Shawn Snyder, Citi U.S. Wealth Management Head of Investment Strategy joins the Yahoo Finance Live panel to discuss the latest market action.
Shawn Snyder, Citi U.S. Wealth Management Head of Investment Strategy joins the Yahoo Finance Live panel to discuss the latest market action.
(Bloomberg) -- Monday may provide the true test for Saudi Arabian markets following the U.S. intelligence report that said Crown Prince Mohammed bin Salman signed off on the killing of columnist Jamal Khashoggi.The benchmark Tadawul All Share Index fell 0.5% on Sunday, a move that barely reflected the slump in emerging markets at the end of last week when Saudi markets were closed. The relatively muted response may be a sign of relief that the sanctions announced by the U.S. weren’t tougher, though the lower participation of foreign investors on a Sunday might have clouded the picture, analysts said.President Joe Biden’s administration imposed only modest new sanctions on the kingdom when the report was released last week. Still, the president said in an interview with Univision News that he told Saudi King Salman that “the rules are changing” in the kingdom’s relationship with the U.S. and promised “significant changes” on Monday.Saudi Arabia said it “rejects the negative, false and unacceptable assessment in the report” that implicated the crown prince, the king’s son and effective ruler.The report “may affect international institutions’ flows into the Saudi market in the short term, especially until Biden’s Monday speech,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital Ltd in Abu Dhabi. “But local money, whether retail or institutional, will be steady.”Outflows from the Saudi stock exchange rose to a record of 6.6 billion riyals ($1.76 billion) in October 2018, the month Khashoggi was killed at the Saudi consulate in Istanbul. It was the biggest exodus from Saudi markets since the country introduced measures in 2015 that made it easier for foreigners to invest in its stock market.Saudi bonds will be on investors’ radars in anticipation of further measures from Washington. The country’s $2.25 billion of dollar bonds maturing in 2061 rallied Friday, with yields falling 3 basis points, after dropping for five consecutive sessions. Meanwhile, the country’s risk of default as measured by credit default swaps jumped the most since September.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 Reserve Bank of Australia doubled down on bond purchases Monday, spurring the biggest drop in yields in a year as policy makers around the world seek to check runaway bets on reflation.The central bank announced plans to buy more than $3 billion of longer-dated securities, following up on a surprise boost in purchases of shorter-maturity debt at the end of last week. Japanese government bonds also advanced while those in New Zealand surged in the wake of an about-face in the American market on Friday.As the global trading day shifts west, yields on German bunds look primed to decline, with attention also turning to bond-buying figures from the European Central Bank. Markets are also awaiting more from key global leaders this week, including Federal Reserve Chair Jerome Powell, who will deliver what are likely to be his final public comments before a mid-month policy meeting.“The Fed may realize that telling the market that they’re ok with what’s happened is just a red flag to a bull,” said Eric Robertsen, chief strategist at Standard Chartered Bank. “The RBA is in the same camp as every major central bank -- they want their economies to recover but they’re more and more dependent on low interest rates.”This Week: Dizzied Bond Traders Brace for More Pain as Fed Speakers Line UpBond markets have been pricing in accelerating inflation on expectations of a rapid global economic recovery that will leave central banks unable to maintain loose settings. Policy makers have pushed back, but with trillions of dollars sloshing around economies courtesy of monetary and fiscal infusions and vaccination rollouts, investors have seen rising price pressures on the horizon.U.S. Treasury yields ended an already tumultuous week on Friday with another sharp move -- shifting suddenly lower as traders squeezed in their final business for the month. The 10-year yield dropped as much as 14 basis points amid month-end rebalancing from equities to bonds. They were little changed on Monday during Asian trading.That set the scene for the open of trading in Asia on Monday, with Australia’s 10-year yield immediately dropping 19 basis points. It then dropped as much as 32 basis points to 1.60% after the RBA said it would buy A$4 billion ($3.1 billion) of long-dated bonds -- double the usual amount -- in a regular operation.Read More: Australia Central Bank Girds for All-Out Defense of Yield TargetThe RBA is expected to maintain its broad settings on Tuesday: a key interest rate and three-year bond yield target at 0.10% and a A$100 billion QE program for longer-dated securities. It surprised last month by announcing a second round of QE when the current tranche expires in mid-April and could tweak its buying plans Tuesday.“Markets will be looking for a firm response to the extreme bond market volatility,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada. “At a minimum, we would expect a step up in yield-curve control for the next couple of weeks, possibly including more purchases on non QE operation days.”Coming Monday: ECB to Prove Whether Pledge to Cap Yields Is More Than Just TalkThe ECB is due to reveal how serious it is about countering rising yields when it publishes its latest bond-buying figures.A significant increase in purchases would show they are backing their words with action. Yet if the amount is little changed it could convince investors to push on with reflation trades, which are effectively bets the ECB will tolerate higher borrowing costs as the economy begins to recover.Based on moves in 10-year German bond futures since Friday’s close, cash bond yields are implied to fall around four basis points from the open.“With the ECB due to report its bond-buying figures today, the RBA meeting tomorrow and a raft of Fed speakers due this week, the risk is central banks fight back and throw some doubt in rates traders’ minds that the earlier hike schedule is mispriced,” Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne, said in a note.(Updates with outlook for German bond market 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) -- Turkey’s $736 billion economy outperformed major competitors in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed, data will likely show Monday.Gross domestic product probably rose 6.9% from a year earlier, according to the median of 20 forecasts in a Bloomberg survey, more than in any other G-20 nation, including China. The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year.The data will expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.“The key drivers of the economic activity in the last quarter were industrial production and credit growth,” said Can Ayan, an Istanbul-based economist at Aktif Bank, who ranks second among forecasters of Turkish GDP data. Consumption and government spending will support activity in the first quarter of 2021, lifting growth over the year to 5.2%, Ayan said.The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid-19 emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.Agbal has raised the benchmark interest rate by 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”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.
Brazos Electric Power Cooperative Inc is one of dozens of electricity providers facing enormous charges stemming from a severe cold snap last month. The fallout threatens utilities and power marketers who collectively face billions of dollars in blackout-related charges, executives said. Brazos and others that committed to provide power to the grid and could not, were required to buy replacement power at high rates and cover other firms' unpaid fees.
The payments in President Biden's COVID relief plan will rely on an IRS formula.
The legislation, which just passed the U.S. House, includes several tax savers.
When you buy $1,000 of a company’s stock in your Robinhood account, how much of that cash goes directly to help fund the company and its business operations? The answer is $0. Where Your Cash Goes: The issue of buying shares of stock to help “save” struggling companies like GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) has come up frequently on social media since the WallStreetBets-fueled meme stock buying frenzy began in January. However, experienced investors know that publicly traded companies don’t get a dime from the cash you spend buying their shares of stock. Related Link: Kevin O'Leary Of 'Shark Tank,' Benzinga CEO Jason Raznick Talk GameStop, Bitcoin And Economic Recovery Trades Companies typically raise cash in the public market when they first go public via an initial public offering (IPO), a merger with a special acquisition company (SPAC) or a direct listing. However, once their shares are trading on the public market, any shares you buy in your brokerage account are coming directly from another shareholder who is selling, not the company itself. Aside from any trading fees you may spend on the transaction, every dollar you spend buying shares of GameStop, AMC or other stocks ends up in the brokerage account of the person or institution that sold them to you. AMC and GameStop traders on Reddit and Twitter have been celebrating their efforts to “save” these companies by buying shares of stock. In reality, the companies haven’t gotten any funds from any of the recent stock buying. How Public Companies Raise Funds: Once a company is public, it must raise capital via options such as a follow-on public offer (FPO), also known as a secondary offering. FPOs can be both dilutive or non-dilutive. A non-dilutive FPO happens when the founders or other large shareholders sell some of their shares to the public. An FPO may increase a stock’s float, or free-trading shares, but it does not increase the company’s outstanding shares or decrease its EPS. A dilutive FPO happens when a company creates new shares to sell to the public. By creating new shares, the ownership stakes of existing shareholders are decreased slightly the same way the value of a currency erodes when central banks print more money. Companies can also raise capital by borrowing money. However, the company must first find a lender that will agree on a reasonable interest rate. Many lenders don’t want to touch struggling companies like AMC and GameStop because they aren’t convinced they will be able to pay back their debts. What It Means For Meme Stocks: Despite all the publicity and wild volatility in GameStop, the company itself hasn’t actually been directly helped by all the retail buying. GameStop reportedly considered selling more shares during the January rally, but the SEC has said it would closely scrutinize any company that attempted to take advantage of the extreme trading volatility to knowingly sell overpriced shares to vulnerable investors. In June 2020, bankrupt Hertz Global Holdings Inc (OTC: HTZGQ) withdrew a proposed $500 million equity offering after the SEC cracked down on the company for potentially preying on investors. AMC, on the other hand, was able to raise $1.2 billion via debt and equity deals in January after its stock rallied more than 700%. “The irony here, of course, is that GME couldn’t even tap equity markets to take advantage of the recent short squeeze,” DataTrek Research co-founder Nicholas Colas said this week. He said the so-called “dumb money” flowing into the market may not be helping the companies directly, but it is certainly making short sellers think twice. “You don’t have to be long, but betting against people who think their 10-share buy order is going to change the world is both risky and not actually a fundamentally-based investment position,” Colas said. Benzinga’s Take: GameStop hasn’t been helped directly by all the retail stock buying, but investor enthusiasm and a higher stock price definitely help more than it hurts. If GameStop can now demonstrate its army of new investors and its massive amount of free publicity has translated into improved sales and earnings numbers, the company may have several funding options open up in the near future. GameStop reports fourth-quarter earnings in late March. Photo by Sharon McCutcheon on Unsplash. Latest Ratings for GME DateFirmActionFromTo Jan 2021B of A SecuritiesMaintainsUnderperform Jan 2021Telsey Advisory GroupDowngradesOutperformUnderperform Oct 2020JefferiesDowngradesBuyHold View More Analyst Ratings for GME View the Latest Analyst Ratings See more from BenzingaClick here for options trades from BenzingaWhy GameStop Stock Traders Should Beware The 'Law Of Twos And Threes'Kevin O'Leary Of 'Shark Tank,' Benzinga CEO Jason Raznick Talk GameStop, Bitcoin And Economic Recovery Trades© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Bitcoin is nursing losses after its worst weekly plunge in almost a year and on one view its longer term outlook could be even worse because of environmental concerns and tightening regulations.The sheer amount of energy needed to mine Bitcoin and the prospect that governments will create more obstacles for the largest cryptocurrency point to the token losing “most of its value over time,” BCA Research Inc. said.The expense and slowness of Bitcoin transactions make it “unsuitable as a medium of exchange,” BCA Research Chief Global Strategist Peter Berezin wrote in the report released Friday. In addition, environmental, social and governance-focused funds are likely to shun companies associated with Bitcoin due to the large energy consumption by miners on computer networks.Bitcoin is still up more than five times over the past year, a divisive rally pitting believers in a new asset class against naysayers who see a speculative bubble. Among notable recent developments are Tesla Inc.’s $1.5 billion purchase of the token. At the same time, Microsoft Corp. co-founder Bill Gates and Treasury Secretary Janet Yellen are among those signaling caution.Governments will create more obstacles because they could lose billions of dollars in revenue from seigniorage -- the difference between the face value of money and the cost to produce it -- according to BCA.“Many companies have cozied up to Bitcoin in order to associate themselves with the digital currency’s technological mystique,” BCA’s Berezin added. “As ESG funds start to flee Bitcoin, its price will begin a downward spiral. Stay away.”Bitcoin, the largest cryptocurrency, was up 2.5% to $46,359 as of 11:53 a.m. in Hong Kong on Monday. That leaves it well off the record high of $58,350 set just over a week ago.JPMorgan Chase & Co. strategists in a note Friday said the launch of the Purpose Bitcoin exchange-traded fund may be hurting the price of the cryptocurrency as well. After an initial “strong start” flows have quieted down, strategists led by Nikolaos Panigirtzoglou wrote. The four-week pace of flows into all Bitcoin funds is weak relative to a December peak, they said.The Grayscale Bitcoin Trust, the largest traded crypto fund, also remains one of the keys to the outlook. Inflows into the trust are “ceasing,” and the cash going into other Bitcoin vehicles isn’t “strong enough to prevent an overall slowing in the Bitcoin fund flow impulse,” the strategists wrote.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 Philippine peso has been under siege from rising Treasury yields and buoyant crude prices. But technicals may offer some support.The peso slumped to its lowest level in six months last week following an extension of coronavirus-led curbs in the nation and delays in vaccine rollouts. The 10-year Treasury yield’s surge to 1.6% added to the bearish sentiment.Still, losses have been limited to near the dollar-peso’s 200-day moving average so far, spurring hopes that the barrier may hold at least in the near term. The pair’s relative strength index, a momentum indicator, is in the overbought territory, providing further support to the Philippine currency.Still, expectations that U.S. yields will rise further is keeping sentiment cautious toward the peso. Especially after the rout in emerging market assets on Friday brought back memories of the 2013 taper tantrum among investors.“How U.S. yields evolve from here and the broad USD picture will be the key driver of USD/PHP,” said Irene Cheung, a currency strategist at Australia & New Zealand Banking Group Ltd. She sees the peso at 48.30 per dollar at the end of the quarter.The peso is among Southeast Asia’s worst performing currencies this year. It’s declined 1.1% in February to 48.59 as global funds sold $171 million of Philippine stocks during this period.Inflation FocusTechnical factors supporting the peso are likely to come into focus once again on Friday, when February inflation data is due. If price pressures quickened, this could erode the nation’s real yields and weigh on the currency.Comments from Bangko Sentral ng Pilipinas Governor Benjamin Diokno that the rise in the nation’s consumer prices is temporary will also be put to the test. A Bloomberg survey forecasts inflation quickened to 4.8% in February, which would be the fastest since December 2018.“Rising inflation has pushed Philippines’ real rates into the negative territory,” said Divya Devesh, head of Asean and South-Asia currency research at Standard Chartered Bank in Singapore. “Depressed real rates and elevated real effective exchange rate is a negative for the PHP,” he said, adding that the peso may fall toward 49.50 per dollar this year.Below are the key Asian economic data and events due this week:Tuesday, March 2: RBA policy decision, Australia building approvals and 4Q BoP current account balance, net exports of GDP, New Zealand 4Q terms of trade, Japan jobless rate and 4Q capita spending, South Korea industrial productionWednesday, March 3: Australia 4Q GDP, New Zealand building permits, China Caixin services PMIThursday, March 4: Australia retail sales and trade balance, RBNZ Governor. Orr speaks, South Korea CPI and 4Q GDP, BNM policy decision, Thailand consumer confidenceFriday, March 5: New Zealand 4Q volume of all buildings, Philippine CPI, Singapore retail sales, Thailand CPI(Corrects analyst forecast for peso in ninth paragraph and clarifies peso move in sixth paragraph was for February.)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 US Small Business Administration (SBA) is expected to issue a rule as soon as Monday that will make loans from the Paycheck Protection Program (PPP) more generous for business owners without employees. Companies and nonprofits without employees have always been eligible for PPP loans. The new rule expected from the SBA will instead base loan amounts off of sole proprietors’ gross income, significantly expanding the amount of money for which they are eligible.
(Bloomberg) -- China’s bonds stood out as a haven last week when investors fled from virtually everywhere including Treasuries and high-yielding developing-nation debt.Funds poured $671 million into exchange-traded funds tracking yuan bonds over the past five sessions, taking inflows so far this year to $2.2 billion, data compiled by Bloomberg show. In contrast, they offloaded almost $600 million of emerging-market notes last week.China’s bonds have largely escaped the tumult in global debt markets, with yields on the benchmark holding firm on Thursday while that on Treasuries soared more than 20 basis points. With strategists warning of more volatility in the days ahead, investors may find safety in the more-insulated Chinese debt market where fears of sudden monetary tightening is less prevalent.“China bonds are likely to be a safe heaven now -- stable policy and growth make them less volatile compared to global peers, while yields are also more attractive,” said Xing Zhaopeng, a senior China strategist at Australia & New Zealand Banking Group Ltd. in Shanghai. “The notes’ relative performance this year will be better than bonds sold by other major economies.”China’s sovereign notes are the third-best performer globally in February, according to data compiled by Bloomberg, thanks to their interest-rate advantage and inflows spurred by the nation’s inclusion in global bond indexes. The authorities’ successful containment of the coronavirus outbreak has also allowed the economy to rebound quicker.The iShares China CNY Bond UCITS ETF, which tracks the Bloomberg Barclays Index of Chinese government and policy bank debt, saw the largest inflows among all similar contracts this year, data compiled by Bloomberg showed. The fund gained 8.8% over the past year, beating most global peers.Overseas investors are also buying more Chinese notes directly. In January, they purchased $27 billion of bonds in the interbank market, the most according to data going back to 2014. Sovereign securities accounted for $19 billion of the total inflows.Over the past year, global investors boosted holdings of ETFs tracking China bonds by $5.6 billion, including secondary classes of the securities, according to data compiled by Bloomberg. They added $313 million of such funds over the past week and $1.2 billion so far this year, if only primary classes are considered, the figures showed.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 biggest slump in Asian stocks since March hasn’t shaken the faith of strategists, who recommend buying regional cyclical shares on expectations of a strong economic rebound from the pandemic.Growth can offset rate risks, a Goldman Sachs Group Inc. team including Timothy Moe wrote in a note Monday, saying they prefer value cyclicals and short versus long duration ideas. Sanford C. Bernstein and Oanda Asia Pacific Pte see Asian stocks weathering a global surge in sovereign bond yields to stay ahead of their U.S. peers in 2021.“We stay constructive on regional equities with modest downside risk from higher rates/volatility likely to create buying opportunities on corrections,” the Goldman strategists wrote. “We would not expect as sharp an equity reaction now unless yields rise more significantly or the Fed signals changes.”Despite its 3.7% plunge on Friday, the MSCI Asia Pacific Index has outperformed the S&P 500’s advance this year by three percentage points. Asia’s economic revival is predicted to outdo the U.S.: the region’s emerging and developing economies are poised for more than 8% growth in 2021, almost twice as fast as a basket of advanced nations including the U.S., International Monetary Fund projections show.“Asia should lead global equities this year,” said Rupal Agarwal, Asia quantitative strategist at Sanford C Bernstein in Mumbai. The region is recovering the strongest, and rising Treasury yields would be more supportive of a rotation to Asian value stocks, she said.The MSCI Asia Pacific Index was up 1.2% as of 1:27 p.m. in Tokyo, taking its gain this year to 4.5%.READ: Asian Stocks Rebound From Selloff on Tech Gains, Hang Seng MovesSovereign yields have jumped on the risk of faster inflation as economies accelerate. While higher long-term borrowing costs can dull the appeal of equities, some strategists say the U.S. is more exposed than Asia because its stock market is costlier and has more growth shares, such as technology firms.There may be some short-term downward pressure on the MSCI Asia Pacific index, but in the medium term it’s likely to outperform, said Jeffrey Halley, senior market analyst at Oanda. Unlike tech-heavy North American counterparts, Asia Pacific markets are dominated by cyclical industries, which stand to benefit from the acceleration in the global recovery, he said.‘Diversified Approach’However, the picture isn’t uniform across Asia. North Asia is the most sensitive to growth, while select Southeast Asian markets are more sensitive to rates, Goldman strategists wrote in their note.They upgraded Asia’s energy and insurance sectors to overweight given the stronger reflationary backdrop, while lowering internet and media to neutral in order to trim duration risk.Over the next 12 to 18 months, earnings outlooks are likely to be boosted by a solid Asian recovery, Tai Hui, chief Asia market strategist at JPMorgan Asset Management, wrote in a note.“A more diversified approach, both in terms of geography and sector, should help investors to navigate the upcoming bout of market volatility,” he said.(Updates index levels in the sixth 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.
Last week, the NASDAQ slipped below 13,200, making the net loss from its all-time peak, reached earlier this month, 6.4%. If this trend keeps up, the index will slip into correction territory, a loss of 10% from its peak. So what exactly is going on? At bottom, it’s mixed signals. The COVID-19 pandemic is starting to fade and the economy is starting to reopen – strong positives that should boost markets. But an economic restart brings with it inflationary pressures: more people working means more consumers with money in their pockets, and the massive stimulus bills passed in recent months – and the bill working through Congress now, which totals $1.9 trillion – have put additional funds in people’s wallets and liquidity into the economy. There is pent-up demand out there, and people with money to spend, and both factors will work to push up prices. We can see one effect of all of this in the bond market, where the ten-year Treasury bond is yielding 1.4%, near a one-year high, and it has been trending upwards in recent weeks. This may be a case of jumping the gun, however, as Federal Reserve Chair Jerome Powell has said in testimony before the Senate that he is not considering a move to boost interest rates. In other words, these are confusing times. For those feeling lost in all of the stock market fog, investing gurus can offer a sense of clarity. No one more so than billionaire Steven Cohen. Cohen’s investment firm, Point72 Asset Management, relies on a strategy that involves investments in the stock market as well as a more macro approach. This very strategy has cemented Cohen’s status as a highly respected investing powerhouse, with the guru earning $1.4 billion in 2020 thanks to a 16% gain in Point72′s main hedge fund. Bearing this in mind, our focus shifted to Point72's most recent 13F filing, which discloses the stocks the fund snapped up in the fourth quarter. Locking in on three tickers in particular, TipRanks’ database revealed that each has earned a “Strong Buy” analyst consensus and boasts significant upside potential. Array Technologies (ARRY) The first new position is in Array Technologies, a ‘green tech’ company providing tracking technology for large-scale solar energy projects. It’s not enough just to deploy enough photovoltaic solar collection panels to power an energy utility; the panels have to track the sun across the sky, and account for seasonal differences in its path. Array delivers solutions to these problems with its DuraTrack and SmarTrack products. Array boasts that its tracking systems will improve the lifetime efficiency of solar array projects, and that its SmarTrack system can boost energy production by 5% overall. The company clearly has impressed its customers, as it has installations in 30 countries, in more than 900 utility-scale projects. President Biden is expected to take executive actions to boost green economic policy at the expense of the fossil fuel industry, and Array could potentially benefit from this political environment. This company’s stock is new to the markets, having held its IPO in October of last year. The event was described as the ‘first big solar IPO’ in the US for 2020, and it was successful. Shares opened at $22, and closed the day at $36. The company sold 7 million shares, raising $154 million, while another 40.5 million shares were put on the market by Oaktree Capital. Oaktree is the investment manager that had held a majority stake in the company since 2016. Among Array's fans is Steven Cohen. Scooping up 531,589 shares in Q4, Point72's new ARRY position is worth over $19.7 million at current valuation. Guggenheim analyst Shahriar Pourreza also seems to be confident about the company's growth prospects, noting that the stock appears undervalued. “Renewable energy companies have seen a large inflow of capital as a result of the ‘blue wave’ and the Democrats’ control of the White House and both chambers of Congress; however, ARRY continues to trade a significant discount to peers," the 5-star analyst noted. Pourreza added, "We continue to be bullish on ARRY’s growth prospects driven by 1) tracker market share gains over fixed-tilt systems, 2) ARRY market share gains within the tracker industry, 3) ARRY’s large opportunity in the less-penetrated international market, 4) the opportunity to monetize their existing customer base over the longer-term through extended warranties, software upgrades, etc., which are highly margin accretive.” In line with these bullish comments, Pourreza rates ARRY shares a Buy, and his $59 price target implies a 59% upside from current levels. (To watch Pourreza’s track record, click here) New stocks in growth industries tend to attract notice from Wall Street’s pros, and Array has 8 reviews on record since it went public. Of these, 6 are Buys and 2 are Holds, making the consensus rating on the stock a Strong Buy. The average price target, at $53.75, suggests room for ~45% upside in the next 12 months. (See ARRY stock analysis on TipRanks) Paya Holdings (PAYA) The second Cohen pick we're looking at is Paya Holdings, a North American payment processing service. The company offers integrated payment solutions for B2B operations in the education, government, healthcare, non-profit, and utility sectors. Paya boasts over $30 billion in payments processed annually, for over 100,000 customers. In mid-October of last year, Paya completed its move to the public market via a SPAC (special acquisition company) merger with FinTech Acquisition Corporation III. Cohen is standing squarely with the bulls on this one. During Q4, Point72 snapped up 3,288,843 shares, bringing the size of the holding to 4,489,443 shares. After this 365% boost, the value of the position is now ~$54 million. Mark Palmer, 5-star analyst with BTIG, is impressed with Paya’s prospects into the mid-term, writing, “We expect PAYA to generate revenue growth in the high-teens during the next few years, with Integrated Solutions poised to grow in the mid-20s and Payment Services set to grow in the mid-single digits. At the same time, the company’s operating expenses should grow in the 5% context, in our view. As such, we believe PAYA’s adjusted EBITDA growth will be north of 20% during the next few years, and that its adjusted EBITDA margins will expand to 28% by YE21 from 25% in 2019.” Palmer puts an $18 price target on PAYA shares, indicating his confidence in 49% growth for the year ahead, and rates the shares as a Buy. (To watch Palmer’s track record, click here) PAYA’s Strong Buy analyst consensus rating is unanimous, based on 4 Buy-side reviews set in recent weeks. The shares have an average price target of $16, which suggests ~33% upside potential from the current share price of $12.06. (See PAYA stock analysis on TipRanks) Dicerna Pharma (DRNA) Last but not least is Dicerna Pharma, a clinical stage biotech company with a focus on the discovery, research and development of treatments based on its RNA interference (RNAi) technology platform. The company has 4 drug candidates in various stages of clinical trials and another 6 in pre-clinical studies. The company's pipeline clearly got Steven Cohen’s attention – to the tune of taking a new stake totaling 2.366 million shares. This holding is worth $63.8 million at current values. The drug candidate farthest along Dicerna’s pipeline is nedosiran (DCR-PHXC), which is being investigated as a treatment for PH, or primary hyperoxaluria – a group of several genetic disorders that cause life-threatening kidney disorders through overproduction of oxalate. Nedosiran inhibits the enzyme that causes this overproduction, and is in a Phase 3 trial. Top-line results are expected in mid-’21 and, if everything goes as planned, an NDA filing for nedosiran is anticipate near the end of 3Q21. Covering the stock for Leerink, analyst Mani Foroohar sees nedosiran as the key to the company’s near-term future. “We expect nedosiran could see approval in mid-2022, placing the drug roughly a year and a half behind competitor Oxlumo (ALNY, MP) in PH1... A successful outcome will transform DRNA into a commercial rare disease company in an attractive duopoly market with best-in-class breadth of label," Foroohar noted. To this end, Foroohar rates DRNA an Outperform (i.e. Buy), and his price target of $45 suggests a one-year upside potential of 66%. (To watch Foroohar’s track record, click here) All in all, Dicerna Pharma has 4 Buy reviews on record, making the Strong Buy unanimous. DRNA shares are trading for $26.98, and their $38 average price target puts the upside at ~41% over the next 12 months. (See DRNA stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
(Bloomberg) -- New World Development Co.’s Adrian Cheng is planning to raise funds through a special purpose acquisition company in the U.S., according to people familiar with the matter, making him the latest Hong Kong tycoon to jump on the blank-check firm bandwagon.Cheng is working with advisers on the potential SPAC’s initial public offering, said the people, asking not to be identified as the information isn’t public. The blank-check company could raise $200 million to $400 million, one of the people said.Deliberations are at an early stage and details such as size and strategy could still change, they said. A representative for New World said the company had no immediate comment.Cheng, who’s the chief executive officer of New World, joins fellow Hong Kong tycoons Li Ka-shing and Richard Li in planning a blank-check company, tapping what has become a red-hot market in the U.S. with over $60 billion raised through the vehicles, more than half of the total amount fetched in all of 2020, data compiled by Bloomberg show.SPACs raise money from investors and then look to acquire another business, usually a private one, within two years. Historically just a U.S. product, a growing number of Asia-based funds and financiers have been setting up blank-check companies with the aim of snapping up a target in the fast-growing region.So far this year, eight blank-check companies backed by Asian sponsors including Primavera Capital and Hopu Investment have gone public in the U.S., raising a total of $2.42 billion, according to data compiled by Bloomberg. That’s an acceleration from 2020, when 11 Asian SPACs raised $2.26 billion in the whole year.New World Development, whose businesses span across real estate, retail and infrastructure, is also looking for a senior executive to oversee its merger and acquisition activities in areas such as health care and logistics as it expands beyond property, Bloomberg News reported this month.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 personal finance guru says plan now for the new $1,400 payment now before Congress.
(Bloomberg) -- A new market consensus has quickly formed after last week’s fire-sale in bonds -- expectations for interest-rate hikes have become too aggressive and it’s time to buy.Swap traders now see the Federal Reserve raising rates in March 2023, with more than 90 basis points of increases priced in by the end of 2024. A number of strategists have come out saying that’s too much and investors should buy short-maturity bonds to fade the move.JPMorgan Chase & Co.’s Jay Barry recommended purchasing five-year notes, while strategists at TD Securities doubled down on their bullish stance on the same securities on Friday. Barclays Plc’s Anshul Pradhan told investors to buy three-year securities, while Citigroup Inc.’s Jabaz Mathai recommended the “belly of the curve,” which traditionally means maturities between three and seven years.Their views seem to have struck a chord with investors. Short-term Treasuries outperformed longer-dated peers on Monday, with five-year yields falling as much as five basis points to 0.68%, and 30-year equivalents climbing three basis points to 2.18%.Five-year Treasuries slumped last week as traders brought forward the pricing of rate hikes, driving an exodus of positions which had previously been sheltered by rate guidance from the Federal Reserve. Yields on the securities surged 16 basis points to 0.73% in the five days through Friday, with Thursday’s move the worst performance on the yield curve since 2002.Read more: Dizzied Bond Traders Brace for More Pain as Fed Speakers Line Up“We think these moves are not consistent with the Fed’s stance and framework, and therefore not sustainable,” Guneet Dhingra, head of U.S. interest-rate strategy at Morgan Stanley in New York, wrote about the rate-hike expectations. The Fed is likely to push back against the market pricing in rate hikes in 2023, he said.In remarks last week, Fed Chair Jerome Powell offered a reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base. The central bank’s so-called dot plot -- which it uses to signal its outlook for the path of interest rates -- shows a majority of Fed members expect rates to be unchanged from current levels at the end of 2023.Powell will deliver this week what are likely his final public comments before a mid-month policy meeting.(Updates with comments from Fed’s Powell in eighth paragraph. A previous version of this story was corrected to fix the spelling of a name.)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.
Oil prices rebounded more than $1 on Monday after the U.S. House of Representatives passed a huge stimulus package, although a slowdown in China's February factory activity growth capped gains. U.S. West Texas Intermediate (WTI) crude futures jumped $1.18, or 1.9%, to $62.68 a barrel. Front-month prices for both contracts touched 13-month highs last week, slipping back on Friday along with wider financial markets following a bond rout amid inflation fears.
The U.S. House has given its OK; here's what's ahead.
(Bloomberg) -- Warren Buffett’s 15-page annual letter to shareholders on Saturday made mention of the pandemic that ravaged the globe in 2020 exactly once: One of his furniture companies had to close for a time because of the virus, the billionaire noted on page nine.Buffett likewise steered clear of politics, despite the contested presidential election and riots at the U.S. Capitol, and never touched on race or inequality even after protests and unrest broke out in cities across the nation last year. He also avoided delving into the competitive deal-making pressures faced by his conglomerate, Berkshire Hathaway Inc., a topic routinely dissected in past year’s letters.“Here you have a company with such a revered leader who’s held in such high regard -- whose opinion matters, who has businesses that were directly impacted by the pandemic, insurance companies that were influenced by global warming and social inflation -- and there was not one word about the pandemic,” Cathy Seifert, an analyst at CFRA Research, said in a phone interview. “That to me was striking. It was tone deaf and it was disappointing.”Buffett, 90, has been unusually quiet since last year’s annual meeting in May amid a multitude of issues facing Americans. His annual letters are often seen as a chance to offer investors help in understanding his thinking on broad topics and market trends, in addition to details on how his conglomerate is faring.But the Berkshire chief executive officer carefully weighs his words, and some topics, such as the pandemic, risk veering into highly controversial political territory, Jim Shanahan, an analyst at Edward D. Jones & Co., said in an interview.“There’s been a lot of comments about the pandemic and the impact on the businesses, but by not saying something in the letter, I think it’s just a way to try and avoid saying something that could be perceived as a political statement, which he’s been less willing to do in recent years,” Shanahan said.A representative for Buffett didn’t immediately respond to a request for comment placed outside routine office hours.Buffett also stayed quiet on topics that are key to his conglomerate, such as the market environment amid a tumultuous year -- and the work of key investing deputies like Todd Combs and Ted Weschler, according to Cole Smead, whose Smead Capital Management oversees investments in Berkshire.“There’s more found by what’s not in the letter,” said Smead, the firm’s president and portfolio manager. “I think just time and time again in this letter were sins of omission.”Here are other key takeaways from Buffett’s letter and Berkshire’s annual report:1. Buffett Relies on Buybacks Instead of DealsBerkshire repurchased a record $24.7 billion of its own stock as Buffett struggled to find better ways to invest his enormous pile of cash.And there’s more where that came from: The conglomerate has continued to buy its own stock since the end of last year, and is likely to keep at it, Buffett said Saturday in his annual letter.“That action increased your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet,” Buffett said in the letter, which pointed out that the company “made no sizable acquisitions” in 2020.Berkshire did make a small amount of progress in paring the cash pile, which fell 5% in the fourth quarter to $138.3 billion. Buffett has struggled to keep pace with the flow in recent years as Berkshire threw off cash faster than he could find higher-returning assets to snap up, leading to the surge in share repurchases.2. Apple Is as Valuable to Berkshire as BNSF RailroadBerkshire’s $120 billion investment in Apple Inc. stock has become so valuable that Buffett places it in the same category as the sprawling railroad business he spent a decade building.He began building a stake in the iPhone maker in 2016, and spent just $31.1 billion acquiring it all. The surge in value since then places it among the company’s top three assets, alongside his insurers and BNSF, the U.S. railroad purchase completed in 2010, according to the annual letter.“In certain respects, it’s his kind of business,” said James Armstrong, who manages assets including Berkshire shares as president of Henry H. Armstrong Associates. “It’s very much brand name, it’s global, it’s an absolutely addictive product.”Buffett had always balked at technology investments, saying he didn’t understand the companies well enough. But the rise of deputies including Combs and Weschler has brought Berkshire deep into the sector. In addition to Apple, the conglomerate has built up stakes in Amazon.com Inc., cloud-computing company Snowflake Inc., and Verizon Communications Inc.3. Buffett Concedes Error in $37.2 Billion DealBuffett admitted he made a mistake when he bought Precision Castparts Corp. five years ago for $37.2 billion.“I paid too much for the company,” the billionaire investor said Saturday in his annual letter. “No one misled me in any way -- I was simply too optimistic about PCC’s normalized profit potential.”Berkshire took an almost $11 billion writedown last year that was largely tied to Precision Castparts, the maker of equipment for aerospace and energy industries based in Portland, Oregon.The pandemic was the main culprit. Precision Castparts struggled as demand for flights plummeted, prompting airlines to park their jets and slash their schedules. Less flying means lower demand for replacement parts and new aircraft. Precision slashed its workforce by about 40% last year, according to Berkshire’s annual report.4. Profit Gains Thanks to Railroad, ManufacturersDespite the pandemic’s effects continuing to hit Berkshire’s collection of businesses, the conglomerate posted a near 14% gain in operating earnings in the fourth quarter compared to the same period a year earlier.That was helped by a record quarter for railroad BNSF since its 2010 purchase and one of the best quarters for the manufacturing operations since mid-2019.5. Good-bye Omaha, Hello Los AngelesBerkshire’s annual meeting has for years drawn throngs of Buffett fans to Omaha, Nebraska, where the conglomerate is based. This year, the show is moving to the West Coast.While still virtual because of the pandemic, the annual meeting will be filmed in Los Angeles, the company said Saturday.That will bring the event closer to the home of Buffett’s longtime business partner, Charlie Munger. Buffett and Munger will be joined by two key deputies, Greg Abel and Ajit Jain, who will also field questions.Buffett and Abel, who lives closer to Berkshire’s headquarters, last year faced “a dark arena, 18,000 empty seats and a camera” at the annual meeting, Buffett said in his letter. The 90-year-old billionaire said he expects to do an in-person meeting in 2022.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.
Warren Buffett in his annual letter to shareholders offered words of encouragement to a battered country while also signaling that more stock buybacks are to come. Buffett's Annual Letter: The letter from the 90-year-old chief executive officer of Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) was even more anticipated than usual this year, because his influential voice has largely been silent since his last letter, which came in the very early days of the pandemic. A lot has happened since, from the contentious election and ensuing fallout, to the arrival of retailer investors pushing "stonks," not to mention the meteoric rise of Bitcoin (CRYPTO: BTC). Buffett's lieutenant, Berkshire Hathaway Vice Chairman Charlie Munger, spoke on Wednesday about some of these issues. He said the trading in stocks such as GameStop Corp. (NYSE: GME) was tantamount to "betting on racehorses" and cast doubt on the idea that Bitcoin will ever replace regular money as the world's primary medium of exchange. Buffett in his letter did not talk about cryptocurrency or GameStop, but he did touch on the turmoil of the past year, without directly referencing any particular event. He used the stories of companies throughout the country that he has invested in, such as GEICO and Pilot Travel Centers, to deliver a simple, clear message: "Never bet against America." (Italics in original.) "There has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking," he wrote. "Beyond that, we retain our constitutional aspiration of becoming 'a more perfect union.' Progress on that front has been slow, uneven and often discouraging. We have, however, moved forward and will continue to do so." Earnings, Stock Repurchases: As for the latest numbers on the company's performance, the letter showed Berkshire earned $42.5 billion last year, down 48% from 2019's $81.4 billion. This included an $11 billion loss from a write-down in subsidiary and affiliate businesses, particularly the 2016 purchase of Portland, Oregon-based metal fabricator Precision Castparts. The company does business in the aerospace industry — not the best one to be in last year. In his letter, Buffett said he overpaid for the company and that last year's "adverse developments" in the industry made that clear. "I was simply too optimistic about PCC’s normalized profit potential," Buffett wrote. The company spent $24.7 billion to repurchase the equivalent of 80,998 "A" shares last year, including $9 billion in the fourth quarter. That is likely to continue: "Berkshire has repurchased more shares since year-end and is likely to further reduce its share count in the future," Buffett wrote. Berkshire also as usual listed its top holdings by market value. They included Apple Inc (NASDAQ: AAPL), Coca-Cola Co (NYSE: KO), American Express Company (NYSE: AXP) and Bank of America Corp (NYSE: BAC). Filings from Berkshire earlier this month showed the company trimmed its positions in Apple while piling into drug, telecom and oil companies in the latest quarter. Recent Price Action: Berkshire's class B shares ended Friday at $240.51, down for the week at 0.54%. Class A shares were down 0.88% to $364,580. Photo Courtesy Wikimedia Commons. See more from BenzingaClick here for options trades from BenzingaBitcoin Hits Another All-Time High30,000 Macs Infected With Newly Detected Form Of Malware, Dubbed 'Silver Sparrow'© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.