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CF Industries initially fell last week after reporting earnings, but the fertilizer maker cleared a 47.10 buy point Monday.
CF Industries initially fell last week after reporting earnings, but the fertilizer maker cleared a 47.10 buy point Monday.
Britain will modernise its listing rules to attract more high-growth company and so-called blank cheque flotations, Finance Minister Rishi Sunak said after a government-backed review said London was on the back foot after Brexit. The London Stock Exchange is facing tougher competition from NYSE and Nasdaq in New York, and from Euronext in Amsterdam since Britain fully left the European Union on Dec. 31.
Carmaker Stellantis, created by the merger of Peugeot-maker PSA and Fiat Chrysler (FCA), aims to lift profit margins this year towards the levels attained by its Chief Executive Carlos Tavares at PSA. With 14 brands under one roof, including Fiat, Peugeot, Opel, Jeep, Ram and Maserati, the world's fourth largest carmaker was formed in January. The group said on Wednesday it was targeting an adjusted operating profit margin of 5.5%-7.5% this year, assuming no further significant COVID-19 related lockdowns.
(Bloomberg) -- Bitcoin rallied back above $50,000, surpassing the key psychological level as bullish momentum returned after last week’s selloff. The digital token climbed 8% to trade around $51,500 in early U.S. trading, reaching the highest level in a week. The cryptocurrency has been volatile. Prices plunged 21% last week and have recovered with the broad bounce back in equities. The swings in Bitcoin and Ethereum give “the impression that they are a general barometer of risk sentiment,” said Steen Jakobsen, chief investment officer of Saxo Bank. On Tuesday, prices dipped 2.9% after Gary Gensler, nominee for chairman of the U.S. Securities and Exchange Commission, said that making sure crypto markets are free of fraud and manipulation is a challenge for the agency.Gensler, who served as a Commodity Futures Trading Commission chairman during the Obama administration, has been viewed as a strong advocate for digital assets. He serves as a senior advisor to the MIT Media Lab Digital Currency Initiative and teaches about blockchain technology and digital currencies.“While the Bitcoin market reacted quickly to his comments, Gensler was largely positive about Bitcoin and cryptocurrencies,” said John Wu, president of blockchain technology firm Ava Labs. “I’m hopeful the new administration will help foster innovation in blockchains, cryptocurrencies and digital assets, instead of stifling it.”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.
Among investors, Buffett’s annual advice is eagerly awaited and closely followed.
(Bloomberg) -- Bond traders have been saying for years that liquidity is there in the world’s biggest bond market, except when you really need it.Last week’s startling gyrations in U.S. Treasury yields may offer fresh backing for that mantra, and prompt another bout of soul-searching in a $21 trillion market that forms the bedrock of global finance. While stocks are prone to sudden swings, such episodes are supposed to be few and far between in a government-debt market that sets the benchmark risk-free rate for much of the world.Yet jarring moves occur periodically in Treasuries, forming a bit of a mystery as no two events have been the same. Some point to heightened bank regulations in the wake of the 2008 financial crisis. Scrutiny over liquidity shortfalls intensified in October 2014 when a 12-minute crash and rebound in yields happened with no apparent trigger. Panic selling during the pandemic-fueled chaos a year ago, exacerbated when hedge funds’ leveraged wagers blew up, brought the issue to the fore again.And then came last week, when the gap between bid and offer prices for 30-year bonds hit the widest since the panic of March 2020.The latest events “are a stark reminder what happens when liquidity suddenly vanishes in the deepest, largest bond market,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors.At issue is whether this vast market is more vulnerable to sudden bouts of turbulence thanks to measures that have made it more difficult for banks to hold Treasuries. Some analysts say the tumult last week was magnified by questions over whether the Federal Reserve will extend an easing of bank capital requirements, which is set to end March 31. Put in place early on in the pandemic, the measure is seen as making it easier for banks to add Treasuries to their balance sheets.The 2014 episode triggered a deep dive into the market structure, and regulators have pushed through some changes -- such as increased transparency -- and speculation has grown that more steps to bolster the market’s structure may be ahead.“While the scale and speed of flows associated with the COVID shock are likely pretty far out in the tail of the probability distribution, the crisis highlighted vulnerabilities in the critically important Treasury market that warrant careful analysis,” Fed Governor Lael Brainard said Monday in prepared remarks to the Institute of International Bankers.There are plenty of potential culprits in last week’s bond-market tumble -- which has since mostly reversed -- from improving economic readings to more technical drivers. Ultra-loose Fed policy and the prospect of fresh U.S. fiscal stimulus have investors betting on quicker growth and inflation. Add to that a wave of convexity hedgers, and unwinding by big trend-following investors -- such as commodity trading advisers.Based on Bloomberg’s U.S. Government Securities Liquidity Index, a gauge of how far yields are deviating from a fair-value model, liquidity conditions worsened recently, though it was nothing like what was seen in March.For Zoltan Pozsar, a strategist at Credit Suisse, the action began in Asia with bond investors reacting to perceived hawkish signs from the central banks of Australia and New Zealand. That sentiment then carried over into the U.S. as carry trades and other levered positions in the bond market were wiped out. A disastrous auction of seven-year notes on Thursday added fuel to the unraveling.Last week’s drama “brings to mind other notable episodes in recent years in which a deterioration in the Treasury market microstructure was primarily to blame,” JPMorgan & Chase Co. strategist Henry St John wrote in a note with colleagues.One key gauge of Treasury liquidity -- market depth, or the ability to trade without substantially moving prices -- plunged in March 2020 to levels not seen since the 2008 crisis, according to data compiled by JPMorgan. That severe degree of liquidity shortfall didn’t resurface last week.The bond-market rout only briefly took a toll on share prices last week, with equities surging to start this week, following a sharp retreat in Treasury yields amid month-end buying.The Fed cut rates to nearly zero in March 2020, launched a raft of emergency lending facilities and ramped up bond buying to ensure low borrowing costs and smooth market functioning. That breakdown in functioning has sparked calls for change from regulators and market participants alike.GLOBAL INSIGHT: Recovery? Yes. Tantrum? No. Yield Driver ModelFor now, Treasuries have settled down. Pozsar notes that the jump in yields has provided an opportunity for some value investors to swoop in and pick up extra yield, effectively helping offset the impact of the leveraged investors who scrambled for the exits last week.“Some levered players were shaken out of their positions,” Pozsar said in a forthcoming episode of Bloomberg’s Odd Lots podcast. “It’s not comfortable -- especially if you’re on the wrong side of the trade -- but I don’t think that we should be going down a path where we should redesign the Treasury market.”Why Liquidity Is a Simple Idea But Hard to Nail Down: QuickTake(Updates with details on Bloomberg’s liquidity index in 10th paragraph, and a chart)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.
A U.S. national security commission on Monday recommended Congress tighten up "choke points" on chipmaking technology to prevent China from overtaking the United States in semiconductors in the coming years. The National Security Commission on Artificial Intelligence (NSCAI), led by former Google Chairman Eric Schmidt, recommended clamping down on China's ability to procure the manufacturing equipment needed to make advanced computing chips. "China is making an aggressive push to promote authoritarianism around the world," an NSCAI official told Reuters.
Zoom is sitting on a monster cash pile. The company's CFO Kelly Steckleberg explains how they may spend some of the money.
Buffett has shared these bits of wisdom to protect your money from COVID.
(Bloomberg) -- China’s top banking regulator said he’s “very worried” about risks emerging from bubbles in global financial markets and the nation’s property sector, sparking fresh concerns about further tightening in the world’s second-biggest economy. Stocks dropped across Asia.Bubbles in U.S. and European markets could burst because their rallies are heading in the opposite direction of their underlying economies and will have to face corrections “sooner or later,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission and Party secretary of the central bank said at a briefing in Beijing on Tuesday.READ MORE: Asian stocks slip as investors weigh impact of bond yields and China’s asset-bubble warningChina’s financial regulators are walking a fine line of trying to curb risks at home while limiting disruptions from abroad as the economy opens wider to foreign capital. The CBIRC vowed in January to stay “ahead of systemic risks,” after capping bank lending to the property market, slashing shadow banking activities and claiming victory in unwinding a wild expansion in peer-to-peer lending.“China’s monetary policy has not been as easy as the U.S. and Europe,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “This latest comment will create worry of further tightening.”Asia stocks tumbled and U.S. futures declined on Guo’s comments. The MSCI Asia Pacific Index erased earlier gains of as much as 0.8%. The CSI 300 Index in China fell as much as 1.4% and Hong Kong’s main gauge dropped almost 1%. Chinese government bonds gained from a shift toward haven assets, sending yields on benchmark 10-year notes to a nearly three-week low.“Beijing calling the overseas market rally a bubble won’t help sentiment in Hong Kong stocks, which had been seeing strong inflows from the mainland,” said Castor Pang, head of research at Core Pacific-Yamaichi.Regulators are watching capital inflows into China, where the economy is still growing and interest rates are higher, although the size and speed of such inflows remain controllable at the moment, Guo said.China’s top financial regulator also weighed in on the fintech sector, saying platforms that offer banking services must comply with the same capital requirements as traditional lenders to curb risks. The regulator has set different deadlines for each type of service, with the longest grace period of no more than two years, Guo said, without elaborating.Guo also said bubbles in China’s property market remain relatively big, with many people buying homes for investment or speculative purposes, which is “very dangerous.”A strong economic recovery, combined with a credit surge and a renewed fear of missing out have stoked buyer enthusiasm across China’s largest cities despite stricter curbs this year. Authorities have responded with a slew of policies to fine tune the industry, including a new mechanism on bank lending for real estate and fresh land-bidding rules designed to curb high-flying land costs.Still, home prices in the secondary market, which faces less government intervention, gained the most in 18 months in January, official data showed last week. Existing-home prices of certain popular projects in Shanghai surged more than 30% last year, according to China Real Estate Information Corp.“Guo’s comment reflects that Beijing wants a very stable financial market,” said Linus Yip, a strategist at First Shanghai Securities. “Stabilization is the ultimate goal of its monetary policy.”Other comments from Guo:China lending rates are likely to rebound this yearFinancial firms in Hong Kong not bound by U.S. sanctionsChina supports more Chinese firms listing in Hong KongReaction: Here’s What Analysts Are Saying on China’s Concern Over Bubbles(Updates with chart)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.
Blackstone Group Inc Chief Executive Stephen Schwarzman pocketed at least $610.5 million in 2020 from dividends and compensation, more than any other private equity executive and up 20% from last year despite the impact of the COVID-19 pandemic, regulatory filings showed. Blackstone President Jonathan Gray, Schwarzman's No. 2, took home at least $216.1 million in 2020, consisting of $123.2 million in compensation and $92.8 million in dividends from the company's shares he owns, the filing showed.
The personal-finance superstar doesn’t want you running out of coin in your golden years.
(Bloomberg) -- Saudi Arabia’s sovereign wealth fund is set to close a deal for its biggest loan ever as soon as this week, according to people familiar with the matter.The Public Investment Fund is raising about $15 billion from a group of international banks to finance new investments, the people said, asking not to be identified as the information is private. The final bank group participating in the facility is still being determined, and the size of the loan as well as the timing may change, they said.The PIF declined to comment.The wealth fund has more than doubled the size of the loan from an initial plan to raise up to $7 billion, Bloomberg reported last month.The $400 billion sovereign investor fund is tapping banks for its third loan so far, after borrowing $11 billion in its debut debt raising, and another $10 billion bridge facility in 2019 that it paid off last year.The fund has also received cash injections in the form of the $30 billion proceeds from the sale of shares in Saudi Aramco and a $40 billion transfer from the kingdom’s foreign reserves last year as it looked to finance an asset-buying spree during a slump in equity markets caused by the coronavirus.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.
A wealth tax could be impossible to enforce. Other taxes would do the job much better.
(Bloomberg) -- Stock market optimism among Wall Street strategists has risen close to levels that signaled trouble for equities in the past.A Bank of America measure of their bullishness is near a level that historically has been bearish for stocks. The gauge assesses the average recommended allocation to equities by sell-side strategists and is very close to triggering a sell signal, a team including Savita Subramanian wrote Monday.“The last time the indicator was this close to ‘Sell’ was June 2007 after which we generally saw 12-month returns of minus 13%,” the strategists said, adding even current levels signal below-average equity returns over the next year. “We‘ve found Wall Street bullishness to be a reliable contrarian indicator.”Last week’s worries about the impact of higher bond yields on stocks evaporated Monday, with U.S. equities notching their biggest advance since June. Optimism is evident from the record amount of cash poured into stock ETFs in February as investors bet additional fiscal stimulus and the Covid-19 vaccine rollout will supercharge growth.The S&P 500 is up about 4% so far this year and some 32% over the last 12 months. The Bank of America gauge rose nearly 1 point to 59.2% in February.“The current level is forecasting 12-month returns of just 7%, a much weaker outlook compared to an average 12-month forecast of 16% since the end of the Global Financial Crisis,” the BofA team wrote.While investors seem to have come to terms with the recent upheaval in bond markets for now, an ongoing shakeout could spark fresh angst, particularly if real yields keep rising.The correlation between U.S. equities and inflation-adjusted Treasury yields dropped to the most negative in five years last week, according to data compiled by Bloomberg. That suggests further increases in real yields could hurt the S&P 500 index.(Updates with more on bond yields from the seventh 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.
Texas energy companies failed to pay another $345 million for electricity and other services incurred during last month's cold snap, the operator of the state's grid said on Monday. The state's deregulated electricity market was thrown into turmoil last month as 48% of its generating plants went offline, fueling up to $9,000 per megawatt hour (mwh) spot rates and $25,000 per mwh service fees. In all, electricity prices on the state's wholesale market soared by $47 billion for the about five-day period when cold weather drove up demand and generating plants failed, estimated Carrie Bivens, a vice president at Potomac Economics, which monitors the Texas power market.
Gary Gensler, Biden’s pick to head the SEC, told Congress Tuesday that the “greater challenge” in bitcoin and cryptocurrencies is protecting investors.
(Bloomberg) -- The sudden shortage of semiconductors is disrupting automotive production and limiting revenue growth for Apple Inc. It’s created a stock market boon, however, for the makers of chip production equipment.Those companies have emerged as the biggest winners from the supply crunch as chipmakers rush to add more factory capacity. Applied Materials Inc., the world’s biggest equipment maker, has seen its shares advance 36% this year, making it the best performer in a semiconductor index. Brooks Automation Inc., Lam Research Corp. and KLA Corp. are each up more than 19%, nearly twice the gain in the Philadelphia semiconductor index. The stocks fell on Tuesday amid a broad technology slump following a two-day rally.Expanding equipment budgets by major chipmakers and governments concerned about foreign dominance of production facilities are giving Wall Street increasing confidence that the rally has staying power.“Over the next three to five years, this is definitely very bullish for semicap equipment in terms of overall tightness and focus on domestic supply,” said Krish Sankar, an analyst with Cowen & Co.The shortfall is a problem that seemed unthinkable a year ago when a rapidly spreading Covid-19 virus sent economic activity plummeting as companies began efforts to reduce production in anticipation of ebbing sales. Instead, after an initial shock, sales in many industries surged and companies scrambled to boost inventories. Many chipmakers are now producing at maximum capacity and governments are suddenly looking at a dearth of homegrown plants as a national security risk.Supply CrunchU.S. President Joe Biden signed an executive order last week to review the country’s supply chains for semiconductors and other products. While there aren’t expected to be any quick fixes, industry watchers say the long-term trend is clear: more equipment will be needed.“The semiconductor industry is running on all cylinders, and you’re seeing companies that might in the past have been reluctant to commit to capex (capital expenditures) now all of a sudden trying to ramp up as quickly as they can,” said Daniel Morgan, a senior portfolio manager with Synovus Trust Co., which owns shares of Applied Materials.Taiwan Semiconductor Manufacturing Co., which produces chips for Apple and Broadcom Inc., plans to spend $12 billion to construct a plant in Arizona. Some of the costs for that facility were included in the company’s capital spending plans for 2021 that sparked a rally in chip related stocks around the world in January. Broadcom’s capital outlays could total as much as $28 billion, up from $17 billion in 2020.Huge manufacturers like Taiwan Semi building smaller plants in new regions creates particularly attractive opportunities for Applied Materials, Chief Executive Officer Gary Dickerson said on the Santa Clara, California-based company’s earnings call last month.“You have to look at the scale of the factories they’re building and at least what’s been announced is smaller scale,” he said. “That somewhat less efficient factory size is a positive for Applied.”In addition to Applied Materials, top picks for Cowen’s Sankar include Lam Research and MKS Instruments Inc.“You have an environment where demand is very strong, supply is constrained and then you add to it domestic supply build out,” the analyst said in an interview. “At some point these things will normalize, but it won’t be any time soon.”(Updates chart and closes shares in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Lawrence Stroll, executive chairman of Aston Martin, tells the BBC he wants to build a firm with a "luxury profile".
Alibaba and Ant Group founder Jack Ma has lost the title of China's richest man, a list published on Tuesday showed, as his peers prospered while his empire was put under heavy scrutiny by Chinese regulators. Ma and his family had held the top spot for China's richest in the Hurun Global Rich List in 2020 and 2019 but now trail in fourth place behind bottled water maker Nongfu Spring's Zhong Shanshan, Tencent Holding's Pony Ma and e-commerce upstart Pinduoduo's Collin Huang, the latest list showed.
Global equity markets were little changed on Tuesday as Wall Street retreated and investors took stock of gains from Monday's surge, pausing to gauge whether a bond yield jump had run its course. "It was such a strong opening to the month yesterday that investors could be short-term focused and saying, 'Let's take some of the profits that we saw yesterday,'" said Sam Stovall, chief investment strategist at CFRA Research in New York. March began with a bang on Monday as global equities markets rose, the S&P 500 had its best day since June 5 and bond markets calmed after a month-long selloff.