Barron's Roundtable panelists weigh in on the opportunities and pitfalls of initial public offerings and "blank check" companies.
Barron's Roundtable panelists weigh in on the opportunities and pitfalls of initial public offerings and "blank check" companies.
Britain will modernise its listing rules to attract more high-growth company and so-called blank cheque flotations, Finance Minister Rishi Sunak said after a government-backed review said London was on the back foot after Brexit. The London Stock Exchange is facing tougher competition from NYSE and Nasdaq in New York, and from Euronext in Amsterdam since Britain fully left the European Union on Dec. 31.
(Bloomberg) -- Dublin is the favorite destination for finance firms moving jobs into the European Union after Brexit, according to a study by consultancy EY.Three dozen financial services firms are considering moving some U.K. operations to the Irish capital, or have already done so, the review found. Luxembourg is second, attracting 29 companies in total, followed by Frankfurt, which has drawn 23. Twenty businesses are moving business to Paris, according to EY’s survey of public statements by 222 firms through February.Finance firms have announced that about 7,600 jobs will move from the U.K. to the bloc -- an increase of about 100 since EY’s last tracker, published in October. Almost 1.3 trillion pounds ($1.8 trillion) of assets have also moved, up about 100 billion pounds.Some companies have pulled back from the U.K. as policy makers try to establish how much access to the EU’s markets London will have. Think-tank Bruegel said in 2018 that the City could ultimately lose 10,000 banking jobs and 20,000 roles in the financial services industry.There are other signs that some aspects of London’s decades-long dominance of European finance is eroding. This year, the capital lost its crown to Amsterdam as Europe’s top place to buy and sell stock while traders have shifted some interest-rate swaps out of the U.K.“The push and pull of markets across Europe for business historically led from the U.K. continues,” EY partner Omar Ali said. “Such ongoing uncertainty poses the risk of fragmented markets, which is inefficient and costly for all financial services users and potentially damaging to the global competitiveness of both the UK and EU.”(Updates with comment in final paragraph. An earlier version of the story corrected million to billion in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(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.Treasuries resumed declines on Wednesday, sending yields higher across the curve. That follows a disastrous sale of seven-year notes in the U.S. last week, which set the tone for tepid demand for subsequent sovereign bond offerings from Indonesia to Japan and Germany, and prompted other nations to scrap offerings. The push for higher rates comes as central bank policy makers attempt to ease investors’ discomfort at the pace of the recent jump in yields.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. 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’s markets this week is clear. In Germany, a sale of 15-year bonds on Wednesday received the weakest demand since the tenor was launched last summer. That comes after 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.“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.Even though global bonds have stabilized this week, investors are clearly still rattled by the prospect of more volatility. Other than Indonesia, Japan’s sale of 10-year bonds on Tuesday recorded the lowest bid-to-cover since February 2016, and Germany’s sale of 15-year debt also saw tepid demand.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.Italy’s sale of green bonds was the exception, racking 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.In early signs of what would unfold at the U.S. auction last Thursday, the coverage ratios for debt sold in Thailand and Australia a day before that dropped. Later, there were signs of distress in Italy, while New Zealand ended up accepting just over half of the bids it received for a sale as yields soared.The U.K.’s annual budget due Wednesday will also be in focus as the government tries to balance the need for prolonged economic aid with calls to control the deficit. Strategists expect Britain to nearly halve its borrowing in 2021-22, following an expected record high of 486 billion pounds this fiscal year.“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.”Still, the recent jump in yields has put central banks on 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.(Updates with details of voided Mexican sale in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Italy’s first foray into the sustainable debt market looks set to pull in the biggest-ever orderbook for a sale of green bonds.The nation racked up over 80 billion euros ($97 billion) of bids for its 8.5-billion-euro sale of 2045 securities via banks, more than twice that seen for Germany’s debut last year. European nations are piling into the market to finance a greener recovery from the pandemic.“Investors are still buying like there’s no tomorrow,” said Jens Peter Sorensen, chief analyst at Danske Bank A/S. “The green investor base continue to grow.”The rush of demand allowed the nation to knock a few basis points off the pricing, the latest evidence of a so-called greenium for sustainable assets. Countries and companies issuing such debt, where spending is ringfenced for environmental projects, have often managed to achieve cheaper financing than from conventional bonds.The strong interest comes despite the market’s pullback from a year-long rally in Italy’s bonds, following a global selloff. Investor sentiment toward the nation has improved following the appointment of former European Central Bank President Mario Draghi as Prime Minister this year, and its debt remains among the region’s highest-yielding assets.Europe is at the forefront of debt tied to more sustainable activities. The European Union has sold a series of social bonds tied to a jobs program and is set to become the largest green debt issuer after its recovery fund sales get underway later this year.The Boom in ESG Shows No Signs of Slowing: Green InsightItaly published its framework for green bond issuance last week and said that it would align as much as possible with the EU’s green bond standard, due in the coming months. The proceeds of the bonds will be used to fund projects from renewable electricity to biodiversity, while part of it will go to refinancing previous projects between 2018-2020.Italy lowered the guidance twice on the sale to 12 basis points over its 2041 bonds, from 15 basis points initially. Previously, the 33-billion-euro orderbook for Germany’s sale in September was the largest recorded, according to data compiled by Bloomberg.The country mandated Credit Agricole SA and Intesa Sanpaolo SpA as structuring advisors, and those plus BNP Paribas SA, JPMorgan Chase & Co. and NatWest Markets to joint lead manage the sale.“It comes at a perfect time,” said Althea Spinozzi, a fixed income strategist at Saxo Bank A/S. “By issuing a green bond Italy ensures to have more attention from the market, therefore better bidding metrics compared to a traditional issuance. It’s a win-win.”(Updates with sale and order sizes in second 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.
The Australian and New Zealand Dollars are trading mixed early Wednesday after data out of China and Australia failed to generate any meaningful upside momentum. Despite economic data from China and Australia, the price action suggests investors are still eyeing the movement in U.S. Treasury yields for direction. Bullish investors are hoping that lower Treasury yields help to restore some calm to global markets and reignite demand for riskier assets.
(Bloomberg) -- The main fund from Cathie Wood’s Ark Investment Management extended its drop from a February peak to 20%, highlighting a swift turnaround for the formerly high-flying stocks favored by the firm.The $24.6 billion Ark Innovation ETF (ARKK) tumbled 6.3% on Wednesday alone as growth stocks such as Pinterest Inc. and Zillow Group Inc. took a beating. The Nasdaq 100 Index lost almost 3% as traders turn away from tech in favor of so-called value stocks that had underperformed during the pandemic, bringing its losses since a peak last month to 8.1%.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, with ARKK growing 10-fold over the past year, including a whopping $2.37 billion inflow just last month. 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%. On Wednesday, they all slumped.In fact, all but three stocks held by ARKK fell and three suffered losses exceeding 10%, 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. And even after the recent losses, ARKK is still slightly up for the 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 the past two days, after losing more than $690 million last week in its worst five-day period on record.“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 prices throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A new compromise would make millions of Americans ineligible for the third checks.
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.
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.
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).
Eight energy companies have failed to pay nearly $1 billion for power and services during February's deadly power blackout in Texas, the state's grid operator said this week, and the costs are likely to fall on consumers. Texas consumers will see higher prices as the unpaid fees are passed along to remaining providers. Power grid operator Electric Reliability Council of Texas (ERCOT) last week said grid users it did not identify had failed to pay $2.46 billion due.
Stellantis CEO Carlos Tavares on Wednesday said the new car company formed from the merger of Fiat Chrysler Automobiles and PSA Peugeot would be a “disruptive” force in the industry, and that both sides would provide technologies to achieve the promised 5 billion euros ($6 billion) in cost savings each year. The Italian-American carmaker and the French mass-market automotive company completed their merger on Jan. 16, creating Stellantis, the world’s fourth-largest carmaker, despite a pandemic year that saw profits plunge.
FEATURE Investors dumped their holdings in cloud-based software stocks on Wednesday, taking profits in last year’s hottest names and shifting cash to other sectors expected to benefit from an economic recovery late this year.
Costco Wholesale Corporation (NASDAQ: COST) remains the wholesale leader, but smaller rival BJs Wholesale Club Holdings Inc (NYSE: BJ) is showing superior metrics. What To Know: Costco entered 2020 on a strong note but the early days of the COVID-19 pandemic quickly shifted buying habits, according to the foot traffic analytic firm Placer.ai report. Since early 2020, Costco has seen inconsistent foot traffic trends to the point where it saw year-over-year growth in just four months -- all of which were in the back half of the year. BJs, on the other hand, saw a stellar 2020 with year-over-year foot traffic growth in every month except January. The smaller wholesale chain averaged 13.8% monthly year-over-year growth in visits in the back half of 2020. The momentum continues into 2021 with an identical 13.8% growth rate in January. Related Link: Can Grocers Sustain The 'Pre-Christmas Bump'? Why It's Important: Foot traffic trends are only one part of the equation as it's possible that customers are visiting Costco less often but spending more per trip. In Costco's case, visits were down 1.7% from November 2020 to January 2021 while visits per visitor were down 28.9%. "A massive decline in visits per visitor alongside a fairly minor drop in overall visits shows that Costco may actually be stronger than it's ever been and that the brand is likely adding new members at a very high rate," according to the Placer.ai report. What's Next: BJs deserves credit for a strong 2020 performance but it's unclear if it can sustain momentum in 2021 and beyond, according to Placer.ai. The company continues to offer the compelling value that stands out amid economic uncertainty. BJs Wholesale's stock is up nearly 60% over the past year, while Costco's is up about 4.5%. See more from BenzingaClick here for options trades from BenzingaAccelerated Vaccine Timeline Will 'Inspire Confidence' In Travel Says Marriott CEOBurger King UK's Menu To Be Half Plant-Based Food By 2031© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Buying MicroStrategy stock solely for the bitcoin play? It'll cost you a lot.
Rocket Companies Inc (NYSE: RKT) founder Dan Gilbert’s wealth got a $25 billion booster on Tuesday as the holding company gets the attention of retail investors on Reddit’s r/WallStreetBets, according to Bloomberg Billionaire’s Index. What Happened: Gilbert, Age 59, has moved up 19 spots to No. 16 on the index that tracks 500 of the world’s richest. A large chunk of Gilbert’s fortune, 93% to be precise, is comprised of his stake in Rocket, reported Bloomberg. See also: How to Buy Rocket Companies (RKT) Stock Why It Matters: The one-day jump in Gilbert’s wealth is the largest so far in the year, noted Bloomberg. As of press time, Detroit-based Rocket Companies with subsidiaries such as Rocket Mortgage and Quicken Loans was the most discussed company on WallStreetBets, according to SwaggyStocks data. WallStreetBets investors previously carried out short squeezes in the stocks of GameStop Corp (NYSE: GME), AMC Entertainment Holdings Inc (NYSE: AMC), Nokia Oyj (NYSE: NOK), BlackBerry Ltd (NYSE: BB), and others. Rocket reported 162% revenue growth and 350% growth in net income for the fourth quarter, which beat analyst estimates. The company’s shares have shot up since last Friday. S3 Partners data indicates the Rocket has currently $1.2 billion in short interest — making it one of the most shorted stocks in the market. Price Action: Rocket shares traded nearly 8.2% lower at $38.20 in after-hours trading on Tuesday after shooting up almost 71.2% in the regular session. Photo by Steve Jennings on Wikimedia See more from BenzingaClick here for options trades from BenzingaRocket Companies Overtakes GameStop, Palantir As WallStreetBets' Top Interest© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Commercial electric-vehicle maker Workhorse meets with the USPS Wednesday to discuss its contract bid loss to Oshkosh.
(Bloomberg) -- U.S. Treasuries tumbled anew on Wednesday, driving long-maturity yields to their highest levels this week and pushing up inflation expectations as traders continued to price in a quicker economic rebound from the pandemic.Benchmark 10-year Treasury yields surged as much as 10.3 basis points to 1.495%, a move reminiscent of last Thursday’s startling selloff in government debt. Meanwhile, a market proxy for the anticipated annual inflation rate for the next half-decade exceeded 2.5% for the first time since 2008 -- aided by climbing oil prices. At least part of the trigger for the fixed-income losses came from the U.K., which said it will sell more bonds than expected as its economy emerges from a deep recession.Also in the background was Joe Biden’s announcement that enough doses of virus vaccine should be available to every American adult by the end of May, and a report Wednesday that the president would moderate certain stimulus demands to try to win support for his virus-relief bill. Rising yields have started to draw the attention of Federal Reserve officials, leaving all eyes on an appearance Thursday by Chair Jerome Powell.Among other things, “the stimulus package is likely to go through and the economy is reopening,” said Michael Franzese, managing partner at MCAP LLC in New York. “The battle is on between rates going higher super-fast and a Federal Reserve that’s trying to keep the market stable and may try to slow the momentum of the reflation and economic-rebound trade into something more manageable.”Early inklings of inflation were evident in data from the Institute for Supply Management this week: Measures of prices paid jumped to their highest levels since 2008.A large trade on Wednesday in 10-year Treasury options and accompanying futures selling also fueled the leap in yields, as did heavy corporate bond supply.The rates market is not yet done fully pricing in robust U.S. economic growth, which would entail a 10-year yield trading around 1.90%, said Mark Heppenstall, chief investment officer of Penn Mutual Asset Management in Horsham, Pennsylvania. That’s the level last seen in January 2020, two months before pandemic fears started prompting forced shutdowns in the U.S.Beyond rising nominal and breakeven rates, “the dynamic rise in the 10-year real, inflation-adjusted yield we’ve seen is the market partly adjusting to a faster-than-anticipated pace of rate normalization by the Fed,” he said.The timing of the Fed’s first rate hike, known as liftoff, and subsequent rate hikes haven’t been factored in, making Treasuries vulnerable to a further selloff in the weeks ahead, according to Heppenstall.(Adds reference to Fed rate hikes in ninth 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.
A bill in Congress would give families up to $300 a month per child starting this summer.
Bitcoin's first decade of existence was marked by scandals and wild price swings. Will the next decade be similar or is the cryptocurrency poised for bigger things?