Lt. Gov. Dan Patrick on the Supreme Court’s decision to allow President Trump to use military funds to build his southern border wall and the Trump administration’s asylum agreement with Guatemala.
Lt. Gov. Dan Patrick on the Supreme Court’s decision to allow President Trump to use military funds to build his southern border wall and the Trump administration’s asylum agreement with Guatemala.
Major global stock indexes scaled new peaks on Wednesday after upbeat U.S. and European earnings pointed to a strong recovery from the coronavirus pandemic, while the dollar dipped to three-week lows as Treasury yields held below recent highs. High-flying growth stocks declined on Wall Street, sending the benchmark S&P 500 and Nasdaq lower in afternoon trade, while underpriced value stocks rose, lifting the Dow to a new record. U.S. import prices increased more than expected in March, lifted by higher costs for petroleum products and tight supply chains in the latest data to show inflation is heating up as economies reopen.
Stocks traded mixed Wednesday afternoon, with traders digesting a slew of earnings results from big banks that largely topped expectations. The Dow set a fresh record high as shares of Goldman Sachs advanced after the company reported better-than-expected quarterly results.
The firm released $5.2 billion of credit reserves, bolstering EPS.
The Coinbase listing is seen as a watershed moment for the cryptocurrency industry.
To understand President Joe Biden's challenge in taming a semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S. firm for Hyundai Motor Co's new electric vehicle, the IONIQ 5. Production of the chip, a camera image sensor designed by On Semiconductor, begins at a factory in Italy, where raw silicon wafers are imprinted with complex circuitry. The wafers are then sent first to Taiwan for packaging and testing, then to Singapore for storage, then on to China for assembly into a camera unit, and finally to a Hyundai component supplier in Korea before reaching Hyundai's auto factories.
Gold may have risen following the release of the CPI data, but it was not because of concerns over inflation.
(Bloomberg) -- Hundreds of thousands of small Indian businesses are planning to protest against large foreign retailers like Amazon.com Inc. in an event Thursday that coincides with the U.S. e-commerce giant’s annual seller jamboree in the South Asian nation, a sign of escalating tensions in the retail market of 1.3 billion people.The summit is the latest protest by local traders, which have long accused global retailers Amazon and rival Walmart Inc.-owned Flipkart of masquerading as platforms and employing unfair practices that hit at the livelihoods of small online and offline sellers. The trader groups’ event is named Asmbhav, or “impossible” in Hindi, and takes place on the first day of Amazon’s annual seller extravaganza, called Smbhav, or “possible.”“Over half-a-million sellers and leading small trader groups are participating in the Asmbhav event which will focus on ruined livelihoods because of the bullying and partisanship by e-commerce marketplaces,” said Abhay Raj Mishra of the non-profit Public Response Against Helplessness and Action for Redressal (PRAHAR), one of the organizers of the event spearheaded by a collective of Indian sellers.India’s small traders, distributors and merchants have petitioned the country’s courts and antitrust regulator to curb the foreign retailing giants ahead of a potential revision of foreign investment rules. The government is expected to tighten regulations that already bar e-commerce platforms from owning or controlling companies that sell on their platform, forging exclusive deals with makers of products such as smartphones, and discounting goods sold on their platforms.Amazon’s seller event -- which made its debut last year with founder Jeff Bezos in attendance -- will span four days this year and be held virtually. Key business figures including former Pepsico Inc. Chief Executive Officer Indra Nooyi, telecom operator Bharti Airtel Ltd.’s Chairman Sunil Mittal, India’s chief economic adviser Krishnamurthy Subramanian and Infosys Ltd. co-founder and Chairman Nandan Nilekani will be among panel speakers. Participants will include small businesses, startups, developers and retailers.To counter Amazon’s Smbhav awards to select sellers, organizers of the protest event will hand out tongue-in-cheek “Asmbhav awards” to Bezos, country chief Amit Agarwal and its India business partner, Narayana Murthy, the billionaire co-founder of Infosys. The event is backed by trade groups like the All India Online Vendors Association and the All-India Mobile Retailers Association.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.
Global stock markets pushed to record highs on Wednesday as bond yields eased, after data showed U.S. inflation was not rising too fast as the economy re-opens. With fears receding for now that a strong inflation reading might endanger the Federal Reserve's accommodative stance, European shares opened 0.1% higher. Gains were capped after Johnson & Johnson said it would delay rolling out its COVID-19 vaccine to Europe, after U.S. health agencies recommended pausing its use in the country after six women developed rare blood clots.
Grab’s record-breaking deal to merge with a special purpose acquisition company (SPAC) will raise an eye-popping $4.5 billion in cash. A quick recap: Singapore-based Grab is poised to have a market value of around $39.6 billion after it combines with a SPAC called Altimeter Growth. Altimeter is basically a $500 million pot of money listed on Nasdaq that was looking for a target to merge with (which is why SPACS are sometimes called “blank check” companies).
(Bloomberg) -- Saudi Arabia is celebrating one of the biggest foreign-investment windfalls in its history after netting more than $12 billion by selling off a stake in the oil pipelines that traverse the desert kingdom.But the country may also be facing an uncomfortable reality as a result. As carefully cultivated relationships with firms such as BlackRock Inc. and SoftBank Group Corp. have yet to draw in the desired investment, it’s turning to the jewels of its energy industry to attract new money.Last week’s sale of the stake to EIG Global Energy Partners LLC shows how reliant Saudi Arabia is on its traditional mainstay and the challenges Crown Prince Mohammed bin Salman faces in diversifying the country away from oil and gas to achieve his Vision 2030 goal. The likes of BlackRock and SoftBank haven’t invested back into the country as much as the government might have hoped, while foreigners favor revenue-rich energy assets over tourism and entertainment.“Entertainment and tourism might have had a better year of foreign direct investment in 2020 if Covid had not happened,” Karen Young, resident scholar at the American Enterprise Institute in Washington, said via e-mail. “But all the same, the core investors who see value in Saudi will be interested in the largest and most profitable sector, and that is still very much oil and energy.”Though EIG, the Washington-based private equity firm led by Chief Executive Blair Thomas, is a prominent investor in North America and Europe, it barely resonates in Saudi circles. It hasn’t made a single equity purchase in the Middle East until now, let alone the kingdom itself, and its management team has never showed at Saudi Arabia’s marquee “Davos in the Desert” conference, an event attended routinely by investment leaders from The Blackstone Group Inc.’s Stephen Schwarzman to Ray Dalio of BridgeWater Associates LP and the Carlyle Group’s David Rubenstein.Saudi Arabia attracted $5.5 billion in net FDI flows in 2020, equivalent to about 1% of its economic output, according to data compiled by Bloomberg, which means the EIG deal brings more than twice last year’s total. The government’s goal is 5.7% by 2030, hence the temptation to offer up prized energy assets such as parts of Saudi Aramco, the state-owned energy giant.“This is the latest milestone in an ongoing shift,” said Jim Krane, a fellow at Rice University’s Baker Institute for Public Policy in Houston. “Mohammed bin Salman and his advisers keep finding novel ways to coax cash out of Aramco without disrupting its operational capability. Right now it’s cash that the kingdom needs and Aramco controls the spigot.”EIG beat out rivals including Apollo Global Management Inc. and Brookfield Asset Management Inc. to buy the stake. It’s now putting together a consortium of other investors to join the deal.While several global investors have forged closer ties with Saudi Arabia in recent years, most of them see it more as a source of capital than an investment destination. The kingdom’s flagship Public Investment Fund, or PIF, is the largest investor in Softbank’s $100 billion technology vehicle, with an allocation of $45 billion. The PIF has also pledged as much as $20 billion to help Blackstone Group LP build the world’s largest infrastructure fund.The reasons are manifold, ranging from the inconsistency of the Saudi legal system to an economic slump as the country adjusts to lower oil prices. The 2017 arrest and incarceration of scores of Saudi businessmen at Riyadh’s Ritz Carlton hotel and the murder of dissident writer Jamal Khashoggi the following year have hardly helped.FDI into Saudi Arabia peaked between 2008 and 2012, averaging more than $26 billion. During those years, it was mostly driven by large refinery and petrochemical projects developed with foreign partners including Total SE and Sumitomo Chemical Co. at a time when oil averaged over $90 a barrel. The subsequent slide in oil has seen average FDI into Saudi drop to about $6 billion a year.“Despite the measures to liberalize and open the economy for investment into new industries, FDI has not come in the way originally planned,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.FDI may be set to pick up further this year. The kingdom signed agreements with developers including Electricite de France SA and Marubeni Corp. to build solar power plants last week, and later this year it is likely to complete the sale of the world’s largest desalination plant. In 2020, FDI rose 20%, in part driven by deals with Alphabet Inc. and Alibaba Group Holding Ltd. to develop cloud-computing hubs that Saudi Arabia said were worth a combined $1.5 billion.In selling assets of its main state-owned energy explorer, Saudi Arabia is following a model successfully implemented by neighboring Abu Dhabi. Instead of pursuing an initial public offering of its state-owned energy firm Adnoc, the emirate has raised more than $20 billion in recent years by bringing international investors into some of its key assets. EIG studied some of the Adnoc assets that were on offer but couldn’t reach an agreement. Hence, it didn’t want to lose out on the Aramco transaction, a person familiar with the matter said.Saudi Aramco is encouraged by the valuation and the interest generated for the pipelines deal, meaning the oil giant may pursue more disposals in the coming years, people familiar with the matter said. It has already entrusted boutique investment bank Moelis & Co with formulating a strategy for selling stakes in some subsidiaries, people familiar with the matter said in December.“It’s a great deal for Aramco, but also a new kind of investment strategy, in that it is “giving up” much more in terms of investor access to information, control over operations than an IPO does,” said Young of the American Enterprise Institute. “It is a real partnership, a long-term effort with outsiders, which is an entirely new level of trust outside of the firm and the government.”Founded in 1982, EIG has committed more than $34 billion to the energy sector, according to its website. Its portfolio includes holdings in Spanish solar developer Abengoa SA, Houston-based Cheniere Energy Inc., natural-gas producer Chesapeake Energy Corp. and storage and pipeline operator Kinder Morgan Inc.(Adds details on previous Saudi refinery investments in 11th 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.
Gold traders may have priced in higher inflation, so the market could actually bounce higher even if the CPI numbers beat the forecast.
Fed Chairman Jerome Powell said that he has not yet met with President Joe Biden, illustrating the administration’s caution in approaching matters at the independent central bank.
(Bloomberg) -- Coinbase Global Inc.’s highly anticipated direct listing had touched off a frenzy in demand for all things crypto. A tumble shortly after its debut dented the euphoria.Bitcoin pulled back from an all-time high as the biggest U.S. crypto exchange tumbled to close down 14%. It opened at $381 a share in its direct listing shortly before 1:30 p.m. in New York and spiked as high as $429 in the first 10 minutes of trading before turning lower. It closed at $328.28. Bitcoin fell to its session low when Coinbase turned, before paring losses. It was trading around $63,160 as of 8:12 a.m. in Hong Kong.The listing is seen pushing crypto even more into the mainstream of investing, exposing legions of potential buyers to digital tokens, which have grown into a $2 trillion industry in little more than a decade. Bitcoin, the original and biggest crypto coin, is valued at more than $1 trillion alone after a more than 800% surge in the past year.At the closing price, Coinbase’s valuation on a fully diluted basis is about $86 billion. Given its size and visibility, Coinbase is likely to be popular with actively managed equity funds, particularly growth managers, essentially making a large swath of stock holders passive investors in crypto.“It’s a huge step forward for the industry and the legitimacy it brings in the eyes of investors and regulators,” Mati Greenspan, founder of Quantum Economics, said on Bloomberg TV.Read more: Bitcoin ETF Drumbeat Gets Louder as Eight Issuers File With SECGrowing mainstream acceptance of cryptocurrencies has spurred Bitcoin to a 120% rally since December, as well as lifting other tokens to record highs. That’s despite lingering concerns over their volatility and usefulness as a method of payment. Attention from regulators is poised to intensify as Coinbase becomes a public company.“As the direct listing on the Nasdaq will reach a wider investment base other than the usual crypto evangelists, investors must expect much greater government scrutiny,” said Nigel Green, CEO and founder of deVere Group.(Updates prices in the third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- It’s just a quarter of the way through 2021 and stocks have already leaped past Wall Street’s year-end forecasts. They’ve jumped 10% and priced in so much optimism that it will take two more years for earnings to catch up.Is that enough for bulls? Nope. In a market that has plowed through records once every five days, the only things expanding faster than valuations are investor expectations. At Citigroup, an indicator that compares levels of panic to euphoria in the market has been pinned on elation all year, while a Bank of America model weighing optimism among sell-side analysts sits at a 10-year high.To be sure, animal spirits have calmed at the market’s loopiest edge, with penny-stock volume down and the meme craze receding. But robust appetite persists in its tamer -- and still speculative -- districts. And while fortunes would have been sacrificed repeatedly by anyone expecting this rally to overheat, the juxtaposition of stretched sentiment and a still-healing economy is a source of growing anxiety for professionals.“It is strange to see these sentiment measures elevated at the same time the economy is still recovering,” said George Mateyo, chief investment officer at Key Private Bank. “We’ve had a shot in the arm with respect to fiscal and monetary stimulus” and its impact on the economy “is likely to continue for a while longer, but at some point it’d fade.”Not that there aren’t a lot of reasons to stay optimistic, with many data points coming in stronger than expected, vaccine rollouts (mostly) continuing and earnings expected to buttress the bull case. Taking any single sentiment indicator at face value and relying on it as a sell signal could have meant missing out on one of the largest year-over-year rallies ever recorded.Sentiment readings “are hovering at extremely high levels and we could have been worried about them three months ago -- we could have been worried about them one month ago,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, told Bloomberg TV. “They are telling us that the gains are going to be harder to come by, that if we do get negative catalysts, we are vulnerable to the downside. But I think it’s hard to view any of this data as an automatic sell signal right now.”Doubters point to everything from potential Fed tapering and tax hikes to the potential for fatigue among retail investors. A look under the surface already shows a shift in leadership that’s tilting toward companies whose growth is seen as more resilient during an economic slowdown. The frenetic buying of cyclical shares like energy and banks has cooled during the past month. Vaulting back to the top of the leader board are defensive stocks like technology, real estate and utilities.Bank of America’s “sell side indicator,” which aggregates the average recommended equity allocation by strategists, has risen for a third month to a 10-year high. But the cyclical rebound, vaccines and stimulus are all largely priced in already, wrote strategists led by Savita Subramanian. Meanwhile, a record amount of equity funds is being absorbed: Inflows to stocks over the past five months, at $576 billion, exceed inflows from the prior 12 years, according to the bank.Citigroup’s panic/euphoria model, which tracks metrics from options trading to short sales and fund flows, has remained in “euphoric” territory for much of this year, “generating a 100% historical probability of down markets in the next 12 months at current levels,” according to the bank’s chief U.S. equity strategist Tobias Levkovich.Options traders are placing bets the calm won’t last. The middle part of the VIX curve shows many are expecting volatility to pick up, with the spread between the VIX -- the market’s fear gauge -- and futures on implied 30-day volatility four months from now near the highest level in about five years. One trader last week wagered that the fear gauge will rise toward 40, and won’t be lower than 25, in July. The trader appears to have bought a total of about 200,000 call contracts, an amount almost as big as the total daily volume of VIX calls, based on the 20-day average.“Sentiment -- it’s not usually enough on its own to tip a bull market over, but it does mean that if there is something that causes the broad market to flinch, it can sell off quicker and harder,” said Ross Mayfield, investment strategy analyst at Baird. “When sentiment is running this hot, you’re hitting a new all-time high every day, at some point there will be a correction. Paying up for protection, if you have short-term money, makes plenty of sense.”Going all-in on equities for fear of missing out -- while staying protected against any downturn -- is the preferred posture of hedge funds. Lured by an almost uninterrupted rally since November, the industry has boosted their net exposure to equities to multi-year highs. Meanwhile, they’ve stepped up hedging through macro products such as index futures and exchange-traded funds. Their short sales on ETFs, for instance, increased 11% this year through March 26, according to data from Goldman Sachs Group Inc.’s prime brokerage unit.The hedged-long approach has gained traction on Wall Street. On Friday, JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou recommended investors hold on to risky assets such as stocks but add hedges through options in credit and stocks. One looming risk for the market is a continuing retreat from retail investors, a steadfast driver behind the yearlong bull market, they said.“We don’t believe that the equity bull market is yet exhausted,” the strategists wrote in the note. But “there is clear evidence of elevated equity positioning by retail investors and thus a vulnerability for the equity market going forward,” they said.Gene Goldman, chief investment officer at Cetera Financial Group, says his firm is looking for ways to de-risk its portfolios. “People are seeing the recovery, they’re seeing good things happening today, which is great, but it’s a classic case of ‘buy the rumor, sell the news’ and what they should be doing is looking six-to-nine months from now,” he said. “There are many headwinds that are going to hit the market.”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.
As Coinbase Global Inc's multi-billion dollar stock market listing accelerates cryptocurrency's leap to the top table of finance, its founder and CEO Brian Armstrong is poised to reap the benefits of the company's nine-year journey. Armstrong owns 21.7% of the San Francisco-based cryptocurrency exchange, filings show - a stake worth around $20 billion given Coinbase's projected value. Such a paper fortune might have been hard to imagine when Armstrong founded Coinbase in 2012, just four years after bitcoin was invented by the pseudonymous Satoshi Nakamoto.
The S&P 500 hit a record high on Tuesday and the Nasdaq jumped as investors flocked to technology-related stocks after the United States' pause in the rollout of Johnson & Johnson's COVID-19 vaccine sparked fears of a delay in a broader economic rebound. The drugmaker's shares fell 2.7% to a one-month low as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic. The technology and consumer discretionary sectors, which house high-flying technology names that flourished during coronavirus-induced lockdowns last year, rose 0.6% and 0.4%, respectively.
EUR/USD settled above the 50 EMA and is testing the next resistance at 1.1965.
Before sitting back and letting the IRS do the work, experts say some people should at least consider filing an amended return.
(Bloomberg) -- The Bank of England’s Chief Economist Andy Haldane will step down in June, removing the the Monetary Policy Committee’s most outspoken contrarian and inflation hawk.Haldane, 53, will leave after career spanning more than three decades at the central bank to become chief executive officer at the Royal Society for Arts, Manufactures and Commerce starting in September. He will remain in place through the bank’s rate decision on June 24. He’s departing as the U.K. emerges from its worst recession in three centuries, which pushed the central bank to unleash unprecedented stimulus including 150 billion pounds ($206 billion) of bond purchases this year. Haldane alone on the nine-member policy panel voiced concerns about inflation accelerating with a rapid bounce-back in growth as Prime Minister Boris Johnson winds back restrictions to contain the Covid-19.“The most interesting element to me is that he is probably the arch-hawk on the MPC, and his removal will certainly see a more dovish tone seep into meetings,” said Stuart Cole, chief macro strategist at Equiti Capital and a former BOE economist.Bank of England Governor Andrew Bailey will appoint a successor after the bank advertises the position. While the chief economist traditionally also sits on the MPC, it’s the Treasury’s decision to name members to that panel.In recent months, Haldane has warned about the risk of excessive pessimism about the economic outlook as the pandemic winds down, terming it “Chicken Licken” economics that could undermine the recovery.While many of his colleagues point out concerns about rising unemployment and signs of sluggishness in the economy, he said he expects a “rip-roaring recovery” and on inflation said a “tiger has been stirred” that may “prove difficult to tame.”Several economists said the improving outlook for the U.K. economy has already shifted debate on the MPC away from extra stimulus and toward whether the pace of bond purchases need to slow -- or even an eventual tightening in policy.“In 2022 the BOE is likely to set out an exit strategy from its ultra-easy policy stance before hiking the bank rate in 2023,” said Kallum Pickering, senior economist at Berenberg.Haldane joined the BOE in 1989 after gaining a masters in economics from Warwick University.He logged experience at the central bank in international finance, market infrastructure and financial stability during the financial crisis before clinching his current role under previous Governor Mark Carney in 2014. That year, “Time” magazine named him one of the world’s 100 most influential people.Haldane is known for his occasionally quirky speeches. He once used Dr. Seuss to bemoan the reading age needed to understand the central bank’s communications.His words sometimes raised eyebrows, notably when he compared pre-crisis economic projections to a famously inaccurate forecast by BBC weatherman Michael Fish before a 1987 storm that killed 18 people.In 2012, he drew the ire of his future boss with a speech -- titled “The Dog and the Frisbee” -- which called for simplicity in banking regulation. Carney, who was then the Bank of Canada governor and head of the global Financial Stability Board, said the speech was “uneven” and the conclusion “not supported by the proper understanding of the facts.”Haldane has also led the government’s Industrial Strategy Council until it was dissolved a few weeks ago and is the co-founder of charity Pro-Bono Economics.“If your business is trying to predict rates and quantitative easing, it will be a bit easier without Andy’s speeches somewhat clouding the issue,” said Tony Yates, a former BOE official who worked with Haldane. “If you’re trying to get up to speed on the latest things in monetary economics and finance, then it’s less good because there won’t be Andy picking up new things and explaining them.”(Updates with context and comment from the first paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Wealthy investor Mike Novogratz speculates that bitcoin could be worth $100,000 by the end of 2021 and sees that value increasing by five-fold by 2024, as the nascent crypto market continues to evolve and grow.