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Futures Attempt to Rebound to Start Week

Before the opening bell, stocks are trying to rebound after they closed in the red on Friday.

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  • S&P 500 rises in choppy trading ahead of Powell speech

    The S&P 500 firmed on Thursday after two days of losses while sentiment was fragile ahead of remarks from Federal Reserve Chair Jerome Powell on rising bond yields. The Nasdaq nearly wiped out all of its year-to-date gains and was down about 8% from its record closing high on Feb. 12. A 10% decline would confirm a correction territory.

  • 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.

  • 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.

  • Your next stimulus check may be in jeopardy now

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  • 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.

  • How Regulating GameStop’s ‘Market Manipulation’ Could Harm Crypto

    Calls to stop GameStop-type "market manipulation" could open the door to government regulation the crypto industry won't like.

  • 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.

  • Exclusive: India merchants almost halt exports to Iran as its rupee reserves fall - officials

    Indian merchants have almost entirely stopped signing new export contracts with Iranian buyers for commodities such as rice, sugar and tea, due to caution about Tehran's dwindling rupee reserves with Indian banks, six industry officials told Reuters. "Exporters are avoiding dealing with Iran since payments are getting delayed for months," said a Mumbai-based dealer with a global trading house. Iran's rupee reserves in India's UCO and IDBI Bank, the two lenders authorised to facilitate rupee trade, have depleted significantly and exporters are not sure whether they would be paid on time for new shipments, the dealer said.

  • Maxing Out Your 401(k) and What to Do Next

    Max out your 401(k) each year, and be sure to get your 401(k) employer match, if you have one. And for you super savers, here are other ways to save for retirement.

  • Gold Price Forecast – Gold Markets Plunging Toward Support

    Gold markets are plunging towards the $1700 level again, an area that if we break down through could send gold plummeting another couple of hundred dollars.

  • EV Battery Maker QuantumScape Is Worth Billions. It May Be Fairly Valued Already.

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  • China’s Top Stock Funds Trashed by $111 Billion Moutai Wipeout

    (Bloomberg) -- The most popular stock trade in China is unraveling, tarnishing the reputations of some of the country’s most successful money managers and undermining the outlook for the world’s second-largest equity market.Until three weeks ago, buying the nation’s beloved liquor maker Kweichow Moutai Co. was a surefire way for the $3 trillion mutual fund industry to mint money and attract bumper inflows. The stock soared 30% year-to-date through its Feb. 10 record, after gaining almost 70% in 2020 -- and doubling in the year before that.Many funds, flush with a record amount of cash, didn’t have a choice if they wanted to keep their clients and attract new investors. Buying Moutai was the simplest and most effective way to top rankings -- until it wasn’t. The stock began tumbling after the Lunar New Year break, and kept falling. It’s now down 22% since its peak, including a drop of as much as 6% Thursday, and has lost more than $111 billion in value.One of the most high-profile casualties is E Fund Management Co.’s Zhang Kun, the first in China to oversee 100 billion yuan ($15 billion). Zhang’s E Fund Blue Chip Selected Mixed Fund is down 12% in 10 trading days after returning 95% last year largely due to a big bet on baijiu, the Chinese white spirit. The fund had 9.6% of its assets invested in Moutai as of December. Another fund run by Zhang has lost 23%. Zhang didn’t immediately reply to a request for comment.The fund manager has received “verbal abuse” in recent weeks by investors who were previously fans, according to a report Wednesday in China’s state tabloid Global Times. He was known as “Prince Charming” or “Brother Kun” among his investors, who now refer to him on social media as “Kun Gou” or “Kun the dog” -- an offensive term in Chinese.Other copycat money managers will be feeling the pain: recent data showed two-thirds of mutual fund assets were invested in only 100 stocks, while the top 400 stocks lured 93% of total funds. Although China’s onshore market contains more than 4,000 stocks, Moutai is by far the largest with a market value of about $390 billion.Moutai accounts for 27% of the loss in the FTSE China A50 Index of the nation’s largest companies since Feb. 10. When added together with fellow spirit makers Wuliangye Yibin Co. and Luzhou Laojiao Co., the three comprise more than half of the gauge’s decline.Concern had been growing about the stretched valuations of Moutai and its peers, especially as gains accelerated. A gauge tracking consumer staples, including liquor makers, traded at a record 36 times projected 12-month earnings in February.Read how China is warning against ‘entertaining’ investors with fund pitchesTo be sure, the company’s shares have faced plenty of risks in the past. The stock tumbled about 8% in a single day in July after the People’s Daily criticized the high price of the company’s liquor. In 2017, Xinhua News Agency said the stock was rising too fast, triggering a selloff. Back in 2013, the stock plunged when Xi Jinping came to power and clamped down on lavish spending by party cadres.But this time around, authorities have grown increasingly concerned about risks to the financial system posed by excess liquidity. On Tuesday, China’s top banking regulator jolted markets with a warning about the need to reduce leverage amid the rising risk of bubbles globally and in the local property sector. With Moutai being the best-known proxy for liquidity-fueled bets and momentum, fund managers will likely need to find a new strategy to protect their returns.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.

  • WallStreetBets Eyes Tanger Factory Outlet Centers As A Short Squeeze Target

    Tanger Factory Outlet Centers Inc (NYSE: SKT) is attracting heightened discussion on r/WallStreetBets, the forum that came to light with the short squeeze in GameStop Corp (NYSE: GME) stock earlier in the year. What Happened: The North Carolina-based real estate investment trust which operates factory outlet centers had a comments volume of 600 on WallStreetBets as of press time, as per SwaggyStocks data, and was the top-trending stock in the community in the near-term. Several users were pointing to what they said is a short squeeze opportunity. One forum member claimed he “just had to buy” Tanger stock as Melvin Capital and Citadel are short on it. Tanger shares have soared 76.69% since the year began. In the after-hours trading on Wednesday the company’s shares rose 5.13% to $18.65 after closing 9.24% higher at $17.74. Why It Matters: Tanger is the second most shorted stock after GameStop — attracting short interest or 39.98%, according to High Short Interest Stocks, a website that tracks stocks with short interest over 20%. The company was affected badly by the COVID-19 pandemic as most of the occupants of their outlet centers are non-essential businesses, the Motley Fool reported. See also: How to Buy Tanger Factory Outlet Centers (SKT) Stock However, the company’s fourth-quarter results indicated that it managed to attract customer traffic at 90% of 2019 levels and collect 95% of billed rent in the same period. Some of the positives related to the latest results have been noted by the WallStreetBets participants. Another emerging darling of the Reddit crowd is Rocket Companies Inc (NYSE: RKT), which was the second most discussed firm on the discussion board attracting over 3,700 comments as of press time. The resulting spike in Rocket shares gave Rocket founder Dan Gilbert’s wealth a billion boost on Tuesday before the stock dipped 32.67% on Wednesday. Related Link: GameStop Short-Selling Fame's Melvin Posts 20% Returns For February: Report Photo by Billy Hathorn on Wikimedia See more from BenzingaClick here for options trades from BenzingaWhy Globalstar Stock Spiked 9% In After-Hours TodayGameStop Short-Selling Fame's Melvin Posts 20% Returns For February: Report© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • ARK’s Red-Hot ETF Fell 20% in 12 Days. The Pain for Tech Stocks Might Just Be Beginning.

    Growth investors should watch out. The ETF (ticker: ARKK), actively managed by Cathie Wood, founder of ARK Investment Management, was one of the star performers of 2020. It gained more than 150% by riding stay-at home stars like (TSLA) (TSLA), (ROKU) and (SQ)(SQ) to new heights.

  • The oil market’s wild pandemic ride is about to take another turn

    The oil industry is no stranger to boom-bust cycles, but the pandemic has been its wildest ride to date, and on March 4 it’s due to take another turn when OPEC meets to consider rolling back production cuts. As the world’s cars and airplanes idled, global oil demand bottomed out in April at levels 16.4% below the previous year, dragging the price into negative territory for the first time. White-knuckling through it all has been OPEC, the 13-member cartel that dictates quotas for most of the world’s biggest oil-producing countries (notably excluding the US).

  • Buy this dip in Apple, Microsoft and these other tech stocks before they’re out of reach, says analyst

    It’s been a bad week for tech stocks. The Nasdaq tumbled 2.7% on Wednesday and the slide looks set to continue on Thursday. So buy the dip before tech stocks move at least 25% higher this year, says veteran tech analyst Daniel Ives of investment firm Wedbush.

  • 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.

  • Bond Market Turns Attention to Risk of U.S. Yields Cracking 2%

    (Bloomberg) -- The Treasury market may be just one spark away from exploding and sending 10-year yields all the way up to 2%, suggesting that the rout of 2021 may not yet be over and raising the chances that other assets like emerging-market bonds might also be living on borrowed time.Analysts are now putting the target on Treasury yields around half a percentage point higher than current levels following the rapid, reflation-fueled selloff that took the market by storm last week. Should that happen, it’s not just developed markets that will be left reeling. Developing-market bonds are increasingly at risk as investor concern grows about stretched valuations and the chances of a policy misstep by the Federal Reserve.“The velocity of the moves in U.S. Treasury yields are now intensifying at a time when both hard currency and local emerging-market bonds are more vulnerable to such a move,” said Lisa Chua, a New York-based portfolio manager on the emerging-markets debt team at Man Group Plc’s hedge-fund unit Man GLG.The reason 2% is on the radar for many is the market is in the midst of a rapid repricing back to a normal economy. What still hasn’t been priced in, among other things, are a much-sooner-than-expected cycle of interest-rate hikes and a real yield -- which strips out inflation -- closer to zero than the current level of around minus 0.8%. The record-breaking rally in stock markets meanwhile has been buffeted by the pick up in bond rates.More analysts are sounding the alarm that there’s little to stop yields surging higher. ING Groep NV says investors’ attitude toward holding longer-dated Treasuries has grown cautious, “to put it mildly,” exacerbating the potential for rapid selling on any sign of weakness in the market. They see yields on 10-year Treasuries rising another 50 basis points, joining the likes of BNP Paribas SA who also expect 2% by year-end.Investor jitters were on display again Wednesday, when a bigger-than-expected bond sale plan from the U.K. caused ructions globally. The U.S. 10-year yield jumped to around 1.49%, closing in again on the one-year high above 1.60% that it reached last Thursday in the wake of a sloppy seven-year Treasury auction. The rate was around 1.47% Thursday morning in New York.Concern over supply hitting the market is adding to fears inflation is set to accelerate, which could force central banks to begin tightening policy. Then there’s the risk liquidity evaporates to fuel sharper moves.“The bond market has been sitting on a powder keg since last week,” wrote ING strategists led by Padhraic Garvey in a note to clients. “In this context, we do not blame investors for exiting at the first sign of a selloff.”Liquidity in the $21 trillion Treasury market, which underpins the global financial system, is under scrutiny following last week’s startling gyrations and weak auction demand. The gap between bid and offer prices for 30-year bonds hit the widest since the panic of March 2020.All eyes will be on an appearance on Thursday by Federal Reserve Chairman Jerome Powell to see if he hints at possible action by the central bank to cap recent moves. In comments last week -- before the violent gyrations on Thursday -- he indicated that the Fed sees rising yields as a sign of economic health. But that message could well be shifted.The European Central Bank, meanwhile, has indicated it sees no need for drastic action to curb the rise in longer-term borrowing rates.For ING, the five-year U.S. bond is the key barometer for where rates are going. Mizuho International Plc agrees, having signaled the 0.75% level -- broken a week ago -- as the threshold that could signal a sharp correction in riskier stock and credit markets. That yield was hovering at 0.72% Thursday.Emerging markets, though, are starting to tell a different story. For bonds there, the crunch point could come with 10-year Treasury yields holding north of 1.5%. For Lisa Chua at Man GLG, that could trigger “major outflows” in both hard-currency and local assets.Not all investors see the path higher for yields. Some, like PGIM Fixed Income’s Robert Tipp, are betting on Treasuries going the other way and sending rates back down to 1% on the belief that the stimulutive effect from U.S. President Joe Biden’s $1.9 trillion spending package will fade and the economy will slow.Right now, the selling momentum seems hard to shake, with the eagerness of investors to borrow and short 10-year securities creating a rush within the market for repurchase agreements that’s sent rates there deeply negative.BNP strategists see the market pricing in an interest-rate hike from the Fed at the end of 2022, leading them to raise their year-end Treasury yield forecast to 2%. While they see the Fed sticking with dovish rhetoric, their risk scenario is that doesn’t work and the central bank has to increase the pace of bond purchases beyond the current $120 billion per month.“A break in asset market correlations and collapse in UST market liquidity (all out taper tantrum or “T”) would likely facilitate a Fed response to limit the deterioration in financial conditions,” wrote BNP strategists including Sam Lynton-Brown. While no Fed rate hikes are expected until the end of 2022, “this does not prevent the market from pricing it in.”(Updates with stocks 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.

  • Cathie Wood’s ARKK Struggles in Early Trading After 20% Retreat

    (Bloomberg) -- The main fund from Cathie Wood’s Ark Investment Management slipped in pre-market trading on Thursday, as it struggles to stabilize following a 20% drop from its February peak.The $22.9 billion Ark Innovation ETF (ARKK) was down 0.7% as of 8:53 a.m. in New York. The ETF tumbled 6.3% on Wednesday, adding to recent losses as growth stocks such as Pinterest Inc. and Zillow Group Inc. took a beating.The decline on Thursday had been steeper, but ARKK clawed back some of the drop as futures on the Nasdaq 100 Index also erased much of an earlier decline. The underlying gauge lost almost 3% on Wednesday, with traders turning away from tech in favor of so-called value stocks that had underperformed during the pandemic.The rotation, along with higher bond yields that dim the allure of equities, is taking the shine off what had been one of the hottest investments on Wall Street. Since peaking on Feb. 12, ARKK’s price has now dropped by a fifth, the level that commonly defines a bear market.“People are worried the crowded trades will lose their momentum like they did last September” when some of the biggest tech names suffered a bout of selling, said Matt Maley, chief market strategist at Miller Tabak + Co.Yields on benchmark 10-year Treasury notes have jumped more than 50 basis points in 2021, on track for the largest quarterly increase since 2016. Consequently, it’s growing more difficult to justify sky-high valuations for highly speculative, expensive areas of the stock market.ARKK’s three largest holdings, Tesla Inc., Square Inc. and Roku Inc., have about tripled over the past year. Tesla is up close to 350%, while Square has surged about 200% and Roku is up more than 240%. They all slumped on Wednesday.In fact, all but three stocks held by ARKK fell and three suffered losses exceeding 10% on Wednesday, including Stratasys Ltd., a maker of 3D printers, and Veracyte Inc., which develops molecular tests for oncology.The fund’s tilt toward long-term growth means short-term profitability isn’t a key consideration when stocks are picked. In fact, two-thirds of its current holdings didn’t make a profit in the past year.Inflows to the fund have faltered in the past week, but there’s yet to be a mass exodus. ARKK took in more than $600 million combined in Friday and Monday trading, then lost $150 million in Tuesday’s session, the latest for which data is available.“There is growing unease in the markets and whether higher-risk asset classes can continue to climb,” said Michael Purves, chief executive officer at Tallbacken Capital Advisors. “If sentiment turns, you can see substantial outflows.”(Updates for Thursday’s pre-market moves.)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.

  • Day-Trading Reddit Users Nearly Crashed the Stock Market. Now They’re the Organizing Principle for a New ETF.

    Barstool Sports founder Dave Portnoy tweeted an elaborately produced “emergency press conference” video to debut the ETF. The stunt was also an uncomfortable reminder that one man’s meta meme may be another’s market manipulator.