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Fauci Says Don't Delay Getting a Second Covid Shot

Feb.08 -- Dr. Anthony Fauci says don't delay getting a second Covid vaccine dose on time. He also says the B117 variant could become dominant by the end of March.

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  • Exxon to Hold Output at 20-Year Low to Address Debt, Emissions

    (Bloomberg) -- Exxon Mobil Corp. pledged to hold oil production at a two-decade low as part of a plan to reduce debt, boost dividends and address shareholders’ concerns about its record as one of America’s biggest corporate polluters.The oil giant will produce the equivalent of 3.7 million barrels a day by 2025, about the same level as this year, after aggressively cutting investment in new projects to focus on rebuilding cash flow.That’s down about 18% from Exxon’s 2011 peak, when it sat atop the S&P 500 Index, and the lowest since the late-1990s takeover of Mobil Corp., according to Bloomberg data. By contrast, Exxon’s pre-pandemic plan, first laid out to Wall Street three years ago, would have ballooned daily production to 5 million barrels.In his annual address to Wall Street, Chief Executive Officer Darren Woods on Wednesday laid out plans for a smaller, nimbler Exxon in a bid to resuscitate the company’s reputation as a financial powerhouse and technological innovator. Woods spent a significant portion of his presentation discussing Exxon’s centrality to a low-carbon world, despite the absence of any new, long-term emissions targets.The stagnant production outlook took some analysts by surprise and will stem primarily from reduced drilling schedules in North American gas fields and Permian Basin oil, along with asset sales.“Production disappoints,” Giacomo Romeo, an analyst at Jefferies Group LCC said in a note. “This should trigger some consensus downgrades.”READ: Exxon’s $30 Billion Mozambique LNG Project Drifts in LimboStill, a less ambitious production program means fewer potential emissions, a key concern for investors including Engine No. 1 which is running a proxy battle to overhaul Exxon’s board. Through 2025, greenhouse-gas emissions from Exxon’s upstream operations will be 30% below what they were a decade earlier, Woods said. That figure does not include pollution from the company’s refining and chemicals businesses.“Exxon Mobil has now adopted the language of long-term net zero emissions and dramatically shifted its emphasis from production growth to investor returns, both of which are remarkable shifts,” Engine No. 1 said in a statement. “Without real change these gains could be short-lived.”Woods spoke at length about Exxon’s forays into carbon capture, where it’s considering 20 projects around the world including several along the U.S. Gulf Coast. While government policy and technological advances have accelerated in recent months, more work needs to be done for such projects to be economically competitive, Woods said.Rather than simply investing in renewable energy like European rivals have done, Exxon will focus on “hard-to-solve problems” such as lowering emissions from airplanes, factories and trucking, he said. Senior Vice President Andrew Swiger, one of the CEO’s top lieutenants, said that such efforts won’t swallow up large amounts of capital beyond the $3 billion allocated to Exxon’s new low-carbon business through 2025.The stock rose 2.1% to $57.24 at 2:38 p.m. in New York, extending the year-to-date advance to 32%.Exxon’s new plans are based on last year’s $10 billion-a-year capital-spending cuts through the middle of the decade. By then, operational cash flow will rise 20% compared with this year, assuming oil averages about $50 a barrel. Any cash generated above this level will be used to erode the company’s $70 billion debt load, Swiger said.The resurgence in cash is much needed. Over the past three years, Exxon has burned through $24 billion as it shelled out $15 billion in annual dividends and plowed capital into costly growth projects. Much of the cash rebound will come from developments in Guyana and the U.S. Permian Basin, which will generate 10% returns even if crude dips below $35 a barrel, the company said Wednesday.In an ominous sign for Exxon’s employees and suppliers, Swiger said there may be a “much larger amount of structural savings” on top of the thousands of jobs already eliminated. Woods chimed in that he was “confident there’s more opportunities” to save money.What Bloomberg Intelligence SaysExxon’s investments in carbon capture, sequestration and storage are expected to increase, more than doubling capacity over the next decade. This is likely to see the company continuing to support a carbon tax wherever it operates.-- Fernando Valle, BI analystKey targets announced Wednesday include:Reiterated 700,000 barrels-a-day forecast for Permian Basin by 2025Pre-Covid-19, the plan was to reach 1 million barrels a day by 20247-10 rigs will be active on Exxon’s Permian wells this year, down from 10-12 at year-end 2020Permian production to be about 400,000 barrels a day in 2021, slightly down from 4Q 2020$3.5 billion of cash flow from Guyana and $4 billion from the Permian by 2025, assuming $50 crude$15 billion-a-year dividend can be maintained at $35 oil and “average” refining, chemical margins(Updates with historic production levels in third paragraph; analyst’s comment in sixth 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.

  • Stimulus check changes: Did Joe Biden kill your $1,400 payment?

    The president has agreed to a compromise making millions ineligible for the third checks.

  • Bond Lull Lures UAE Issuers at Opposite Ends of Credit Scale

    (Bloomberg) -- United Arab Emirates borrowers at the opposite ends of the credit-rating spectrum are seizing on a lull in the U.S. Treasury rout to sell bonds.Abu Dhabi wealth fund Mubadala Investment Co. is planning a dual-tranche offering denominated in euros, according to a person familiar with the matter. Mubadala issues its debt through a unit, Mamoura Diversified Global Holding PJSC, which has the third-highest credit grade from all three major rating companies.Sharjah, a sheikdom with the lowest non-junk rating at Moody’s Investors Service and S&P Global Ratings, mandated HSBC Holdings Plc this week to arrange a sale of 12- and 30-year dollar bonds.“What will be interesting to see is how much demand there is for long duration emerging-market paper now,” said Abdul Kadir Hussain, the Dubai-based head of fixed-income asset management at Arqaam Capital. “With interest-rate volatility increasing and inflation becoming a bigger risk, I think investors are getting more weary of duration.”February was the worst month for developing-nation bonds in almost a year after a spike in U.S. Treasury yields sent fixed-income markets tumbling. But it hasn’t derailed placements for now. While emerging-market sovereign and corporate sales fell 6.8% in February from the year earlier, they were still up 1.4% at $170.5 billion in the first two months.Both UAE offerings should find buyers, according to Sergey Dergachev, senior portfolio manager for emerging-market debt at Union Investment in Frankfurt.“Lower-rated sovereign and corporate credits tend to outperform due to their lower sensitivity to Treasury rates,” which should support the Sharjah deal, he said. Meanwhile, Mubadala’s sale will draw investors looking to pick up “quasi-Abu Dhabi sovereign risk,” he said.(Updates with Arqaam’s comment in 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.

  • Texas Watchdog Says Grid Operator Made $16 Billion Error

    (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.

  • Mortgage Rates Are Back Above 3%. Here’s Where They’re Headed Next.

    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.

  • Buzzy stock-market ETFs backed by Portnoy and Wood get crushed Thursday afternoon as the Nasdaq nears correction

    Cathie Wood's flagship ARK Invest ETF and a VanEck Vectors Social Sentiment backed by Wall Street bro Dave Portnoy are down by at least 4%. The VanEck Vectors Social Sentiment ETF was down 4.3% in Thursday afternoon trade, in its debut. Meanwhile, Wood's ARK Innovation deepened its slide into correction on Thursday, off 6.6%. Both ETFs focus on drawing interest from many of the growthy tech stocks which are in the market's crosshairs as bond yields rise, including electric-vehicle maker Tesla Inc. . On Thursday, bonds took a leg higher after Federal Reserve Chairman Jerome Powell said he was watching the rise in rates but offered no concrete steps the central bank was taking to tamp down rate moves. The 10-year Treasury yield jumped by 7 basis points in afternoon action, hitting around 1.54% and accelerating a sell-off in stocks that are viewed as pricey and that don't offer a coupon. The tech-heavy Nasdaq Composite Index was down nearly 10% from its Feb. 12 peak, meeting the commonly used definition for a correction. The Dow Jones Industrial Average was down more than 400 points, or 1.3%, and nursing a 0.8% year-to-date gain. The S&P 500 index was down 1.6% and holding on to a 2021 gain of less than 0.1%. The Nasdaq Composite was negative for the year, down 1.4%.

  • U.S. ITC criticizes Ford for pursuing SK Innovation battery deals

    The U.S. International Trade Commission (ITC) on Thursday criticized Ford Motor Co for pursuing battery contracts with SK Innovation after evidence had emerged the South Korean electric vehicle (EV) battery maker misappropriated trade secrets from cross-town rival LG Chem. It permitted SK to import components for domestic production of batteries for Ford's EV F-150 program for four years, and for Volkswagen of America’s MEB electric vehicle line for North America for two years.

  • DOGE Adoption on the Rise. Dallas Mavericks to Accept Dogecoin for Tickets, Merchandise

    The team will soon be accepting the crypto as part of a deal with payment services provider BitPay.

  • Getting A Third Covid-19 Stimulus Check Just Got Tougher — But You Might Still Influence How Big Yours Is

    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.

  • Bitcoin Could Reach $1 Million or More, Kraken CEO Says

    (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.

  • Walmart's Flipkart in early talks for U.S. listing via SPAC deal - sources

    Walmart Inc-owned Indian e-commerce giant Flipkart is exploring going public in the United States through a deal with a blank-check firm, although a traditional stock market listing is much more likely, people familiar with the matter said. The talks for a deal with a special purpose acquisition company (SPAC) are at a very early stage and could fall apart as no plans have been finalized yet, said the people, who declined to be named as the information is confidential. "We have been clear that we support an IPO for Flipkart, but we have not made any decisions on timing, listing venue or methodology," a spokesman for Walmart told Reuters.

  • Portnoy-Backed ETF Sees Third-Highest Volume Ever in a Debut

    (Bloomberg) -- A new exchange-traded fund seeking to ride the companies most loved by investors online has found plenty of its own positive sentiment in its first day of trading.About $438 million worth of shares in the VanEck Vectors Social Sentiment ETF (ticker BUZZ) changed hands on Thursday, making it the third best ETF debut on record, according to data compiled by Bloomberg.“Normally, this kind of blow-the-roof-off volume for the first day is for ETFs that open up a new asset class like gold or Bitcoin,” said Eric Balchunas, ETF analyst for Bloomberg Intelligence.The fund, which has been promoted by Barstool Sports Inc. founder Dave Portnoy, follows an index that uses AI to scan online sources like blogs and social media to identify the 75 most favorably mentioned equities.Because of its criteria for inclusion, the hottest names among the day-trading crowd like GameStop Corp. and AMC Entertainment Holdings Inc. don’t actually make it into the gauge. Its top holdings currently are Ford Motor Co., Twitter Inc. and DraftKings Inc.Nonetheless, the rapid uptake suggests VanEck has succeeded in tapping into the increasingly powerful retail investing cohort.“Given the explosion of individual, younger retail traders, it makes sense to see a pile of volume,” said Dave Lutz, macro strategist at JonesTrading. “Whether it is the WSB crowd embracing Dave Portnoy’s marketing of the ETF, or institutions playing it to bet on the direction of the trend (or hedge) -- we won’t know for a bit. I suspect it’s a bit of both.”The fund opened at $24.40. It was down 1% at $24.15 at 12:02 p.m.(Updates with latest figures, analyst comments.)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.

  • 10-year Treasury yield jumps above 1.50% Thursday afternoon after Powell refers to inflation's rise as transitory

    U.S. Treasury yields Thursday after Federal Reserve Chairman Jerome Powell said he was monitoring the rise in bond yields and that he would be concerned if financial conditions did tighten. "I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals," Powell said during a webinar hosted by The Wall Street Journal. The 10-year Treasury note yield climbed 7.1 basis points to 1.541%. Bond prices fall as yields rise. Many investors had said that if Powell didn't offer more explicit pushback on higher government bond rates, it could fuel Treasury market weakness. Powell stressed again that the Fed would be "patient" with higher inflation expected this year, saying it was likely to be a "one time" effect and not price gains that continue year-after-year.

  • Cost of Treasuries-Led Rout Seen as Global Bond Sales Falter

    (Bloomberg) -- A string of poorly-received bond auctions in the past week is driving home a message -- the Treasuries-led global rout is leaving investors scarred and governments staring at higher borrowing costs.U.S. yields resumed their rise Wednesday after a brief lull that followed a disastrous sale of seven-year Treasury notes last week. Sovereign bond offerings from Indonesia to Japan and Germany have drawn tepid demand and at least one sale was scrapped. The push for higher rates comes as central bankers attempt to ease investors’ discomfort over the pace of the recent rise.Investors are demanding higher yields to compensate for the risk of further volatility, which may complicate efforts to finance $14 trillion worth of fiscal stimulus globally. Concerns that central banks may withdraw policy support has soured sentiment, amid mounting evidence of a faster-than-anticipated economic recovery.“Investors will be increasingly differentiating countries based on their fundamentals and prospects,” said Tuuli McCully, head of Asia Pacific economics at Scotiabank. “Considering elevated debt levels in some countries, higher funding costs could dampen their economic recovery momentum further.”Clear MessageThe message from Europe and Asia Pacific markets this week is clear. Even though global bonds have stabilized somewhat, investors are still rattled by the prospect of more volatility.In Germany, a sale of 15-year bonds on Wednesday received the weakest demand since the tenor was launched last summer. Japan’s auction of 10-year debt the previous day recorded the lowest bid-to-cover since February 2016.Indonesia’s Finance Ministry agreed to sell 13.6 trillion rupiah ($951 million) of non-Islamic bonds on Tuesday, the least since March 2020, according to data compiled by Bloomberg. Including bills, the sale totaled 17 trillion rupiah, below the government’s revised target of 30 trillion rupiah.There were ominous signs even before last week’s ill-fated U.S. auction, including a drop in coverage ratios for debt sold in Thailand and Australia. Signs of distress also emerged in Italy, while New Zealand ended up accepting just over half of the bids it received for a sale as yields soared.“If there is still no reversal in sentiment, the government may need to accept higher bid yields, or cut down on planned spending,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. in Singapore.Mexico’s Finance Ministry declared a local-currency sovereign debt sale void last week despite demand that was triple the amount offered. In a statement, the ministry blamed high rates due to market volatility for sinking the 3.7 billion-peso ($178 million) sale.A couple of offerings bucked the global trend. A sale of Italian green bonds racked up 76 billion euros of orders, boosted by its environmentally-friendly tag. In Russia, the Finance Ministry sold the most fixed-coupon notes since June, as mild sanctions from the U.S. failed to deter investors.The U.K. delivered an annual budget Wednesday that tried to balance the need for prolonged economic aid with calls to control the deficit, with Finance Minister Rishi Sunak saying he intends to raise the tax burden to its highest level in over 50 years. While the Debt Management Office’s projected bond sales for 2021-22 were well below the record this fiscal year, the total is higher than expected at 295.9 billion pounds ($413 billion).“We are in an uncomfortable spot where attention is shifting toward elevated asset prices,” said Eugene Leow, a rates strategist at DBS Bank Ltd. in Singapore. “Even as central banks try to reassure, there is this lingering fear that less-loose policy may be on the way.”PerspectiveFor all the jitters, optimists say that higher yields are a sign of confidence and emerging economies continue to enjoy inflows and improved current-account positions. In Asia, central banks have built up their foreign-exchange holdings by the most since 2013.“We remain of the view that fears of a 2013-like Taper Tantrum for emerging markets are overblown,” said Sameer Goel, Deutsche Bank’s global head of EM research in Singapore. “Central banks stand readier as part of fiscal-monetary coordination to quarterback term premia and the cost of capital to governments.”Central banks are clearly on their guard. Federal Reserve Governor Lael Brainard warned Tuesday that bond-market volatility could further delay any pullback in asset purchases while European Central Bank Executive Board member Fabio Panetta said the recent jump in yields “is unwelcome and must be resisted.” Still, the institution as a whole sees no need for drastic action to combat rising yields, according to officials familiar with internal discussions.While the Federal Reserve’s guidance is that a hike is unlikely until at least 2024, money markets in the U.S. are positioned for interest rates to start rising again by the end of next year.“That’s a significant difference, a big gap between the Fed’s message and where the market is, and they will push back against that,” said Kathy Jones, chief fixed income strategist at Charles Schwab & Co. in New York.(Adds details of Treasury selloff in second paragraph and U.K. budget in 12th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Dow slides, Nasdaq hits three-month low after Powell struggles to soothe bond market

    Stock benchmarks finished sharply lower Thursday as Federal Reserve Chairman Jerome Powell said he was monitoring the recent rise in bond yields but added that the inflation expected this year was unlikely to last

  • Stock-market crash? No, but rising bond yields are sparking a nerve-racking rotation below the surface

    Despite the hashtags, the stock market is far from “crash” territory, as anyone with a working memory of last year's pandemic-inspired selloff would recall. But a rotation away from the market's recent leaders does appear to be under way.

  • How to claim stimulus money on your 2020 taxes. ‘It’s really the only vehicle that you have right now’

    36% of taxpayers said the Recovery Rebate Credit was the 'most confusing' part of taxes this year.

  • Sole proprietors, contractors, and freelancers now qualify for bigger PPP loans

    Contractors, freelancers, and sole proprietors in the US can now access considerably larger loans from the Paycheck Protection Program (PPP), following a new rule issued by the Small Business Administration (SBA) on Wednesday. The rule allows entrepreneurs without employees to calculate their loan eligibility using gross income rather than net income, making the loans far more generous, especially for businesses with little or no profit.

  • Oil Prices Spike on OPEC Surprise. How to Play It.

    Oil prices shot as much as 5% higher on Thursday as OPEC and its allies agreed to extend most of their production cuts through April, a sign that high prices could be here to stay. Oil company stocks jumped, too, often much more than the commodity, because prices this high will give many of them operating leverage. Because capital costs are high in the industry, oil company margins expand considerably once prices rise above $50 and companies have fully paid for the cost of the equipment and labor they need to extract oil.

  • Tesla Megabull Ron Baron Says It Was 'Painful' To Sell 1.7M Shares

    Longtime Tesla Inc (NASDAQ: TSLA) bull Ron Baron acknowledged Thursday morning his fund Baron Capital sold 1.7 million shares of the electric automaker despite his long-held belief the stock has a path to $2,000. What Happened: Baron Capital invested $387 million in Tesla's stock back in 2014 and the position has grown to be worth $5.5 billion in February, Baron said on CNBC's "Squawk Box." Over the past six months, the fund has sold 1.7 million out of its 8-million share position between $450 and $900 a share with an average price of $666.70. Baron said many of his friends were skeptical with his original 2014 thesis that Tesla's stock would return 20 times. "We persisted," Baron said. "And at the time we invested, it was unlikely in most people's opinions that electric cars were going to dominate." Related Link: Ark More Convinced On Tesla's Autonomous Strategy And Cathie Wood Says A New Price Target Is Coming Soon Why It's Important: The decision to authorize a sale of a stock he believes still has tremendous upside potential was due strictly to profit-taking as the stock's surge means it accounted for an outsized representation in the fund portfolio, Baron said. The fund also used some of the proceeds from the sale to pay down part of a line of credit. Baron said it was "painful" to sell close to 2 million shares of Tesla's stock as the company's prospects of eventually selling 20 million cars a year is a more realistic outcome. Tesla has so many opportunities ahead, such as the ability to monetize each of the 20 million cars sold by charging a monthly $100 fee for autonomous driving features. "That alone is worth the present price of the stock in 10 years," he said. See also: How to Invest in Tesla Stock What's Next: The billionaire himself said he has not sold a single share he personally owns and is unlikely to do so "for another 10 years." Tesla's stock traded around $657 a share at publication time. See more from BenzingaClick here for options trades from BenzingaExclusive: Grayscale CEO 'Wouldn't Rule Out' Future Bitcoin ETF Launch In US© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.