Jan.27 -- Facebook Inc.’s fourth-quarter sales jumped 33%, with online shopping during the pandemic fueling demand for digital ads on its social networks. Bloomberg Intelligence's Mandeep Singh has more on "Bloomberg Markets: The Close."
Jan.27 -- Facebook Inc.’s fourth-quarter sales jumped 33%, with online shopping during the pandemic fueling demand for digital ads on its social networks. Bloomberg Intelligence's Mandeep Singh has more on "Bloomberg Markets: The Close."
Chinese Premier Li Keqiang pledged on Friday to promote business ties with the United States based on "mutual respect" that benefit both countries. The world's two largest economies have been at odds over trade and economic policy, especially when it comes to U.S. efforts to restrict tech exports to China and tariffs both have put on each others goods. This week, President Joe Biden singled out a "growing rivalry with China" as a key challenge facing the United States, with his top diplomat describing the Asian country as "the biggest geopolitical test" of this century.
By Yasin Ebrahim
(Bloomberg) -- Traders in the $21 trillion U.S. Treasury market are sending a clear signal that they intend to keep pushing yields higher until they upend financial conditions sufficiently to spark action from the Federal Reserve.Ten-year yields climbed again on Friday, heading toward last week’s one-year high and undermining stocks, after Fed Chair Jerome Powell gave just a minor nod to the recent, abrupt surge in long-term borrowing costs. He stressed that officials are focused on the long road ahead before they achieve their policy goals.Even before Powell spoke, some strategists were predicting the global borrowing benchmark rate was on course to reach 2%, a mere 40 basis points above last week’s peak. With yields on the rise again, it may not be long before mortgage-related hedging kicks in and brings that target closer. Goldman Sachs Group Inc. boosted its year-end forecast for 10-year Treasury yields on Thursday to 1.90% from 1.50%.Friday’s February payrolls report now looms as the next catalyst. Yields have already soared more than a half-point this year as a cheerier outlook for growth and inflation led traders to bring forward how soon they see the Fed lifting its policy rate. Many strategists had expected Powell to try to more forcefully tamp down yields before the Fed’s black-out period ahead of its March 17 policy decision. With no such effort emerging, market participants are left to ponder where policy makers’ pain threshold may be.“In this environment yields can certainly continue to test higher,” said Jonathan Cohn, a strategist at Credit Suisse. “How far the Fed is willing to allow stock markets to fall -- which is the poor man’s version of thinking about broad financial conditions -- is a key question.”During an appearance in a Wall Street Journal webinar Thursday, Powell said the recent bond-market swings “caught my attention.” He said he’s monitoring financial conditions and would be “concerned by disorderly conditions in markets.”Ten-year yields added 8 basis points on the day to 1.56%, and continued to creep higher in Asia hours touching 1.58%, bringing into view last week’s one-year high of 1.61%. With yields at current levels, there have been fresh concerns of convexity-related hedging flow which can undermine liquidity conditions and further roil riskier assets. Stocks slumped Thursday, with the S&P 500 Index briefly erasing its 2021 gains.Powell said he’d be concerned if there were a “persistent tightening in financial conditions that threatens the achievement of our goals.” But he didn’t mention any actions the Fed might take to curtail the climb in yields, which has lifted mortgage rates and risks dimming a bright spot in an economy still on the mend from the pandemic.Wall Street strategists have mulled options the Fed could take to push down long-term yields including: extending the duration of its bond purchases, or implementing a so-called “twist” operation -- involving selling part of the Fed’s shorter-dated holdings in favor of long-term Treasuries.“If yields continue higher too quickly, then that could be a problem for the Fed,” said Mark Zandi, chief economist at Moody’s Analytics. “It might undermine asset prices, possibly causing a major correction in stock prices and a freezing up of the housing market. This is not our base case, but it’s a concern and a risk.”Meanwhile, a market proxy for the anticipated annual inflation rate for the next half-decade exceeded 2.5% this week for the first time since 2008 -- aided by climbing oil prices.Traders are now pricing in a full quarter-point Fed rate boost in the first quarter of 2023. The Fed itself has signaled it intends to keep policy steady at least through the end of that year.”Market participants are putting the Fed to the test and saying, ‘OK, given this spike in inflation, if it’s not transient then you’re going to have to act sooner,”’ Scott Minerd, global chief investment officer of Guggenheim Partners, said in a Bloomberg Television interview.(Updates with Friday’s yield 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) -- 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) -- CLSA Ltd. has lost more than half of its fixed income team that focuses on bond sales in Hong Kong after its Beijing parent tightened control over the brokerage and cut down on risk, people familiar with the matter said.The departures include five of an eight-member sales team in Hong Kong, which facilitates trades for institutions, the people said, asking not to be identified because they aren’t allowed to discuss personnel changes. Director Tom Carlone, associate directors, Luke Yang and Gary Lam, as well as associates, Chris Wai and Cherry Chan, all left in the past two months, the people said.CLSA’s owner, Beijing-based Citic Securities, has reined in risk at the once freewheeling Hong Kong broker over the past year, cutting the available balance sheet for the fixed-income business and hampering its ability to trade, the people said. After buying CLSA in 2013, Citic Securities in early 2019 started to assert its control over the brokerage, also corralling pay and leading to the exit of most of its top executives.“We do not consider it appropriate to comment,” a CLSA spokeswoman said in an emailed statement on the most recent departures. “The fact that we are responding only by saying ‘no comment’ should not be taken as our form of acceptance of the accuracy of the contents of your proposed article.”The flurry of exits follow the departure of John Sun, who led the fixed income, currencies and commodities team till last year, before moving to APlus Partners, a Hong Kong-based firm focusing on private equity and credit investments. He was replaced by Shi Liang, a former vice president at Citic Securities who was transferred from Beijing.Leo Tong, Sun’s deputy who hired the five employees during his tenure at CLSA, also left in October to join SMBC Nikko Securities Inc.The shake-up at the Hong Kong-based brokerage started in early 2019 after Citic Securities chairman Zhang Youjun took over the same role at CLSA. It deepened last year as the parent overhauled the decision-making structure of the company, telling key managers to report directly to Beijing.The departures of the top echelons at the leadership committee has been followed by their counterparts at the debt business units. David Pong, head of debt capital markets for South and Southeast Asia, resigned earlier this year, as did the head of debt syndicate, Samuel Chan.(Updates with other departures in last two 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.
(Bloomberg) -- The renewed bout of Treasury volatility spurred a surge in bond yields on Wednesday, dragging down stocks as investors grappled with concern over stretched valuations.A selloff in high-flying giants such as Apple Inc. and Amazon.com Inc. outweighed gains in banks and energy producers. The Nasdaq 100 slumped to a two-month low, bringing its losses from a February peak to about 8%. The S&P 500 extended its slide into a second day, while the Dow Jones Industrial Average outperformed. Benchmark U.S. government yields approached 1.5%, with bonds pricing in the highest five-year inflation expectations since 2008. Traders also assessed data pointing to a slow and uneven economic recovery from the depths of the pandemic.The rout in Treasuries has rattled nerves across the globe amid warnings of excessive optimism among equity investors after the S&P 500 surged 70% in 11 months, notching the best start for a bull market in nine decades. While there haven’t been any signs of panic, concerns over lofty valuations have emerged. The stock benchmark’s earnings yield was about 1.7 percentage points above 10-year rates: the smallest advantage in three years.“Volatility has picked up a little bit, we’ve had bigger up days and down days,” said James Ragan, director of wealth management research at D.A. Davidson. “The focus is still on rising interest rates and how that’s impacting valuations on some of the higher multiple sectors.”Data Wednesday showed that growth at U.S. service providers slowed to a nine-month low in February, when severe winter weather gripped much of the nation and limited activity. Meanwhile, the number of employees at U.S. businesses rose by less than expected, underscoring the jobs market’s struggle to recover despite a decline in Covid-19 infections in recent weeks.The U.S. economy expanded modestly in the first two months of the year and sentiment among business owners is picking up as vaccinations bolster the prospects for growth, according to the Federal Reserve’s Beige Book. President Joe Biden has agreed to moderate Democrats’ demands to narrow eligibility for stimulus checks, but party leaders in the Senate are resisting a push to trim extra unemployment benefits as they try to consolidate support for the $1.9 trillion relief-bill, a Democratic aide said.Elsewhere, oil jumped on a government report showing a record drop in domestic fuel inventories in the aftermath of a deep freeze that shuttered refineries in the U.S. South.Some key events to watch this week:OPEC+ meeting on output Thursday.U.S. factory orders, initial jobless claims and durable goods orders are due Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.These are some of the moves in markets:StocksThe S&P 500 slid 1.3% as of 4 p.m. New York time.The Stoxx Europe 600 Index was little changed.The MSCI Asia Pacific Index increased 1.1%.The MSCI Emerging Market Index advanced 1.4%.CurrenciesThe Bloomberg Dollar Spot Index gained 0.3%.The euro decreased 0.2% to $1.2066.The Japanese yen depreciated 0.3% to 106.97 per dollar.BondsThe yield on 10-year Treasuries jumped eight basis points to 1.47%.Germany’s 10-year yield climbed six basis points to -0.29%.Britain’s 10-year yield rose nine basis points to 0.779%.CommoditiesWest Texas Intermediate crude advanced 2.6% to $61.28 a barrel.Gold slid 1.4% to $1,714.77 an ounce.Silver fell 2.3% to $26.16 per 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) -- Growth at U.S. service providers slowed to a nine-month low in February as companies grappled with logistical challenges and rising prices at the same time a stretch of severe winter weather gripped much of the nation.The Institute for Supply Management’s services index fell to 55.3 during the month from an almost two-year high of 58.7 in January, according to data released Wednesday. Readings above 50 signal growth and the February figure was weaker than the most pessimistic forecast in a Bloomberg survey of economists.The group’s measures of orders and business activity also plummeted to the lowest levels since May. While many service providers remain constrained by the pandemic, the setback in February included an arctic blast that disrupted supply chains, caused blackouts and impeded commerce in some areas.“Respondents are mostly optimistic about business recovery and the economy. Production-capacity constraints, material shortages and challenges in logistics and human resources are impacting the supply chain,” Anthony Nieves, chair of the ISM Services Business Survey Committee, said in statement.The polar vortex brought record-cold temperatures to more than 9,000 U.S. cities. The most severe case occurred in Texas, where the state’s power grid was overwhelmed and millions of residences went without lights, heat and water.The weather “one of the variables for sure one of the factors in there but not the big one. The big one I feel right now has to do with capacity constraints due to increased demand and not having the output, coupled with the logistics issues,” Nieves said on a conference call with reporters.Seventeen service industries reported growth during the month, led by accommodation and food services, wholesale trade, transportation and warehousing, and construction.Backlogs RiseIn a sign the slowdown in services activity is temporary, the ISM index of order backlogs rose to a six-month high of 55.2, while a gauge of export demand was the strongest since June.The services figures also showed prices paid for materials jumped to 71.8 in February, the highest since September 2008. Delivery times also lengthened. The group’s manufacturing data, released Monday, showed input costs for factories were also the highest since 2008.Both reports indicate that supply shortages and labor constraints remain obstacles across a broad swath of industries.Select ISM Industry Comments“Suppliers are taking the opportunity with the commodity-price increases in the last few months to propose price increases that are above and beyond normal expectations, causing significant concern. “ - Accommodation & Food Services“Sales of residential real estate continue to be strong, even outstripping supply. Cost inflation in building materials seen as shortages develop from sporadic Covid-19 closures at manufacturing facilities.” - Construction“Supplier deliveries continue to be an issue as well as lead-times. Additionally, price increases are occurring with more frequency for products containing raw materials such as copper and steel.” - Retail Trade“We are seeing an ongoing influx of price increases due to raw-material shortages, labor shortages, and transportation delays.” - Wholesale Trade“Many materials have inconsistent lead times or are facing delivery delays.” - UtilitiesThe ISM’s index of services employment indicated slower growth in February, falling to 52.7 from 55.2. Another report on Wednesday from the ADP Research Institute showed companies added fewer workers during the month than forecast.(Adds graphic)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.
Some households are collecting a big pile of federal money in 2021.
The president has agreed to a compromise making millions ineligible for the third checks.
A firm hired to monitor Texas' power markets says the region's grid manager overpriced electricity over two days during last month's energy crisis, resulting in $16 billion in overcharges.
Bitcoin (CRYPTO: BTC) may be headed for the $100,000 mark by the end of this month, according to Mike McGlone, a Bloomberg analyst. What Happened: McGlone, who previously ascribed a $50,000 plus level for the cryptocurrency, said in a March outlook report that if the Grayscale Bitcoin Trust (OTC: GBTC) closing at its steepest discount ever is an indicator, then it may “signal [Bitcoin’s] march to $100,000.” The Greyscale premium, a metric watched closely, ended February with a 2.7% discount. McGlone pointed to March 2017, when BTC backed up to nearly $1,000 on the way to its peak near $20,000 in December of that year. “Sharp reductions in the GBTC premium have often marked bottoms in Bitcoin,” wrote McGlone. “The increasing probability of [exchange-traded] funds in the U.S., on the back of launches in Canada are adding pressure to the trust price, but we see sustaining the upward trajectory as the more likely outcome.” Bitcoin traded 8.48% lower at $47,120.70 at press time. GBTC closed 10.31% lower at $41.40 on Thursday. Why It Matters: The Grayscale premium is a reference to the difference between the value of the holdings of GBTC versus the market price of its holdings. McGlone also noted the increased replacement of Gold in portfolios with BTC. “In 2020, the benchmark crypto gained legitimacy with declining volatility vs. the opposite in most assets. In 2021, we see little to stop the process of old-guard gold allocators simply focusing on prudent diversification,” wrote the analyst. On Thursday, Kraken CEO Jesse Powell said that BTC could replace all of the world’s currencies and hit a million-dollar price target within the next ten years. “The younger demographic is certainly taking notice of it and they see it as a better version of gold,” said Powell. Read Next: 'Morons:' Crypto Enthusiasts Burn Banksy's Real Artwork To Turn It Into Digital Token See more from BenzingaClick here for options trades from BenzingaHow Square's Purchase of Jay Z's Tidal Could Popularize Blockchain'Morons:' Crypto Enthusiasts Burn Banksy's Real Artwork To Turn It Into Digital Token© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
GameStop shares closed up 6.4% at $131.93 after earlier hitting $147.87, their highest since a surge in the heavily shorted stock late last month. One analyst and some Twitter users pointed to a cryptic tweet by Ryan Cohen, a major shareholder of GameStop and founder of e-commerce firm Chewy.com, as a plausible reason for the move, although Reuters could not independently determine causation. The late afternoon rally in GameStop began roughly around the time that Cohen tweeted what appeared to be a screenshot with the puppet dog advertising mascot of Pets.com, a famous casualty of the dotcom bubble two decades ago.
Mortgage rates have risen past a psychological benchmark for the first time since they fell to historic lows during the pandemic. The average rate on a 30-year fixed-rate mortgage increased to 3.02% this past week, according to Freddie Mac’s Primary Mortgage Market Survey—the first time since July that the rate has risen above 3%. “Since reaching a low point in January, mortgage rates have risen by more than 30 basis points,” wrote Freddie Mac’s chief economist, in a release.
(Bloomberg) -- A firm hired to monitor Texas’ power markets says the region’s grid manager overpriced electricity over two days during last month’s energy crisis, resulting in $16 billion in overcharges.Amid the deep winter freeze that knocked nearly half of power generation offline, the Electric Reliability Council of Texas, known as Ercot, set the price of electricity at the $9,000-a-megawatt-hour maximum -- standard practice during a grid emergency. But Ercot left that price in place days longer than necessary, resulting in massive overcharges, according to Potomac Economics, an independent market monitor hired by the state of Texas to assess Ercot’s performance. In an unusual move, the firm recommended in a letter to regulators that the pricing be corrected and that $16 billion in charges be reversed as a result.Potomac isn’t the first to say that leaving electricity prices at the $9,000 cap for so long was a mistake. Plenty of power companies at risk of defaulting on their payments have said the same. But the market monitor is giving that opinion considerable weight and could sway regulators to let companies off the hook for some of the massive electricity charges they incurred during the crisis.The Arctic blast that crippled Texas’s grid and plunged more than 4 million homes and businesses into darkness for days has pushed many companies to the brink of insolvency and stressed the power market, which is facing a more-than $2.5 billion payment shortfall. One utility, Brazos Electric Power Cooperative, has already filed for bankruptcy, while retailers Griddy Energy LLC and Entrust Energy Inc. defaulted and have been banned from participating in the market.“The market is under quite a bit of duress,” Kenan Ogelman, Ercot’s vice president of commercial operations told Texas lawmakers Thursday. Moody’s Investors Service downgraded Ercot one notch from A1 to Aa3 and revised the grid operator’s credit outlook to “negative.”Retroactively adjusting the power price would ease the financial squeeze on some of the companies facing astronomical power bills in the wake of the energy crisis. EDF Renewable Energy and Just Energy are among those asking the Public Utility Commission to reset the power price for the days after the immediate emergency while others have also asked regulators to waive their obligation to pay until price disputes are resolved.“If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, the Ercot independent market monitor director at Potomac Economics. “It creates a cascading effect.”The erroneous charges exceed the total cost of power traded in real-time in all of 2020, said Bivens, who spent 14 years at Ercot, where she most recently was director of market operations before becoming its watchdog. “It’s a mind-blowing amount of money.”While prices neared the $9,000 cap on the first day of the blackouts, they soon dipped to $1,200 -- a fluctuation that the utility commission later attributed to a computer glitch. The panel, which oversees the state’s power system, ordered Ercot to manually set the price at the maximum to incentivize generators to feed more electricity into the grid during the period of supply scarcity. The market monitor argues that Ercot should have reset prices once rotating blackouts ended because, at the point, the emergency was over.It’s asking the commission to direct Ercot to correct the real-time price of electricity from 12 a.m. Feb. 18 to 9 a.m. Feb. 19. Doing so could save end-customers around $1.5 billion that otherwise would be passed through to them from electricity providers, Bevins said.But power generators that reaped substantial profits from the high prices during the crisis week are likely to push back. Vistra Corp. on Thursday submitted comments to the utility commission arguing against repricing. During a Texas senate hearing the same day, utilities South Texas Electric Cooperative and the Lower Colorado River Authority also voiced opposition.Texas Competitive Power Advocates, a trade association representing generators, said retroactively changing prices could discourage future investments in Texas’s electricity market. “Changing prices after the fact creates additional instability and uncertainty,” Michele Richmond, the group’s executive director, said in an email.Bivens acknowledged the market monitor isn’t typically in favor of repricing, but noted in her letter to the commission that the move wouldn’t result in any revenue shortfalls for generators. Instead, the new price would reflect the actual supply, demand and reserves during the period.“This isn’t some Monday morning quarterbacking,” she said in an interview. “Ercot made an error and we don’t let errors slide.”The utility commission on Wednesday adopted a prior recommendation made by the market monitor, voting to to claw back some payments to power generators for services they never actually provided during energy crisis. The commissioners also expressed support for capping the price of certain grid services -- a request made by several retailers -- but didn’t take action on it. Another commission meeting is scheduled for Friday.(Adds Ogelman quote, Moody’s downgrade in fifth 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.
It appears the breakdown is underway, and this could turn into an outright collapse into mid-March.
(Bloomberg) -- Major oil sands producers in Western Canada will idle about half a million barrels a day of production next month, helping tighten global supplies as oil prices surge.Canadian Natural Resources Ltd.’s plans to conduct 30 days of maintenance at its Horizon oil sands upgrader in April will curtail roughly 250,000 barrels a day of light synthetic crude output, company President Tim McKay said in an interview Thursday. Work on the Horizon upgrader coincides with maintenance at other cites.Suncor Energy Inc. plans a major overhaul of its U2 crude upgrader, cutting output by 130,000 barrels a day over the entire second quarter. Syncrude Canada Ltd. will curb 70,000 barrels a day during the quarter because of maintenance in a unit.The supply cuts out of Northern Alberta, following a surprise OPEC+ decision to not increase output next month, could add more support to the recent rally in crude prices. OPEC+ had been debating whether to restore as much as 1.5 million barrels a day of output in April but decided to wait.The Saudi-led alliance closely monitors other major oil producers as it seeks to manage the entire global market, and surging production in North America was its biggest headache in recent years -- especially from U.S. shale but also from Canada.“The U.S., Saudi Arabia, Russia, Canada, Brazil and other well endowed countries with hydrocarbon reserves -- we need to work with each other, collaboratively,” Saudi Energy Minister Prince Abdulaziz bin Salman said after the group’s meeting on Thursday.Canada’s contribution to balancing the market with less production, much like slowing output in the U.S., is not a deliberate market-management strategy but significant nonetheless.Even though the output cuts are short-term, the battered oil-sands industry shouldn’t be a concern for the Saudis in the long run either, judging from McKay’s outlook for the industry.“I can’t see much growth in the oil sands happening because there is going to be less demand in the future,” he said. “The first step is we have to get our carbon footprint down.”After years of rising output turned Canada into the world’s fourth-largest crude producer, expansion projects have nearly halted on the heels of two market crashes since 2014.Adding to its struggles, Canada’s oil industry is being shunned by some investors such as Norway’s $1.3 trillion wealth fund amid concern that the higher carbon emissions associated with oil sands extraction will worsen climate change. These forces help make future growth in the oil sands unlikely, said McKay, whose company is among the largest producers in the country.Oil sands upgraders turn the heavy bitumen produced in oil sands mines into light synthetic crude that’s similar to benchmarks West Texas Intermediate and Brent. Syncrude Sweet Premium for April gained 60 cents on Thursday to $1.50 a barrel premium to WTI, the strongest price since May, NE2 Group data show.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) -- As the leader of crypto exchange Kraken, Jesse Powell is bound to be bullish on Bitcoin. Yet he’s projecting a disruptive future that would stretch the imagination of even the most ardent crypto fans.In a Bloomberg Television interview, Powell said Bitcoin could reach $1 million in the next decade, adding that supporters say it could eventually replace all of the major fiat currencies.“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”The CEO also said San Francisco-based Kraken is considering going public, possibly next year.Extreme predictions are nothing new in the world of Bitcoin, where adherents stand to profit from convincing a wider audience that crypto is a legitimate asset class, rather than a speculative fad. The dollar remains the world’s reserve currency and is the benchmark for global trade, though its value has softened in the past year.Powell said Bitcoin bulls see it one day exceeding the combined market cap of the dollar, euro and other currencies.The dollar “is only 50 years old and it’s already showing extreme signs of weakness, and I think people will start measuring the price of things in terms of Bitcoin,” he said.The digital currency slipped 3% in early U.S. trading on Thursday, hovering around $49,000. Prices have surged almost 600% since the start of 2020 on the back of wider mainstream adoption, with bulls seeing it as both an inflation hedge and speculative asset.Critics argue that Bitcoin is in a giant, stimulus-fueled bubble destined to burst like the 2017 boom and bust cycle.Kraken benefits from higher prices as it reaps fees from increased trading. Bloomberg reported last month that the exchange was in talks to raise new funding, which would double the company’s valuation to more than $10 billion.“Personally, I think $10 billion is a low valuation,” Powell said. “I wouldn’t be interested in selling shares at that price.”The CEO did acknowledge the potential for wild market swings, saying prices can “move up or down 50% on any given day.” That kind of volatility has long been one of the negatives of Bitcoin, relegating the market to one of speculation, rather than a means of doing business.“If you are buying into Bitcoin out of speculation, you should be committed to holding for five years,” Powell said. “You have to have strong convictions to hold.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Congress is nearing passage of the third economic stimulus check it will send out to you and other taxpayers as part of its Covid-19 relief bill.
Australian dollar has pulled back slightly on Wednesday, but what I am keeping a close eye on is the fact that the February candlestick was a shooting star.
Prominent gold advocate and Bitcoin skeptic Peter Schiff has criticized billionaire investors Mark Cuban and Kevin O’Leary for turning positive on Bitcoin. What Happened: “Bubbles typically peak when rational investors capitulate,” said Schiff on Twitter, calling them the newest skeptics to “join the cult.” Congratulations to those who bought Bitcoin early, pumped up the price, and who've been dumping into the hype. You succeeded in getting Wall Street to buy into the mania. When I first learned about #Bitcoin I didn't think smart investors would be dumb enough to buy. I was wrong. — Peter Schiff (@PeterSchiff) March 1, 2021 Schiff’s criticism comes after Kevin O’Leary announced he would be allocating 3% of his portfolio to the digital asset while also looking at investing in the most energy-efficient Bitcoin mining companies. Earlier this week, Mark Cuban commented on some of Schiff’s most recent remarks saying, “Gold is dead Peter. Move on.” Why It Matters: Schiff has often criticized Bitcoin as an asset class, calling it inferior to gold as a store of value. His most recent comments on Twitter invited criticism from Mark Cuban, who commented that gold is hyped just as much as cryptocurrencies. “As tech continues to get better/cheaper/faster there will be new applications and maybe even something that supersedes what we know as crypto today. But gold won't ever change. Which is why it will die as a SOV (Store of Value),” said Cuban on Twitter. According to Schiff, the fact that gold won’t ever change is part of its appeal to investors. Jeffrey Gundlach, a well-known gold bull, commented earlier today that Bitcoin is up over 467% in the past 12 months while gold is down by 11% for the same period. The price of gold is down 11% over the past twelve months. The S&P 500 is up 27% over the past twelve months. Bitcoin is up 467% over the past twelve months. Great dispersions often precede great reversions. We shall see. — Jeffrey Gundlach (@TruthGundlach) March 4, 2021 According to him, dispersions of this size between asset classes often come before reversions to the mean. Price Action: After a volatile week, the market-leading cryptocurrency was trading at $48,171 at the time of writing. Earlier this week, Bitcoin recorded a low of $43,867 and a high of $52,535. Image: Dmitry Demidko via Unsplash See more from BenzingaClick here for options trades from BenzingaFantom Is Top Performing Cryptocurrency Again: Here's What You Need To KnowGoldman Sachs To Restart Crypto Desk After Abandoning The Idea In 2018© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.