IMF's Christine Lagarde speaks with Yahoo Finance on the state of the Global economy. Ryan Patel, Global Business Executive and Drucker School Senior Fellow, joins Akiko Fujita on 'The Ticker' to discuss.
IMF's Christine Lagarde speaks with Yahoo Finance on the state of the Global economy. Ryan Patel, Global Business Executive and Drucker School Senior Fellow, joins Akiko Fujita on 'The Ticker' to discuss.
BEIJING (Reuters) -China should implement its commitments to equal treatment for foreign business and abandon "implicit" guidance to replace foreign products with domestic alternatives, the American Chamber of Commerce in China said on Tuesday. In an annual white paper, the chamber, also known as AmCham, which represents 900 companies, also called on the United States and China to communicate more and cooperate on climate change and public health. The relationship between the world's two biggest economies deteriorated rapidly over the past few years over issues ranging from trade to China's response to COVID-19.
(Bloomberg) -- Parabolic jumps in digital tokens such as Ether, Dogecoin and Binance Coin are outshining Bitcoin, prompting more questions about whether that segment of the cryptocurrency sector is ripe for a reckoning.The rallies have contributed to a slump in Bitcoin’s share of the $2.6 trillion crypto market to 43% from about 70% at the start of 2021, a metric that for strategists at JPMorgan Chase & Co. and DataTrek Research LLC may be a warning sign of investor excess in a range of digital tokens.Bitcoin’s waning dominance carries echoes of “froth” to the extent it’s being fueled “by a rally in other cryptocurrencies driven more by retail demand,” a JPMorgan team led by Nikolaos Panigirtzoglou wrote in a note Friday. DataTrek’s co-founder Nicholas Colas has indicated that history suggests tokens outside Bitcoin can drop “pretty quickly” when Bitcoin’s share hits 40%.Plenty of commentators have been fretting for some time that a stimulus-fueled peak is at hand in cryptocurrencies -- only to see them rally even more. But the worry is hard to shake in a sector that defies traditional investment analysis.The share of the largest cryptocurrency could be declining because investors are getting more comfortable with a wider array of tokens. Alternatively, retail traders may be chasing quick, speculative gains.“Even if you don’t invest in the space, this is worth tracking,” DataTrek’s Colas wrote in a recent note. He added that with more than $2 trillion now invested in virtual currencies, “a meaningful reset lower could also affect more traditional financial assets like equities.”For the JPMorgan team, the possible retail-driven froth in cryptocurrencies is a reminder of late 2017, when a crypto boom peaked.Ether RecordAmong the most notable moves in the crypto market Monday was Ether’s jump past $4,000 for the first time after a climb of more than 2,000% in the past year. The JPMorgan team said an analysis of activity on the affiliated Ethereum blockchain suggests a lower fair value of $1,000 for the token.Dogecoin -- which started as a joke in 2013 but is now a dominating Internet meme and sitting on a 20,000% advance in the past year -- captured the headlines over the weekend.First off, billionaire Elon Musk cited the token again, this time in a much-touted television appearance on the U.S. show Saturday Night Live. Later, it emerged that the cryptocurrency is apparently being used to pay for a lunar satellite launch with SpaceX, Musk’s commercial rocket firm.Dogecoin Used to Pay for Lunar Satellite Mission With SpaceXBitcoin was up 1.7% Monday at about $58,887 as of 8:30 a.m. in London. The largest cryptocurrency remains some way shy of April’s record of $64,870 after a pullback.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) -- Cathie Wood, founder and chief executive officer of Ark Investment Management LLC, joined the board of cryptocurrency platform Amun Holdings Ltd. after personally investing in the operator of 21Shares AG, which specializes in exchange-traded products.“21Shares is forging a new path for crypto ETPs by leading with research and a keen understanding of this developing asset class,” Wood said in an emailed statement. “I am thrilled to support its efforts.”Zurich-based Amun’s assets under management have climbed to about $2 billion from $27 million in March 2020, CEO Hany Rashwan said in an interview. It’s profitable, with $40 million to $50 million in annual revenue generated from both retail and institutional investors such as family offices, he said.“We built the company to make crypto as accessible as stocks and have seen tremendous demand for our products,” Rashwan said.One of the firm’s offerings, 21Shares Short Bitcoin ETP, allows investors to bet against Bitcoin. The 21Shares Crypto Basket Index tracks the top five cryptocurrencies by market value.Amun and 21shares instruments are listed on Swiss, Austrian and German national exchanges, among other locations. The company plans to list its first non-European product in coming months and to expand ETP offerings by as many as 30 products this year in eight countries, Rashwan said.Wood met Amun co-founder and president Ophelia Snyder at a conference in 2019, before the pandemic. “We sat next to each other at a lunch and got to talking about the industry structure and the potential for new technology applications in the space,” Snyder said.“Cathie’s counsel on critical business strategy, product development and distribution will be critical as 21Shares expands our global footprint,” she added.The company’s backers include Morgan Creek Digital, Collaborative Ventures, Quiet Capital, Boost VC and Graham Tuckwell, founder of ETF Securities.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.
(Reuters) -Novavax Inc on Monday again delayed its timeline for ramping up COVID-19 vaccine production and said it does not expect to seek regulatory authorization for the shot in the United States, Britain and Europe until the third quarter of 2021, sending its shares tumbling. Novavax shares fell more than 9% in extended trading after closing nearly 9% lower on Monday. The pushback of regulatory filings "to Q3 (from Q2) and a downward revision to time to full production to Q4 (from Q3), represent delays to prior timelines and difficulty in growing," said Kelechi Chikere, an equity analyst at Jefferies in a Monday note.
Stocks traded mixed on Monday, with technology stocks under more pressure as investors weighed the risks that higher inflation during the pandemic recovery might weigh on high-growth names.
(Bloomberg) -- Whatever caused the tech selloff, and inflation angst looks to be the likeliest culprit, evidence has been gathering for weeks that traders were bracing for declines.Short interest in the Nasdaq 100 exchange-traded fund, in free fall as recently as March, was surging before the index had its biggest plunge since March. Flows to the ETF were negative in April and would’ve been this month, too, if not for a jump on Friday. All told, about half a billion dollars has been drained from the QQQs this year.As the Nasdaq 100 -- trading at more than 5 times annual revenue -- dropped more than 2.5%, volatility in tech stocks jumped by the most since early March. With inflation expectations leaping to the highest level since 2006, everything from the biggest megacap tech stocks to the frothiest small fry was slammed. Futures on the Nasdaq 100 slid as much as 1.4% in early Asian trading on Tuesday.“Inflationary pressures are becoming harder to ignore,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors. “Although the jury is still out on whether this is merely a temporary issue, the prospect of inflation is leading investors to seek out areas that are better insulated from the threat of rising prices.”Duck and CoverThe breadth of the tech plunge made Monday particularly painful for bulls. Cathie Wood’s ARK Innovation ETF (ticker ARKK) sank 5.2% to the lowest since November as its biggest holdings nosedived, with the likes of Tesla Inc., Roku Inc. and Teladoc Health Inc. skidding. After an eye-watering 150% gain in 2020, ARKK has dropped 16% so far this year.But damage wasn’t limited to tech’s speculative fringe. The New York Stock Exchange FANG Index fell 3.6%, putting the gauge on track for its worst month since March 2020. With inflation threatening to break higher, the cohort’s expensive valuations are growing increasingly harder to justify. Alphabet shares are trading at eight times revenue, the highest in more than a decade, according to data compiled by Bloomberg, while Facebook’s price-to-sales multiple is nine -- nearly twice that of the average Nasdaq 100 company.Roaring BearsBears boosted bets against tech stocks as the industry’s leadership faltered amid a flight to the reflation trade. Short interest on the biggest ETF tracking the Nasdaq 100, or QQQ, increased to 3.6% of the stock outstanding, the highest level since August and up from 0.9% in December. The spike in bearish wagers stood out in a market where shorts have collapsed amid the S&P 500’s 88% rally since the pandemic trough in March 2020.Meanwhile, after several years of one-way flows, investors are starting to pull cash from the $161 billion Invesco QQQ Trust Series 1 ETF. The fund has bled roughly $425 million so far in 2021, after absorbing nearly $17 billion in 2020 -- the second-biggest haul on record. The ETF is on track for its first yearly outflow since 2016.Troubling TechnicalsCharts on the Nasdaq 100 look precarious. In the short term, the gauge is approaching its average price over the 100 days, a trend line that sits within 0.1% of the index’s current level and has served as support during the selloff in last November and again in March. A sustained breakdown in late 2018 and March 2020 foreshadowed losses that exceeded 20% from peak to trough.Viewed from a wider lens, the picture is no better. Plot the Nasdaq’s relative altitude versus the S&P 500 shows the ratio has fallen back below its 2000 peak again. Its failure in March to hold above that resistance was flagged by DoubleLine Capital LP founder Jeffrey Gundlach as a sign that another collapse may be in store.Cooling CallsWhile none of the data shows significant jumps in bearish sentiment, it’s consistent with a backdrop in which the extreme bullishness that has marked the last 14 months shows signs of subsiding. That may make sense after the index’s 92% gain since its pandemic low.The largest companies, loosely known as Faamg, last September saw day traders flocking to bullish options for quick profits. That demand has since waned, with their combined call open interest falling almost a third from the peak, data compiled by Bloomberg show.(Adds Nasdaq futures move in the third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Stock futures began the overnight session mixed Monday evening, with contracts on the Nasdaq extending declines.
Sterling surged to more than $1.41 as investors celebrated the Scottish National Party’s failure to win a majority in Holyrood’s elections, pushing the prospect of a second independence referendum off the table for now. The rise of more than 1pc against the dollar to a two-month high was matched by a similar appreciation against the euro meaning the pound is worth more than €1.16. Nicola Sturgeon’s party won 64 seats in the Scottish Parliament, one short of the 65 needed for a majority, which FX analyst John Hardy at Saxo Bank said means international investors can put referendum fears “in the rearview mirror” and buy more UK assets. “Clearly the market was concerned the SNP could get an outright majority and this could shorten the timeline to some eventual new referendum campaign,” he said. “By falling one seat short, the mandate isn't quite there and it sends the whole referendum scenario over the horizon for investors.” This is combined with a strong economic outlook as well as some wobbles in the US which make the dollar relatively less attractive, strengthening sterling. Francesco Pesole, an FX strategist at ING, said the fundamental picture is one of a strong economy supporting the pound. “Hopes of a strong economic rebound continue to be fuelled by the reopening plans in the UK and this should continue to put a floor under sterling,” he said. At the same time markets reacted badly to Friday’s weak jobs report in the US which saw the unemployment rate creep up to 6.1pc in April, raising fears for the sustainability of the recovery in the world’s largest economy. Analysts at UBS predict a wider shift away from US assets as the rest of the world recovers, which could push the pound to $1.49 by the end of the year. A rise on this scale would put sterling back up at a level last seen before the Brexit vote knocked the currency five years ago.
After having been instructed by their own government to slash oil imports from Saudi Arabia, Indian state refiners have reversed crude import cuts after India received critical medical aid from the Arabian oil giant
Dozens of state attorneys general wrote to U.S. lawmakers on Monday to urge Congress to fund their antitrust probes, which have resulted in big lawsuits filed against Alphabet Inc's Google and Facebook Inc. Attorneys general from 45 states and territories cited calls from Republicans and Democrats for a "more robust antitrust enforcement across a multitude of markets." "An appropriation of federal funding for state antitrust enforcement, particularly with respect to Big Tech litigation, will inure to the benefit of the economy and consumers throughout the United States," they wrote in a letter to Senators Amy Klobuchar and Mike Lee, the chair and top Republican on the Senate Judiciary Committee's antitrust panel.
Venezuelan state oil company PDVSA would need $58 billion in investment to revive its crude production to the levels of 1998 before ex-President Hugo Chavez came to power, equivalent to 3.4 million barrels per day (bpd), a document seen by Reuters shows. In the February 2021 document entitled "Investment Opportunities," Petroleos de Venezuela's planning and engineering division said it was seeking capital investment from Venezuelan and foreign partners, mostly to recover and upgrade oil production infrastructure "under new business models".
(Bloomberg) -- Iron ore futures surged more than 10% and copper extended its record run amid increasing bets they’ll be among the biggest winners from a commodities boom that’s stoking concerns about inflation around the world.While analysts struggled to pinpoint a trigger for Monday’s gains in iron ore, they cited several trends including optimism that central banks will retain supportive policies even as the global economy recovers. Expectations China will tighten environmental rules have added to the bull case for copper -- seen as vital to the green energy transition -- and fueled speculation that steelmakers may front-load iron ore purchases before new curbs kick in.The gains add to a more than yearlong surge in raw-materials prices that’s shifted into overdrive in recent weeks, with the Bloomberg Commodity Spot Index rising for 14 of the past 15 days to the highest level in almost a decade. Metals including copper pared advances later in Monday’s session as dollar losses ebbed and U.S. Treasury yields advanced.A “Goldilocks scenario” may be forming as strengthening global growth combines with restrained wage pressures and a dovish Federal Reserve, Goldman Sachs Group Inc. commodities analysts said in a May 7 report, the same day weak U.S. jobs figures added to the case for more stimulus. The risk for bulls -- and anyone betting on buoyant returns from stocks and bonds -- is that the surge in raw materials feeds through to broader measures of inflation and eventually forces central banks to tighten.For copper, the long-term outlook is also being bolstered by a likely surge in demand as governments target huge investments in renewables and electric-vehicle infrastructure. While copper’s last march to record highs in 2011 was driven by China’s economic boom, analysts expect this rally to be supported by a much broader rise in metals usage.”We’re in a new world,” Jeffrey Currie, global head of commodities research at Goldman Sachs, said in a Bloomberg TV interview. “We’re seeing a much more balanced growth between the U.S, Europe and China.”The iron ore sector “is very, very hot,” Vivek Dhar, commodities analyst at Commonwealth Bank of Australia, said in Bloomberg Television interview. “Supply is still not able to meet that strong demand.”Iron ore futures in Singapore jumped to a record above $226 a ton. Contracts in Dalian rose by the daily limit when the market opened.Copper, often viewed as a barometer of the global economy’s health, rose as much as 3.2% to a record $10,747.50 a ton on the London Metal Exchange, before erasing gains and settling 0.3% lower at $10,382. Aluminum slipped 0.4% after climbed as much as 2.5%.“Looks like there’s some profit-taking going on in copper and other metals after the big surge,” said Wenyu Yao, senior commodities strategist at ING Bank.Still, “there’s still quite a lot of room to go,” Evy Hambro, global head of thematic investing at BlackRock Inc., said on Bloomberg Television. “What we’re really doing is we’re testing the upper ranges of commodity markets to work out what the new price range is going to be.”There were fresh jitters on the supply side as China’s major copper smelters vowed to reduce purchases of mined concentrate this year as the country seeks to curb carbon emissions. While that could ease strains on mine supply, the smelters will need to boost scrap purchases to avoid a slump in production of refined metal.“It’s notable that the smelters don’t imply a cut to output,” Morgan Stanley analysts Susan Bates and Marius van Straaten said in an emailed note. “They appear comfortable that they can make up the reduction in concentrate purchases with a lift in the use of copper in other forms.”The iron-ore boom comes as China’s steelmakers keep output rates above 1 billion tons a year, despite a swath of production curbs aimed at reducing carbon emissions and reining in supply. Those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs and potentially front-load output ahead of more environmental restrictions.Steelmakers in the rest of the world, such as ArcelorMittal SA, are also enjoying a boom as demand bounces back from pandemic lows.“There is a chance that ex-China demand can come back to such an extent that we still see steel demand pick up globally and that will see iron ore demand remain at these elevated levels,” CBA’s Dhar said.Traders will be watching closely for how China responds. Shipmakers and household-goods manufacturers will eventually be unable to withstand elevated steel prices, the country’s state-run Xinhua News Agency reported on Sunday, citing analysis from the China Iron & Steel Association. The report said it would be difficult for steel to continue rallying.The government has scheduled nationwide inspections on steel-capacity cuts, with the National Development and Reform Commission calling on the state asset regulator and provincial level working groups to complete self-checks by May 15. Authorities will conduct on-site inspections in June and July, according to a statement Monday.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) -- Sony Group Corp. warned a group of analysts the PlayStation 5 will remain in short supply through 2022, suggesting the company will be constrained in its ability to boost sales targets for its latest games console.While reporting financial results in late April, the Japanese conglomerate said it had sold 7.8 million units of the console through March 31, and it is aiming to sell at least 14.8 million units in the current fiscal year. That would keep it on pace to match the trajectory of the popular PlayStation 4, which has sold in excess of 115.9 million units to date.In a briefing after those results, Sony told analysts it is challenging to keep up with strong demand. The PS5 has been difficult to find in stock since its release in November, in part because of shortages in components such as semiconductors, and the company hasn’t given an official estimate for when it expects supply to normalize.“I don’t think demand is calming down this year and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn’t be able to catch up with demand,” Chief Financial Officer Hiroki Totoki said at the briefing, according to several people who attended and asked not to be named as it wasn’t public.A Sony spokesman declined to comment.Sony said it would buy back up to 200 billion yen ($1.8 billion) of its own shares after reporting profit for the March quarter that fell short of analyst estimates. It forecast that operating profit would slide about 4% in the current fiscal year, but analysts have been weighing whether the company could exceed the conservative outlook with the help of strong demand for the new console and games.Shares have dropped about 8% since the earnings report on April 28, after rising 75% over the previous year.Read More About Sony’s Plans For The Year AheadTotoki told analysts that Sony needs to ramp up production as soon as possible and make sure there are consoles on store shelves. Demand will remain high regardless of the Covid-19 situation, the CFO assured an analyst wary about Sony’s ability to fully capitalize on the stay-at-home entertainment surge triggered by lockdowns and emergency orders.“We have sold more than 100 million units of the PlayStation 4 and considering our market share and reputation, I can’t imagine demand dropping easily,” he said.Still, the company’s latest earnings report suggests that stay-at-home demand is leveling off. Sony said monthly active users on PlayStation Network fell to 109 million at the end of the January-March period from 114 million a quarter earlier and sales of full games also declined in the period from a year earlier.Rival Nintendo Co. warned last week that component shortages could affect production. It’s officially targeting sales of 25.5 million consoles in the year ending March 2022, down slightly from the previous year. But internally, Nintendo’s management is said to be shooting for production of between 28 and 29 million consoles, Bloomberg News has reported.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) -- At least nine new U.S. crypto ETF filings stoked optimism regulatory approval was close. Wall Street’s top cop all but doused it with a string of comments last week.Freshly sworn-in Securities and Exchange Commission Chairman Gary Gensler told Congress that the cryptocurrency market “could benefit from greater investor protection,” signaling that a long-stated prerequisite for SEC oversight of the industry has not been met. He also urged lawmakers give the agency regulatory authority over trading venues, a stance he reiterated in a CNBC interview Friday.Gensler’s comments were likely an unwelcome reality check for crypto and ETF enthusiasts alike. Bitcoin ETF approval was being touted by many industry boosters as a nearly sure-thing in 2021, amid new SEC leadership, Wall Street’s growing crypto embrace and the launch of similar funds in Canada. However, Gensler’s skeptical remarks and a hefty regulatory to-do list has some experts pushing out the potential time line.“The SEC has made their priorities clear, and vetting crypto ETFs is not one of them,” said Ben Johnson, Morningstar Inc.’s global director of ETF research. “Given that the SEC has bigger fish to fry, and taking Gensler’s recent remarks regarding crypto ETFs into account, I think the odds we’ll see a Bitcoin ETF approved in 2021 are very low.”Efforts have been underway for nearly a decade to get a Bitcoin ETF launched stateside. U.S. regulators have rejected every application since the first was filed in 2013, citing concerns about manipulation and criminal activity.Nevertheless, a raft of crypto ETF applications have been filed this year. Advocates predicted Gensler would prove more open-minded toward the structure than his predecessor Jay Clayton, given that he once taught a class at MIT’s Sloan School of Management called “Blockchain and Money.”However, the SEC under Gensler’s leadership has punted its deadline to make a decision once already, and the chair’s scrutiny of crypto exchanges suggests the agency is proceeding cautiously. Trading disruptions are relatively run-of-the-mill in the crypto sphere, where trading hubs are lightly regulated relative to traditional exchanges.“SEC concerns over fraud and manipulation in the Bitcoin spot market have been the primary roadblock for a Bitcoin ETF approval,” said Nate Geraci, president of the ETF Store, an advisory firm. “If Gensler isn’t yet fully comfortable with crypto exchanges, it’s highly unlikely he would bless a Bitcoin ETF.”The SEC didn’t immediately respond to a request for comment.Bitcoin, the world’s largest cryptocurrency, has doubled so far in 2021 after climbing over 300% last year. A recent rally in so-called alt-coins have put those gains to shame -- Ether is roughly 460% higher year-to-date, while Dogecoin, the joke cryptocurrency that’s found new life as an internet meme, has surged more than 16,000% in the past year, according to CoinGecko.Three Bitcoin ETF filings have been acknowledged by the SEC, meaning it has a limited amount of time to either approve or reject the proposals. However, with Gensler’s recent remarks in mind, it’s unlikely that any of those filings will be given the green light in their current form, according to Dave Nadig, the chief investment officer at data provider ETF Trends.“There’s zero chance any existing filing goes through with no modifications whatsoever. I’m still thinking this year, but honestly, who knows,” said Nadig. “It could be tomorrow or never.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China is shaping up to be the first real test of Big Tech’s ambitions in the world of carmaking, with giants from Huawei Technologies Co. to Baidu Inc. plowing almost $19 billion into electric and self-driving vehicle ventures widely seen as the future of transport.While Apple Inc. has long had plans for its own car and Alphabet Inc. has Waymo, its autonomous driving unit, the size -- and speed -- of the move by China’s tech titans puts them at the vanguard of that broader push. The lure is an industry that’s becoming increasingly high tech as it pivots away from the combustion engine, with sensors and operating systems making cars more like computers, and the prospect of autonomy re-envisioning how people use will them.As the world’s biggest market for new-energy cars, China is a key battlefield. Established automakers like Volkswagen AG and General Motors Co. are already slogging it out with local upstarts such as market darling Nio Inc. and Xpeng Inc. Over the past three months, Huawei, smartphone giant Xiaomi Corp., Baidu -- which runs China’s top search engine and a mapping app -- and even Apple’s Taiwanese manufacturing partner Foxconn have joined the fray, forging tie-ups and unveiling their own carmaking plans.Nowhere was that more on display than at last month’s Shanghai Auto Show, which has become one of the world’s premier events for showcasing the hottest new trends in the automotive sector. Visitors queued for hours to access the pavilions of Huawei and Baidu, thronging their displays and snapping pictures of sensor systems, high-tech dashboards and model vehicles. But despite the intense interest, the era of the new car is a hyper-competitive one in China, and tech giants have a lot to prove.“There’s a big element of faith in the tech companies’ bets,” said Stephen Dyer, managing director of consultancy AlixPartners in Shanghai and a former Ford Motor Co. executive. “This is a matter of creating something new that doesn’t exist now. That’s where the element of faith comes into play.”Huawei has been at the fore, recently announcing plans to invest $1 billion in EVs and its own self-driving technology, which it claims has “already surpassed” electric car pioneer Tesla Inc. in some aspects.The Shenzhen-based company, better known for its mobile-phone networks and being the subject of crippling U.S. sanctions, has unveiled its first car developed with BAIC BluePark Mew Energy Technology Co. The mid-sized Arcfox S sedan uses HI, or Huawei Inside, an intelligent automotive software package that enables it to run on autonomous driving mode in city areas for more than 1,000 kilometers (620 miles) without human intervention. Delivery is slated to start in the fourth quarter.Huawei’s auto show display attracted larger crowds than nearby China Evergrande New Energy Vehicle Group Ltd., an EV upstart that took one of the biggest stands to showcase nine models despite the fact it hasn’t sold a car under its own brand. As well as the Arcfox S sedan, a Seres SF5 coupe equipped with Huawei Inside was on display, along with Huawei’s HiFin Intelligent Antenna Solution, a new generation in-vehicle communication system plus 4D-imaging radar that’s used to monitor roads and traffic.One of the biggest challenges for new entrants to the automotive sector is how capital and resource intensive it is to make cars. How tech companies negotiate that will be key, and potentially provide opportunities for established players in the sector, with Huawei repeatedly saying its plan is not to produce its own vehicles. Rather, it’s partnering with three Chinese automakers -- BAIC Motor Corp., Chongqing Changan Automobile Co., and Guangzhou Automobile Group Co. -- to make self-driving cars that will carry its name as a sub-brand.Guangzhou Auto will jointly build a “truly unmanned car” that will be produced in 2024, President Feng Xingya said last month. The carmaker will also cooperate with Huawei on big data, smart cockpits, and hardware and electronic chips, Feng said.“China adds 30 million cars each year and the number is growing,” Huawei Deputy Chairman Eric Xu said in April. “Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan ($1,550) from each car sold in China, that’s already a very big business.”Apple appears to be considering a similar route, talking at one point with carmakers including Hyundai Motor Co. before discussions fizzled. Unlike China’s tech giants, Apple is keeping its plans largely secret. The company lost a key manager overseeing its self-driving car program in February and it’s unclear what impact that may have had on Apple’s progress on delivering a commercially viable car.The rise of smart vehicles and autonomous driving throws up a raft of possibilities for tech companies, not least access to data such as real-time insight into popular destinations and the routes taken to get there. On top of that, for some there’s the opportunity to charge for tech add-ons and system improvements, essentially treating the vehicle like a piece of computer hardware that constantly gets its software updated.“They will definitely focus on being intelligent,” said Yale Zhang, managing director of Shanghai-based consultancy Autoforesight Co. “Making a good electrified car is a ‘pass,’ while making a good intelligent car will make an ‘A-grade.’ That’s what these tech giants are good at. Their main revenue will not be from selling the car but finding other ways to earn post-sale, such as over-the-air system upgrades or software subscriptions.”Big Tech in China Is Eyeing EVs for a Reason: Hyperdrive DailyFirst MoversBaidu -- which started investing in robo-taxi technology as early as 2013 and funded Chinese EV startup WM Motors -- now plans to spend $7.7 billion over the next five years developing smart-car technology via its newly established unit Jidu Auto. The division aims to launch its first model in three years, followed by new releases every 12 to 18 months, Chief Executive Officer Xia Yiping said.“The core value of cars in the future will be how intelligent they are,” Xia said, echoing a familiar refrain. “The earlier a company plans, the more control of self-developed technologies it gains, the more advanced technology it has, the more power it will own in the market.”Jidu has a core team of about 100 staff, and will expand to as many as 3,000 personnel by the end of next year, including up to 500 software engineers, he said. The first batch of cars will be based on Zhejiang Geely Holding Group Co.’s pure EV manufacturing structure, while Jidu will collaborate with Baidu’s autonomous-driving unit Apollo, with a special focus on smart cars and the mass production of autonomous driving features. The unit will embark on its next fundraising round soon, with further investment expected from Baidu and external investors.Chinese smartphone maker Xiaomi has also announced plans to invest about $10 billion over the next decade to manufacture electric cars, though hasn’t disclosed much detail or given a timeframe for deliveries. Billionaire co-founder Lei Jun in March announced his intention to lead a new standalone division and spearhead the drive into EVs, in what he called his final major startup endeavor.“We have deep pockets for this project,” Lei, who is also Xiaomi’s chief executive officer, said when unveiling the plan. “I’m fully aware of the risks of the car-making industry. I’m also aware the project will take at least three-to-five years with tens of billions of investment.”While China’s tech giants may be late to the game and entering unfamiliar territory, that could play to their advantage, said Dyer of AlixPartners.“This isn’t an industry where you have to be the first-mover to win,” he said. “In fact, in the auto industry, the first mover typically never wins. It’s always the follower who wins. Because when you are the first mover, you’re the one paying to learn through all the mistakes.”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.
Goldman Sachs voices concern on the FAAMG (Facebook, Apple, Amazon, Microsoft and Google) stock complex as the Biden administration seeks various tax increases.
(Bloomberg) -- The rand’s 30% gain against the dollar since the height of the pandemic has outstripped emerging-market peers -- and the rally may not be over yet.South Africa’s currency has recovered all its losses since it slumped to a record in April last year, and then some. Strong commodity prices and the global search for yield should support the narrative for further gains in coming months. Domestic fiscal metrics -- though still far from healthy -- are improving along with terms of trade, while the government’s crackdown on corruption is also fueling positive sentiment.It’s becoming easier to back the rand, and these charts illustrate why:Bond Investors ReturnAfter record outflows from South Africa’s bond market in the first four months of the year, last week’s disappointing U.S. jobs numbers heralded a reprieve. Foreign investors bought a net 5.2 billion rand ($370 million) of South African government debt on Friday, the biggest in inflow since November, as the move lower in Treasury rates gave new impetus to the search for yield. Together with a healthy trade surplus fueled by rising commodity prices, those inflows could be rand-supportive in coming months.Technical CheerThe dollar last week tested a pivotal area at 14.40-14.50 after consolidating in the second half of April. Failure to breach resistance meant that rand bulls got the upper hand once again, as shown by the fear-greed indicator, and the pair fell to fresh cycle lows. In the longer-term, the rand seems to be in the final stages of the ABC correction of an Elliot Wave Cycle that started in 2011 and was completed in early 2020. The dollar may weaken toward the 11.50 handle, according to the pattern.Encouraging OptionsDemand for dollar topside exposure took a hit as key resistance around 14.50 held. While greenback calls still trade at a significant premium, bearish sentiment for the South African currency, as measured by one-month risk reversals, has moved to the lowest level in three weeks, with room to extend toward February range extremes.Shiny ProspectsThe correlation between the Bloomberg Industrial Metals Sub-Index and the rand has strengthened to 0.6, near its strongest level this year. Industrial metals account for about a quarter of South Africa’s export earnings, bolstering the current-account balance, for long the rand’s Achilles heel. The current account may be in surplus this year, according to the median forecast in a Bloomberg survey.Best BetThe large inflows from loans South Africa procured from the International Monetary Fund and New Development Bank amid the height of the Covid-19 pandemic have created a surplus of dollars in the local banking system. That’s lifted USDZAR basis swaps well above the long-term average, making it expensive to short the South African currency. With more inflows expected this year from a World Bank loan and Eurobond issuance, the cost of betting against the rand will remain elevated for some time.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 worldwide slump in technology stocks deepened Tuesday, with investor angst over inflation and stretched valuations adding to fresh signs of regulatory scrutiny in China.Losses in Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. helped send MSCI Inc.’s gauge of Asian tech stocks to its biggest drop since Feb. 26, while futures on the Nasdaq 100 slumped in Asia after the underlying index’s 2.6% slide on Monday.The Hang Seng Tech Index sank as much as 4.5%, extending its tumble from a February high to about 30%. Meituan drove declines after the Chinese e-commerce giant’s business practices were criticized by an influential consumer advocacy group, just days after the company’s CEO shared and then deleted a poem on social media that some interpreted as a veiled criticism of Beijing.Global technology stocks benefited from lower interest rates and emerged as investor favorites last year, when the pandemic stoked demand for online services. Now concern is mounting that commodity-fueled inflation will prompt central banks to tighten monetary policy, denting the appeal of stocks whose valuations often hinge on earnings prospects far into the future.With the Nasdaq 100 still trading within 5% of its all-time high last month, some market participants see a good window to take profits.Investors “continue to place their focus on the inflation narrative, with rising commodities prices and chip shortages in play,” said Yeap Jun Rong, a market strategist at IG Asia Pte. “Concerns of higher inflation may weigh on growth stocks, considering that much of their value may come from future earnings.”Broader MarketTuesday’s tech rout weighed heavily on the broader equity market, with the MSCI Asia Pacific Index slipping about 2% and heading for its lowest close since March 31.MSCI’s broadest measure of world equities fell for a second day. That’s after hitting another record just last week after surprisingly weak U.S. jobs data eased some fears about inflation and a cutback in stimulus.“Investors’ tendency to look at just the good side of things is quickly fading,” said Shogo Maekawa, a strategist at JPMorgan Asset Management in Tokyo. “People were inclined to buy technology stocks even after weak U.S. jobs data on the view that any exit in monetary policies is far away. But now, a deep-rooted concern over inflation is leading to declines in technology stocks.”Chinese tech giants have borne the brunt of the sector’s retreat this month, after regulators expanded an antitrust crackdown and announced steps to rein in the companies’ fast-growing finance units.Meituan’s stock plunged as much as 8.7% on Tuesday, taking the slump over two days to 15% after the Shanghai Consumer Council released criticism late Monday on issues that hurt consumer rights.Herald van der Linde, HSBC Holdings Plc’s head of Asia Pacific equity strategy, says they went neutral on China’s internet sector in November arguing that this might be the “single biggest issue” in 2021.“Sometimes, Asian stock markets get carried away by what we can call ‘big market delusions,’ they believe that growth in sectors will continue,” he said. “But then, these stocks can turn suddenly and de-rate even while growth remains strong.”(Updates with more comments in the 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 U.K. government is preparing to sell more than 1 billion pounds ($1.4 billion) of shares in NatWest Group Plc, further reducing its stake in the lender it bailed out during the 2008 financial crisis.The Treasury said Monday it plans to place 580 million shares, representing approximately 5% of NatWest’s overall stock, through an accelerated bookbuild. This will take the government’s stake down to 54.8%. A term sheet seen by Bloomberg News said the offering is valued at about 1.14 billion pounds. Shares in NatWest fell as much as 4% after Sky News earlier reported that Goldman Sachs Group Inc., which is advising the government on privatizations, has begun to sound out institutional investors about a possible disposal.The news comes two months after the Treasury sold 1.13 billion pounds-worth of stock to the bank, reducing its holding for the first time in almost three years. That sale took place at 190.5 pence per share.Barclays Plc, Citigroup Inc., Goldman Sachs and Morgan Stanley have been appointed to act as joint bookrunners on the sale, according to the statement. (Adds confirmation of sale from first 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.
According to a federal indictment, Mustafa Qadiri, 38, fraudulently obtained millions of dollars to buy luxurious cars and take lavish vacations.