Fox News security analyst Walid Phares on Iran's navy exercises in the Strait of Hormuz, Iran's political future and Secretary of State Mike Pompeo pushing for the release of a U.S. pastor detained in Turkey.
Fox News security analyst Walid Phares on Iran's navy exercises in the Strait of Hormuz, Iran's political future and Secretary of State Mike Pompeo pushing for the release of a U.S. pastor detained in Turkey.
Mortgage rates have risen past a psychological benchmark for the first time since they fell to historic lows during the pandemic. The average rate on a 30-year fixed-rate mortgage increased to 3.02% this past week, according to Freddie Mac’s Primary Mortgage Market Survey—the first time since July that the rate has risen above 3%. “Since reaching a low point in January, mortgage rates have risen by more than 30 basis points,” wrote Freddie Mac’s chief economist, in a release.
(Bloomberg) -- Macy’s Inc. is tapping the junk-bond market to capitalize on record-low borrowing costs after reporting better-than-expected holiday sales and predicting that pandemic pressures will ease later this year.The department store chain is selling $500 million of senior notes due 2029 to help fund a tender offer of the same amount, according to separate statements Tuesday. It’s looking to buy back notes due in the next four years with coupons between 2.875% and 7.6%.The bond deal launched at a coupon of 5.875% after initial price discussions ranged between a low-to-mid 6% yield, according to people with knowledge of the matter, who asked not to be identified discussing a private transaction.Representatives for Macy’s and Credit Suisse Group AG, which is leading the bond sale, declined to comment.Troubled companies have been engineering reprieves for themselves by taking advantage of historically cheap funding costs in high-yield markets. Party City Holdco Inc. and Carnival Corp. have raised cash with junk bond sales over the past few weeks. Bloomberg reported in February that Macy’s was sounding out investors on a potential debt sale that would further aid the retailer through the pandemic.Macy’s shares and bonds plunged last year as the pandemic took hold in the U.S. and it was forced to temporarily close stores. Government stimulus measures and gradual re-openings helped the company’s debt rally from distressed levels, and many of the securities now trade near or above par.Macy’s, which also owns Bloomingdale’s and BlueMercury, reported all three of its brands exceeded expectations in the holiday quarter. It predicted 2021 will be a “recovery and rebuilding year,” according to a statement, “with momentum building in the back half.”The new issue may be sold as soon as Tuesday, one of the people said. JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. are also managing the offering.(Updates with early pricing discussions and coupon from 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.
A new compromise would make millions of Americans ineligible for the third checks.
(Bloomberg) -- As the leader of crypto exchange Kraken, Jesse Powell is bound to be bullish on Bitcoin. Yet he’s projecting a disruptive future that would stretch the imagination of even the most ardent crypto fans.In a Bloomberg Television interview, Powell said Bitcoin could reach $1 million in the next decade, adding that supporters say it could eventually replace all of the major fiat currencies.“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”The CEO also said San Francisco-based Kraken is considering going public, possibly next year.Extreme predictions are nothing new in the world of Bitcoin, where adherents stand to profit from convincing a wider audience that crypto is a legitimate asset class, rather than a speculative fad. The dollar remains the world’s reserve currency and is the benchmark for global trade, though its value has softened in the past year.Powell said Bitcoin bulls see it one day exceeding the combined market cap of the dollar, euro and other currencies.The dollar “is only 50 years old and it’s already showing extreme signs of weakness, and I think people will start measuring the price of things in terms of Bitcoin,” he said.The digital currency slipped 3% in early U.S. trading on Thursday, hovering around $49,000. Prices have surged almost 600% since the start of 2020 on the back of wider mainstream adoption, with bulls seeing it as both an inflation hedge and speculative asset.Critics argue that Bitcoin is in a giant, stimulus-fueled bubble destined to burst like the 2017 boom and bust cycle.Kraken benefits from higher prices as it reaps fees from increased trading. Bloomberg reported last month that the exchange was in talks to raise new funding, which would double the company’s valuation to more than $10 billion.“Personally, I think $10 billion is a low valuation,” Powell said. “I wouldn’t be interested in selling shares at that price.”The CEO did acknowledge the potential for wild market swings, saying prices can “move up or down 50% on any given day.” That kind of volatility has long been one of the negatives of Bitcoin, relegating the market to one of speculation, rather than a means of doing business.“If you are buying into Bitcoin out of speculation, you should be committed to holding for five years,” Powell said. “You have to have strong convictions to hold.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Stock benchmarks on Thursday afternoon were sharply lower as Federal Reserve Chairman Jerome Powell said he was monitoring the recent rise in bond yields, and that the pent-up inflation expected this year was unlikely to last.
U.S. Treasury yields Thursday after Federal Reserve Chairman Jerome Powell said he was monitoring the rise in bond yields and that he would be concerned if financial conditions did tighten. "I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals," Powell said during a webinar hosted by The Wall Street Journal. The 10-year Treasury note yield climbed 7.1 basis points to 1.541%. Bond prices fall as yields rise. Many investors had said that if Powell didn't offer more explicit pushback on higher government bond rates, it could fuel Treasury market weakness. Powell stressed again that the Fed would be "patient" with higher inflation expected this year, saying it was likely to be a "one time" effect and not price gains that continue year-after-year.
(Bloomberg) -- Chancellor Rishi Sunak unveiled a fresh wave of support for home buyers across the U.K., adding further fuel to one of the economy’s only bright spots during the pandemic.The government postponed the deadline for a tax break on purchases for six months, and set out plans to enable buyers to put down a smaller deposit for their properties.The tax perk, which was due to end this month and allowed buyers to save up to 15 thousand pounds ($21,000), juiced the market during the lockdown that devastated other parts of the economy.Mortgage demand soared as buyers rushed to take advantage, and data this week showed annual home-price growth accelerated to almost 7% in February. But the extension merely staves off a cliff edge temporarily, and the market could suffer a setback once it ends.In his Budget on Wednesday, Sunak said the temporary level before so-called stamp duty kicks in will remain at 500,000 pounds ($698,000) until the end of June. It will then drop to 250,000 pounds before returning to its usual level of 125,000 pounds in October. U.K. homebuilders rose to session highs after the announcement.The three-month extension of the full benefit is likely to mainly benefit people who are already in the process of buying a home, rather than opening up the possibility of savings to new buyers, said Aneisha Beveridge, head of research at Hamptons International.“There is fairly limited time for it to make a difference for those not yet in the market,” she said. Still, property website Rightmove Plc estimates that an additional 300,000 transactions in England could beat the deadline at the end of June.Sunak also set out plans for government-backed mortgages that will allow house purchases of up to 600,000 pounds with only a 5% deposit.Lenders pulled similar low-deposit products from the market last year -- only eight were available in January, according to the Treasury. Sunak said lenders including LLoyds Banking Group Plc, Natwest Group Plc, Banco Santander SA, Barclays Plc, and HSBC Holdings Plc will be offering the mortgages from next month, with Virgin Money UK Plc to follow “shortly after.”(Updates with homebuilders, Rightmove estimates, lenders offering mortgages)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.
Congress is nearing passage of the third economic stimulus check it will send out to you and other taxpayers as part of its Covid-19 relief bill.
Traders aren’t sure if OPEC+ will leave output cuts steady in April, or lower them slightly. Prices could firm if the cuts stay at current levels.
Australian dollar has pulled back slightly on Wednesday, but what I am keeping a close eye on is the fact that the February candlestick was a shooting star.
36% of taxpayers said the Recovery Rebate Credit was the 'most confusing' part of taxes this year.
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.
Cathie Wood's flagship ARK Invest ETF and a VanEck Vectors Social Sentiment backed by Wall Street bro Dave Portnoy are down by at least 4%. The VanEck Vectors Social Sentiment ETF was down 4.3% in Thursday afternoon trade, in its debut. Meanwhile, Wood's ARK Innovation deepened its slide into correction on Thursday, off 6.6%. Both ETFs focus on drawing interest from many of the growthy tech stocks which are in the market's crosshairs as bond yields rise, including electric-vehicle maker Tesla Inc. . On Thursday, bonds took a leg higher after Federal Reserve Chairman Jerome Powell said he was watching the rise in rates but offered no concrete steps the central bank was taking to tamp down rate moves. The 10-year Treasury yield jumped by 7 basis points in afternoon action, hitting around 1.54% and accelerating a sell-off in stocks that are viewed as pricey and that don't offer a coupon. The tech-heavy Nasdaq Composite Index was down nearly 10% from its Feb. 12 peak, meeting the commonly used definition for a correction. The Dow Jones Industrial Average was down more than 400 points, or 1.3%, and nursing a 0.8% year-to-date gain. The S&P 500 index was down 1.6% and holding on to a 2021 gain of less than 0.1%. The Nasdaq Composite was negative for the year, down 1.4%.
(Bloomberg) -- A firm hired to monitor Texas’ power markets says the region’s grid manager overpriced electricity for almost two days during last month’s energy crisis, resulting in $16 billion in overcharges.Amid the deep winter freeze that knocked nearly half of power generation offline, the Electric Reliability Council of Texas, known as Ercot, set the price of electricity at the $9,000-a-megawatt-hour maximum -- standard practice during a grid emergency. But Ercot left that price in place days longer than necessary, resulting in massive overcharges, according to Potomac Economics, an independent market monitor hired by the state of Texas to assess Ercot’s performance. In an unusual move, the firm recommended in a letter to regulators that the pricing be corrected and that $16 billion in charges be reversed as a result.Potomac isn’t the first to say that leaving electricity prices at the $9,000 cap for so long was a mistake. Plenty of power companies at risk of defaulting on their payments have said the same. But the market monitor is giving that opinion considerable weight and could sway regulators to let companies off the hook for some of the massive electricity charges they incurred during the crisis.The Arctic blast that crippled Texas’s grid and plunged more than 4 million homes and businesses into darkness for days has pushed many companies to the brink of insolvency and stressed the power market, which is facing a more-than $2.5 billion payment shortfall. One utility, Brazos Electric Power Cooperative, has already filed for bankruptcy, while retailer Griddy Energy LLC defaulted and has been banned from participating in the market.Retroactively adjusting the power price would ease the financial squeeze on some of the companies facing astronomical power bills in the wake of the energy crisis. EDF Renewable Energy and Just Energy are among those asking the Public Utility Commission to reset the power price for the days after the immediate emergency while others have also asked regulators to waive their obligation to pay until price disputes are resolved.“If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, the Ercot independent market monitor director at Potomac Economics. “It creates a cascading effect.”The erroneous charges exceed the total cost of power traded in real-time in all of 2020, said Bivens, who spent 14 years at Ercot, where she most recently was director of market operations before becoming its watchdog. “It’s a mind-blowing amount of money.”While prices neared the $9,000 cap on the first day of the blackouts, they soon dipped to $1,200 -- a fluctuation that the utility commission later attributed to a computer glitch. The panel, which oversees the state’s power system, ordered Ercot to manually set the price at the maximum to incentivize generators to feed more electricity into the grid during the period of supply scarcity. The market monitor argues that Ercot should have reset prices once rotating blackouts ended because, at the point, the emergency was over.It’s asking the commission to direct Ercot to correct the real-time price of electricity from 12 a.m. Feb. 18 to 9 a.m. Feb. 19. Doing could save end-customers around $1.5 billion that otherwise would be passed through to them from electricity providers, Bevins said.But major power generators that reaped substantial profits from the high prices during the crisis week are likely to push back against any move to do so.“The signal that we want to send is not that we changed the rules after the game’s been played,” said Michele Richmond, executive director of the Texas Competitive Power Advocates, a trade group representing companies that own 70% of the generating capacity in Ercot. “That doesn’t instill confidence in the markets.”Bivens acknowledged the market monitor isn’t typically in favor of repricing, but said the correction is necessary.“This isn’t some Monday morning quarterbacking,” she said. “Ercot made an error and we don’t let errors slide.”The utility commission on Wednesday adopted a prior recommendation made by the market monitor, voting to to claw back some payments to power generators for services they never actually provided during energy crisis. The commissioners also expressed support for capping the price of certain grid services -- a request made by several retailers -- but didn’t take action on it. Another commission meeting is scheduled for Friday.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.
Federal Reserve Chairman Jerome Powell on Thursday said he would be concerned if there was persistent tightening in U.S. financial conditions
Indian merchants have almost entirely stopped signing new export contracts with Iranian buyers for commodities such as rice, sugar and tea, due to caution about Tehran's dwindling rupee reserves with Indian banks, six industry officials told Reuters. "Exporters are avoiding dealing with Iran since payments are getting delayed for months," said a Mumbai-based dealer with a global trading house. Iran's rupee reserves in India's UCO and IDBI Bank, the two lenders authorised to facilitate rupee trade, have depleted significantly and exporters are not sure whether they would be paid on time for new shipments, the dealer said.
Longtime Tesla Inc (NASDAQ: TSLA) bull Ron Baron acknowledged Thursday morning his fund Baron Capital sold 1.7 million shares of the electric automaker despite his long-held belief the stock has a path to $2,000. What Happened: Baron Capital invested $387 million in Tesla's stock back in 2014 and the position has grown to be worth $5.5 billion in February, Baron said on CNBC's "Squawk Box." Over the past six months, the fund has sold 1.7 million out of its 8-million share position between $450 and $900 a share with an average price of $666.70. Baron said many of his friends were skeptical with his original 2014 thesis that Tesla's stock would return 20 times. "We persisted," Baron said. "And at the time we invested, it was unlikely in most people's opinions that electric cars were going to dominate." Related Link: Ark More Convinced On Tesla's Autonomous Strategy And Cathie Wood Says A New Price Target Is Coming Soon Why It's Important: The decision to authorize a sale of a stock he believes still has tremendous upside potential was due strictly to profit-taking as the stock's surge means it accounted for an outsized representation in the fund portfolio, Baron said. The fund also used some of the proceeds from the sale to pay down part of a line of credit. Baron said it was "painful" to sell close to 2 million shares of Tesla's stock as the company's prospects of eventually selling 20 million cars a year is a more realistic outcome. Tesla has so many opportunities ahead, such as the ability to monetize each of the 20 million cars sold by charging a monthly $100 fee for autonomous driving features. "That alone is worth the present price of the stock in 10 years," he said. See also: How to Invest in Tesla Stock What's Next: The billionaire himself said he has not sold a single share he personally owns and is unlikely to do so "for another 10 years." Tesla's stock traded around $657 a share at publication time. See more from BenzingaClick here for options trades from BenzingaExclusive: Grayscale CEO 'Wouldn't Rule Out' Future Bitcoin ETF Launch In US© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- The most popular stock trade in China is unraveling, tarnishing the reputations of some of the country’s most successful money managers and undermining the outlook for the world’s second-largest equity market.Until three weeks ago, buying the nation’s beloved liquor maker Kweichow Moutai Co. was a surefire way for the $3 trillion mutual fund industry to mint money and attract bumper inflows. The stock soared 30% year-to-date through its Feb. 10 record, after gaining almost 70% in 2020 -- and doubling in the year before that.Many funds, flush with a record amount of cash, didn’t have a choice if they wanted to keep their clients and attract new investors. Buying Moutai was the simplest and most effective way to top rankings -- until it wasn’t. The stock began tumbling after the Lunar New Year break, and kept falling. It’s now down 22% since its peak, including a drop of as much as 6% Thursday, and has lost more than $111 billion in value.One of the most high-profile casualties is E Fund Management Co.’s Zhang Kun, the first in China to oversee 100 billion yuan ($15 billion). Zhang’s E Fund Blue Chip Selected Mixed Fund is down 12% in 10 trading days after returning 95% last year largely due to a big bet on baijiu, the Chinese white spirit. The fund had 9.6% of its assets invested in Moutai as of December. Another fund run by Zhang has lost 23%. Zhang didn’t immediately reply to a request for comment.The fund manager has received “verbal abuse” in recent weeks by investors who were previously fans, according to a report Wednesday in China’s state tabloid Global Times. He was known as “Prince Charming” or “Brother Kun” among his investors, who now refer to him on social media as “Kun Gou” or “Kun the dog” -- an offensive term in Chinese.Other copycat money managers will be feeling the pain: recent data showed two-thirds of mutual fund assets were invested in only 100 stocks, while the top 400 stocks lured 93% of total funds. Although China’s onshore market contains more than 4,000 stocks, Moutai is by far the largest with a market value of about $390 billion.Moutai accounts for 27% of the loss in the FTSE China A50 Index of the nation’s largest companies since Feb. 10. When added together with fellow spirit makers Wuliangye Yibin Co. and Luzhou Laojiao Co., the three comprise more than half of the gauge’s decline.Concern had been growing about the stretched valuations of Moutai and its peers, especially as gains accelerated. A gauge tracking consumer staples, including liquor makers, traded at a record 36 times projected 12-month earnings in February.Read how China is warning against ‘entertaining’ investors with fund pitchesTo be sure, the company’s shares have faced plenty of risks in the past. The stock tumbled about 8% in a single day in July after the People’s Daily criticized the high price of the company’s liquor. In 2017, Xinhua News Agency said the stock was rising too fast, triggering a selloff. Back in 2013, the stock plunged when Xi Jinping came to power and clamped down on lavish spending by party cadres.But this time around, authorities have grown increasingly concerned about risks to the financial system posed by excess liquidity. On Tuesday, China’s top banking regulator jolted markets with a warning about the need to reduce leverage amid the rising risk of bubbles globally and in the local property sector. With Moutai being the best-known proxy for liquidity-fueled bets and momentum, fund managers will likely need to find a new strategy to protect their returns.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Baird analyst Ben Kallo began coverage of the company, setting a price target that implies a modest gain for the stock.
U.S. stocks closed lower Wednesday, as benchmark bond yields climbed nearer to their highs of 2021 and a slate of fresh economic data came in mixed, despite progress on the vaccination front.