Morgan Stanley Investment Management Fixed Income Portfolio’s Jim Caron, joins Yahoo Finance to discuss the markets divide on inflation outlooks and concerns over rise in yields.
Morgan Stanley Investment Management Fixed Income Portfolio’s Jim Caron, joins Yahoo Finance to discuss the markets divide on inflation outlooks and concerns over rise in yields.
(Reuters) -The S&P 500 and the Dow hit record highs on Thursday as easing inflation concerns boosted demand for richly valued technology stocks, while upbeat earnings reports and strong March retail sales raised hopes of a broader economic rebound. The S&P information technology and communication services indexes, which include Apple Inc, Microsoft Corp and Facebook Inc, led gains after underperforming last month.
A gauge of global shares rose to record highs on Tuesday, led by surging technology-related stocks, as Treasury bond yields eased after U.S. consumer price data for March showed the pace of inflation was not rising wildly. The consumer price index rose 0.6%, the biggest gain since August 2012, as increased vaccinations and fiscal stimulus unleashed pent-up demand. "Fed comments continue to be conciliatory."
Gold may have risen following the release of the CPI data, but it was not because of concerns over inflation.
(Bloomberg) -- U.S. stocks retreated after climbing to an all-time high. Treasuries fell with the dollar. Oil rallied.PayPal Holdings Inc. and Nvidia Corp. paced losses among tech companies in the S&P 500, which had fluctuated for much of Wednesday’s session as traders sifted through earnings from some of the world’s biggest banks. Bitcoin slid in the wake of the debut by cryptocurrency company Coinbase Global Inc. on the Nasdaq.Read: Goldman, JPMorgan Traders Show the Reddit Crowd How It’s DoneWith equities lingering near a record, investors are looking to the earnings season for further catalysts. Expectations of a strong profit rebound have helped markets rally, setting the bar high as reporting gets underway. More broadly, investors are monitoring vaccine developments for any threats to the economic recovery. The Federal Reserve said in its Beige Book that activity has picked up pace amid an improvement in consumer spending.“You’re going to see this tug-of-war continue within markets as investors weigh the prospects of a strengthening economy with the risk of rising inflationary pressures,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors.A quarter that began with retail investors declaring the end of the status quo on Wall Street just ended with big banks tallying surprisingly massive hauls. Goldman Sachs Group Inc. and JPMorgan Chase & Co. -- two of the most gilded names in finance -- kicked off bank earnings season with revenue windfalls from trading and dealmaking, defying warnings from within the industry that good times couldn’t last.Goldman Sachs’s stock jumped, while JPMorgan’s slipped -- undermined by concern over weak demand for loans.Some key events to watch this week:U.S. data including initial jobless claims, industrial production and retail sales come Thursday.China economic growth, industrial production and retail sales figures are on Friday.These are some of the main moves in financial markets:StocksThe S&P 500 fell 0.4% at 4 p.m. New York time.The Stoxx Europe 600 Index gained 0.2%.The MSCI Asia Pacific Index advanced 0.7%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%.The euro climbed 0.3% to $1.1979.The Japanese yen appreciated 0.2% to 108.89 per dollar.BondsThe yield on two-year Treasuries rose less than one basis point to 0.16%.The yield on 10-year Treasuries rose two basis points to 1.63%.The yield on 30-year Treasuries climbed two basis points to 2.31%.CommoditiesWest Texas Intermediate crude gained 4.5% to $62.89 a barrel.Gold weakened 0.5% to $1,736.65 an ounce.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.
Qantas Airways Ltd said it expected domestic travel would top pre-pandemic levels next financial year as it raised its forecast for the current quarter on the back of strong demand in a country nearly free of COVID-19. A return to 90% of pre-pandemic domestic capacity in the fourth quarter ending June 30 will allow it to report positive cashflow and begin repairing a balance sheet burdened by extra debt that helped get it through the pandemic, Chief Executive Alan Joyce said on Thursday. The airline entered the crisis with one of the industry's strongest balance sheets, though its biggest domestic rival, Virgin Australia, benefited from a bankruptcy restructuring that allowed it to cut fixed costs more than Qantas.
Chinese internet and social media giant Tencent Holdings Ltd plans to raise up to $4 billion in a bond launched on Thursday, two sources with direct knowledge of the matter said. The deal has been launched with 10-, 20-, 30- and 40-year tranches, according to a term sheet reviewed by Reuters. The deal sheet did not specify an exact figure but sources said the company was targeting to raise $4 billion from the issue, which would be its second major fundraising deal in a year.
(Bloomberg) -- Turkey’s central bank is likely to leave its benchmark interest rate unchanged in the first monetary policy meeting of its newly appointed governor.Installed after President Recep Tayyip Erdogan abruptly fired his predecessor following a bigger-than-expected rate increase, Sahap Kavcioglu is under pressure to reduce rates but has so far signaled he would not rush to loosen the stance he inherited.All but two respondents in a Bloomberg survey of 25 analysts expect the central bank to keep the one-week repo policy rate at 19% on Thursday. The dissenters, HSBC Bank PLC and Capital Economics Ltd, predict the meeting will deliver a reduction of 50 and 200 basis points, respectively.“Kavcioglu’s initial communication to markets has done enough to alleviate apprehensions about a major policy reversal at the April meeting,” said Ehsan Khoman, Head of Emerging Market Research for Europe, Middle East and Africa at MUFG Bank in Dubai. Turkey “does not have the policy room to lower rates this year given the elevated inflation outlook” but Kavcioglu’s dovish views suggest the central bank will eventually take a more accommodative stance.In a written interview with Bloomberg after his appointment last month, Kavcioglu said markets shouldn’t view a rate cut at the April 15 Monetary Policy Committee meeting as a given, easing some concerns among investors.Turkey raised its benchmark one-week repo rate by 200 basis points on March 18, at Naci Agbal’s final rate-setting meeting as governor, citing concerns about inflation. A professor of banking, Kavcioglu was among the critics of that move, saying it could damage economic growth.Last week, Erdogan said the government was determined to both reduce inflation and cut interest rates to single digits, prompting a slide in the lira. The currency has weakened more than 10% against the dollar since the unexpected appointment of Kavcioglu.What Our Economists Say:“Turkey President Recep Tayyip Erdogan would like the new-look central bank to lower interest rates, but market forces will likely delay the delivery of his orders. With inflation rising and the lira weakening, we expect the monetary policy committee to keep rates on hold when it meets on Thursday.” --Ziad Daoud, Bloomberg Economics (Read More: Market Forces to Keep Turkey Central Bank on Hold)Inflation accelerated to an annual 16.2% through March, up from 15.6% the previous month because of a global oil rally and weaker currency, leaving the new central bank chief little room to enact the interest-rate cuts that would mollify Erdogan, who holds the unorthodox view that high interest rates cause inflation.Among the dissenters, Jason Tuvey, senior emerging markets economist at Capital Economics, said they are basing their forecast of a big rate cut more “on the basis of pressure from Erdogan.”“If I was governor, I would hike interest rates,” he said, “but I’d probably get sacked the next day.”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 central bank left its benchmark interest rate unchanged but removed a pledge to deliver additional tightening in the first monetary policy meeting under its newly appointed governor.The Monetary Policy Committee held its key rate at 19% Thursday, in line with the forecasts of most analysts in a Bloomberg survey.While the decision matched market expectations, the bank’s omission of an earlier pledge to keep monetary policy tight and even deliver additional rate hikes if needed weighed on the lira. The currency reversed earlier gains and was trading 0.5% lower at 8.1226 per dollar at 3:01 p.m. in Istanbul.Abandoning the earlier hawkish language, the monetary authority said it “has decided to maintain the tight monetary policy stance by keeping the policy rate unchanged.”Balancing ActFew minutes of volatility in the currency immediately after Thursday’s decision highlights the challenge facing Governor Sahap Kavcioglu, who was installed after President Recep Tayyip Erdogan abruptly fired his predecessor following a bigger-than-expected rate increase.Many investors perceive the new governor to be under pressure to reduce borrowing costs to boost growth. Although Kavcigolu has said he would not rush to loosen the stance he inherited, the changes in the rates decision prompted further speculation that rate cuts might be imminent.“The language also suggests that they are looking for opportunities to lower interest rates,” said William Jackson, chief emerging markets economist at Capital Economics. He also noted there were “reassuring” comments by the bank in the rest of the decision.Jackson’s Capital Economics and HSBC Bank were the only dissenters in the Bloomberg survey, predicting the meeting would deliver a reduction of 200 and 50 basis points, respectively.In a written interview with Bloomberg after his appointment last month, Kavcioglu said markets shouldn’t view a rate cut at the April 15 Monetary Policy Committee meeting as a given, easing some concerns among investors.Turkey raised its benchmark by 200 basis points on March 18, at Naci Agbal’s final rate-setting meeting as governor, elevating the key rate adjusted for inflation to one of the world’s highest. A professor of banking, Kavcioglu was among the critics of that move, saying it could damage economic growth.Last week, Erdogan said the government was determined to both reduce inflation and cut interest rates to single digits, prompting a slide in the lira. The currency has weakened more than 10% against the dollar since the unexpected appointment of Kavcioglu. Foreign investors sold a net $1.2 billion in Turkish equities and similar amount of government bonds and the benchmark Borsa Istanbul 100 Index slid 8% during the same period.Inflation accelerated to an annual 16.2% through March, up from 15.6% the previous month because of a global oil rally and weaker currency, leaving the new central bank chief little room to enact the interest-rate cuts that would mollify Erdogan, who holds the unorthodox view that high interest rates cause inflation.(Updates with more details from the central bank statement, analyst comments.)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) -- Russian markets trimmed losses as investors speculated that the impact of long-awaited U.S. debt sanctions would be milder than feared.Benchmark ruble bonds pared declines, leaving the yield up the most since September. The White House barred U.S. financial institutions from buying new Russian bonds, a step that potentially leaves the secondary market unaffected. The ruble and stocks also clawed back losses.The growing threat of bond sanctions had been weighing on investor confidence in Russia for months and Thursday’s announcement came after a massive troop buildup on the border with Ukraine. JPMorgan Chase & Co. cited Russia’s spiraling tensions with the West as one of the reasons for cutting its recommendation on emerging-market currencies to underweight.“Some of the uncertainty has gone,” said Dmitry Polevoy, an analyst at Locko-Invest. “Ultimately, it all depends how it’s interpreted by the compliance departments of U.S. banks and, more importantly, investors in other jurisdictions.”A senior Russian official, speaking on condition of anonymity to discuss matters that aren’t public, called the new debt restrictions the least painful option since they don’t affect the secondary market.Despite a sharp selloff when markets opened in Moscow, the ruble and local bonds are still stronger in the week. Markets rallied after U.S. President Joe Biden proposed a face-to-face meeting in a phone call with Russia’s Vladimir Putin on Tuesday.Russian officials have long said debt curbs won’t seriously hurt the government’s ability to fund itself as local banks and non-U.S. investors could step in to replace those forced to sell. State lender VTB Bank PJSC bought more than 70% of the local notes on offer in Wednesday’s debt sales, which saw a record placement equivalent to almost $3 billion.Foreigners now hold about a fifth of the so-called OFZ debt, worth roughly $37 billion.By targeting the primary market for government ruble debt, the U.S. has found “a way to test the waters,” said Elina Ribakova, deputy chief economist at the Institute of International Finance in Washington.“There is a lot of plumbing we do not understand, so even if there is a plan to move to the secondary market, one wants to do so gradually”Market Snapshot:Yields on Russia’s 10-year ruble bonds were up 13 basis points at 7.17% as of 4:31 p.m. in Moscow, set for the biggest increase since SeptemberThe ruble traded 0.9% weaker at 76.5350, paring a drop of as much as 2.1%Russia’s benchmark MOEX stock index retreated 0.7%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) -- Taiwan Semiconductor Manufacturing Co. warned that a global shortage of semiconductors across industries from automaking to consumer electronics may extend into 2022, prompting the linchpin chipmaker to lift targets on spending and growth for this year.The world’s largest contract chipmaker said Thursday that its auto industry clients can expect chip shortages to begin easing next quarter, alleviating some of the supply disruptions that have forced the likes of General Motors Co. and Ford Motor Co. to curtail production. But overall deficits of critical semiconductors will last throughout 2021 and potentially into next year, Chief Executive Officer C.C. Wei told analysts on a conference call.TSMC now expects investments of about $30 billion on capacity expansions and upgrades this year, after spending $8.8 billion in the first three months, Chief Financial Officer Wendell Huang said. The company had previously forecast spending of as much as $28 billion. Sales in the June quarter may be between $12.9 billion and $13.2 billion, beating the average $12.8 billion seen by analysts, though its target for gross margin came in below expectations at 49.5% to 51.5%. Full-year revenue may climb 20% in dollar terms, ahead of the “mid-teens” growth predicted in January.“We see the demand continue to be high,” Wei said. “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.”TSMC joins a growing number of industry giants from Continental AG to Renesas Electronics Corp. and Foxconn Technology Group that warned of longer-than-anticipated deficits thanks to unprecedented demand for everything from cars to game consoles and mobile devices. While Taiwan’s largest chipmaker has kept its fabs running at “over 100% utilization,” the firm doesn’t have enough capacity to satisfy all its customers and it has pledged to invest $100 billion over the next three years to expand.Read more: See How a Chip Shortage Snarled Everything From Phones to CarsSemiconductor shortages are cascading through the global economy. Automakers like Ford, Nissan Motor Co.and Volkswagen AG have already scaled back production, leading to estimates for more than $60 billion in lost revenue for the industry this year. The situation is likely get worse before it gets better: a rare winter storm in Texas knocked out swaths of U.S. production, while a fire at a key Japan factory will shut the facility for a month. Rival chipmaker Samsung Electronics Co. warned of a “serious imbalance” in the industry.With major American carmakers and other gadget suppliers facing a prolonged shortage of chips, U.S. President Joe Biden has proposed $50 billion to bolster semiconductor research and manufacturing at home. The initiative could aid TSMC’s plan to build a cutting-edge fab in Arizona this year that could cost $12 billion.TSMC is “happy” to support chip manufacturing in the U.S., though research and development and the majority of production will continue to remain in Taiwan, executives said on Thursday. They reiterated that construction of their plant in Arizona will begin this year.Read more: Why Shortages of a $1 Chip Sparked Crisis in Global EconomyNet income for the January-March period climbed 19% to NT$139.7 billion ($4.9 billion), beating the average analyst estimate of NT$136.2 billion, buoyed by demand for high-performance computing (HPC) equipment and a milder seasonal effect on smartphone demand. Gross margin for the quarter eased to 52.4% from 54% in the three months prior, due in part to relatively lower levels of utilization and exchange-rate fluctuations. First-quarter revenue rose 17% to NT$362.4 billion, according to a company statement last week.The company said Thursday it now expects to be able to achieve the higher end of its compound annual growth rate target of 10% to 15% for the five years to 2025, citing its investment spending plans.“TSMC’s statement that the chip crunch may spill into 2022 will smooth over concerns that chip demand may fall on overbooking later this year and further boost investors’ confidence in the overall semiconductor demand in the long run,” said Elsa Cheng, an analyst at GF Securities.Shares of TSMC have more than doubled over the past year. The stock advanced 1.1% on Thursday, before the company reported earnings.TSMC’s most-advanced technologies continued to account for nearly half of revenue in the March quarter, with 5-nanometer and 7-nanometer processes contributing 14% and 35% of sales, respectively. By business segment, its smartphone business amounted for about 45% of revenue, while HPC increased to more than a third, reflecting sustained demand for devices and internet servers even as economies start to emerge from the pandemic.“We are seeing stronger engagement with more customers on 5-nm and 3-nm, in fact the engagement is so strong that we have to really prepare the capacity for it,” Wei said. Smartphones and HPC will be the main drivers for demand of 5-nm, which will contribute around 20% of wafer revenue this year.TSMC Is On Fire. Just Beware of the Flames: Tim Culpan(Updates with company comments throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- New Zealand’s central bank signaled it is in no rush to remove monetary stimulus, saying the outlook remains uncertain as the economy gradually recovers from the Covid-19 pandemic.The Reserve Bank’s monetary policy committee on Wednesday maintained its current stimulatory settings, holding the official cash rate at 0.25% and the Large Scale Asset Purchase program at NZ$100 billion ($71 billion). It reiterated it is prepared to lower the cash rate further if required.“The committee agreed that, in line with its least regrets framework, it would not remove monetary stimulus until it had confidence that it is sustainably achieving the consumer price inflation and employment objectives,” the bank said. “Given that uncertainty remains elevated, gaining this confidence is expected to take considerable time and patience.”Policy makers are assessing whether an expected pick-up in inflation this year will be sustained, and whether the labor market’s gradual recovery will be hurt by the possibility of a double-dip recession. At the same time, the government now requires the RBNZ to consider the impact of its decisions on New Zealand’s housing market, where soaring prices are raising concerns about widening social inequalities.“The New Zealand economy is evolving broadly in line with RBNZ expectations, and there’s time to see how more recent developments impact things,” said Sharon Zollner, chief economist at ANZ Bank New Zealand in Auckland. “The RBNZ is under no pressure to make any bold calls about how precisely things will turn out.”The New Zealand dollar rose after the statement. It bought 70.88 U.S. cents at 3:21 p.m. in Wellington, up from 70.60 cents beforehand.The RBNZ said the outlook for growth remains similar to the scenario it presented in its last statement in February. It said inflation is likely to exceed its 2% target “for a period” but this is likely to be temporary.“This outlook remains highly uncertain, determined in large part by both health-related restrictions, and business and consumer confidence,” it said. “The committee agreed that medium-term inflation and employment would likely remain below its remit targets in the absence of prolonged monetary stimulus.”New Zealand’s economy has enjoyed a V-shaped recovery from its pandemic-induced recession and the housing market is booming, turning attention to when the RBNZ might begin to remove stimulus. The jobless rate fell to 4.9% in the fourth quarter and the central bank in February forecast that inflation will accelerate to 2.5% by June, exceeding the midpoint of its target range.Double-Dip Recession?Still, the economy unexpectedly contracted 1% in the final three months of 2020 and economists see little or no growth in the three months through March, raising the prospect of a double-dip recession.Some analysts are tipping the RBNZ will explicitly start to reduce its bond buying later this year, with a minority already projecting rate rises in 2022. But others see the central bank on hold for a prolonged period after the government in March announced a raft of measures to cool the rampant housing market, including tax adjustments to curb investor demand.The RBNZ said the extent of the dampening effect of the government’s new housing policies on house prices, and hence inflation and employment, will “take time to be observed.”New Zealand will start to allow travelers from Australia to enter the country without undergoing quarantine from April 19, which may deliver some relief for a decimated tourism industry. But the border is expected to remain closed to all other foreigners throughout 2021, and the country won’t start mass immunization until the second half.“The planned trans-Tasman travel arrangements should support incomes and employment in the tourism sector both in New Zealand and Australia,” the RBNZ said. “However, the net impact on overall domestic spending will be determined by the two-way nature of this travel.”In late February, the government instructed the RBNZ to consider the impact on housing when it makes monetary and financial policy decisions. Specifically, the monetary policy committee will to need to explain regularly how it has sought to assess the impacts of its decision on housing outcomes, Finance Minister Grant Robertson said at the time.“The committee’s initial assessment is that stimulatory monetary policy is playing a role in lifting house prices,” the bank said today. “Other factors are also influencing house prices including: the impact of low global interest rates on all asset prices, constrained housing supply and infrastructure, land use regulations, tax policies and the broader recovery in aggregate demand.”(Updates with economist in fourth 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) -- For the euro area to achieve a jumpstart in economic growth with a consumption boom, a whole generation of citizens who hoard money rather than spend it would need to seize the day and splash out.That’s because a mass of savings built up by wealthier households stuck at home without restaurant visits or vacations during the coronavirus crisis is concentrated among older Europeans, who are less likely to open their wallets than younger counterparts.Whether that cohort of consumers will break with the norm and use their freedom to go out and spend when the pandemic abates is crucial in judging the recovery of most advanced economies. It’s most important in Europe however, which has the highest median age of any region of the world.The wall of money that could be unleashed is vast, with Barclays Plc estimating accumulated excess savings at 600 billion euros ($714 billion). But that bank is among those concerned that the clustering of that wealth among citizens known to be conservative with their cash may limit any benefits.“You should have a gradual release of savings,” said Davide Oneglia, an economist at TS Lombard. “Perhaps less pronounced than many expect, because a lot of these savings are sealed in a sector where households are particularly wealthy and less inclined to consume.”What Bloomberg Economics Says...“We estimate 300 billion euros more than might normally be expected poured into bank accounts last year. That cash pile is the biggest upside risk to our economic forecasts, if only consumers feel safe enough to spend it.”-Maeva Cousin. To read the full report click hereDeutsche Bank AG estimates pent-up demand could add about 1 percentage point to 2021 growth -- a sizable chunk for an economy the International Monetary Fund sees expanding 4.4%. UBS Group AG economist Dean Turner sees savings constituting a “substantial proportion” of the post-pandemic rebound, with consumer expenditure growth of 2.9% this year.Such a quantum would be critical to fueling a euro-area boom, not least because the region needs additional growth drivers as its recovery, hindered by slow vaccinations, lags that of the U.S. and China. Germany’s prolonged lockdowns prompted research institutes there to cut their joint 2021 growth forecast by a full percentage point to 3.7% on Thursday. Retail-sales data for the euro-area show spending on goods has generally held up well, even during later lockdowns. But it’s less clear how much of a rebound there will be in consumer-facing services when businesses reopen.Policy makers aren’t holding their breath. European Central Bank data show extra cash chiefly accrued to those older than 50 over the past year, while people aged 16 to 49, with a greater propensity to spend and a higher risk of unemployment, saw their financial situation deteriorate.For Gloria Sattél and Alfons Pribek, an Austrian couple whose pre-crisis spending habits included frequent restaurant meals, regular opera and theater visits, week-long spa stays twice a year and also trips to Greece, Germany and France, an end to lockdowns might not revive their old consumption habits any time soon.“We’ll be heading to the spa as soon as it opens, but beyond that we’re holding off on planning anything,” said Sattél, 78, who lives with her 81-year-old husband in central Vienna. “We’ve been generous with ourselves in the last year, but there’s money left over and there simply won’t be that many opportunities to spend it.”With such people in mind, the ECB is taking a cautious view. Its latest forecasts assume the savings rate, which nearly doubled to 25% during lockdowns last year, would eventually return to pre-crisis levels -- while excess hoarding during the period wouldn’t be substantially reduced.Cash HoardThe sheer size of the cash hoard waiting on the sidelines is giving some euro-zone officials pause for thought about the possibility of a spending binge. The Bundesbank reckons excess savings in Germany increased by 110 billion euros last year, and its counterpart in France estimates households there hoarded as much as 120 billion euros.Even so, a recent German survey suggests pent-up demand is much lower than additional savings. There’s also the issue of economic uncertainty, which may brake spending, particularly if people worry their jobs might be on the line once labor-market support programs expire.“The absolutely key factor for transforming these savings into spending and direct support for activity is confidence,” Bank of France Governor Francois Villeroy de Galhau told France Culture radio this week.European Commission data show euro-area households’ savings patterns are improving though their interest in a major purchase over the next 12 months is still only somewhat above average.“People are aware that a lot of government support underpinning the economy and the labor market specifically will have to be unwound,” said Aline Schuiling, economist at ABN Amro Bank NV. “So they’re cautious about spending money on things that aren’t essential.”(Updates with German economic outlook in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The IRS sent out COVID-19 relief checks to nearly 2M more Americans, including over 700,000 'plus-up' payments for people eligible for more money.
Amazon's future remains very bright contends EvercoreISI tech analyst Mark Mahaney.
(Bloomberg) -- Wall Street is thriving with its employees working remotely -- and that should worry New York’s policy makers, according to BlackRock Inc. Chief Executive Officer Larry Fink.While BlackRock plans to remain in the city -- it’s moving its headquarters to a new skyscraper in Hudson Yards -- a fresh tax increase on the wealthy may encourage people to relocate, Fink said Thursday in an interview after the firm reported that assets under management eclipsed $9 trillion in the first quarter.“There’s no question there are employees at our firm who are wishing to move to other locations because of taxes,” he said. “Every firm is seeing this.”Read more: Guggenheim’s Minerd Moves to Miami as Firm Eyes Flexible WorkSome of New York’s most affluent residents fled to other parts of the state after the start of the pandemic, as well as Florida or Texas, which don’t levy income taxes. Several money-management firms, including Elliott Management Corp. and Citadel, are relocating their headquarters or opening offices elsewhere.New York is raising taxes on its wealthiest residents as part of a budget deal struck earlier this month by Governor Andrew Cuomo and state lawmakers. The combined top rate for the highest earners in New York City -- who also pay a city income tax -- would range from 13.5% to 14.8%, the highest in the country.Richest New Yorkers Risk New Tax Blow With Top Rate of Over 50%New York’s move is the latest attempt to target the wealthy in the U.S. to fund budget shortfalls or future spending. The nation’s richest people continued to prosper even as the pandemic crippled parts of the economy.“We are a proud firm in New York,” Fink said. “We’ll find out if we can bring back the old New York, and have the same vitality.”Read more: BlackRock Bucks New York Departure Trend With Plans to Stay PutBlackRock, meanwhile, is on a roll, buoyed by fresh government stimulus and the accelerating deployment of vaccines. Total net inflows reached a record as equity markets continued to march upward, the company said in a statement.Shares of the world’s biggest asset manager climbed 2.8% to $823.40 at 9:41 a.m. in New York, extending their gain for the year to 14%.An increase of cash on the sidelines during the pandemic -- either from stimulus checks or changes in behavior -- is fueling an interest in investing, Fink said in an earlier interview with CNBC.“It’s fantastic that we’re seeing more people either investing for the long term or even trading,” he said.Net flows into long-term investment products, such as mutual funds and exchange-traded funds, totaled $133 billion as of March 31. In the same period last year, investors withdrew a net $18.7 billion as panic selling followed the declaration of a pandemic, ending the longest bull market in history.But stocks quickly recovered, setting fresh records through last year and into 2021. The S&P 500 rose 5.8% in the first quarter as President Joe Biden pushed through a $1.9 trillion stimulus package and oversaw the rollout of Covid-19 vaccines, bolstering investor optimism.Infrastructure PlanBiden is now pressing Congress to enact an even bigger spending plan to address the nation’s crumbling infrastructure, something that Fink has sought for years.Infrastructure investment is “desperately necessary,” Fink told Bloomberg. “We are excited about that opportunity but we need to know a lot more information related to the real structure around infrastructure financing for America.”Other earnings highlights:Adjusted net income was $1.2 billion, or $7.77 a share, beating the $7.71 estimate of analysts. Revenue totaled $4.4 billion, also beating estimates.Fixed-income attracted the biggest inflows with a net $60.8 billion, followed by equities at $49.9 billion. Total net flows reached a record $172 billion.Active funds saw net inflows of $59 billion, including about $21 billion from active equities.Customers continued to invest in BlackRock’s ETFs, adding a net $68.5 billion to those funds.(Updates with share price in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The IRS commissioner says the child credit payments will arrive on time after all.
Positive signs related to the state of the economy aren’t causing interest rates to rise, one economist noted.
(Bloomberg) -- U.S. stocks jumped to record highs with retail sales and weekly jobless claims data signaling an accelerating recovery in the world’s biggest economy. Yields on benchmark 10-year Treasury notes dropped the most since February.The S&P 500 advanced to an all-time high, led by the health care and technology sectors. Financial shares declined with yields falling, even after Citigroup Inc. and Bank of America Corp. posted better-than-forecast trading revenue. The Dow Jones Industrial Average and the Nasdaq 100 indexes also reached all-time peaks.“The consumer is ready to go out and spend, after nearly a year of lockdowns from Covid-19,” said Vanessa Martinez, managing director and partner at The Lerner Group, a Chicago-based wealth management firm. “There is plenty of pent-up demand in the economy.”The ruble slid as the Biden administration imposed new sanctions on some Russian debt, individuals and entities in retaliation for alleged misconduct related to the SolarWinds hack and the U.S. election. Traders suggested international concerns may have helped fuel the rally in Treasuries, with many investors caught positioned for higher yields.“This continues to be one of the more confusing dynamics in markets at least right now,” said Michael Arone, chief investment strategist for the U.S. SPDR exchange-traded fund business at State Street Global Advisors. “I think part of it is that you saw the 10-year make a very rapid move over a very short period of time, so this could be a pause before it starts to move higher again.”Expectations of a strong economic recovery, combined with optimism over monetary and fiscal stimulus, have pushed equities to record levels this week as company reporting continues. Still, investors are closely monitoring developments on the vaccine rollout, while also keeping an eye on the threat from rising inflation.“We are probably entering the last stage of the pricing of the growth acceleration, and we see encouraging signs suggesting the ‘reflationary’ environment can continue and be supportive for risky assets in the near term,” Goldman Sachs Group Inc. strategists led by Alessio Rizzi wrote in a note. “Across assets we continue to prefer equity over credit, and favor a pro-cyclical stance within equity.”Elsewhere, Bitcoin gained and Coinbase Global Inc. climbed following news that three funds at Cathie Wood’s Ark Investment Management bought shares. Oil fluctuated after Wednesday’s surge.In Asia, the Chinese central bank’s liquidity operations signaled it’s seeking to contain rising leverage, prompting declines in the nation’s equities and in Hong Kong shares.Some key events to watch this week:China economic growth, industrial production and retail sales figures are on Friday.These are some of the main moves in financial markets: StocksThe S&P 500 Index rose 1% to a record high as of 2:09 p.m. New York timeThe NASDAQ Composite Index rose 1.3%, more than any closing gain since April 5The Dow Jones Industrial Average rose 0.7% to a record highThe MSCI World Index rose 0.8% to a record highCurrenciesThe Bloomberg Dollar Spot Index fell 0.1%, falling for the fourth straight day, the longest losing streak since April 6The euro was unchanged at $1.20The British pound climbed 0.1%, rising for the fourth straight day, the longest winning streak since Feb. 24The Japanese yen climbed 0.3%, rising for the fourth straight day, the longest winning streak since Feb. 22BondsThe yield on 10-year Treasuries declined 10 basis points, more than any closing loss since Feb. 26Germany’s 10-year yield declined 3.2 basis points, more than any closing loss since April 1Britain’s 10-year yield declined 6.7 basis points, more than any closing loss since March 2CommoditiesWest Texas Intermediate crude rose 0.4%, climbing for the fourth straight day, the longest winning streak since Feb. 25Gold futures rose 1.8%, the most since March 8For 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.
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