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Be careful of chasing iShares 20+ Year Treasury Bond ETF because it's well extended after a breakout last month.
Be careful of chasing iShares 20+ Year Treasury Bond ETF because it's well extended after a breakout last month.
Gold may have risen following the release of the CPI data, but it was not because of concerns over inflation.
(Bloomberg) -- Credit Suisse Group AG unloaded about $2 billion of stocks tied to the Archegos Capital Management blowup in the second such block sale since the bank wrote down the bulk of its exposure in the first quarter.The stock offerings included Discovery Inc. and Iqiyi Inc., adding to some $2.3 billion worth of shares tied to the debacle that the bank sold last week, according to people familiar with the matter. The trades follow a torrent of similar transactions that had already erased about $194 billion in market value as banks from New York to Zurich and Tokyo unwound leveraged equity bets by Bill Hwang’s family office.Shares of Credit Suisse fell as the sale adds to evidence that the Archegos collapse could impact the bank beyond the first quarter, when it took a 4.4 billion franc ($4.8 billion) writedown, its worst trading hit in more than a decade. While the Swiss bank has substantially reduced its exposure, transactions since the end of March weren’t included in the first-quarter results, a person familiar with the matter has said.Credit Suisse fell as much as 2.2% in early Zurich trading and was 1.2% lower by 9:43 a.m. The stock has lost 15% this year, compared with double-digit gains for an index that includes its European peers.A spokesperson for Credit Suisse declined to comment on the sale and whether the bank plans more such transactions.Hwang’s private investment firm became the center of one of the biggest margin calls of all time late last month, and represented one of the most spectacular failures of risk-management and oversight in recent memory. The downfall of Archegos will result in $10 billion of losses to banks, according to analysts at JPMorgan Chase & Co. The debacle could attract regulatory scrutiny and potential fines for the banks involved, the analysts said this week.Read more: Archegos Ripples Through Banks’ Lucrative Hedge Fund BusinessTuesday’s block trades -- which sold at the lower end of ranges -- included 19 million Class A shares of Discovery sold at $38.40, said one of the people, asking not to be identified discussing a private matter. In addition, 22 million Class C shares of Discovery sold at $32.35 while a stake of 35 million Iqiyi shares went for $15.85.Credit Suisse’s latest sale comes weeks after several rivals dumped their shares to skirt losses. While the firm was one of several global investment banks to facilitate the leveraged bets of Archegos, it was slower than others to unwind the positions and had initially tried to reach some sort of standstill agreement, people familiar with the matter have said.The strategy failed as rivals rushed to cut their losses. Global banks including Goldman Sachs Group Inc. and Deutsche Bank AG have told investors that they shed their Archegos-linked positions with little financial impact.Credit Suisse is now planning a sweeping overhaul of its hedge fund business. It has already announced plans to cut its dividend, suspend share buybacks and scrap bonuses for top executives.(Updates with Credit Suisse shares from third 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.
Stocks traded mixed Wednesday afternoon, with traders digesting a slew of earnings results from big banks that largely topped expectations. The Dow set a fresh record high as shares of Goldman Sachs advanced after the company reported better-than-expected quarterly results.
(Bloomberg) -- Bond veteran Greg Wilensky has seen hype about a surge in inflation crushed too many times to get carried away with this year’s great reflation trade.“I’ve been managing bond portfolios for 25 years, through very large monetary programs, big deficits, and the Fed trying to raise inflation expectations,” the Janus Henderson money manager said in an interview. “As much as I can see legitimate reasons why it might happen this time -- I could have said that very often over the last 12 years too.”Wilensky’s skepticism epitomizes the cooling investor enthusiasm for bets linked to a rapid economic recovery and higher prices. Trades favoring economically-sensitive value stocks, steeper yield curves and a rebound in commodities have faltered after a stellar first quarter.The MSCI AC World Value Index has lagged its growth counterpart by about 6 percentage points since March 8. Benchmark Treasury yields have retreated some 13 basis points already this quarter, even as U.S. inflation data begin to beat expectations. And Tuesday’s strong 30-year Treasury auction suggested demand for even the most interest rate-exposed bonds is returning.One of the biggest questions money managers confront now is whether the stimulus-fueled rebound in growth and inflation -- in particular in the U.S. -- can transition to a sustainable expansion that will keep pushing equities and bond yields higher. The International Monetary Fund recently upgraded its 2021 global growth forecast to the strongest in four decades, but the outlook beyond that is less clear-cut.Envisaging a trajectory for price levels beyond this year is even harder for investors given the warping effect of coronavirus shutdowns, temporary supply bottlenecks and base effects from last year’s disinflation. A surge in five-year U.S. breakevens-- a gauge of inflation expectations -- has petered out since they hit their highest since 2008 in mid-March.Simple Math Is About to Cause an Inflation Problem: QuickTake“Inflation and rates, especially as a bond investor right now, is the call that you have to make,” said Elaine Stokes, fixed income portfolio manager at Loomis Sayles. “It’s the make-or-break call of your year.”The response to the stall for many investors has been to pare back some trades geared to the sharpest stage of the economic rebound. Vishal Khanduja, fixed income fund manager at Eaton Vance Management, has halved his portfolio’s overweight in U.S. inflation-linked bonds from the start of the year.“Inflation expectations were dislocated in 2020” in a “surgical recession,” Khanduja said. “The typical post-recession positioning that you see happen over multiple years is quickly going through the market.”Franklin Templeton’s Gulf Arab bond fund has removed its hedges against the risk of accelerating U.S. inflation, as it sees another spike in Treasury yields as “possible, not probable,” according to its Dubai-based manager.As for some traditional inflation hedges in the commodities markets, the story is about to get more complicated than the year-to-date rebound in oil and copper prices would suggest. Strategists at the BlackRock Investment Institute anticipate a divergence within the asset class, as factors such as climate risks are more fully captured in pricing.“The lift for oil from the economic restart is likely to be transitory, while some metals may benefit from structural trends such as the ‘green’ transition for years to come,” a team including Wei Li wrote in a note this week.Tremendous ChallengeMeanwhile, in the bond market, traders are not reacting to signs of inflation as one might expect. On Tuesday, data showed U.S. consumer prices climbed in March by the most in nearly nine years, yet 10-year Treasury yields fell five basis points to their lowest in three weeks.“The tremendous challenge right now, especially this year is that the quality of almost any of the numbers we’re looking at, whether it’s the short-term inflation numbers, the economic growth numbers, these things are being very much distorted by the economic volatility,” Janus Henderson’s Wilensky said.(Adds Franklin Templeton move 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.
(Bloomberg) -- Coinbase Global Inc.’s highly anticipated direct listing had touched off a frenzy in demand for all things crypto. A tumble shortly after its debut dented the euphoria.Bitcoin pulled back from an all-time high as the biggest U.S. crypto exchange tumbled to close down 14%. It opened at $381 a share in its direct listing shortly before 1:30 p.m. in New York and spiked as high as $429 in the first 10 minutes of trading before turning lower. It closed at $328.28. Bitcoin fell to its session low when Coinbase turned, before paring losses. It was trading around $63,160 as of 8:12 a.m. in Hong Kong.The listing is seen pushing crypto even more into the mainstream of investing, exposing legions of potential buyers to digital tokens, which have grown into a $2 trillion industry in little more than a decade. Bitcoin, the original and biggest crypto coin, is valued at more than $1 trillion alone after a more than 800% surge in the past year.At the closing price, Coinbase’s valuation on a fully diluted basis is about $86 billion. Given its size and visibility, Coinbase is likely to be popular with actively managed equity funds, particularly growth managers, essentially making a large swath of stock holders passive investors in crypto.“It’s a huge step forward for the industry and the legitimacy it brings in the eyes of investors and regulators,” Mati Greenspan, founder of Quantum Economics, said on Bloomberg TV.Read more: Bitcoin ETF Drumbeat Gets Louder as Eight Issuers File With SECGrowing mainstream acceptance of cryptocurrencies has spurred Bitcoin to a 120% rally since December, as well as lifting other tokens to record highs. That’s despite lingering concerns over their volatility and usefulness as a method of payment. Attention from regulators is poised to intensify as Coinbase becomes a public company.“As the direct listing on the Nasdaq will reach a wider investment base other than the usual crypto evangelists, investors must expect much greater government scrutiny,” said Nigel Green, CEO and founder of deVere Group.(Updates prices in the third 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) -- U.S. stocks retreated after climbing to an all-time high. Treasuries fell with the dollar. Oil rallied.PayPal Holdings Inc. and Nvidia Corp. paced losses among tech companies in the S&P 500, which had fluctuated for much of Wednesday’s session as traders sifted through earnings from some of the world’s biggest banks. Bitcoin slid in the wake of the debut by cryptocurrency company Coinbase Global Inc. on the Nasdaq.Read: Goldman, JPMorgan Traders Show the Reddit Crowd How It’s DoneWith equities lingering near a record, investors are looking to the earnings season for further catalysts. Expectations of a strong profit rebound have helped markets rally, setting the bar high as reporting gets underway. More broadly, investors are monitoring vaccine developments for any threats to the economic recovery. The Federal Reserve said in its Beige Book that activity has picked up pace amid an improvement in consumer spending.“You’re going to see this tug-of-war continue within markets as investors weigh the prospects of a strengthening economy with the risk of rising inflationary pressures,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors.A quarter that began with retail investors declaring the end of the status quo on Wall Street just ended with big banks tallying surprisingly massive hauls. Goldman Sachs Group Inc. and JPMorgan Chase & Co. -- two of the most gilded names in finance -- kicked off bank earnings season with revenue windfalls from trading and dealmaking, defying warnings from within the industry that good times couldn’t last.Goldman Sachs’s stock jumped, while JPMorgan’s slipped -- undermined by concern over weak demand for loans.Some key events to watch this week:U.S. data including initial jobless claims, industrial production and retail sales come Thursday.China economic growth, industrial production and retail sales figures are on Friday.These are some of the main moves in financial markets:StocksThe S&P 500 fell 0.4% at 4 p.m. New York time.The Stoxx Europe 600 Index gained 0.2%.The MSCI Asia Pacific Index advanced 0.7%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%.The euro climbed 0.3% to $1.1979.The Japanese yen appreciated 0.2% to 108.89 per dollar.BondsThe yield on two-year Treasuries rose less than one basis point to 0.16%.The yield on 10-year Treasuries rose two basis points to 1.63%.The yield on 30-year Treasuries climbed two basis points to 2.31%.CommoditiesWest Texas Intermediate crude gained 4.5% to $62.89 a barrel.Gold weakened 0.5% to $1,736.65 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.
Wall Street indexes closed mixed on Wednesday, with the Nasdaq Composite and S&P 500 falling despite another record intraday high for the latter and big banks' stellar results on the first day of earnings season. Shares of Goldman Sachs Group Inc and Wells Fargo & Co rose 2.3% and 5.5% respectively on bumper first-quarter profits. Goldman capitalized on record levels of global dealmaking activity, and Wells reduced bad loan provisions and got a grip on costs tied to its sales practices scandal.
(Bloomberg) -- As Bitcoin hits records and Coinbase Global Inc. goes public, ETF issuers are betting en masse that U.S. regulators will green-light a fund tracking the largest cryptocurrency at long last.No fewer than eight applications for a Bitcoin ETF have now been filed with the Securities and Exchange Commission since late December, after billionaire Michael Novogratz’s Galaxy Digital Holdings Ltd. joined the list on Monday.It is racing with the likes of Fidelity Investments for first-mover advantage as conviction grows that the SEC will relent after years of rejected applications. With the first North American Bitcoin ETF in Canada already at $1 billion in assets, industry-watchers are wagering the agency will follow its northern neighbor’s lead.“Anyone who wants to launch a Bitcoin ETF and has been waiting wants to make sure their hat is in the ring if/when the SEC approves,” Bloomberg Intelligence analyst James Seyffart said. “So if they’re not first, they’re at least on the radar.”Bitcoin rose for a seventh straight day on Wednesday morning, hitting the highest on record and trading at about $63,900 as of 6:12 a.m. in New York. The all-time high comes as Coinbase, the largest U.S. crypto exchange, prepares to list on the Nasdaq.Whether Gary Gensler, the nominee to be next SEC chairman, will prove more open-minded toward a Bitcoin ETF than his predecessor Jay Clayton remains unclear. The agency has rejected every crypto ETF application since the first was filed in 2013 amid concerns about manipulation and criminal activity.An SEC spokesperson declined to comment.This time around, there’s more attention on the potential benefits of a Bitcoin ETF as a way to reduce market distortions.The Grayscale Bitcoin Trust (ticker GBTC) is the largest crypto product. In its current structure as an investment trust, it lacks the share creation and redemption process that helps an ETF keeps its price in line with its holdings. That makes GBTC vulnerable to dislocations like its monster premium at the end of 2020 relative to the Bitcoin it held, or the record discount it swung to earlier this year.In a report on Friday, JPMorgan Chase & Co. touted the benefits of a listed ETF over the closed-end trust to reduce tracking errors. Grayscale Investments LLC, the firm behind GBTC, has said it is “100% committed” to converting GBTC into an ETF.That means the pipeline is even larger than the eight official applications.“There’s a huge amount of pressure on the SEC to do something,” said Nic Carter, a partner at crypto-focused venture firm Castle Island Ventures. “The trust has way outgrown its structure and the lack of an arbitrage mechanism is causing a fair amount of harm to holders.”Between events like the Reddit-fueled GameStop Corp. mania and the recent blowup of Bill Hwang’s Archegos Capital Management, the SEC may have bigger priorities. But the Bitcoin ETF clock is ticking.The regulator has now acknowledged applications from VanEck Associates Corp. and WisdomTree Investments, meaning it has a limited period of time in which to approve or reject their proposals, though it can also extend its deliberations.“They would have to either approve or deny both WisdomTree and VanEck in 2021,” Seyffart said. “Personally, I just can’t see the SEC denying both of them, unless something changes.”Other ETF watchers are similarly bullish on a turning of the regulatory tide.“At some point, if we’re not already there, the SEC runs out of reasons for not approving,” said Nate Geraci, president of advisory firm The ETF Store.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) -- Cryptocurrency exchange Coinbase Global Inc. soared above a $112 billion valuation in its trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board.The massive valuation, which dwarfs more traditional financial companies including Intercontinental Exchange Group Inc. and Nasdaq Inc. itself, is a landmark moment for the crypto industry and for Coinbase, which was started almost a decade ago when few people had even heard of Bitcoin, and many exchanges were run by amateurs from their garages and homes.Coinbase shares closed at $328.28, down 14% from the $381 opening price on Nasdaq after earlier climbing as high as $429.54. At the closing price, the company’s valuation on a fully diluted basis is about $86 billion.Bitcoin, which along with Ethereum made up 56% of Coinbase’s 2020 trading revenue, dipped below $62,000 after earlier hitting a record price.The debut isn’t just a mark of success for Coinbase, which was valued at just $8 billion in its most recent funding round in 2018. It’s also a win for Nasdaq, which hosted its first direct listing after beating out the New York Stock Exchange for Coinbase’s debut. Coinbase is the biggest company to take the direct listing route to market.Coinbase Chief Financial Officer Alesia Haas said in an interview Wednesday morning that one of the reasons that the company picked Nasdaq was because the bourse offered the ticker symbol “COIN,” which wasn’t part of the New York Stock Exchange’s pitch.“Ultimately that they had the ticker COIN, and that was a really great ticker for us to get,” Haas said.Nasdaq on Tuesday set a reference price of $250 a share for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalization. Every major direct listing has so far opened significantly above its reference price, with Roblox shares debuting at $64 each –- 42% higher than the number set by the exchange.Coinbase shares changed hands at a roughly $90 billion valuation in early March, Bloomberg News reported at the time, in what was one of the last chances for investors to trade its private stock before the company went public.Digital Currency Group founder Barry Silbert, who’s built an empire that spans the crypto world, tweeted Tuesday that his shares would definitely not be changing hands at the reference price, in an early sign that the stock was set for a pop at the open.Direct listings are an alternative to a traditional initial public offering that has only been deployed a handful of times. Until Wednesday, every company to pursue one -- including Slack Technologies Inc., Palantir Technologies Inc. and most recently Roblox Corp. -- listed on the New York Stock Exchange.As well as the ticker, Nasdaq’s ability to provide a private market for the shares, as well as services it offers such as investor relations work, were among its selling points to Coinbase, according to a person familiar with the matter.Appropriately for a company that in May said it was committing to a “remote-first” work culture and doesn’t list a headquarters on its filing, Coinbase’s pitch meetings with Nasdaq happened virtually, the person added.“We evaluated both NYSE and Nasdaq and ultimately felt that the Nasdaq platform was aligned with our value as a tech company,” Haas said.In a direct listing, a company’s shares begin trading without it issuing new shares to raise capital. That avoids diluting the shares and also, unlike a traditional IPO, often allows the company’s existing investors to put their shares on the market without waiting for lockup period -- typically six months -- to expire.Luring Coinbase was a win for Nasdaq, whose years-long fight for a larger share of mega listings gained traction in the past year. Half of the 10 largest U.S. IPOs, excluding blank-check companies, were on on Nasdaq, according to data compiled by Bloomberg. That included the third largest, Airbnb Inc.’s $3.8 billion IPO in December, which was the biggest listing on Nasdaq since Facebook Inc.’s $16 billion monolith in 2012.Crypto UpstartsPutting his trust in the stock exchange is Coinbase Chief Executive Officer Brian Armstrong, who started the company with Fred Ehrsam in 2012. Unlike most rivals, Coinbase’s founders always envisioned strict regulatory compliance as a cornerstone of the operation, which has helped the exchange to grow in the U.S., where many early Bitcoin traders and investors were located.Ehrsam left the company in 2017, and is now investing in crypto startups. Both Armstrong and Ehrsam own huge swaths of Coinbase.Coinbase last week said it expects to report a first-quarter profit of $730 million to $800 million, more than double what it earned in all of 2020.“They are going to build out a full financial services company,” said Barry Schuler, a co-founder of Coinbase investor DFJ Growth who until last year sat on the company’s board. “Like a crypto version of a Goldman Sachs or a Morgan Stanley.”Skeptics, RegulationThe company’s rapid growth hasn’t been without controversy, ranging from frequent outages during periods of heavy trading to new restrictions Armstrong placed on employee discussions of politics last fall. In March, Coinbase also settled with the Commodity Futures Trading Commission for $6.5 million, after the agency said the company reported inaccurate data about transactions and that a former employee engaged in improper trades.Then there are the crypto skeptics, as well as the regulators around the world who are stepping up oversight and casting doubt on Bitcoin’s usefulness as a currency.European Central Bank executive board member Isabel Schnabel, in an interview this month with Der Spiegel, called Bitcoin “a speculative asset without any recognizable fundamental value.”A publicly traded Coinbase was unimaginable several years back when Wall Street was full of crypto bears including JPMorgan Chase & Co.’s Jamie Dimon, who once called Bitcoin “a fraud.”Dimon later said he regretted saying that. His bank as well as Goldman Sachs Group Inc. advised on Coinbase’s direct listing.“I don’t think we sought Wall Street’s approval but we did seek to bring more transparency to crypto and to introduce crypto to more and more users,” Coinbase’s Haas said.Crypto Partners“Wall Street can become trader of crypto. They are going to be partners of us going forward,” she said.Coinbase’s early investors are celebrating.“I think Coinbase is this decade’s Microsoft, Netscape, Google or Facebook,” Garry Tan, founder and managing partner at Initialized Capital and an early-stage Coinbase investor, said in an interview with Bloomberg Television Tuesday.(Updates with closing share price in third 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.
Gold traders may have priced in higher inflation, so the market could actually bounce higher even if the CPI numbers beat the forecast.
(Bloomberg) -- Gap Inc. and Synchrony Financial are parting ways after they couldn’t reach an agreement to renew their longstanding card partnership.The clothing retailer has decided to shift the portfolio to Barclays Plc beginning in May 2022, it said in a statement Tuesday. Synchrony said in a regulatory filing that it expects to recognize a gain on the sale of the portfolio when it unloads it next April.“Synchrony was unable to reach contractual and economic terms with Gap that made sense for our company and our shareholders,” the Stamford, Connecticut-based firm said in the filing.Synchrony shares dropped 3.7% to $41.55 at 2:34 p.m. in New York, the second-worst performance in the 65-company S&P 500 Financials Index. The lender plans to use about $1 billion of the proceeds from the sale of the portfolio to buy back shares and invest in “higher growth programs,” according to the filing.Gap and Synchrony have offered cards together for more than two decades, and the lender counts the retailer as one of its five largest partners. The portfolio represents about 5% of the bank’s roughly $80 billion in receivables.It’s the second time Synchrony has opted not to renew a partnership with a major retailer after Walmart Inc. shifted its portfolio to Capital One Financial Corp., a move that was first announced in 2018. The decision comes just a few weeks after the lender installed Brian Doubles as its new chief executive officer, replacing its longtime leader, Margaret Keane.“This is a speed bump,” Jon Arfstrom, an analyst at RBC Capital Markets, said in a note to clients. “We do not believe this loss (and Walmart in 2018) are due to any uncompetitive positioning for Synchrony, and we believe it comes down to preferences and negotiations and bottom-line profitability.”Gap, like most of its mall-based peers, has struggled to attract customers during the coronavirus pandemic. “We faced one of the most difficult years in our company’s history,” Chief Executive Officer Sonia Syngal said last month as Gap capped its fiscal year with fourth-quarter sales that fell short of Wall Street’s expectations.What Bloomberg Intelligence Says:“Revenue and earnings from the Gap partnership have been steadily shrinking, so the retailer’s move to Barclays should reduce Synchrony’s costs and shift resources to new, high-potential cards with Venmo and Verizon.”-- David Ritter, BI fintech analystClick here to read the research.Its Banana Republic brand, which primarily sells work clothes, has been particularly weak. One bright spot for the retailer is its Athleta activewear brand, which passed $1 billion in sales in 2020.Gap said the new credit-card program will be a key component of the revamped rewards program it launched in September. Barclays will issue both private label and co-brand credit cards for Gap, with the latter using Mastercard Inc.’s payment network.“With our shared values and focus on inclusion, we look forward to working with Gap Inc. and Barclays to deliver an enhanced card program to their customers,” Linda Kirkpatrick, president of Mastercard’s North America business, said in an emailed statement.It will be Barclays’s first private-label card, and the bank has already begun investing in the systems it will need to provide the program, said Denny Nealon, CEO of the U.S. consumer bank at Barclays. The bank has also recently been investing in data and analytics and other efforts to improve technology.Barclays has been looking to diversify its card partnerships, which have long focused on airlines, cruises and hotel chains. The firm recently debuted a new card with the nonprofit AARP.“We’re absolutely thrilled to join forces with Gap, it’s an iconic American brand, its got a huge customer base,” Nealon said. “We think we can help them drive growth and success.”(Updates with executive commentary beginning in 11th 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.
ZURICH (Reuters) -Proxy adviser Glass Lewis urged Credit Suisse shareholders to oppose board member Andreas Gottschling's re-election, on grounds that as risk committee chairman he should be held accountable for problems tied to Greensill and Archegos. Switzerland's second-biggest bank has been reeling from the collapses of Greensill Capital and Archegos Capital Management, with a 4.4 billion Swiss franc ($4.75 billion) charge hitting its balance sheet after Archegos failed to meet margin commitments.
(Reuters) -JPMorgan Chase & Co's first-quarter results on Wednesday laid bare the challenge big banks face in this phase of the pandemic, where stimulus programs have left individuals and businesses in good financial shape but so flush with cash that few of them need loans. The biggest U.S. bank sailed past Wall Street expectations by reporting a nearly 400% increase in quarterly profit. The gains came from JPMorgan releasing more than $5 billion it had set aside to cover potential coronavirus loan losses that have not materialized, as well as a continued boom in capital-markets activity.
Before sitting back and letting the IRS do the work, experts say some people should at least consider filing an amended return.
The IRS commissioner says the child credit payments will arrive on time after all.
Wealthy investor Mike Novogratz speculates that bitcoin could be worth $100,000 by the end of 2021 and sees that value increasing by five-fold by 2024, as the nascent crypto market continues to evolve and grow.
Popular crypto asset, dogecoin, which was engineered as a joke back in 2013, is surging along with a number of crypto assets ahead of the Coinbase IPO.
(Bloomberg) -- It turns out it’s not just some of Extended Stay America Inc.’s top shareholders who oppose its proposed $6 billion takeover. Two of the company’s own directors are against it as well.Extended Stay disclosed in a regulatory filing late Tuesday that while the majority of the board approved the deal with Blackstone Group Inc. and Starwood Capital Group, Neil Brown and Simon Turner opposed it, saying the $19.50-a-share price was insufficient, and below similar transactions in recent years.They were also concerned about the timing of the deal in light of a recent rebound in hotel stocks, and the potential for further recovery with the U.S. stimulus plan and increasing Covid-19 vaccinations, the filing shows.Turner was of the belief a transaction below $20 a share was inappropriate, and also was concerned about changes to the termination fee that were made in order for the buyers to raise their bid to $19.50 a share from $19.25, according to the filing.Extended Stay has two boards, one for the C-Corp and one for the real estate investment trust. Both Brown and Turner sit on the REIT board, according to the company’s website.The concerns raised by the two directors are similar to those of five top investors who came out against the deal. Tarsadia Capital LLC, Hawk Ridge Capital Management, SouthernSun Asset Management LLC, Cooke & Bieler LP and River Road Asset Management LLC have all said they plan to vote against the transaction.‘Obviously Inadequate’“We are dismayed that the board would approve such an obviously inadequate price and shocked that the board did so over the objection of two of its own members,” Tarsadia said in an emailed statement.Collectively, the investors own roughly 13% of Extended Stay’s outstanding common stock, according to data compiled by Bloomberg.Representatives for the other opposing investors weren’t immediately available for comment. A representative for Blackstone and Starwood declined to comment.Extended Stay defended its decision to sell, arguing the deal would provide immediate, certain and compelling value for shareholders.“The company ran a thorough, rigorous and thoughtful process, which included a careful consideration of the alternatives available,” a spokesperson said in an email Tuesday. “I would note that the company has thoughtful and independent board members, and paid careful attention to the points raised by the two dissenting directors. However, after detailed discussions, the boards ultimately concluded that the immediate cash certainty at a premium to the valuation over multiple time periods was in the best interest of shareholders.”‘Lose-Lose-Lose’Michael Bellisario, an analyst with Robert W. Baird & Co., said in a note to clients it was “intriguing” that two board members oppose the transaction, and that shareholders seeking a sweetener are likely to focus on this. But he said a voted-down deal would be a “lose-lose-lose” for investors because the company would likely trade back to $16 a share.Extended Stay shares have traded above the offer price since March 22. They were up 0.4% to $19.80 at 12:36 p.m. in New York Tuesday, giving the company a market value of $3.5 billion.Blackstone and Starwood agreed last month to acquire Extended Stay in a 50-50 joint venture in what would be the biggest deal in the hotel industry since Covid-19 decimated the travel business. The filing Tuesday shows that talks between the parties were on and off since 2017, and that at least two other undisclosed potential buyers had expressed interest over the years.Investor Tarsadia had also discussed numerous investment ideas with Extended Stay beginning in August 2020, including various transactions the company could pursue, the documents show.(Updates share price in paragraph 13, adds additional details in final 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) -- China should build more pig farms in Xinjiang as its cotton industry is under threat from declining soil fertility, according to a government researcher, commenting after some international companies avoided fiber produced in the region over allegations of forced labor.Hog farming could become a pillar industry in the region and supply 10% of the nation’s output, up from 1% now, wrote Mei Xinyu, a think-tank researcher at the commerce ministry. Xinjiang already grows more than 80% of the country’s cotton, and some of those pig farms would replace fields sown to the fiber that have been degraded.The suggestion comes after the U.S. banned imports of textile products containing cotton from Xinjiang in protest over alleged ill-treatment of its ethnic Uighur Muslim minority, and several western countries slapped sanctions on China over the same issue.Cotton is the most profitable crop in the region, and rotation to other crops is not in the interests of growers and hard to achieve on a large scale, Mei said on the WeChat account of Beijing News, a government-run newspaper. The only feasible option is to build more hog farms, he said, and they can use local grain to feed the pigs or import supplies from neighboring countries.Xinjiang Production and Construction Corps, a military-affiliated entity, and other groups have already started building several large-scale pig farms, which will increase output significantly in the next two years. In the meantime, animal waste from the farms could be used to boost soil fertility, which has been exhausted by extensive use of chemical fertilizer, said Mei.“The most desirable way to solve this problem is to raise pigs and grow cotton simultaneously, and return a large amount of manure from pig farms to the fields after treatment to enhance soil fertility and increase profits,” Mei said.China should expand hog farms in areas like Xinjiang and Heilongjiang, which are less population-intensive than the inland provinces like Sichuan, Hunan and Henan which dominate the country’s pork production, Mei said. Outbreaks of African swine fever that started in 2018 slashed hog herds by as much as half and sent meat imports spiraling to a record.(Updates with details from the report 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.
(Bloomberg) -- The U.S. economy is emerging from a year of lockdowns in a big way and that’s showing up in the oil market.A rolling average of U.S. gasoline demand rose to the highest since August, according to the latest data from the Energy Information Administration. The nation’s refineries are processing the most crude crude oil in over a year just after the pandemic started as they make more fuel for the upcoming summer travel surge. At the same time, crude supplies fell by the most in two months, bringing nationwide stockpiles to the lowest since late February.The data underpin the recovery in the oil market a year after the pandemic spurred a historic demand crash. Gasoline demand has been leading the comeback, with more gains in diesel and jet fuel needed to provide sure footing for markets after the pandemic slump. West Texas Intermediate crude futures surged more than 5% Wednesday and broke out the narrow trading range they had been stuck in since mid-March.The oil rally comes during a period of quicker economic expansion, as cited in a speech Wednesday by Federal Reserve Chair Jerome Powell. Gasoline prices have averaged about $2.86 as gallon this spring amid predictions they should hit $3 a gallon this year for the first time since 2014.Careful supply management by refiners has helped maintain balance. Only 300,000 barrels of gasoline were added to storage last week, even with more production. Stockpiles are about 28 million barrels below where they were a year ago.“These numbers are quite constructive for gasoline,” said Houston oil analyst Andy Lipow. “We are headed to what looks like a decent summer driving season with Americans having been pent up with their desire to get out on the road.”To be certain, the market still has a long way to go for a full recovery, gasoline demand is at 8.8 million barrels day compared with 9.4 million barrels seen in April 2019.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.