalled after the firm submitted a new proposal that lacks sufficient information for evaluation.Toshiba revealed a preliminary approach from CVC in early April, which sent its shares soaring. Just days later, the company’s board urged caution over the discussions, warning the proposal may not lead to a transaction.In the latest chapter of the convoluted drama, Toshiba revealed it had received a letter from CVC on Monday, but it included “no specific and detailed information capable of detailed evaluation.”“It merely stated that CVC would step aside to await our guidance as to whether a privatization of Toshiba would suit management’s and the Board of Directors’ strategic objectives,” the statement said.“As this preliminary proposal lacks the required information the Board has concluded it is not possible to evaluate it,” it said.The disclosure is yet another setback for any potential buyout of the Japanese company, which also saw the resignation of its chief executive officer earlier this month. Nobuaki Kurumatani, who had previously worked at CVC, stepped down after he suffered a sharp drop in support from Toshiba employees and executives.It’s not clear whether other reported bidders will proceed after CVC. After the firm’s initial approach, private equity firm KKR & Co. and Canadian investment giant Brookfield Asset Management Inc. began exploring potential offers, Bloomberg News reported.Satoshi Tsunakawa, who took over as CEO this month, offered reassurances that Toshiba would remain a strong Japanese company and invest in research and development. His comments appeared aimed at reassuring employees and business partners in the wake of the CVC offer.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Food delivery behemoth Meituan has raised $10 billion in a stock and convertible bonds sale, underscoring strong investor faith in the growth prospects of some Chinese tech firms despite a regulatory clampdown on the sector. The Tencent-backed firm with a market valuation of $220 billion said it plans to use its new warchest to invest in autonomous delivery vehicles, delivery drones and other cutting-edge technology. Analysts also expect the company to shore up its community group bulk buying service, Meituan Select, which has been growing in popularity.
P&G had another big quarter as people cleaned more at home during the pandemic. But, now the company is raising some prices. Here's why.
Despite a surge at reopened stores in England and Wales, the chain lost £1.1bn in sales under lockdown.
(Bloomberg) -- U.S. stocks were on pace for their first back-to-back drop since late March as investors sifted through a batch of corporate results.Energy and financial shares led declines in the S&P 500. United Airlines Holdings Inc. paced a selloff in travel shares on a bigger-than-expected loss. International Business Machines Corp. climbed after reporting its largest revenue growth in 11 quarters. Netflix Inc.’s results later Tuesday may show whether the streaming giant can manage expectations as Wall Street projects a steep slide in its most closely watched metric.Other corporate highlights:Johnson & Johnson posted stronger-than-expected sales, while Travelers Cos.’s earnings beat estimates and Philip Morris International Inc. raised its outlookProcter & Gamble Co. is boosting the prices of some consumer products as the household-goods behemoth grapples with higher commodity costsWith American stocks still trading near all-time highs, traders are focused on what’s forecast to be the best earnings season in two years. One of the biggest concerns among investors is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.“Earnings season is ramping up, and there’s this concern about how the multinationals will give their guidance in view of the fact that we haven’t drawn a line under Covid yet,” said Fiona Cincotta, senior financial markets analyst at City Index. “That is just starting to unnerve investors. Demand for riskier assets has come off.”For David Donabedian, chief investment officer at CIBC Private Wealth Management, the stock market has been just taking a breather after a big rally, but there are still reasons to be bullish.“The economic recovery has taken hold, the earnings recovery has taken hold, everything we’ve seen from first-quarter earnings so far has been that it’s going to be a blowout quarter,” he said.Here are some key events to watch this week:EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data Friday.These are some of the main moves in markets:StocksThe S&P 500 fell 0.3% as of 10:26 a.m. New York timeThe Nasdaq 100 was little changedThe Dow Jones Industrial Average fell 0.4%The Stoxx Europe 600 fell 1.4%The MSCI World index fell 0.4%CurrenciesThe Bloomberg Dollar Spot Index was unchangedThe euro rose 0.1% to 1.2050The British pound fell 0.1% to 1.3967The Japanese yen was little changed at 108.22 per dollarBondsThe yield on 10-year Treasuries fell two basis points to 1.584%Germany’s 10-year yield was little changed at 0.241%Britain’s 10-year yield was little changed at 0.751%CommoditiesWest Texas Intermediate crude was unchanged at $63 a barrelGold futures rose 0.4% to $1,778 an ounceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Dogecoin briefly replaced XRP as the fourth-largest coin early Monday.
Dogecoin (CRYPTO: DOGE) has been hard to ignore lately, as the meme-based cryptocurrency rose to become the sixth-largest with over $46 billion in market cap. What Happened: With 7,000% year-to-date returns and considerable outperformance against several top cryptocurrencies, DOGE’s appeal to retail investors has steadily been on the rise. However, several crypto influencers and traders have cautioned against going “all-in” on DOGE, citing concerns of a few large holders controlling the majority of its supply. See also: How to Buy DOGE Over 65% of Dogecoins are distributed among just 98 wallets across the world, while the single largest wallet holds 28% of all Dogecoins. In fact, just five wallets control 40% of the coin’s supply. Essentially, around 100 people control the entire $46 billion DOGE market. “The scam is simple - Hold on to Dogecoin till there is enough traction after it multiplies, dump all coins and cash out - Become instant billionaires,” said Akand Sitra of cryptocurrency risk management platform TRM Labs. Why It Matters: Sitra’s analysis of DOGE’s supply distribution was possible due to the nature of blockchain transactions, which are available for anyone to see on the open distributed ledger. Some on-chain analytics of the top DOGE holders led experts to believe that the cryptocurrency’s supply is concentrated among just a few holders. “The Dogecoin bubble will burst by the end of this year, easily,” said Sitra. Other traders in the space echoed this sentiment, calling it the reason why they will never be in DOGE “no matter the gains.” Why I'm not in $DOGE and will never be no matter the gains. https://t.co/jFVU2yQf03 — QuartzHands (@NFTiepie) April 19, 2021 At press time, DOGE was trading at $0.3976, up 32% overnight and 394% in the past seven days. DOGE holders were preparing for April 20, where a large group of retail traders has predicted the coin will touch $0.69. See Also: Dogecoin Creator Defends Meme Crypto's Supply: Doesn't 'Matter For Price' Image: Ivan Radic via Flickr See more from BenzingaClick here for options trades from BenzingaDeFi Blue Chip Season? Here's What Cryptos Coinbase Employees Are Buying Right NowInvestors In Disbelief As DOGE Becomes Top 5 Crypto With B Market Cap© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Rebates required under Obamacare could put hundreds of dollars back in your pocket.
(Reuters) -Harley-Davidson Inc on Monday raised its full-year earnings forecast after smashing analysts' quarterly profit estimates, vindicating Chief Executive Jochen Zeitz's decision to focus on more-profitable touring bikes at the expense of cheaper entry-level models. The company, however, also received a setback in the European Union - its second-biggest market - where all of its products, regardless of origin, will be subjected to a 56% import tariff from June following a new EU ruling. The ruling revokes the credentials that currently allow Harley to ship certain motorcycles to the EU from its international manufacturing facilities at a 6% tariff.
(Bloomberg) -- Tribune Publishing Co. ended talks with a group contesting hedge fund Alden Global Capital’s takeover of the newspaper giant after the interlopers lost their biggest funding source, but the takeover fight may not be over yet.Choice Hotels International Inc. Chairman Stewart Bainum Jr. is pressing ahead with efforts to buy the publisher and is pursuing other partners, a person with knowledge of the matter said Monday.Swiss billionaire Hansjoerg Wyss dropped out of the $18.50-a-share bid for Tribune led by Bainum Jr., Bloomberg News reported on April 17. After conducting due diligence for the past two weeks, Wyss decided not to go forward with the proposal, people familiar with the situation said at the time. A representative for Wyss declined to comment. In a filing Monday, Tribune said it received a letter from Bainum informing the company of Wyss’s departure and concluded the Bainum group could no longer top Alden’s $17.25-a-share proposal.The Bainum-Wyss group, which called itself Newslight, was seen as friendlier to the publishing company’s news staff than Alden, since the investors have vowed to protect local journalism. Alden, which already owns 32% of Tribune Publishing, has a reputation for deep cuts at the companies it acquires. Tribune’s newspapers include the Chicago Tribune and New York Daily News.Tribune shares were down 5.3% to $17.40 in New York trading at 12:52 p.m.Prior to the Newslight offer, Tribune Publishing agreed in February to be acquired by Alden. Bainum was initially part of that transaction, with a side deal that would have allowed him to acquire the Baltimore Sun and smaller newspapers in Maryland.But Bainum and Alden disagreed over how they would share services in the time before the Maryland newspapers were fully independent of Tribune, and Bainum grew skeptical of Alden’s intentions in the deal, people familiar with the situation said in March.Bainum then decided to pursue an acquisition of the whole company, with the help of like-minded backers. On April 5, Tribune Publishing said it would hold talks with Newslight about its $680.8 million bid, which it said was probably superior to Alden’s $634.8 million offer.(Updates with continuation of Bainum plans starting in first paragraph, shares in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Coinbase is for sure going to buy more companies. And with the success of its stock listing, other crypto companies are sure to follow and will also do what public companies do: buy things.
These past 12 months have seen the S&P 500 return its best performance ever – an 80% gain as of the end of March. But are the good times wrapping up? Some historical data would suggest that the bulls will keep running. Since 1950, the market has seen 9 sustained, year-long runs with a rolling return of 30% or better on the S&P 500. These periods have seen an average one-year gain of 40% (the median has been 34%) – and none of these bull markets has ever ended in its second year. But investors should not expect the same sky-high returns in the coming 12 months as they have just seen in the last, according to Callie Cox, a senior investment strategist at Ally Invest. "[I]t's typical for the bull market to lose a little bit of steam going into year two... Expectations start rising and makes it harder for the market to… beat everybody's expectations. And that leaves a greater chance for disappointment. And to be clear, again, we're not calling for doom and gloom. We just think the market is due for a breather up in the next quarter or two," Cox opined. For investors focused on returns, the prospect of a lower sustained gain in share appreciation will naturally prompt a look at dividend stocks. Reliable, high-yield dividend payers offer a second income stream, to complement the share appreciation and ensure a solid return for investors. With this in mind, we used the TipRanks' database to pinpoint three stocks that meet a profile: a Strong Buy rating from Wall Street’s analysts and a dividend yield around 7%. Trinity Capital (TRIN) We’ll start with Trinity Capital, a venture debt company that makes capital available to start-ups. Trinity’s investment portfolio totals $494 million, spread over 96 companies. The company entered the public markets earlier this year, closing its IPO early in February. The opening saw 8.48 million shares become available for trading, and raised over $105 million after expenses. In its 4Q20 report – the company’s first quarterly report as a public entity, covering the last quarter as a private firm – Trinity showed net investment income of $5.3 million, with a per-share income of 29 cents. This was more than enough to fund the dividend, paid in December at 27 cents per share. Since then, Trinity has declared its 1Q21 dividend, raising the payment by a penny to 28 cents per common share. Trinity has a announced a policy of paying between 90% and 100% of taxable quarterly income in the dividend. At the current rate, the payment annualizes to $1.12 per share, and gives a yield of 7.6%. This is significantly higher than the average yield of 1.78% found among peers in the financial sector. In his note on the stock, Compass Point analyst Casey Alexander states his belief that Trinity has a clear path toward profitable returns. “TRIN operates within the attractive, growing venture debt ecosystem. As such we expect strong net portfolio growth followed by improved NII and increasing dividend distributions, with potential upside from equity/warrant investments,” Alexander noted. To this end, Alexander rates TRIN a Buy, and his $16.75 price target implies an upside of ~14% for the next 12 months. (To watch Alexander’s track record, click here) This newly public stock has already picked up 5 analyst reviews – and those break down to 4 Buys and 1 Hold, for a Strong Buy consensus rating. Trinity shares are selling for $14.74; their $16.46 average price target suggests the stock has ~12% upside potential. (See TRIN stock analysis on TipRanks) Energy Transfer LP (ET) With our second stock, Energy Transfer, we move into the energy midstream universe. Midstream is the necessary sector connecting hydrocarbon exploration and production with the end markets; midstreamers control the transport networks that move oil and gas products. ET has a network of assets in 38 states, which link three major oil and gas regions: North Dakota, Appalachia, and Texas-Oklahoma-Louisiana. The company’s assets include pipelines, terminals, and storage facilities for both crude oil and natural gas products. The big news for Energy Transfer, in recent weeks, comes from two sources. First, on April 9, reports came out that that the US Army Corps of Engineers is not likely to recommend shutting down the Dakota Access Pipeline (DAPL). This project, when complete, will move oil from Alberta’s oil sands region across the US to the Gulf Coast; the Biden Administration wants to shut it down for environmental reasons, but the industry is fighting to keep it. And second, two largest shareholders of Enable Midstream have approved a proposed merger, by which ET will acquire Enable. The merger is projected to be worth $7 billion. Earlier this year, Energy Transfer reported 4Q20 EPS of 19 cents per share, on income of $509 million. While down year-over-year from the 38 cent EPS reported in 4Q19, the recent result was a strong turnaround from the 29-cent net loss reported in Q3. The company’s income is supporting the current dividend of 15.25 cents per common share. This annualizes to 61 cents, and give a yield of 7.7%. The company has paid out a dividend every quarter since Q2 of 2006. Covering this stock for Credit Suisse, analyst Spiro Dounis writes: “We updated our model to reflect a mid-2021 completion of the Enable Midstream acquisition. We view the deal as accretive and see additional potential upside resulting from operational/commercial synergies. ET highlighted potential synergies around both ENBL’s natural gas and NGL assets, noting that gas synergies could be realized fairly quickly while NGL opportunities are more long-term as legacy contracts roll. Upwards of ~$100mm of NGL uplift over the next several years doesn’t appear unreasonable, in our view.” Dounis also notes that the main risk to the company arises from DAPL, which may still be shut down by the Biden Administration. Even so, he rates the stock an Outperform (i.e. Buy), with an $11 price target indicating a 39% one-year upside. (To watch Dounis’s track record, click here) Wall Street’s analysts can be a contentious lot – but when they agree on a stock, it’s a positive sign for investors to take note. That’s the case here, as all of the recent reviews on ET are Buys, making the consensus rating a unanimous Strong Buy. The analysts have given an average price target of $11.60, indicating ~47% upside from the current share price of $7.94. (See ET stock analysis on TipRanks) Oaktree Specialty Lending (OCSL) Last but not least is Oaktree Specialty Lending. This company is one of many specialty finance providers, making loans and credit available in the mid-market segment, to smaller firms that would otherwise have difficulty accessing capital. Last month, Oaktree Specialty Lending completed a merger with Oaktree Strategic Income Corporation (OCSI). The combined company, using OCSL’s name, has more than $2.2 billion in assets. Oaktree’s investment portfolio totals more than $1.7 billion, primarily in first and second liens, which make up 85% of the company’s investment allocations. Oaktree finished 2020 with its fiscal first quarter, ending December 31. In that quarter, the company increased its dividend payment by 9%, to 12 cents per share, or 48 cents per share annualized. At this rate, the dividend yields 7.25% -- and marks the third quarter in a row of a dividend increase. Oaktree has kept up reliable dividend payments for more than three years. Among the bulls is Kyle Joseph, a 5-star analyst with Jefferies, who puts a Buy rating and an $8 price target on this stock. His target implies room for 20% upside potential in the next 12 months. (To watch Joseph’s track record, click here) “OCSL's conservative strategy in recent years has ultimately paid off, as the BDC is deploying dry powder into higher-yielding investments. Credit performance remained solid through the MRQ, while fundamentals are encouraging… We believe the BDC has sufficient liquidity to support near-term opportunities and believe the company is positioned to take advantage of the recent economic volatility, which was particularly highlighted by the recent 9% increase in the quarterly distribution... In the longer term, we believe OCSL represents an attractive investment,” Joseph wrote. Overall, OCSL has received 3 recent Buy reviews, making the analyst consensus rating a Strong Buy. The stock is currently trading at $6.66 and its average price target of $7.33 indicates ~10% upside from that level. (See OCSL stock analysis on TipRanks) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Semiconductors are one of the modern world’s essential industries, making possible so much of what we rely on or take for granted: internet access, high-speed computers with high-speed memory, even the thermostats that control our air conditioning – there isn’t much, tech-wise, that doesn’t use semiconductor chips. The global semiconductor chip market was valued at over $513 billion in 2019, and despite the worst the pandemic could do, the chip sector rose to $726 billion in 2020. It’s a market based on a near-limitless customer base; it’s estimated that 2.5 billion people own at least one smartphone. That’s 1 in 3 of the total world population, enough to ensure that demand for semiconductor chips will never slacken. And with that background, Raymond James analyst Chris Caso sees two chip giant poised to make gains this year – but one that investors should avoid. Let's take a closer look. Advanced Micro Devices (AMD) The first chip stock we’ll look at, AMD, is consistently ranked among the top 20 largest chip makers – by sales – globally. The company held the fifteenth spot last year, with $9.76 billion in total revenues. That top line was up 45% from 2019, when AMD was ranked eighteenth. AMD’s position in the industry is based on its high-quality products, including microprocessors, motherboard chipsets, and graphics processors. AMD’s Ryzen Mobile 4000 chip was the first 7nm x86 processor on the market. The chip company showed a solid second half in 2020, with revenues in Q3 and Q4 rapidly recovering the 1H20 dip and rising above 2019 level. Earnings in Q4 skyrocketed, growing from Q3’s 32 cents per share to an impressive $1.45 per share. For all of 2020, earnings came in at $2.06, compared to 30 cents for 2019. The strong second half pushed the full-year revenue to a company record, on the strength of expanding demand in the PC, gaming, and data center markets. AMD’s prospects have attracted Raymond James’ Chris Caso, who compares the company favorably to competitor Intel. “We are using the pullback since the start of the year to get involved with AMD, which we expect to be a secular winner due to what we believe to be a durable technical advantage vs. Intel. We think the stock’s pullback has been driven by improved sentiment that Intel will solve their manufacturing challenges, which will reverse AMD’s successes. We’re taking the other side of that view," the 5-star analyst noted. Caso continued, "Nowthat Intel has committed to internal manufacturing, we think it’s unlikely that Intel ever regains a transistor advantage vs. AMD, and the current roadmaps ensure an advantage for AMD/TSMC through at least 2024. In the meantime, we think Street numbers are too low for both server and consoles, putting our base case 2022 EPS estimate of $2.81 12% ahead of the Street, with an upside case to about $3.00." In line with this outlook, Caso initiated coverage of AMD with an Outperform (i.e. Buy) rating, and $100 price target to suggest a 23% one-year upside potential. (To watch Caso’s track record, click here) The Raymond James view is no bullish outlier; AMD has 13 positive reviews on record. These are partly balanced by 5 Holds and 1 Sell, making the analyst consensus rating a Moderate Buy. The share are selling for $81.11, and their $104.44 average price target implies an upside of ~29% for the next 12 months. (See AMD stock analysis on TipRanks) Nvidia Corporation (NVDA) Next up, Nvidia, is another of the chip industry’s giants. Like AMD, Nvidia is slowly rising in the rankings; going by total sales, the company was rated number 10 in 2019 – and number 8 in 2020. Nvidia’s sales last year totaled more than $16 billion, a gain of 53% year-over-year. Nvidia rode to its success on the combination of memory chips – which have a strong market in the data center segment – and graphics processors – which are popular among both hardcore gamers and professional graphic designers. For the most recent quarter, Q4 of fiscal 2021, ending on December 31, Nvidia reported $5 billion in revenue, a company record, and a 61% gain from the year before. EPS rose from $1.53 in the prior Q4 to $2.31 in the current print, a gain of 51%. Full year numbers were strong; the $16.68 billion at the top line was a record, and the EPS, at $6.90, was 53% higher than the previous year. Company management noted the strength of the data center segment, but also pointed out that Nvidia has a growing AI business. The company makes between 5% and 10% of its total sales in the automotive market, and more than half of that is AI-related, in the autonomous vehicle niche. Raymond James’ Chris Caso notes this, too, in his report upgrading his stance on NVDA. “Our call is not really new, as we’ve been positive on NVDA for some time. Our call rather is meant to express our conviction in both the short and long term. In the short term, we think NVDA results will be more dependent on supply than demand given widespread shortages – and we do expect incremental supply as the year progresses…. Our longer term conviction is driven by the fact that NVDA has more shots on goal than anyone else in our coverage, and their success in AI has earned them a permanent seat at the table in both hyperscale and enterprise compute,” Caso opined. Caso bumps his stance up from Outperform to Strong Buy, and sets a price target of $750. At current levels, this indicates room for a 17% one-year upside. NVDA’s strong share appreciation over the past 12 months (115%) has pushed the stock price close to the average price target. Shares are selling for $614.47, with an average target of $670.20 suggesting room for 9% growth. Nonetheless, the stock holds a Strong Buy consensus rating based on 22 Buys and 4 Hold given in recent weeks. (See NVDA stock analysis on TipRanks) Intel Corporation (INTC) The third stock we’re looking at, Intel, is the one that Raymond James says to avoid. This may seem counterintuitive; Intel is, by sales, the world’s largest semiconductor chip maker, with more than $77 billion in annual revenue last year and a leading position in a $720+ billion market. So why does Caso advise caution here? “Intel’s stock has risen of late due to optimism that new leadership from their very capable new CEO will allow them to turn around their manufacturing issues and return to their former dominance. Our Underperform rating reflects not just the risk that Intel won’t reach that goal, but also the pain they will likely endure in pursuit of that goal in terms of capex, lost market share, and a shifting landscape in datacenter that will make the industry less dependent on Intel," Caso explained. The analyst added, "In addition, we’re concerned that demand in the PC market, on which Intel remains highly dependent, has been significantly pulled forward due to the pandemic, and expect an eventual mean reversion – which may unfortunately occur just as Intel needs to ramp investment.” Caso, as noted, rates INTC an Underperform (i.e. Sell), and does not put a price target on it. All in all, the market’s current view on INTC is a mixed bag, indicating uncertainty as to its prospects. The stock has a Hold analyst consensus rating based on 12 Buys, 10 Holds, and 8 Sells. Meanwhile, the $67.68 price target suggests a modest upside potential of nearly 6%. (See INTC stock analysis on TipRanks) To find good chip ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
(Bloomberg) -- The Reserve Bank of Australia said its policy settings were helping hold down the currency, while surging property prices meant it needed to monitor trends in home borrowing, according to minutes of its April meeting.Easy policy “continued to support the economy by keeping financing costs very low, contributing to a lower exchange rate than otherwise,” the central bank said Tuesday in the minutes. “Members agreed that it would be important to watch carefully for increased risk-taking by lenders.”Australia’s V-shaped recovery is reflected in the labor market, with hiring surging and unemployment falling even as the labor force swelled to a record last month. The economy faces a challenging few months ahead with the expiry of the government’s vast JobKeeper wage subsidy program, forcing firms and households to stand alone.“While the overall recovery in the labor market was expected to pause in the period ahead, this was expected to be only temporary,” the RBA said. “It was likely that the full effect of the end of the JobKeeper program would become apparent over several months.”Australia’s jobless rate dropped to 5.6% in March as employment soared by more than 70,000, according to data released last week, after policy makers held their meeting.The central bank said in the minutes that A$95 billion ($74 billion) had been drawn from its lending facility that provides cheap funding to banks and a further A$95 billion was available until the end of June. The board said it would consider extending the facility if “there were a marked deterioration in funding and credit conditions.” There are no such signs currently, the bank said.The RBA is currently tapping a second A$100 billion tranche of quantitative easing to help hold down the currency. Beyond this, the bank said it would undertake further bond purchases “if doing so assisted with progress towards the goals of full employment and inflation.”It reiterated that a decision on whether to roll over yield curve control to the November 2024 three-year bond from the current April 2024 maturity would be made later in the year. Its decision would be guided by “the flow of economic data and the outlook for inflation and employment.”A burst of selling emerged in Aussie bond futures after the minutes, while the Australian dollar rose, buying 78.08 U.S. cents at 4:38 p.m. in Sydney. It has gained about 1.5% this year.Australia’s hot housing market is likely to be increasingly central in RBA discussions, with house prices rising in March at the fastest pace since 1988.“Given the environment of rising house prices and low interest rates, the bank would be monitoring trends in housing borrowing and the maintenance of lending standards carefully,” it said.Yet Australians, like counterparts in much of the developed world, have solid financial buffers as people saved government cash payments during the height of the pandemic. The rapid recovery in the labor market is helping households meet their financial commitments.The RBA noted survey data suggested income and savings increased for most household income groups, “with most of the additional saving undertaken by higher-income households.”The RBA also provided some observations on the economy’s performance in the first quarter:GDP in the March quarter was likely to have recovered further to around its pre-pandemic level, earlier than previously expected; andGrowth in household consumption had moderated in the March quarter following strong growth in previous quartersIn a cross-country reference discussion, the RBA noted that despite Australia’s rapid recovery in employment, wages growth had slowed to a greater extent “and had been more subdued than in other countries.” A key reason is Australia’s labor market adjusted by reducing hours and restraining wages, whereas countries like the U.S. adjusted through a decline in employment.The upshot is that the central bank’s goal of wages growth sustainably above 3% to return inflation to target remains a high hurdle.The RBA also noted in the minutes that the board would have a broader discussion on the implications of climate change for financial stability in coming months.(Updates markets in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The exercise equipment maker says a regulatory warning about its treadmills was inaccurate. Wall Street analysts remain positive about the outlook.