Jan.25 -- New York Governor Andrew Cuomo says the state can begin to loosen restrictions and increase economic activity as the post-holiday spike in Covid-19 cases subsides.
Jan.25 -- New York Governor Andrew Cuomo says the state can begin to loosen restrictions and increase economic activity as the post-holiday spike in Covid-19 cases subsides.
The rollercoster ride in bitcoin since the start of the year has not dampened wealth manager Jim Paulsen's enthusiasm for the cryptocurrency. Yet Paulsen, chief investment officer for Leuthold Group, which manages $1 billion, cannot own bitcoin in client portfolios due to regulatory constraints. The promise of an asset class that behaves differently than stocks or bonds is leaving portfolio and wealth managers scrambling own cryptocurrencies if they can.
(Bloomberg) -- Stocks fell with American equity futures as investors await key U.S. jobs data at the end of a week in which fears of a growth break-out sparked volatility across markets. Treasuries rose and the dollar advanced.Europe’s Stoxx 600 index opened more than 1% lower, with every industry sector in the red. Equity futures in the U.S. slipped, with contracts on the tech-heavy Nasdaq 100 signaling more declines after a topsy-turvy week that erased this year’s gains. Ten-year Treasuries recovered, with their yields down two basis points to 1.54%.Bond yields have climbed in recent weeks on mounting expectations of stronger economic growth and price pressure, with erratic moves unsettling stocks as well. The February U.S. employment report on Friday will give a much-needed update on the speed and direction of the country’s labor-market recovery.“It makes logical and intuitive sense that Treasury yields should move back up to 1.50% or 2%, but we are concerned with the rest of the market about the speed at which it’s getting there,” said Mona Mahajan, investment strategist at Allianz Global Investors LLC.Federal Reserve Chair Jerome Powell sounded a gentle word of caution to the bond market on Thursday that he’s watching the jump higher in long-term interest rates, but stopped well short of trying to rein them in.Treasuries extended losses and inflation expectations reached new session highs as Powell spoke, with some traders disappointed that the Fed chair didn’t provide any specifics on what the central could possibly do to tamp down long-term rates if they desired.Powell Sends Dovish Message That Leaves Bond Market DisappointedMeanwhile, the U.S. Senate voted to take up a $1.9 trillion relief bill backed by President Joe Biden, setting off a debate expected to end this weekend with approval of the nation’s sixth stimulus since the pandemic-triggered lockdowns that began a year ago.Elsewhere, oil prices leaped after the OPEC+ alliance surprised traders with its decision to keep output unchanged. Bitcoin fell with other risk assets.Shares in London Stock Exchange Group Plc fell after it issued an upbeat outlook that contrasted with uncertainty about the impact of Brexit.These are some of the main moves in markets:StocksFutures on the S&P 500 Index decreased 0.5% as of 8:33 a.m. London time.The Stoxx Europe 600 Index fell 1%.The MSCI Asia Pacific Index dipped 0.6%.The MSCI Emerging Market Index declined 0.7%.CurrenciesThe Bloomberg Dollar Spot Index advanced 0.3%.The euro fell 0.3% to $1.1934.The British pound dipped 0.3% to $1.386.The onshore yuan weakened 0.1% to 6.476 per dollar.The Japanese yen weakened 0.3% to 108.35 per dollar.BondsThe yield on 10-year Treasuries declined two basis points to 1.54%.The yield on two-year Treasuries declined one basis point to 0.13%.Germany’s 10-year yield increased one basis point to -0.30%.Japan’s 10-year yield decreased four basis points to 0.096%.Britain’s 10-year yield advanced three basis points to 0.756%.CommoditiesWest Texas Intermediate crude increased 1.2% to $64.62 a barrel.Brent crude gained 1.4% to $67.69 a barrel.Gold weakened 0.2% to $1,694.10 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.
By Yasin Ebrahim
(Bloomberg) -- Bitcoin’s appeal as a hedge against inflation is being put to the test, with the largest cryptocurrency slumping along with other risk assets after Jerome Powell failed to ease investor concern about rising price pressures.The digital token fell as much as 6.7% and traded at about $47,900 as of 2:38 p.m. in New York, after the Federal Reserve chairman said he is monitoring financial conditions and would be “concerned” by disorderly markets, but stopped short of offering specific steps -- which sent Treasury yields higher and stocks lower.“Once it feels like the market is in risk-off mode, which it clearly is, because if you’re selling everything except for energy, that’s very risk-off,” said Arthur Hogan, chief market strategist at National Securities Corp. “It really doesn’t matter whether you are Bitcoin or Ark or semis or banks -- every thing’s being thrown over the transom.”Bitcoin surged to more than $58,000 last month, with advocates such as MicroStrategy Inc. Chief Executive Officer Michael Saylor touting the token as alternative to cash because of the risk of rising inflation from government and central bank stimulus. Shares of the enterprise software maker, which has purchased over 90,000 Bitcoins, tumbled as much as 17% on Thursday. Critics say Bitcoin is in a giant, stimulus-fueled bubble that’s destined to burst like the 2017 boom and bust cycle. Bitcoin slid 21% last week but is still up more than fivefold in the past year. 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.
Wall Street ended sharply lower on Thursday, leaving the Nasdaq down nearly 10% from its February record high, after remarks from Federal Reserve Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields. A decline of 10% from its February record high would confirm the Nasdaq is in a correction. The benchmark 10-year Treasury yield spiked to 1.533% after Powell's comments, which did not point to changes in the Fed's asset purchases to tackle the recent jump in yields.
(Bloomberg) -- Stocks and bonds sold off after Federal Reserve Chairman Jerome Powell underwhelmed markets by refraining from pushing back more forcefully against the recent spike in Treasury yields.The S&P 500 briefly erased its 2021 gains, notching its lowest close in about five weeks. Benchmark 10-year bond rates topped 1.5% and the dollar climbed. The Nasdaq 100 extended losses from a February peak to almost 10%, and the Russell 2000 of small caps slid 2.8%. Reddit users appeared to rush back into GameStop Corp., with the video-game retailer soaring.Powell said in an online event Thursday that he’d be “concerned” by disorderly markets, but stopped short of offering steps to curb heightened volatility. The surge in Treasury yields has triggered fears about elevated stock valuations after a torrid equity rally from the depths of the pandemic. While bulls have decided to view the jump in rates as a sign of economic strength that could lift corporate profits, there’s been mounting concern over a potential inflation pickup. For Bleakley Advisory Group’s Peter Boockvar, the Fed has put itself in a “tough situation.”“We are again seeing a market that is taking control of monetary policy from the Fed,” said Boockvar, the firm’s chief investment officer. “Long rates are rising right now because Powell is again very dovish. The more dovish they get in the face of market expectations of higher inflation, the more financial tightening we’ll see.”Stock-Market Momentum Comeuppance Gets No Sympathy From the FedDespite the lingering uncertainties about the impacts of rising bond yields, such fears are “misplaced,” according to Candice Bangsund, portfolio manager of global asset allocation at Fiera Capital.“As long as the back-up in bond yields reflects stronger growth expectations (versus tighter monetary policy), then the long-term bull market will not be at risk,” she said. “The latest normalization in bond yields should be viewed as an encouraging sign that growth is healing, while the prospect for a hawkish turn from the Federal Reserve is clearly not in the cards today.”The U.S. Senate voted to take up a $1.9 trillion relief bill backed by President Joe Biden, setting off a debate expected to end this weekend with approval of the nation’s sixth stimulus since the pandemic-triggered lockdowns that began a year ago.Elsewhere, Bitcoin’s appeal as a hedge against inflation was put to the test, with the largest cryptocurrency joining a slump in other risk assets. Oil surged after the OPEC+ alliance surprised traders with its decision to keep output unchanged, signaling a tighter crude market in the months ahead.Some key events to watch this week: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 main moves in markets:StocksThe S&P 500 sank 1.3% at 4 p.m. New York time.The Stoxx Europe 600 Index fell 0.4%.The MSCI Asia Pacific Index dipped 2.5%.The MSCI Emerging Market Index declined 2.6%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.7%.The euro decreased 0.8% to $1.1971.The Japanese yen depreciated 0.8% to 107.92 per dollar.BondsThe yield on 10-year Treasuries rose six basis points to 1.54%.Germany’s 10-year yield fell two basis points to -0.31%.Britain’s 10-year yield decreased five basis points to 0.731%.CommoditiesWest Texas Intermediate crude jumped 4.8% to $64.24 a barrel.Gold fell 0.8% to $1,698.21 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.
(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.
(Bloomberg) -- Saudi Arabia just made a high-stakes wager that the glory days of U.S. shale, which transformed the global energy map in the last decade, are never coming back.By keeping a tight grip on supply at Thursday’s meeting of the OPEC+ alliance of oil producers, Saudi Energy Minister Prince Abdulaziz bin Salman showed he’s focused on boosting prices -- and confident that this time around it won’t encourage American producers to surge back and steal market share.“‘Drill, baby, drill’ is gone for ever,” said Prince Abdulaziz, who’s orchestrated the revival of the oil market after last year’s catastrophic collapse.His swagger comes mixed with a good dose of diplomatic tension: Russia, Saudi Arabia’s most important OPEC+ partner, has tried to convince Riyadh for several months to increase output, fearing that rising oil prices would ultimately awaken rival shale producers. The Saudis are certain the American industry has reformed itself.If the prince is right, OPEC+ will be able to both push prices higher now and recover market share later without worrying that rivals in Texas, Oklahoma and North Dakota will flood the market. But if Riyadh has miscalculated -- and it’s got shale wrong before -- the danger will be lower prices and production down the line.The Saudis have so far convinced their allies the strategy will work. After a quick virtual meeting on Thursday, OPEC+ agreed to prolong its production cuts, defying expectations of an output hike. Russia, however, secured an exemption for itself and Kazakhstan, and will increase output marginally in April.Brent crude jumped 5% to a one-year high of almost $68 a barrel after the decision. Front-month futures extended gains on Friday and a raft of banks updated their price forecasts, including Goldman Sachs Group Inc., which increased its estimates by $5 -- to $75 next quarter and $80 in the following three months.“This is an incredibly bold move on the part of OPEC+ to extend the oil price rally,” said KPMG Global Energy Sector Leader Regina Mayor.If history is a guide, however, trouble may be brewing. The OPEC+ coalition, which groups Saudi Arabia, Russia and almost two dozen other oil producers, has in the past underestimated its American rivals, who year after year produced more than most expected. From a low point of less than 7 million barrels a day in 2007, the U.S.’s total petroleum output more than doubled to hit an all-time high of almost 18 million barrels a day by early 2020, forcing the cartel to cede market share.Risky Move“This is a risky take,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said Friday in a Bloomberg Television interview. While U.S. oil companies probably won’t raise output this year, in 2022 “there’s nothing really stopping them, especially the small and mid-cap producers.”Sen sees prices hitting $70 a barrel as soon as next week, $80 by the end of the year and a possible climb to $100 in 2022.For now, U.S. total oil output remains constrained, hovering at 16 million barrels due to the impact of last year’s slump, which briefly saw benchmark prices trade below zero.Under pressure from shareholders, shale producers have promised restraint, putting profits before the growth they relentlessly pursued during the boom years. Although drilling has risen from the lows of 2020, it’s well below previous levels. In addition, President Joe Biden is trying to temper the worst excesses of the industry, including the indiscriminate natural gas flaring that’s a byproduct of shale’s success.Under a different oil minister, Saudi Arabia attacked shale producers in 2014 and 2015, flooding the market and forcing prices lower -- a strategy that ultimately failed. Prince Abdulaziz is doing the opposite, because oil higher prices will eventually benefit shale producers. Yet, he’s convinced the industry won’t repeat its past excesses.“Shale companies are now more focused on dividends,” Prince Abdulaziz told Bloomberg News in an interview after the OPEC+ meeting, saying that the kingdom wished the American industry well. “We’ve never had any issue with shale oil. It’s the shale companies which are themselves changing. They have had their fair share of adventure and now they are listening to the call of their shareholders.”Shale executives agree with him -- at least for now.“A couple years ago it was ‘drill, baby, drill,’” John Hess, the head of Hess Corp., said in Houston earlier this week. “Now, it’s ‘show me the money.’”Ryan Lance, the chief executive officer of ConocoPhillips, echoed the sentiment: “I hope there’s discipline in the system. The worst thing that can happen right now is U.S. producers start growing rapidly again.”As the industry cuts spending to pay shareholders fatter dividends, there’s not much left to finance increased production. Even Big Oil is scaling down its ambitions in shale. Exxon Mobil Corp. had been running 55 oil rigs in the Permian basin that straddles West Texas and southeast New Mexico, part of an effort to boost output to 1 million barrels a day by 2025. After tightening its belt, the U.S. oil giant is running just 10 rigs, and has cut its 2025 output target by nearly a third to 700,000 barrels a day.Yet, there are also signs that higher oil prices may ultimately reactivate the U.S. shale industry. With benchmark West Texas Intermediate now changing hands above $60 a barrel, some companies believe they may be able to both grow and keep shareholders happy. EOG Resources Inc., the largest producer in the Permian, has announced a big spending increase for next year. And others are following suit.But the reaction of the stock market made Prince Abdulaziz’s case: investors punished EOG for spending more on drilling, marking down its shares relative to more disciplined rivals.(Updates with comments from Energy Aspects in 10th, 11th paragraphs.)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.
It started 125 years ago with this strange new technology, but now electric vehicles are set to become a $912 billion industry. Here’s who’s set to benefit in 2021
The president has agreed to a compromise making millions ineligible for the third checks.
Wall Street slumped on Thursday and global stock markets declined after U.S. Federal Reserve Chair Jerome Powell repeated his pledge to keep credit flowing until Americans are back to work, pushing back at investors who have doubted if he can hold that promise after the pandemic. Benchmarket U.S. Treasury yields rose toward last week's highs as Powell spoke, and the dollar jumped. Oil prices spiked as OPEC and its allies agreed to extend most oil output cuts into April, after deciding that the demand recovery from the coronavirus pandemic was still fragile.
Gold investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and his assessment of the economy.
Stocks dipped Wednesday, extending losses from a day earlier as investors weighed optimism over widespread post-pandemic business reopenings against concerns over economic overheating.
The $1700 level underneath is being targeted yet again, as the market is trying to break down significantly. The US dollar is also going to be toxic for gold.
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.
(Bloomberg) -- Oil briefly moved above $65 a barrel after OPEC+ chose not to relax supply curbs even as the global economy pulls out of its pandemic-driven slump, confounding widespread expectations the group would loosen the taps.The surprise decision spurred a wave of crude price forecast upgrades by major banks. The producer alliance agreed to hold output steady in April, while Saudi Arabia said that it will maintain its 1 million barrel-a-day voluntary production cut. West Texas Intermediate rose as much as 1.9% and Brent briefly topped $68.See also: Saudis Bet ‘Drill, Baby, Drill’ Is Over in Push for Pricier OilCrude has soared this year, shepherded higher by OPEC+ restraining supplies and the vaccine-aided recovery in consumption that’s drained inventories. The group’s decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported.“Overall, this was the most bullish outcome we could have expected,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients.The Organization of Petroleum Exporting Countries and its allies including Russia had been debating whether to restore as much as 1.5 million barrels a day of output. As part of the agreement, which was struck at a virtual meeting on Thursday, Russia and Kazakhstan were granted exemptions. The group’s next meeting is set for April 1 to discuss production levels for May.Saudi Arabia’s bold and unexpected gamble to restrain production is founded upon its view that, this time around, higher prices will not lead to a big increase in output by American shale drillers. Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg News in an interview after the OPEC+ meeting that shale companies are now more focused on dividends.Oil’s rapid gains this year stand to intensify the debate about the potential resurgence in inflation, and complicate the task facing the Federal Reserve as it supports the U.S. recovery. The Treasury market is already looking for signs of faster price gains, with yields rising rapidly. Crude is up more than 8% since Tuesday’s close despite a strengthening of the dollar and a steep sell-off in other major commodities, especially economic bellwether copper.See also: Here’s What Top Banks Are Saying About the Saudi-Led Oil ShockGoldman Sachs Group Inc. raised its Brent forecasts by $5 a barrel and now sees the global crude benchmark at $80 in the third quarter. JPMorgan increased its Brent projection by $2 to $3 a barrel and Australia & New Zealand Banking Group Ltd. boosted its three-month target to $70. Citigroup Inc. said crude prices could top $70 before the end of this month.Change CourseOil rising to these levels will likely increase strains within OPEC+ as some members will want to pump more to relieve under-pressure economies, Citi said in a note. Top importers such as China and India would also not be happy and the alliance is likely to change course at its next meeting, it said.The lack of fresh supply was reflected in oil’s futures curve. Brent’s prompt timespread widened to 61 cents in backwardation, a bullish structure where near-dated prices are higher than later-dated ones, from 54 cents Thursday. Gauges further along the oil futures curve also surged.More evidence of the demand recovery continued to emerge, especially in Asia. Gasoline and diesel consumption in China has extended its run above pre-virus levels this year after the faster-than-expected return of factory activity and infrastructure building following the Lunar New Year holiday.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.
Traders aren’t sure if OPEC+ will leave output cuts steady in April, or lower them slightly. Prices could firm if the cuts stay at current levels.
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).
The early price action suggests the direction of the NZD/USD on Thursday will be determined by trader reaction to the main 50% level at .7234.
(Bloomberg) -- International bond issuance from the Balkans is dwarfing sales from bigger countries in Eastern Europe.North Macedonia is the latest addition to a widening stream of sovereign issuance from the Balkan region, offering seven-year euro bonds on Wednesday, according to a person familiar with the deal who asked not to be named as they are not authorized to speak publicly. Earlier deals from Slovenia, Serbia and Croatia have pushed the region’s international debt sales this year to more than half of the full-year average since 2010.Meanwhile, more developed countries further north, such as Poland, Hungary and the Czech Republic, are turning away from Eurobonds as they have deep domestic markets to tap into.The growing discrepancy is an extension of an almost decade-long trend. Foreign issuance from the Balkans has topped $10 billion every year since 2011, while sales from Poland, Hungary and the Czech Republic have been falling, barring a spike last year to help fund Covid-19 relief efforts.One reason for the shift is a turn toward debt self-sufficiency in Hungary and Poland, where borrowing in foreign currencies -- both by the state and households -- has left scars on the economy. With economic output more than double the Balkans, domestic saving rates are higher and more mature central banking has allowed officials to turn to asset-purchase programs to help fund budgets.North Macedonia is offering a benchmark-size bond due March 2028 at around 230 basis points above midswaps, according to the person. Slovenia has issued 2.5 billion euros ($3 billion) of debt in two transactions this year, Croatia priced 2 billion euros, and Serbia 1 billion euros.“Issuance on international markets is preferred by Balkan countries because their less-developed local capital markets do not allow for raising such big amounts of capital,” said Anton Hauser, a money manager at Erste Asset Management in Vienna. For investors, the “higher-yielding debt issued by Balkan countries is a kind of substitute for bonds issued by central European countries, which nowadays offer much lower yields,” he said.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.