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Investors are 'more focused on risk mitigation than upside growth': Economist

Yahoo Finance's Editor in Chief Andy Serwer and Alexis Christoforous speak with Economist and Author Dambisa Moyo live at the World Economic Forum in Davos, Switzerland.

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  • Bank Fines, Suspensions Weighed by Zimbabwe for Currency Gouging

    (Bloomberg) -- Zimbabwe is considering penalizing domestic banks, telecommunications operators and other businesses over what the government describes as profiteering off the hard currency it makes available at auctions.Lenders could face fines and suspensions, while companies that charge a premium for foreign exchange may be banned from participating in the auctions, central bank Governor John Mangudya said in a phone interview from the capital, Harare.“All the malpractices will be targeted,” he said. “There’s no need to chase foreign currency as if it will run out.”President Emmerson Mnangagwa on Monday threatened unspecified actions against “sharks in the financial sector,” according to the state-owned Herald newspaper, which said unidentified entities are profiteering at the public’s expense. The president’s comments were made during a wide-ranging interview he gave to state-owned television that will be aired on April 17 on the eve of Independence Day celebrations, the paper said.Exchange ClosedMnangagwa has previously issued warnings to private companies he blames for undermining his efforts to turn around an economy plagued by annual inflation of 241% and foreign-currency shortages.Last year, his government closed the Zimbabwe Stock Exchange for five weeks and singled out the largest mobile operator, Econet Wireless Zimbabwe Ltd., for undermining the nation’s currency through its mobile-money service. Econet denied the allegations.The impending action is an attempt to prevent manipulation of the foreign-currency auction system, according to the Herald. The system has provided over $800 million to companies since its introduction in June, though high demand for U.S. dollars by importers means that there is only a limited supply.Monetary authorities met with the Bankers Association of Zimbabwe on April 12 to discuss “due diligence and know-your-customer requirements” in order to ensure economic stability, Mangudya said.Ralph Watungwa, president of the Banker’s Association of Zimbabwe, didn’t immediately answer two calls to his mobile phone seeking comment.Zimbabwe reintroduced its own currency in 2019 after a 10-year hiatus and has been battling bouts of high inflation and shortages of everything from foreign currency to food. The local unit, which was pegged at parity to the U.S. dollar as recently as February 2019, has plunged to 84 per U.S. dollar.The gap between the official exchange rate and parallel market has widened by 36%, with a U.S. dollar selling for 115 Zimbabwean dollars on the streets of Harare.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.

  • Add Coinbase to the List of Crypto Stocks HSBC Won’t Touch

    An HSBC representative said the bank has “limited appetite to facilitate products or securities that derive their value from virtual currencies.”

  • World stocks rally as Treasury yields tumble

    World stocks extended a five-day run of fresh highs on Thursday, fueled by upbeat earnings and strong U.S. economic data that point to a solid recovery ahead, while Russian markets tumbled at the prospect of the harshest U.S. sanctions in years. A tumble in the 10-year U.S. Treasury note below 1.6% to yield 1.5496%, a fall of 8.6 basis points, helped spur renewed buying of big tech stocks and drive MSCI's benchmark for global equity markets up 0.80% to fresh peaks. The all-country world index, a benchmark heavily weighted to Apple Inc, Microsoft Corp and Amazon.com Inc, is up about 8.5% for the year as growth rose 1.4% and value 0.4% on Thursday, as measured by the Russell 1000 indexes.

  • SoftBank Vision Fund Profit Nears $30 Billion on Coupang

    (Bloomberg) -- SoftBank Group Corp.’s Vision Fund profit may reach an unprecedented $30 billion in the March quarter, almost quadrupling the record it had just set, according to people familiar with the matter.Profit in the unit was supercharged by the successful initial public offering of Coupang Inc., the South Korean e-commerce leader which debuted in New York last month. That will account for the lion’s share of what’s expected to be between $25 billion and $30 billion in reported gains for the three months ended March 31, the people said, asking not to be named because the details are not yet public. SoftBank is scheduled to report results on May 12.The markets are delivering their strongest validation yet for Masayoshi Son’s oft-criticized strategy of pouring massive amounts of cash into mature startups. The Vision Fund’s portfolio of over 160 investments will record its third straight quarter of record profits helped by a global IPO rush that has seen companies worldwide raise more than $200 billion in 2021.When Son takes the stage to report the latest results, he will probably have one more milestone to celebrate: group net income that’s the highest ever for a listed Japanese company in any quarter dating back to 1990, according to data compiled by Bloomberg. SoftBank already holds the top spot, setting the current high of 1.26 trillion yen ($11.5 billion) in June.​Coupang’s $4.6 billion offering was the second biggest this year and marks SoftBank’s best return since Alibaba Group Holding Ltd.’s listing in 2014. The coming months will also see some of Son’s largest and most controversial bets test the market, including ride-hailing giants Grab Holdings Inc. and Didi Chuxing as well as the troubled office-sharing company WeWork.“The markets are very encouraged and supportive of what the Vision Fund has been able to do with its investments,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Clearly there is still a lot of money out there that needs to find a home.”Coupang’s stock ended the quarter 41% higher than its mid-March IPO. The Vision Fund invested in November 2018 in a $2 billion deal that valued Coupang at $9 billion. That funding followed $1 billion from SoftBank itself in 2015, valuing the startup at about $5 billion. The Japanese conglomerate’s 33% stake was worth close to $28 billion as of March 31.SoftBank will also book a valuation gain of about $2 billion on its stake in Uber Technologies Inc., which rose about 7% in the quarter, according to the people. The fund sold $2 billion worth of stock in the ride-hailing company in January, eking out a small profit. Another $1.2 billion gain will come from its stake in Auto1 Group SE, a German wholesale platform for used cars which went public in February.The Vision Fund will also book a gain on its stake in ByteDance Ltd., the Chinese parent of hit video app TikTok. SoftBank owns about 3% of the company, a stake it acquired mostly at a $63 billion valuation in secondary markets in addition to a direct investment at a $75 billion valuation, the people said. The company has since hit $140 billion, according to market researcher CB Insights, and traded at $250 billion in private transactions, Bloomberg News reported.Even WeWork, one of Son’s biggest missteps in recent years, will contribute to profit. After its failed IPO attempt and a bailout by SoftBank in 2019, the office-sharing company saw its worth tumble to $2.9 billion last year amid the pandemic, a far cry from its once-lofty $47 billion valuation. WeWork now plans to go public via a blank-check company in a deal that would value it at $9 billion.Some Vision Fund investments will see their value marked down, though gains will more than offset those losses, the people said. The fund will take a writedown of about $500 million on Greensill Capital, the supply-chain finance company owned by billionaire Lex Greensill that filed for insolvency last month. The valuation of Oyo Hotels will be reduced by several hundred million dollars too.“Coupang is a home run for the Vision Fund. And there is likely to be more good news around Didi, ByteDance, Grab and even WeWork,” said Atul Goyal, senior analyst at Jefferies. “But profits are meaningful when they recur. These gains are neither operating nor recurring.”SoftBank doesn’t have to sell equity holdings to book income, so its profits are often just on paper. It reports income when the value of companies like Coupang rise, boosting the value of its stock. Its accounting practices comply with industry standards.About half of the capital raised in the IPOs so far this year has gone to special purpose acquisition companies and SoftBank has joined the frenzy, listing several blank-check companies since the start of the year. The three SPACs created by the Vision Fund have a combined market capitalization of about $1.5 billion.At the previous earnings briefing in February, Son said SoftBank may see between 10 and 20 public listings a year. Grab said this week it will go public through the largest-ever merger with a blank-check company, valuing the Southeast Asian ride-hailing and delivery giant at about $40 billion. Its Chinese counterpart Didi has filed with the U.S. Securities and Exchange Commission for an IPO that could value the company as highly as $70 billion to $100 billion.“The wind will probably continue to be at Son’s back for some time,” said United First Partners’ Tang. “But matching last fiscal year’s performance would be quite a feat.”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.

  • Coinbase Direct Listing Gets $100B+ Valuation as Share Price Jumps in Nasdaq Debut

    The Coinbase listing is seen as a watershed moment for the cryptocurrency industry.

  • JPMorgan Sells an Exotic Quant Trade Chasing Stock-Market Whales

    (Bloomberg) -- JPMorgan Chase & Co. is tapping into retail demand for trend-following by giving rich investors access to a kind of complex stock strategy that’s usually reserved for institutional managers.The New York-based bank has issued $15 million of structured notes that give investors a way to surf S&P 500 trading patterns caused by market whales including options dealers and pension funds.The thinking goes that their trading, rebalancing and hedging activity are all giving rise to seasonal cycles and momentum trends in the world’s largest stock market.The JPMorgan notes carry maturities of up to five years and track the performance of the bank’s Kronos+ index launched in December, according to SEC filings. While issuance to-date is modest, the deal gives wealthy individuals -- typical buyers of such securities -- a novel way to ride esoteric stock trends ignited by the systematic crowd.It’s a window into a hot and opaque investing style on Wall Street.The Kronos+ index captures the S&P 500’s tendency to outperform at the start and the end of each month, and to maintain its momentum going into monthly options expiry dates. A backtest suggests the gauge hasn’t had a down year since 2008, when it lost 54%. A spokesperson for JPMorgan declined to comment on the issuance.“It makes sense to look at strategies such as this,” said Matthew Yeates, head of alternative and quantitative strategy at Seven Investment Management LLP. “It is difficult to see those distortions evaporating any time soon.”Quants have long devised investing strategies to exploit institutional capital flows. Intraday trend-following for instance flourished in recent years as a way to take advantage of end-of-day trading by passive funds, though the style has struggled of late.At the same time, an increase in options volumes means derivatives traders are moving stocks like never before -- fueling market quirks like those captured in the Kronos index.Read More: Wall Street Dealers in Hedging Frenzy Get Blamed for VolatilityOne is the propensity of the S&P to move in a reliable direction in the run-up to options expiry. If the benchmark has increased in the previous month, call overwriters will tend to buy back their contracts and sell new ones with higher strike prices to dealers. That in turn spurs market makers to buy the underlying equities as a hedge, according to JPMorgan. If the S&P 500 has fallen, the opposite occurs.Hedging TailsThe Kronos index also seeks to exploit the tendency of the S&P 500 to outperform during the first and last few days of each month, as well as its reversion to the mean into the last week of the month. All this can be attributed to the buying and selling patterns of large investors adjusting their portfolios, according to the JPMorgan prospectus.Think pension portfolios rebalancing their exposures or retirement funds buying stocks at the beginning of every month.During bouts of market volatility, these trading patterns can get magnified. In that context, trades designed to follow systematic trading flows “can provide an attractive source of tail risk protection,” according to Yeates.Still, like all investing styles borne out of backtests, it may ultimately struggle for traction in the real world. Smart strategies that look good on paper can misfire thanks to trading costs and market reversals.“Seasonality offers alpha opportunities, but often these are theoretical rather than practical,” said Nicolas Rabener, founder and CEO of FactorResearch.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 World Is Watching as Coinbase Goes Public

    Exchange executives worldwide say the direct listing could spur adoption and acceptance of crypto.

  • JPMorgan Q1 earnings blow past estimates; Dimon sees 'extremely robust, multi-year growth'

    The firm released $5.2 billion of credit reserves, bolstering EPS.

  • Mortgage Rates in the U.S. Slide to the Lowest Level in a Month

    (Bloomberg) -- Mortgage rates in the U.S. fell for a second straight week, slipping to the lowest level in more than a month.The average for a 30-year loan was 3.04%, down from 3.13% last week and the lowest since early March.The decline gives Americans another shot at borrowing costs near the lowest on record -- either for purchasing homes or refinancing current loans. Rates plunged last year as the Covid-19 pandemic took hold, with the 30-year average hitting a low of 2.65% in January. They shot up since then, as optimism increased for an economic rebound.This week, yields for the benchmark 10-year Treasuries slipped as vaccinations hit a bump and investors speculated that the recent rise in inflation will be temporary.“While this is welcome news for homebuyers already grappling with low supply and double-digit price gains,” Danielle Hale, chief economist at Realtor.com, said in an emailed statement, “the break could be temporary with the upward trend resuming as the outlook for the economy brightens.”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.

  • SushiSwap Makes $50K Crypto Donation to No Kid Hungry

    No Kid Hungry currently accepts donations in bitcoin, ether and a variety of other coins, according to The Giving Block.

  • Coinbase Hits $100 Billion Then Slips in Landmark Crypto Listing

    (Bloomberg) -- Cryptocurrency exchange Coinbase Global Inc. soared above a $112 billion valuation in its trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board.The massive valuation, which dwarfs more traditional financial companies including Intercontinental Exchange Group Inc. and Nasdaq Inc. itself, is a landmark moment for the crypto industry and for Coinbase, which was started almost a decade ago when few people had even heard of Bitcoin, and many exchanges were run by amateurs from their garages and homes.Coinbase shares traded at $332.99 apiece on Nasdaq at 2:56 p.m., after earlier climbing as high as $429.54. Bitcoin, which along with Ethereum made up 56% of Coinbase’s 2020 trading revenue, dipped below $62,000 after earlier hitting a record price.The early rally isn’t just a mark of success for Coinbase, which was valued at just $8 billion in its most recent funding round in 2018. It’s also a win for Nasdaq, which hosted its first direct listing after beating out the New York Stock Exchange for Coinbase’s debut. Coinbase is the biggest company to take the direct listing route to market.Coinbase Chief Financial Officer Alesia Haas said in an interview Wednesday morning that one of the reasons that the company picked Nasdaq was because the bourse offered the ticker symbol “COIN,” which wasn’t part of the New York Stock Exchange’s pitch.“Ultimately that they had the ticker COIN, and that was a really great ticker for us to get,” Haas said.Nasdaq on Tuesday set a reference price of $250 a share for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalization. Every major direct listing has so far opened significantly above its reference price, with Roblox shares debuting at $64 each –- 42% higher than the number set by the exchange.Coinbase shares changed hands at a roughly $90 billion valuation in early March, Bloomberg News reported at the time, in what was one of the last chances for investors to trade its private stock before the company went public.Digital Currency Group founder Barry Silbert, who’s built an empire that spans the crypto world, tweeted Tuesday that his shares would definitely not be changing hands at the reference price, in an early sign that the stock was set for a pop at the open.Direct listings are an alternative to a traditional initial public offering that has only been deployed a handful of times. Until Wednesday, every company to pursue one -- including Slack Technologies Inc., Palantir Technologies Inc. and most recently Roblox Corp. -- listed on the New York Stock Exchange.As well as the ticker, Nasdaq’s ability to provide a private market for the shares, as well as services it offers such as investor relations work, were among its selling points to Coinbase, according to a person familiar with the matter.Appropriately for a company that in May said it was committing to a “remote-first” work culture and doesn’t list a headquarters on its filing, Coinbase’s pitch meetings with Nasdaq happened virtually, the person added.“We evaluated both NYSE and Nasdaq and ultimately felt that the Nasdaq platform was aligned with our value as a tech company,” Haas said.In a direct listing, a company’s shares begin trading without it issuing new shares to raise capital. That avoids diluting the shares and also, unlike a traditional IPO, often allows the company’s existing investors to put their shares on the market without waiting for lockup period -- typically six months -- to expire.Luring Coinbase was a win for Nasdaq, whose years-long fight for a larger share of mega listings gained traction in the past year. Half of the 10 largest U.S. IPOs, excluding blank-check companies, were on on Nasdaq, according to data compiled by Bloomberg. That included the third largest, Airbnb Inc.’s $3.8 billion IPO in December, which was the biggest listing on Nasdaq since Facebook Inc.’s $16 billion monolith in 2012.Crypto UpstartsPutting his trust in the stock exchange is Coinbase Chief Executive Officer Brian Armstrong, who started the company with Fred Ehrsam in 2012. Unlike most rivals, Coinbase’s founders always envisioned strict regulatory compliance as a cornerstone of the operation, which has helped the exchange to grow in the U.S., where many early Bitcoin traders and investors were located.Ehrsam left the company in 2017, and is now investing in crypto startups. Both Armstrong and Ehrsam own huge swaths of Coinbase.Coinbase last week said it expects to report a first-quarter profit of $730 million to $800 million, more than double what it earned in all of 2020.“They are going to build out a full financial services company,” said Barry Schuler, a co-founder of Coinbase investor DFJ Growth who until last year sat on the company’s board. “Like a crypto version of a Goldman Sachs or a Morgan Stanley.”Skeptics, RegulationThe company’s rapid growth hasn’t been without controversy, ranging from frequent outages during periods of heavy trading to new restrictions Armstrong placed on employee discussions of politics last fall. In March, Coinbase also settled with the Commodity Futures Trading Commission for $6.5 million, after the agency said the company reported inaccurate data about transactions and that a former employee engaged in improper trades.Then there are the crypto skeptics, as well as the regulators around the world who are stepping up oversight and casting doubt on Bitcoin’s usefulness as a currency.European Central Bank executive board member Isabel Schnabel, in an interview this month with Der Spiegel, called Bitcoin “a speculative asset without any recognizable fundamental value.”A publicly traded Coinbase was unimaginable several years back when Wall Street was full of crypto bears including JPMorgan Chase & Co.’s Jamie Dimon, who once called Bitcoin “a fraud.”Dimon later said he regretted saying that. His bank as well as Goldman Sachs Group Inc. advised on Coinbase’s direct listing.“I don’t think we sought Wall Street’s approval but we did seek to bring more transparency to crypto and to introduce crypto to more and more users,” Coinbase’s Hass said.Crypto Partners“Wall Street can become trader of crypto. They are going to be partners of us going forward,” she said.Coinbase’s early investors are celebrating.“I think Coinbase is this decade’s Microsoft, Netscape, Google or Facebook,” Garry Tan, founder and managing partner at Initialized Capital and an early-stage Coinbase investor, said in an interview with Bloomberg Television Tuesday.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.

  • Stocks Close at Record Highs; Bond Yields Tumble: Markets Wrap

    (Bloomberg) -- U.S. stocks jumped to record highs with retail sales and weekly jobless claims data signaling an accelerating recovery in the world’s biggest economy. Yields on benchmark 10-year Treasury notes dropped the most since February.The S&P 500 advanced to an all-time high, led by the real estate, health care and technology sectors. Financial shares declined with yields falling, even after Citigroup Inc. and Bank of America Corp. posted better-than-forecast trading revenue. The Dow Jones Industrial Average and the Nasdaq 100 indexes also reached all-time peaks.“The consumer is ready to go out and spend, after nearly a year of lockdowns from Covid-19,” said Vanessa Martinez, managing director and partner at The Lerner Group, a Chicago-based wealth management firm. “There is plenty of pent-up demand in the economy.”The ruble slid as the Biden administration imposed new sanctions on some Russian debt, individuals and entities in retaliation for alleged misconduct related to the SolarWinds hack and the U.S. election. Traders suggested international concerns may have helped fuel the rally in Treasuries, with many investors caught positioned for higher yields.“This continues to be one of the more confusing dynamics in markets at least right now,” said Michael Arone, chief investment strategist for the U.S. SPDR exchange-traded fund business at State Street Global Advisors. “I think part of it is that you saw the 10-year make a very rapid move over a very short period of time, so this could be a pause before it starts to move higher again.”Expectations of a strong economic recovery, combined with optimism over monetary and fiscal stimulus, have pushed equities to record levels this week as company reporting continues. Still, investors are closely monitoring developments on the vaccine rollout, while also keeping an eye on the threat from rising inflation.“We are probably entering the last stage of the pricing of the growth acceleration, and we see encouraging signs suggesting the ‘reflationary’ environment can continue and be supportive for risky assets in the near term,” Goldman Sachs Group Inc. strategists led by Alessio Rizzi wrote in a note. “Across assets we continue to prefer equity over credit, and favor a pro-cyclical stance within equity.”Elsewhere, Bitcoin gained and Coinbase Global Inc. fell even following news that three funds at Cathie Wood’s Ark Investment Management bought shares at Wednesday’s debut of the largest digital asset exchange. Oil edged higher in the wake of Wednesday’s surge.Some key events to watch this week:China economic growth, industrial production and retail sales figures are on Friday.These are some of the main moves in financial markets: StocksThe S&P 500 Index rose 1.1% to a record high as of 4:02 p.m. New York timeThe NASDAQ Composite Index rose 1.3%, more than any closing gain since April 5The Dow Jones Industrial Average rose 0.9% to a record highThe MSCI World Index rose 0.9% to a record highCurrenciesThe Bloomberg Dollar Spot Index fell 0.1%, falling for the fourth straight day, the longest losing streak since April 6The euro was unchanged at $1.20The British pound climbed 0.1%, rising for the fourth straight day, the longest winning streak since Feb. 24The Japanese yen climbed 0.2%, rising for the fourth straight day, the longest winning streak since Feb. 22BondsThe yield on 10-year Treasuries declined 8.1 basis points, more than any closing loss since Feb. 26Germany’s 10-year yield declined 3.2 basis points, more than any closing loss since April 1Britain’s 10-year yield declined 6.7 basis points, more than any closing loss since March 2CommoditiesWest Texas Intermediate crude rose 0.3%, climbing for the fourth straight day, the longest winning streak since Feb. 25Gold futures rose 1.7%, the most since March 30For 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.

  • Netflix Creeps Closer to Investment Grade With Cash, User Growth

    (Bloomberg) -- Netflix Inc.’s long-term credit rating was upgraded two notches by Moody’s Investors Service, putting it on the cusp of investment-grade ratings.The streaming service is now rated Ba1, one step into junk, Moody’s said in a report Thursday. The upgrade reflects Netflix’s strong subscriber growth and expanding operating margins, and the rating outlook remains positive.Netflix’s junk bonds have been trading like investment grade since last year, building on years of cash growth and the company’s commitment to forgo further debt offerings. It added 8.51 million new subscribers in the final three months of 2020 as users binged shows like “Bridgerton” and “The Queen’s Gambit,” lifting its total subscriber count to over 200 million.Its most actively-traded bonds, the 4.875% notes due 2030 rising one cent to 116.75 cents, according to Trace. The 2028 bonds also rose by half a point.Moody’s rank now equals that of S&P Global Ratings, which upgraded Netflix in January following its fourth-quarter earnings. The BB+ rating also carries a positive outlook.Netflix fits into a broader trend in the junk market that has seen a wave of upgrades over the past year as companies capitalize on an economic rebound from the depths of Covid-19. Dell Technologies Inc. is also poised to shed its high-yield ratings after announcing plans to spin off its stake in VMware late Wednesday.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.

  • BlackRock’s Record-Breaking ESG Fund Looks Just Like a Big Tech ETF

    (Bloomberg) -- As the biggest launch in the history of ETFs, it’s a ringing endorsement of all things ESG. But beyond its billion-dollar debut, BlackRock Inc.’s new fund might feel awfully familiar to most investors.The top holdings in the U.S. Carbon Transition Readiness ETF (ticker LCTU) -- which lured about $1.25 billion in its first day on Thursday -- turn out to be Apple Inc., Microsoft Corp., Amazon.com Inc., Alphabet Inc. and Facebook Inc.The same five companies, in the same order, are the top stakes in the largest environmental, social and governance ETF on the market, the $16.5 billion iShares ESG Aware MSCI USA ETF (ESGU). That’s also from BlackRock with a fee of 0.15%, half the price of LCTU.In fact, those tech megacaps form the bedrock of many exchange-traded funds, both in the ESG space and beyond. For example, four of them also are among the five largest holdings of the $167 billion Invesco QQQ Trust Series 1 ETF (QQQ), which is simply tracking the Nasdaq 100. “The new fund looks akin to any other U.S. tech fund,” said James Pillow, managing director at Moors & Cabot Inc. Its early success is all tied to the growing “drumbeat” to allocate to investments tied to responsible themes, he said.For all their overlap in terms of holdings, there are key differences between funds like LCTU and ESGU.The new arrival is actively managed, and aims to target Russell 1000 companies that are best positioned for a green energy transition, considering issues like clean technology and waste and water management.Meanwhile, its more-established sister product passively tracks an index with a broader ESG remit.The sheer size of some tech names naturally leads to heavy ownership, especially by cap-weighted ESGU. The common holdings also may say more about the tech giants and their commitment to ESG, including clean power, than they do about the funds’ strategies.LCTU’s similarities to more mainstream indexes are intentional, according to Carolyn Weinberg, global head of product for iShares at BlackRock. “It enables our clients to invest as a core part of their portfolio as opposed to a satellite aspect,” she said. “They can build portfolios the way that they traditionally build portfolios, but substitute out the benchmark and add the sustainable or climate version.”The approach has certainly won some early fans. A consortium of large institutions was behind the stellar debut of LCTU and another fund, the BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD), the firm said in a statement. These included the California State Teachers’ Retirement System.Read more: Record Number of ETFs Launch Into Industry Deluged With CashThe record launch comes while many questions linger in the still-maturing ESG sector. A report released Friday by the U.S. Securities and Exchange Commission cautioned that some firms are mis-characterizing their products as ESG, possibly even violating securities laws in the process. The agency didn’t name any companies.“The definition of ESG is wide enough to drive a fleet of semi trucks through,” said Ben Johnson, Morningstar Inc.’s global director of ETF research. Even so, ESG ETFs are in demand. They attracted a record $31 billion in 2020, almost four times the prior year. In January alone, investors added $6.3 billion for a best-ever month. That’s pushed assets to an all-time high of $75 billion, up from less than $10 billion two years ago.“It’s one of the areas where I think you will see growth, but there’s very little consensus as far as how you measure these things,” said Marc Odo, client portfolio manager at Swan Global Investments. “We need to be little bit more diligent about how we use that label.”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.

  • When will ‘plus-up’ stimulus check payments arrive? Catch-up COVID payments sent to 700,000 Americans in latest batch

    The IRS sent out COVID-19 relief checks to nearly 2M more Americans, including over 700,000 'plus-up' payments for people eligible for more money.

  • The monthly stimulus checks for families will start in July, IRS now says

    The IRS commissioner says the child credit payments will arrive on time after all.

  • Powell Says U.S. Entering Faster Growth, Though Virus Spike Remains a Risk

    (Bloomberg) -- The Federal Reserve will likely scale back its bond purchases before considering raising interest rates, Chairman Jerome Powell said, hardening expectations on the sequence of its eventual exit from aggressive policy support.“We will reach the time at which we will taper asset purchases when we’ve made substantial further progress toward our goals from last December, when we announced that guidance,” Powell said Wednesday in a virtual event hosted by the Economic Club of Washington. “That would in all likelihood be before -- well before -- the time we consider raising interest rates. We haven’t voted on that order but that is the sense of the guidance.”The appearance was the latest of several by the Fed chair this month, including an interview on CBS’s “60 Minutes” show on Sunday in which he said the economy appears to have turned a corner toward faster growth amid widening vaccinations against Covid-19, but central bankers would not be in a hurry to remove their support.Policy makers will wait until inflation has reached 2% sustainably and the labor-market recovery is complete before considering lifting interest rates, and the combination is unlikely to happen before 2022, he said. Their forecasts last month signaled rates being held near zero through 2023.The U.S. central bank enters its traditional blackout period on public comment on Friday night ahead of the April 27-28 meeting of the Federal Open Market Committee.“When the purchases go to zero, the size of the balance sheet is constant, and when bonds mature you reinvest them,” Powell said. “And then another step -- and we took this late in the day in the last cycle -- was to allow bonds to start to runoff. And we haven’t decided whether to do that or not.”Powell added that he doesn’t think the Fed would actually sell bonds into the market, something it also didn’t do during the recovery from the 2008 financial crisis.Fed Vice Chair Richard Clarida made a similar point about the sequencing of the exit strategy in remarks later Wednesday.“We’re going to reduce the pace of purchases at some point and that would occur prior to any decision about lifting off,” he said in response to question during a virtual event hosted by the Shadow Open Market Committee. Noting that he has a “very robust” baseline outlook for U.S. growth in 2021 that could be the fastest in 35 years, Clarida added that policy makers were not going to act on a forecast.“This is going to be outcome based. We’re going to be looking at the labor market indicators and the inflation data as it comes in,” he said.Patience PledgedPowell and his colleagues have pledged to be patient and maintain aggressive monetary policy support, even as the economic recovery from the pandemic picks up speed. That dovish view has helped U.S. stocks reach fresh record highs. Recent data has also painted a brighter picture as vaccinations spread and the economy reopens, with employers adding 916,000 jobs in March.“Most members of the committee did not see raising interest rates until 2024, but that isn’t a committee forecast, it isn’t something we vote on or or act on as a group -- it really is just our assessment,” Powell said. “Markets focus too much on what we call the economic predictions, and I would focus more on on the outcomes that we’ve described.”Fed policy makers substantially lifted their growth and employment forecasts at the central bank’s meeting last month. Their median estimate sees the economy expanding 6.5% this year and the unemployment rate declining to 4.5% by the end of 2021.Powell said the U.S. is going into a period of faster growth and job creation, and that the main risk is another spike in Covid-19 cases due to virus strains that may be more difficult to treat.Minutes of the central bank’s March meeting released April 7 said policy makers expect it will likely be “some time until substantial further progress” was made on employment and inflation. That refers to the threshold they’ve set for scaling back bond purchases of $120 billion a month.(Updates with comments from Clarida 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.

  • AMC Theaters CEO Says Stock Is ‘Under Attack’ From Short Sellers

    (Bloomberg) -- The chief executive officer of AMC Entertainment Holdings Inc. said the movie-theater chain is once again “under attack” from short sellers after skirting bankruptcy during the Covid-19 pandemic.The volume of short sales -- bets that the stock will go down -- rose about 50% in March to 73.8 million shares, CEO Adam Aron said in a discussion with the social-media finance commentator Trey Collins. In a wide-ranging interview, he also touched on a proposal to raise new equity and praised the meme investors who bid the stock up to more than $20 a share in January.The shares have since retreated from that lofty level. But they rose as much as 9.4% on Thursday after Aron said he has no immediate plans to issue any of the 500 million new shares the company is asking shareholders to authorize. The company won’t seek to sell those shares in 2021 but rather in the coming years. Aron is seeking to carry out a long-term growth plan that could silence AMC’s doubters.“There are strategies we have that are very good for AMC, to come out of this pandemic, to rebuild this company,” Aron said. “But not only get back to where we were, I’d like to keep going. And I’d like to grow this company even more so.”Shirting CollapseAron also reflected on the difficult stretch the theater chain endured. In 2019, revenue averaged $450 million a month. It slumped virtually to zero a little over a year ago, after the pandemic forced theaters to close. The chain was weeks away from running out of cash at least five times, and has since restructured its finances, banking enough cash to last through most of 2021.Other theaters have succumbed to the Covid-19-struggle. ArcLight Cinemas and Pacific Theatres, two jointly owned California movie-theater chains, announced plans this week to close permanently, underscoring the still-tenuous state of the industry.If short-term funding needs arise, AMC has a prior authorization to sell 43 million new shares. Aron said that’s enough to get the company through the pandemic, but limits its growth opportunities. If investors at the May 4 annual meeting approve the plan for additional stock, he’ll gain flexibility to buy back debt at a discount or acquire another chain at an attractive price, which would counteract any dilution.The theater chain has about 450 million shares outstanding now, according to data compiled by Bloomberg. Aron’s remarks were included in a regulatory filing Thursday.Praise for TradersAron, who has long been known as outspoken, also praised the internet investors who see themselves as fighting against “conventional” market participants, like short sellers who profit when stock prices decline. He connected with Collins, who offers online investment commentary under the username Trey’s Trades, after his 30-year-old son saw a tweet that Collins had sent to his nearly 50,000 followers, known as “apes.”“My hat’s off to you,” Aron said. “I’m well aware that you have been talking about AMC a lot over the last few months and you have, you know, hundreds of thousands of subscribers, tens and tens of thousands of people watching your shows on the YouTube channel,” Aron said.“I actually work for you,” he said, “and for that reason it’s a special reason for me to engage with all of you.”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.

  • Guess Who Might Be Buying $BTC? Grayscale, the Power Behind $GBTC

    The investment comes a little over a week after Grayscale confirmed that it would convert GBTC into an ETF.

  • When are taxes due? Despite income federal deadline extension, April 15 remains key deadline for some taxpayers.

    Federal tax returns are due May 17, but many people still need to pay their first quarter 2021 estimated tax payments April 15. Plus more tax tips.