White House coronavirus response coordinator Dr. Deborah Birx explains why masks and asymptomatic testing remain crucial to slowing the pandemic. Photo: Carlos Barria/Reuters
White House coronavirus response coordinator Dr. Deborah Birx explains why masks and asymptomatic testing remain crucial to slowing the pandemic. Photo: Carlos Barria/Reuters
MELBOURNE (Reuters) -Australian lithium miner Orocobre Ltd is buying smaller domestic peer Galaxy Resources for $1.4 billion to create the world's fifth most valuable producer of the key raw material for electric vehicle batteries. The all-stock deal for A$1.78 billion ($1.38 billion)announced on Monday, which will also establish Australia's most valuable lithium miner with a A$4 billion market capitalisation, comes as demand for the material is booming amid a jump in global sales of electric vehicles. The new entity will have hard rock, brine, and chemicals assets across Australia, Argentina, Canada and Japan, and will be able to accelerate development and sell into global markets.
The pre-market rally marks the latest attempt to mount resistance in the low 40s since a 2018 breakdown.
A mortgage slump is showing signs of a turnaround thanks to the lowest rates since March.
(Bloomberg) -- Taiwan’s dollar posted its biggest daily advance since December after a U.S. Treasury report hinted that the Biden administration could exert greater pressure on the island’s central bank to allow the currency to appreciate.The local dollar rose 0.5% to close at 28.205 against the greenback, and was emerging Asia’s best-performing currency for the day. While the Treasury report on Friday didn’t label Taiwan as a currency manipulator, it said the U.S. will initiate “enhanced bilateral engagement” to address what it considers as “structural undervaluation” of the exchange rate.“Despite the relief of not being labeled a currency manipulator, the Treasury report still urged Taiwan authorities to limit FX intervention to exceptional circumstances,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank Ltd. “This, alongside the strong exports, will help support the Taiwan dollar.”The Taiwan dollar has come under scrutiny as the tech-dependent economy posts a quicker recovery from the pandemic than most of its peers in Asia. Six of the 60 pages in the Treasury report were devoted to Taiwan, more than any other U.S. trading partner, in the Biden administration’s first foreign-exchange policy update.The report cites research published in November 2018 that assesses the Asian currency to be undervalued by as much as 21%. Taiwan made net foreign-exchange purchases of $39.5 billion in 2020, equivalent to 5.9% of its gross domestic product, according to the analysis.While Taiwan’s central bank doesn’t deny intervening in currency markets, it pushed back against aspects of the U.S. assessment. The Taiwan dollar is close to being at a balanced level based on the International Monetary Fund’s valuation model, it said, as it urged the U.S. to ease monitoring of trading partners during the Covid pandemic.Held Meetings“Yellen is pragmatic and prudent,” central bank governor Yang Chin-long told lawmakers Monday, when discussing the Treasury report. “We need to show more than just our sincerity about communicating with the U.S.”Taiwan has already held two meetings with the Treasury this year over its currency, Yang added. The central bank only intervenes when there are concerns about supply and demand in the market, he said.Regular late-session moves by state-backed banks to pare gains by Taiwan’s currency against the dollar are “a kind of intervention,” Governor Yang had told reporters in late March. For months, the currency could rise more than 1% during the day, only to pare back most of the advance at the close.While the U.S. didn’t label any economy as a currency manipulator, it also acknowledged that Taiwan, Switzerland and Vietnam all met the threshold. It insisted that it would maintain pressure on trading partners to redress trade imbalances with the U.S.“There will still be pressure on Asian central banks to ease back on their intervention activity, which would lead to greater appreciation pressure,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. “The easing of U.S. 10-year bond yields and the retreat in the dollar of late has also helped the Taiwan dollar’s move.”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) -- China sought to allay fears it wants to topple the dollar as the world’s main reserve currency as Beijing makes bigger strides in creating its own digital yuan.People’s Bank of China Deputy Governor Li Bo said the goal for internationalizing its currency is not to replace the dollar, and the efforts to create a digital yuan are aimed at domestic use.“For the internationalization of the renminbi, we have said many times that it’s a natural process, and our goal is not to replace the U.S. dollar or other international currencies,” Li said on a panel at the Boao forum Sunday. “I think our goal is to allow the market to choose, to facilitate international trade and investment.”China’s central bank is currently testing the use of a “digital yuan” in various pilot programs across the country. A report earlier this week showed the Biden administration is increasing its scrutiny of China’s progress toward the digital yuan amid concern it could kick off a long-term bid to displace the dollar.The PBOC has been working on a digital currency since 2014 and its moves have heightened interest among central banks and policy makers, while the spread of cryptocurrencies has added to a sense that competitors to regular cash could change how the financial sector operates. The PBOC has moved closer to becoming the first major central bank to launch a virtual currency, rolling out a trial for consumers and businesses in 11 cities across the country.“The motivation for the e-yuan, for now at least, is focusing primarily on domestic use,” Li said. International “interoperability is a very complex issue and we are not in a hurry to reach any particular solution yet,” although there could be cross-border use “in the long term,” Li said.China’s Digital Yuan Won’t Topple Dollar, BOJ Official SaysThe central bank is planning to test the cross-border use of the digital yuan at the 2022 Beijing Winter Olympics, where it could be used by both domestic users as well as athletes and visitors from overseas, Li said.Agustin Carstens, general manager of Bank for International Settlements, said on the same panel there was huge potential in the cross-border use of digital currencies as they could make foreign exchange transaction and payment settlement extremely efficient. He said countries can explore various ways to achieve international interoperability, including making different systems compatible and creating connectivity links among the systems.Bahamas Tops China in Ranking of Central Bank Digital CurrenciesWhile the digitization of the yuan could benefit its use in cross-border transactions, the key factor in determining the currency’s global role is whether China will relax its capital controls, said Shen Jianguang, chief economist at JD.com Inc. “If you want to have a global reserve currency, you need to allow foreigners to hold it, to use it.”China will also need to allow its citizens to buy more foreign assets, further develop its financial markets and allow greater exchange rate flexibility in order to push for the internationalization of yuan, Shen said in an interview at the forum.China has seen a flood of capital flows into its financial markets since last year, boosting the amount of yuan traded globally. Yet, in the context of its vast markets, foreign ownership of local stocks and bonds remains relatively low at around 5% and 3% respectively. The yuan’s share of global payments and central bank reserves is still only about 2%.“The digital yuan is a means to help monetary policy efficiency and cross-border usage with partners that tend to trade with China in goods and services, less so the major economies like the U.S.,” said Stephen Chiu, Asia FX and rates strategist at Bloomberg Intelligence. “Digital or not, it’s not so easy to move the dollar’s dominance, be it as a trade settlement or reserve currency.”How China Is Closing In on Its Own Digital Currency: QuickTakeThe initial plans for a digital currency weren’t motivated by considerations of cross-border use, according to former People’s Bank of China Governor Zhou Xiaochuan, who noted that there are many issues with using a digital currency across national borders. International use could affect monetary policy independence, and it’s important it isn’t used for crime, he said on the same panel in Boao.(Updates with comments from BIS, details on yuan trade.)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.
U.S. stocks closed lower on Monday, slipping from last week's record levels, as investors awaited guidance from first-quarter earnings to justify high valuations, while Tesla Inc shares fell after a fatal car crash. The electric-car maker slid 3.4% after a Tesla vehicle believed to be operating without anyone in the driver's seat crashed into a tree on Saturday north of Houston, killing two occupants. The stock was the biggest drag on the S&P 500 and Nasdaq Composite Index.
(Bloomberg) -- A rocky weekend for the legions that poured into all things crypto after Coinbase Global Inc.’s direct listing did little to undermine its grip on retail traders.Dogecoin rallied another 20% or so Monday, even after most of the biggest tokens, including Bitcoin slumped further. To Mike McGlone, a Bloomberg Intelligence commodity strategist, the recent run-up in the joke token is exemplary of retail’s involvement in crypto markets. His plumber told him recently that he’d bought in.To McGlone, it’s a result of the “perfect storm” of pandemic lock-ups, lots of cash in the system, and investors’ ability to speculate around the clock. “Markets will never change -- this one is just 24/7 and the easiest to access in history,” he said. It’s “a prime example of just plain gambling for fun -- unless participants lose too much money, notably because they took too much risk at the casino.”While Coinbase’s market debut was undeniably a watershed moment for crypto’s move into the mainstream, the weekend rout delivered a harsh refresher on one of the market’s basic tenets: violent price swings are common.A false report from an anonymous Twitter account that the U.S. Treasury was cracking down on crypto money laundering was enough to help send Bitcoin plunging by as much as 15% on Sunday, days after clocking in at a record of $64,870. While low weekend liquidity likely exacerbated the nose dive, the world’s largest cryptocurrency dropped another 3.5% on Monday.That an erroneous tweet can torpedo prices is a reminder that even for all the talk of Wall Street’s growing embrace of crypto, individual investors have a lot of heft to throw around. That dynamic is especially prevalent on weekends, when traditional trading desks go dark while Bitcoin and other cryptocurrencies continue to change hands. Even as Coinbase’s direct listing marks an important milestone for crypto, for institutions and traders venturing into crypto, learning to live with that volatility is a key first step.“It’s more an introduction to all the people who had gotten into Bitcoin or crypto over the last week because of Coinbase that crypto markets can be very volatile,” Philip Gradwell, chief economist at crypto data tracker Chainalysis, said by phone. “This is in some sense, nothing new if you’ve been in the industry for a few years.”Even by crypto standards, sentiment was looking stretched at the end of last week. Bitcoin soared in the lead up to Coinbase’s much-anticipated listing, bringing year-to-date gains to over 118% at one point. That enthusiasm spilled into so-called altcoins such as Dogecoin, which has soared more than 13,000% over the past year.The moves can be jarring. Roughly $9.3 billion in so-called long Bitcoin future positions were liquidated on Saturday, followed by another $700 million on Sunday, according to data from Bybt.com.Such a pullback in Bitcoin was “inevitable” given the degree of froth, Galaxy Digital founder Michael Novogratz tweeted over the weekend, adding that “we will be fine in the medium term” as institutions enter the space.Shifting the power dynamic in favor of the institutions will be the “Holy Grail” for Coinbase, BI analyst Julie Chariell said last week, given that corporations are less likely to dump their holdings as quickly as retail traders. Though individual investors made up just 36% of the exchange’s volume during the quarter ending Dec. 31, more than 90% of Coinbase’s revenue came from retail trades.Whether the cryptocurrency exchange is successful remains to be seen. But even should Bitcoin carve out a place in portfolios and on corporate balance sheets beyond the likes of MicroStrategy Inc. and Tesla Inc., the weekend will likely still belong to the individual investor.“The retail investor still dominates the crypto market,” Steven McClurg, CIO at Valkyrie Investments, said in a phone interview. “When you see action like that over the weekend, that’s just when all the institutional traders are asleep or not working.”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.
WASHINGTON (Reuters) -The U.S. Treasury on Monday named climate change financial adviser John Morton to head the department's new "climate hub," disappointing activists who had sought a strong regulator to push financial institutions toward green investments. John Morton, a partner with climate change advisory and investment firm Pollination Group, will work to foster green finance and use tax policy and financial risk assessments to help reduce carbon emissions as climate counselor to Secretary Janet Yellen, the Treasury said.
(Bloomberg) -- Chinese delivery giant Meituan has raised $9.98 billion from a record top-up placement and a convertible bonds sale as it doubles down on efforts to fight the likes of Alibaba Group Holding Ltd. in newer areas such as online groceries.The nation’s third-largest internet company has sold 187 million shares in a top-up placement at HK$273.80 each, near the top end of its marketed range, and also raised $400 million from shareholder Tencent Holdings Ltd., according to terms of the deal obtained by Bloomberg News. The $7 billion new stock issuance is the largest-ever such sale by a Hong Kong-listed company, data compiled by Bloomberg show. Meituan has also sold $2.98 billion in zero-coupon convertible bonds.Meituan’s shares were volatile on Tuesday, trading up 1.2% as of 10:28 a.m. in Hong Kong, after having fallen as much as 1.8% earlier. The placement price represents a discount of 5.3% to the stock’s closing price Monday. The convertible bonds are divided in two tranches -- $1.48 billion six-year notes and $1.5 billion seven-year paper, the terms showed.“There were some rumors about the placement last week, now that overhang is gone,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Demand for the placement was strong near the top end of the range. I heard the issue was taken up very quickly.”The stock and bond sales come as Meituan grapples with the cost of competing against the likes of Alibaba and Pinduoduo Inc. in newer spheres such as community e-commerce and online groceries. The company has warned it will remain in the red for several more quarters despite record revenues as it spends heavily on new initiatives.Meituan intends to use the proceeds from the offerings for technology innovations, including the research and development of autonomous delivery vehicles, drones delivery, and other cutting-edge technology, and general corporate purposes, the terms showed.“It makes sense to raise money to make more of a shift into autonomous delivery, seek to delve into more technology-focused areas especially under the backdrop of the anti-monopoly” drive, said Zhou Luyun, an analyst at Northeast Securities Co. in Shanghai. “The pricing shows that the market buys this blueprint.”Community buying is one of Meituan’s chief expansion areas, where buyers in the same neighborhood enjoy bulk discounts on fresh produce. But the firm faces entrenched competition from other Internet giants.All three main ratings agencies lowered their outlook on Meituan after it reported earnings last month, with S&P Global Ratings and Moody’s Investors Service saying that its large investments in community e-commerce would come at a heavy cost, generate negative free cash flow and dampen earnings.“After this placement, some short-term investors could sell the stock and shares could trade in a range of HK$250-HK$300 for a while,” said Paul Pong, managing director at Pegasus Fund Managers Ltd. “In the medium to longer term, online platform operators like Meituan and Tencent still have a solid growth outlook.”Meituan’s focus on developing fast-growing new businesses comes as China’s economic recovery has helped the world’s largest meal-delivery service increase orders, while its hotels and travel businesses have benefited from a rebound in domestic travel when the country reined in the pandemic.The company has begun using self-driving vehicles for grocery delivery in the Chinese capital since the Covid-19 outbreak last year, with at least 15,000 orders being completed so far, Wang Xing, the company’s chief executive officer, told analysts during a conference call in March. Wang said Meituan is also experimenting with how to deliver food using drones in the southern Chinese city of Shenzhen.Tencent is delving deeper into Meituan at a time global investors are souring on the Chinese tech sector due to heightened regulatory scrutiny. Meituan had lost some $123 billion of its value from a Feb. 17 high through Monday, pummeled by fears that Beijing’s crackdown on Jack Ma’s Internet empire will expand beyond Alibaba and Ant Group Co. to engulf other sector leaders like Tencent and Meituan.“They are going into new areas including group purchases and those need a lot of capital and they need a war chest to compete,” said Kerry Goh, chief investment officer at Kamet Capital Partners Pte. “Valuations are still pretty decent compared to a year ago.”Bank of America Corp. and Goldman Sachs Group Inc. are joint global coordinators and joint bookrunners for both the bond and equity offerings. CLSA Ltd. and UBS Group AG are also joint bookrunners for the top-up placement.(Updates Meituan’s share move in the third paragraph, adds another quote in the fourth 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) -- Emerging-market bulls who’ve benefited from moderating U.S. Treasury yields are bracing for a relapse as political risks pile up.MSCI Inc.’s developing-nation stock gauge extended a three-week winning streak on Friday, while a basket of currencies capped its biggest weekly advance since early February. The risk premium on emerging-market sovereign debt narrowed to 339 basis points over U.S. Treasuries, its lowest since February 2020, according to data compiled by JPMorgan Chase & Co. Investors continued to pour money into exchange-traded funds dedicated to emerging markets.Yet the rally is prompting some traders to reassess their bets. Russian shares, which led last week’s equity advance, may come under pressure as the Biden administration evaluates its options to escalate sanctions. South Africa’s rand, the top currency performer in the developing world, is particularly exposed to a potentially stronger dollar, Andres Jaime, a New York-based strategist at Morgan Stanley, wrote in a note. There’s also concern that Treasury yields, which have declined for two straight weeks, will revert back to their trend in the first quarter, when U.S. bonds suffered their worst rout since 1980.Goldman Sachs Group Inc. said it closed its trade recommendation on a basket of developing-nation currencies after the rapid rebound.“Some profit taking on rallies and re-engagement on market wobbles makes sense, even as we keep the faith on cyclical upside over the longer term,” Goldman strategists including Zach Pandl and Kamakshya Trivedi wrote in a note Friday. “The idiosyncratic risks that have weighed on EM FX in 2021 are likely to continue to generate volatility and create opportunities.”Listen: EM Weekly Podcast: Easing U.S. Yields; Russia, Indonesia RatesAside from Russia, political risks are gathering pace in Latin America and Asia. Peruvian stocks dropped to their lowest since January after an admirer of Fidel Castro and Hugo Chavez won the most votes in the first-round of the nation’s presidential election. In China, the credit stress engulfing one of the country’s largest distressed-debt managers is also weighing on shares and bonds.Investors will turn their attention this week to key rate decisions. Indonesia’s central bank may leave borrowing costs unchanged while their Russian counterparts hike. President Vladimir Putin will also make his annual address to the nation on Wednesday, potentially unveiling new measures to boost the economy through spending. He’s facing condemnation from Western officials over the deteriorating health of jailed opposition leader Alexey Navalny as well as the Kremlin’s hack attacks and actions toward Ukraine. The ruble has posted the third-biggest decline in emerging markets this past month.Central BanksIndonesian policy makers are expected to keep their key rate on hold Tuesday as the weakening rupiah deters further easingAt a briefing following the March meeting, Governor Perry Warjiyo said the central bank will guard the currency to keep it in line with its fundamentalsThe rupiah has dropped 3.4% this year, the second-worst decline in emerging AsiaPolicy makers last lowered the seven-day reverse repo rate in February, cutting to a record low of 3.5%“With the rupiah under pressure, BI’s desire to maintain external stability means rate cuts are off the cards,” Krystal Tan, an economist at Australia & New Zealand Banking Group Ltd. in Singapore, wrote in a noteRussia’s central bank may extend its new tightening cycle on FridayBloomberg Intelligence predicts a quarter-point hike, though U.S. sanctions “raise the risk of a bigger move”China’s central bank will announce one- and five-year loan prime rates on TuesdayPolicy makers last cut the benchmarks in April 2020 to support the economy from the pandemicThe yuan tops emerging Asia currency gains this year after the Taiwan dollarTrade DataThe Philippines will release balance-of-payments data for March after reporting a deficit in FebruaryThe peso has dropped 0.7% this year, beating most peersTaiwan will publish export orders for March on Tuesday and industrial-production data on FridaySouth Korea, a barometer of global commerce, releases trade data on the first 20 days of April on WednesdayThailand will publish customs-trade figures for March on ThursdayThe baht’s 4.0% drop leads emerging Asia losses in 2021What Else to WatchBrazil traders will monitor federal budget negotiations ahead of an April 22 deadline for President Jair Bolsonaro to decide on a vetoOn Monday, a reading of the nation’s February economic activity is expected to show a 10th straight monthly increase while slipping on a year-over-year basis, according to economists surveyed by BloombergThe country’s benchmark stock index extended on Friday its longest winning streak since last NovemberArgentina’s February economic activity may reflect a slide in industrial and construction activity, interrupting the nation’s recovery, according to Bloomberg EconomicsThe peso, which led declines among major currencies last year, is once again trailing all global peers to start 2021Colombian economic activity for February may reflect a recovery while lingering below pre-pandemic levelsThe nation’s benchmark equity gauge has posted the biggest slide in Latin America so far this yearMexico is set to post bi-weekly consumer price figures on Thursday, which may show the uptrend continuing in the first two weeks of April, according to Bloomberg EconomicsFebruary retail sales data on Friday, meantime, are expected to fall from a year earlier, reflecting the pandemic’s lingering impact, Bloomberg Economics saidThe peso has advanced 3.4% over the past month, the biggest gain in emerging markets during that spanSouth Africa will probably report on Tuesday that headline inflation accelerated in March amid higher fuel pricesThe rand has jumped 3.2% this year, beating all major global currenciesMalaysia posts March inflation data on Friday after reporting its first positive reading for the consumer price index in a year in February(Adds ETF line 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) -- Barclays Plc pulled out of its role as the lead underwriter of a municipal-bond sale that was set to build prisons for CoreCivic Inc. after criticism that the bank was backtracking on a pledge to no longer provide financing to for-profit jail companies.KeyBanc Capital Markets, another manager, also said it was resigning from the transaction.The $634 million bond issue was set to be sold as soon as last week through a Wisconsin agency to raise money for a CoreCivic-owned company that was planning to build two prisons in Alabama. The facilities were set to be leased and run by the state’s Department of Corrections.The bank’s lead role in the deal drew controversy because it appeared to be at odds with Barclays’ announcement two years ago that it would no longer provide new financing to private prison companies, whose model of profiting from incarceration has drawn controversy for years. Other banks, including Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., also said at the time that they were severing ties with the industry.The banks’ last minute decision to abandon the deal was highly unusual and may reflect the growing clout of investors who are pouring into socially minded investment funds, creating a lucrative and growing business that financial institutions are eager to court.Bloomberg News was first to report Barclays’ involvement in the muni-bond deal earlier this month.“We have advised our client that we are no longer participating in the transaction intended to provide financing for correctional facilities in the State of Alabama,” Barclays said Monday through a spokesman in an emailed statement. “While our objective was to enable the State to improve its facilities, we recognize that this is a complex and important issue. In light of the feedback that we have heard, we will continue to review our policies.”KeyBanc Capital Markets has “resigned” from the transaction, a bank spokesperson said via email. A representative for Stifel Financial Corp., another underwriter, didn’t immediately respond to a request for comment.The banks’ retreat may not derail the project, though the departure of the lead underwriter will almost certainly delay the financing. Alabama Governor Kay Ivey, a Republican who has spearheaded the overhaul of the prisons, said in a statement that the state was disappointed by the decision but would move forward with the projects.CoreCivic spokesperson Amanda Gilchrist said in an emailed statement on Monday that the company is proceeding with efforts to “deliver desperately needed, modern corrections infrastructure to replace dilapidated, aging facilities.”“The reckless and irresponsible activists who claim to represent the interests of incarcerated people are in effect advocating for outdated facilities, less rehabilitation space and potentially dangerous conditions for correctional staff and inmates alike,” she said.The taxable municipal bond sale was expected to provide about 68% of the financing totaling $927 million, according to investor roadshow documents dated March 31. Those plans included the potential sale of $215.6 million in debt issued through a private placement and an equity contribution from CoreCivic.Barclays had defended its work on the deal, saying it wasn’t at odds with its 2019 decision because the money was financing facilities that would be run by Alabama. The state’s officials said the deal with CoreCivic will help it improve conditions within its prison system after the state and its corrections department were sued by the U.S. Justice Department in December for failing to protect male prisoners from violence and unsanitary conditions.Governor Ivey said in the statement that the new facilities would be safer and provide more secure correctional environments.“These new facilities, which will be leased, staffed, and operated by the state, are critical to the state’s public infrastructure needs and will be transformative in addressing the Alabama Department of Corrections’ longstanding challenges,” the statement said.Related: Barclays Bond Deal Shows Limits to Vow on Financing Prison FirmsBarclays nevertheless drew fire from advocacy groups and the public portion of the debt sale was reduced last week, a step that usually indicates that a bank is having difficulty lining up buyers for securities.Last week, the American Sustainable Business Council and partner organization Social Venture Circle, which represents 250,000 businesses to advocate for responsible practices and policies, announced that they would refund Barclays’ membership dues. Barclays joined the group in 2019.“We applaud Barclays’ decision to not underwrite the Alabama private prison bonds,” said David Levine, president of American Sustainable Business Council in a statement on Monday. He said that he invites the bank and other financial institutions to “chart a responsible and beneficial path forward for investing and rebuilding our communities, and our economy.”Related: Barclays Kicked Out of Business Group Over Prison-Bond Work(Adds comment from Alabama governor starting in ninth paragraph and CoreCivic comment in 10th 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.
Dogecoin briefly replaced XRP as the fourth-largest coin early Monday.
Rebates required under Obamacare could put hundreds of dollars back in your pocket.
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.
(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.
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.
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GameStop shares were on a tear early Monday, as Kieth "RoaringKitty" Gill announced he was doubling his stake in the firm and CEO George Sherman said he is stepping down.
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.
More employers are actively recruiting job candidates, even for low- and middle-level white collar jobs as fewer answer ads during COVID crisis.