Bloomberg reports the existing U.S. tariffs on billions of dollars in Chinese goods are likely to stay in place until after the 2020 presidential election. Yahoo Finance's Seana Smith and the CEO of China Beige Book, Leland Miller, discuss.
Bloomberg reports the existing U.S. tariffs on billions of dollars in Chinese goods are likely to stay in place until after the 2020 presidential election. Yahoo Finance's Seana Smith and the CEO of China Beige Book, Leland Miller, discuss.
(Bloomberg) -- Stocks slid with U.S. and European equity futures Thursday after a surge in bond yields reignited concerns about valuations. Tumbling Chinese shares led the equity losses in Asia.MSCI Inc.’s Asia-Pacific gauge had its worst drop this week. The technology sector struggled while real estate, finance and energy shares outperformed amid a shift to value segments. S&P 500 and Nasdaq 100 futures dipped but were off earlier lows after an overnight slump in both indexes.Benchmark Treasury yields edged lower in Asian trading after approaching 1.5% on Wednesday. A market gauge of inflation expectations over the next five years hit its highest level since 2008. Traders also assessed data pointing to a still uneven economic recovery from the depths of the pandemic.The rise in inflation expectations and long-term borrowing costs is stoking concern that a prolonged rally in equity markets may be in jeopardy. Investors are trying to assess central banks’ appetite to buy more longer-dated bonds to keep financial conditions loose. The focus turns to Federal Reserve Chairman Jerome Powell’s upcoming comments, after Chicago Fed President Charles Evans said the recent climb in yields reflected economic optimism.“Inflation is a concern; there is a lot of money sloshing around the system and it makes sense to have some sort of a correction right now,” said Shana Sissel, Spotlight Asset Group chief investment officer. “And bond yields going up is the market’s implicit way of tightening since the Fed has made it clear they don’t have the intention of doing so.”Read: U.S. Inflation Expectations Hit Decade High as Yields ResurgeDemocratic leaders in the Senate are working to consolidate support for the $1.9 trillion stimulus bill, which is expected to spur growth. The U.S. economy expanded modestly in the first two months of the year and vaccinations are aiding business optimism, according to the Federal Reserve’s Beige Book.Elsewhere, oil traded near $62 a barrel, with traders focusing on a critical OPEC+ meeting that may see supply curbs eased, while tracking events in the Middle East after Houthi rebels said they hit a Saudi Aramco site with a missile.Some key events to watch this week:OPEC+ meeting on output Thursday.U.S. factory orders, initial jobless claims and durable goods orders are due Thursday.Federal Reserve Chairman Jerome Powell speaks Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.These are some of the moves in markets:StocksS&P 500 futures fell 0.2% as of 7:16 a.m. in London. The S&P 500 fell 1.3%. The Nasdaq 100 lost 2.9%.Japan’s Topix index fell 1%.Australia’s S&P/ASX 200 index fell 0.8%.South Korea’s Kospi index slid 1.3%.Hong Kong’s Hang Seng index lost 1.9%.Shanghai Composite was down 2.1%. The CSI 300 index lost 3.2%.Euro Stoxx 50 futures dropped 0.7%.CurrenciesThe yen traded at 107.16 per dollar, down 0.1%.The offshore yuan was at 6.4742 per dollar.The Bloomberg Dollar Spot Index was little changed.The euro traded at $1.2057.BondsThe yield on 10-year Treasuries dipped about two basis points to 1.46%.Australia’s 10-year bond yield rose 10 basis points to 1.77%.CommoditiesWest Texas Intermediate crude added 0.8% to $61.76 a barrel.Gold was 0.5% higher at about $1,720 an ounce.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 Australian and New Zealand Dollars are trading mixed early Wednesday after data out of China and Australia failed to generate any meaningful upside momentum. Despite economic data from China and Australia, the price action suggests investors are still eyeing the movement in U.S. Treasury yields for direction. Bullish investors are hoping that lower Treasury yields help to restore some calm to global markets and reignite demand for riskier assets.
The market moves lower as traders wait for additional upside catalysts.
(Bloomberg) -- A string of poorly-received bond auctions in the past week is driving home a message -- the Treasuries-led global rout is leaving investors scarred and governments staring at higher borrowing costs.U.S. yields resumed their rise Wednesday after a brief lull that followed a disastrous sale of seven-year Treasury notes last week. Sovereign bond offerings from Indonesia to Japan and Germany have drawn tepid demand and at least one sale was scrapped. The push for higher rates comes as central bankers attempt to ease investors’ discomfort over the pace of the recent rise.Investors are demanding higher yields to compensate for the risk of further volatility, which may complicate efforts to finance $14 trillion worth of fiscal stimulus globally. Concerns that central banks may withdraw policy support has soured sentiment, amid mounting evidence of a faster-than-anticipated economic recovery.“Investors will be increasingly differentiating countries based on their fundamentals and prospects,” said Tuuli McCully, head of Asia Pacific economics at Scotiabank. “Considering elevated debt levels in some countries, higher funding costs could dampen their economic recovery momentum further.”Clear MessageThe message from Europe and Asia Pacific markets this week is clear. Even though global bonds have stabilized somewhat, investors are still rattled by the prospect of more volatility.In Germany, a sale of 15-year bonds on Wednesday received the weakest demand since the tenor was launched last summer. Japan’s auction of 10-year debt the previous day recorded the lowest bid-to-cover since February 2016.Indonesia’s Finance Ministry agreed to sell 13.6 trillion rupiah ($951 million) of non-Islamic bonds on Tuesday, the least since March 2020, according to data compiled by Bloomberg. Including bills, the sale totaled 17 trillion rupiah, below the government’s revised target of 30 trillion rupiah.There were ominous signs even before last week’s ill-fated U.S. auction, including a drop in coverage ratios for debt sold in Thailand and Australia. Signs of distress also emerged in Italy, while New Zealand ended up accepting just over half of the bids it received for a sale as yields soared.“If there is still no reversal in sentiment, the government may need to accept higher bid yields, or cut down on planned spending,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. in Singapore.Mexico’s Finance Ministry declared a local-currency sovereign debt sale void last week despite demand that was triple the amount offered. In a statement, the ministry blamed high rates due to market volatility for sinking the 3.7 billion-peso ($178 million) sale.A couple of offerings bucked the global trend. A sale of Italian green bonds racked up 76 billion euros of orders, boosted by its environmentally-friendly tag. In Russia, the Finance Ministry sold the most fixed-coupon notes since June, as mild sanctions from the U.S. failed to deter investors.The U.K. delivered an annual budget Wednesday that tried to balance the need for prolonged economic aid with calls to control the deficit, with Finance Minister Rishi Sunak saying he intends to raise the tax burden to its highest level in over 50 years. While the Debt Management Office’s projected bond sales for 2021-22 were well below the record this fiscal year, the total is higher than expected at 295.9 billion pounds ($413 billion).“We are in an uncomfortable spot where attention is shifting toward elevated asset prices,” said Eugene Leow, a rates strategist at DBS Bank Ltd. in Singapore. “Even as central banks try to reassure, there is this lingering fear that less-loose policy may be on the way.”PerspectiveFor all the jitters, optimists say that higher yields are a sign of confidence and emerging economies continue to enjoy inflows and improved current-account positions. In Asia, central banks have built up their foreign-exchange holdings by the most since 2013.“We remain of the view that fears of a 2013-like Taper Tantrum for emerging markets are overblown,” said Sameer Goel, Deutsche Bank’s global head of EM research in Singapore. “Central banks stand readier as part of fiscal-monetary coordination to quarterback term premia and the cost of capital to governments.”Central banks are clearly on their guard. Federal Reserve Governor Lael Brainard warned Tuesday that bond-market volatility could further delay any pullback in asset purchases while European Central Bank Executive Board member Fabio Panetta said the recent jump in yields “is unwelcome and must be resisted.” Still, the institution as a whole sees no need for drastic action to combat rising yields, according to officials familiar with internal discussions.While the Federal Reserve’s guidance is that a hike is unlikely until at least 2024, money markets in the U.S. are positioned for interest rates to start rising again by the end of next year.“That’s a significant difference, a big gap between the Fed’s message and where the market is, and they will push back against that,” said Kathy Jones, chief fixed income strategist at Charles Schwab & Co. in New York.(Adds details of Treasury selloff in second paragraph and U.K. budget in 12th 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) -- To the outside world, Wall Street banks looked like great places to be last year, as they printed profits during the pandemic slump. To those inside, they now look like great places to leave, too.Technology upstarts and investment firms are offering some unusually attractive opportunities to seasoned Wall Street professionals, including shots at multiplying their paychecks -- an allure all the greater after banks showed restraint in doling out rewards for 2020. Exits are now proliferating as bonus season wraps up.A pair of Goldman Sachs Group Inc. partners, including an architect of its consumer business, became the latest examples over the weekend by giving up their coveted spots for an unconventional alternative: Walmart Inc.’s nascent financial-technology venture. A day later, news broke that another top Goldman executive left to join Tiger Global Management.While Walmart certainly isn’t Wall Street, recruiters and industry veterans say the allure of such an opportunity is obvious: A shot at building something from scratch with enough resources to challenge incumbent players. That’s not to mention the potential riches if the new business succeeds.“These people are very motivated, they’re super smart and they set goals for themselves,” said Noor Menai, chief executive officer of CTBC Bank USA. They’re saying, “‘I built this, now I need to build something else.’”Fintech is a hot space right now. Venture capital firms are pumping money into young companies. Businesses focused on cryptocurrencies, payments, financial advice and no-fee trading are taking off.Companies embarking into financial services need experienced people -- not so much generic investment bankers or management consultants, but those who understand the intricate, unsexy details of consumer banking, like consumer protection and lending risk, said Menai.A division chief making $10 million to $15 million at a top bank can make two to three times that taking the helm of a company, with more upside over time, one senior executive estimated.The Goldman consumer bankers -- Omer Ismail and his deputy David Stark -- had scored promotions in recent months to carry out the 152-year-old firm’s biggest strategy refresh in decades. So it wasn’t that Ismail was looking to leave Goldman but that an opportunity arose to make a big impact.Walmart announced plans in January to build a fintech business with Ribbit Capital, a venture capital firm. Though they’ve disclosed few details on their aspirations beyond saying it will serve Walmart shoppers and associates, the companies’ resources and credibility are enough to get Wall Street buzzing. JPMorgan Chase & Co. CEO Jamie Dimon pointed to Walmart during a Bloomberg Television interview Monday when asked about the competitive environment.Jumps to investment firms are an older phenomenon, but they could pick up this year as senior money managers look to pass the torch or reinvest their profits from the bull market.On Monday it emerged that Eric Lane, who became Goldman’s co-head of asset management less than six months ago, would join Chase Coleman’s Tiger Global as president and operating chief. The move evoked memories of investment-bank boss Gregg Lemkau’s recent exit for billionaire Michael Dell’s investment firm.Despite their windfall last year, Wall Street banks are under pressure to improve shareholder returns by holding down costs -- especially as some firms set aside cash to cover potential losses on loans. Keeping a tight hand on compensation helped big banks post results that sent some of their stock prices to record heights in recent weeks.Initial recruiting packages may offer an immediate boost and have the potential to get dwarfed by greater payouts down the line if the venture proves successful. Closely held companies with external investors, like Walmart’s tie-up with Ribbit, can offer profit-sharing plans or equity awards separate from the parent company’s publicly traded stock.“If Newco is being set up with an equity plan there could be substantial wealth creation realized while building something new,” said Charley Polachi, who runs executive search firm Polachi.Money, however, isn’t the primary driver for many making the shift from finance to fintech, said Jon Pomeranz, a partner at executive search firm True Search in charge of those two areas.“It’s the build,” he said. “The opportunity to be linked up with a brand that’s known by billions of consumers around the world -- and the opportunity to get into an organization where you can build a differentiated financial-services company.”(Updates with recruiter quote in 15th 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.
A new compromise would make millions of Americans ineligible for the third checks.
(Bloomberg) -- Zoom Video Communications Inc.’s upbeat revenue forecast sent shares of the company surging. For its founder, that translates into a $2 billion wealth bump.Eric Yuan, who owns almost one-fifth of the video-conferencing company, is now worth about $22 billion, according to the Bloomberg Billionaires Index. The stock jumped as much as 12% late in the U.S. Monday as Zoom said revenue could climb 43% in fiscal 2022, more than the 37% analysts tracked by Bloomberg estimated on average. Shares climbed 7.8% to $441.56 in premarket trading Tuesday.Yuan has been one of the biggest winners in the fallout of the coronavirus crisis that forced people to stay home and find new ways to work, shop, learn and entertain themselves. But with multiple vaccines rolling out, questions have been growing about whether companies that did well during the pandemic would continue their meteoric growth. Zoom shares jumped almost 400% last year, making Yuan one of the biggest gainers on the Bloomberg wealth index, and they’re up more than 20% in 2021.“We believe we are well positioned for strong growth with our innovative video-communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers,” Yuan said in the earnings statement.The San Jose, California-based company expects sales of as much as $3.78 billion in fiscal 2022, with profit excluding some items potentially reaching $3.65 per share. Revenue more than tripled to $882.5 million in the fourth quarter and earnings excluding some items climbed to $1.22 cents a share, beating the average analyst projection.(Adds premarket trading 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.
(Bloomberg) -- Chancellor Rishi Sunak unveiled a fresh wave of support for home buyers across the U.K., adding further fuel to one of the economy’s only bright spots during the pandemic.The government postponed the deadline for a tax break on purchases for six months, and set out plans to enable buyers to put down a smaller deposit for their properties.The tax perk, which was due to end this month and allowed buyers to save up to 15 thousand pounds ($21,000), juiced the market during the lockdown that devastated other parts of the economy.Mortgage demand soared as buyers rushed to take advantage, and data this week showed annual home-price growth accelerated to almost 7% in February. But the extension merely staves off a cliff edge temporarily, and the market could suffer a setback once it ends.In his Budget on Wednesday, Sunak said the temporary level before so-called stamp duty kicks in will remain at 500,000 pounds ($698,000) until the end of June. It will then drop to 250,000 pounds before returning to its usual level of 125,000 pounds in October. U.K. homebuilders rose to session highs after the announcement.The three-month extension of the full benefit is likely to mainly benefit people who are already in the process of buying a home, rather than opening up the possibility of savings to new buyers, said Aneisha Beveridge, head of research at Hamptons International.“There is fairly limited time for it to make a difference for those not yet in the market,” she said. Still, property website Rightmove Plc estimates that an additional 300,000 transactions in England could beat the deadline at the end of June.Sunak also set out plans for government-backed mortgages that will allow house purchases of up to 600,000 pounds with only a 5% deposit.Lenders pulled similar low-deposit products from the market last year -- only eight were available in January, according to the Treasury. Sunak said lenders including LLoyds Banking Group Plc, Natwest Group Plc, Banco Santander SA, Barclays Plc, and HSBC Holdings Plc will be offering the mortgages from next month, with Virgin Money UK Plc to follow “shortly after.”(Updates with homebuilders, Rightmove estimates, lenders offering mortgages)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.
Congress is nearing passage of the third economic stimulus check it will send out to you and other taxpayers as part of its Covid-19 relief bill.
(Bloomberg) -- The main fund from Cathie Wood’s Ark Investment Management extended its drop from a February peak to 20%, highlighting a swift turnaround for the formerly high-flying stocks favored by the firm.The $24.6 billion Ark Innovation ETF (ARKK) tumbled 6.3% on Wednesday alone as growth stocks such as Pinterest Inc. and Zillow Group Inc. took a beating. The Nasdaq 100 Index lost almost 3% as traders turn away from tech in favor of so-called value stocks that had underperformed during the pandemic, bringing its losses since a peak last month to 8.1%.The rotation, along with higher bond yields that dim the allure of equities, is taking the shine off what had been one of the hottest investments on Wall Street, with ARKK growing 10-fold over the past year, including a whopping $2.37 billion inflow just last month. Since peaking on Feb. 12, ARKK’s price has now dropped by a fifth, the level that commonly defines a bear market.“People are worried the crowded trades will lose their momentum like they did last September” when some of the biggest tech names suffered a bout of selling, said Matt Maley, chief market strategist at Miller Tabak + Co.Yields on benchmark 10-year Treasury notes have jumped more than 50 basis points in 2021, on track for the largest quarterly increase since 2016. Consequently, it’s growing more difficult to justify sky-high valuations for highly speculative, expensive areas of the stock market.ARKK’s three largest holdings, Tesla Inc., Square Inc. and Roku Inc., have about tripled over the past year. Tesla is up close to 350%, while Square has surged about 200% and Roku is up more than 240%. On Wednesday, they all slumped.In fact, all but three stocks held by ARKK fell and three suffered losses exceeding 10%, including Stratasys Ltd., a maker of 3D printers, and Veracyte Inc., which develops molecular tests for oncology.The fund’s tilt toward long-term growth means short-term profitability isn’t a key consideration when stocks are picked. In fact, two-thirds of its current holdings didn’t make a profit in the past year. And even after the recent losses, ARKK is still slightly up for the year.Inflows to the fund have faltered in the past week, but there’s yet to be a mass exodus. ARKK took in more than $600 million combined the past two days, after losing more than $690 million last week in its worst five-day period on record.“There is growing unease in the markets and whether higher-risk asset classes can continue to climb,” said Michael Purves, chief executive officer at Tallbacken Capital Advisors. “If sentiment turns, you can see substantial outflows.”(Updates prices throughout)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.
Barstool Sports founder Dave Portnoy tweeted an elaborately produced “emergency press conference” video to debut the ETF. The stunt was also an uncomfortable reminder that one man’s meta meme may be another’s market manipulator.
(Bloomberg) -- Australia wants to leverage off its position as a top mineral producer by boosting processing and manufacturing, part of a plan to challenge China’s dominance in the supply of products key to the clean-energy transition.The government unveiled a 10-year road map on Thursday that includes A$1.3 billion ($1 billion) of funding to help businesses capitalize on the country’s abundant natural resources and exploit opportunities in a de-carbonizing world. It encourages growth in high-value products like batteries and solar cells, as well as technologies and equipment that make mining safer and more efficient.The Modern Manufacturing Initiative comes as the U.S. and Japan look to cut their dependence on China for minerals that are vital to many manufacturing sectors. Australia is the top exporter of lithium, a key component in batteries, and is also a major source of rare earths. Beijing is reviewing its rare earths policy and there are signs it may ban the export of refining technology to nations or firms that it deems are a threat to state security.See also: Biden’s Hopes for Rare Earth Independence at Least a Decade Away“It’s a sovereign and strategic priority for Australia to ensure that we are hard-wired into this supply chain around the world,” Prime Minister Scott Morrison said at a media briefing following the announcement. It has to be “a supply chain that Australia and our partners can rely on, because these rare earths and critical minerals are what pull together the technology that we will be relying on into the future,” he said.Lynas Rare Earths Ltd. currently sends rare earths from its operations in Australia to Malaysia for processing, but has plans to build a facility close to its Mt. Weld mine in the country’s west. Lynas’ rival Iluka Resources Ltd. is also assessing options to build processing capacity. Energy Renaissance, meanwhile, and other companies are looking to establish a domestic battery manufacturing industry on Australia’s east coast.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.
Growth investors should watch out. The ETF (ticker: ARKK), actively managed by Cathie Wood, founder of ARK Investment Management, was one of the star performers of 2020. It gained more than 150% by riding stay-at home stars like (TSLA) (TSLA), (ROKU) and (SQ)(SQ) to new heights.
36% of taxpayers said the Recovery Rebate Credit was the 'most confusing' part of taxes this year.
A higher minimum wage could bite especially hard on businesses squeezed by the pandemic, while amplifying the shift of activity from physical to digital companies with higher productivity and pay.
The oil industry is no stranger to boom-bust cycles, but the pandemic has been its wildest ride to date, and on March 4 it’s due to take another turn when OPEC meets to consider rolling back production cuts. As the world’s cars and airplanes idled, global oil demand bottomed out in April at levels 16.4% below the previous year, dragging the price into negative territory for the first time. White-knuckling through it all has been OPEC, the 13-member cartel that dictates quotas for most of the world’s biggest oil-producing countries (notably excluding the US).
This chart shows why the S&P 500's bull market run may be both too short lived and too limited, in terms of price gains, to be over anytime soon.
Max out your 401(k) each year, and be sure to get your 401(k) employer match, if you have one. And for you super savers, here are other ways to save for retirement.
U.S. stocks closed lower Wednesday, as benchmark bond yields climbed nearer to their highs of 2021 and a slate of fresh economic data came in mixed, despite progress on the vaccination front.
Stellantis CEO Carlos Tavares on Wednesday said the new car company formed from the merger of Fiat Chrysler Automobiles and PSA Peugeot would be a “disruptive” force in the industry, and that both sides would provide technologies to achieve the promised 5 billion euros ($6 billion) in cost savings each year. The Italian-American carmaker and the French mass-market automotive company completed their merger on Jan. 16, creating Stellantis, the world’s fourth-largest carmaker, despite a pandemic year that saw profits plunge.