Feb.10 -- Microsoft Corp. Chief Executive Officer Satya Nadella talks about trying to buy TikTok and how he plans to scale up other social media properties the company already owns. He speaks with Bloomberg's Emily Chang on "Bloomberg Studio 1.0."
Feb.10 -- Microsoft Corp. Chief Executive Officer Satya Nadella talks about trying to buy TikTok and how he plans to scale up other social media properties the company already owns. He speaks with Bloomberg's Emily Chang on "Bloomberg Studio 1.0."
Berkshire Hathaway’s annual shareholders meeting will take place in Los Angeles, California, with Warren Buffett and his long-time business partner Charlie Munger reuniting again after a year apart, Buffett wrote in his widely-read annual letter.
(Bloomberg) -- EG Group, the gas-station operator owned by the British Issa brothers, is planning to sell 675 million pounds ($956 million) of privately placed bonds to help fund an acquisition spree after an auditing delay by KPMG LLP derailed the prospect of tapping the public market.EG Group plans to issue five-year senior-secured bonds in its first privately placed transaction, which are expected to price with a coupon of around 6.25%, according to people familiar with the matter. The deal will help fund a turbocharged expansion by the company, which owns the U.K. supermarket chain Asda Group Ltd., and forms part of a $1.8 billion debt package to finance the purchase of Asda’s gas stations as well as those owned by OMV in Germany.Representatives for EG Group and KPMG declined to comment when contacted by Bloomberg News.The company owned by Zuber and Mohsin Issa has fueled its expansion at break-neck speed in the debt markets since 2017. Earlier this week, EG Group told investors it needs more time to finish its audit results because KPMG -- which replaced Deloitte & Touche LLP as the firm’s accountants in October -- faced delays in assessing the scale of its business.Companies typically need to publish a prospectus with audited statements when they sell listed bonds to investors, meaning that the KPMG delay led the company to opt for the private route.With a coupon of 6.25%, the bond is offering investors a premium for the paper being less liquid than a publicly listed bond. EG Group’s existing bonds denominated in euros and U.S dollars are currently bid at yields ranging from 4.3% to 5.2%, according to data compiled by Bloomberg.Strong investor appetite for the new sterling bond meant that the borrower was able to increase the size of the offering by more than a 100 million pounds, according to some of the people.The deadline for EG Group’s audit is the end of September, people familiar with the matter said. Until the audit is completed, any plans to lower debt costs by issuing publicly syndicated bond deals will likely be hindered. Private offerings are more expensive for borrowers to sell because investors can only typically hold a small amount of illiquid assets in their portfolios.EG Group was bought by the Issas in 2001 and is now part-owned by sponsor TDR Capital. The brothers and TDR Capital are also said to be in talks to buy more than half of coffee chain Caffe Nero’s 350 million pounds of loans, the Telegraph reported earlier this week.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.
Commodity trader Olam International, which is dividing its portfolio of diverse products into two new operating businesses, said on Friday that it plans to list its food ingredients segment by the first half of next year. The carve-out and separation of Olam Food Ingredients (OFI), which includes its cocoa, coffee and edible nuts businesses, and Olam Global Agri (OGA), which includes grains and animal feed, edible oils, rice and cotton, is estimated to be completed by the end of 2021. The company will decide on the venue for the listing of the food ingredients business by June or July, Chief Executive Officer Sunny Verghese said, adding that the IPO would be of "substantial size and quite significant in any exchange" in which it would be listed.
(Bloomberg) -- In less than a year, Canada’s largest banks have managed to reignite earnings growth -- even when compared with pre-pandemic times.All of the country’s six biggest lenders this week reported higher net income in the three months through January than in last year’s fiscal first quarter, before the coronavirus had spread widely across North America. Results at the six banks also exceeded analysts’ expectations.Much of the credit goes to government stimulus programs that allowed consumers to continue making mortgage payments and prevented many businesses from shutting their doors for good. The Bank of Canada’s interest-rate cuts kept an already-strong housing market humming, and the Office of the Superintendent of Financial Institutions halted share buybacks and dividend increases, helping the banks shore up their capital bases without the temptation of returning more cash to shareholders.“In Canada, there was very good coordination from the beginning between the financial system, the central bank, the regulators and the government more broadly,” Canadian Imperial Bank of Commerce Chief Financial Officer Hratch Panossian said in an interview Thursday. “We’ve managed to mitigate some of the impact of the ongoing pandemic and the challenging time that we’re going through.”The banks also did their part by helping customers avoid default through loan-deferral programs and by setting aside record amounts of capital early in the crisis, protecting themselves in case of widespread loan losses and bolstering investor confidence. That early caution drove much of the profit gains and beats in the first quarter as the banks reported dramatically smaller provisions for credit losses than in the fourth quarter. At all six banks, set-asides were even smaller than a year earlier, before Covid-19 spread.Strong capital markets lifted earnings at Royal Bank of Canada and National Bank of Canada, which have both spent years bulking up their investment-banking and trading operations. Canada’s robust housing market helped consumer-focused Toronto-Dominion Bank and CIBC, which has placed a particular emphasis recently on reigniting its mortgage-lending business. Bank of Nova Scotia showed progress in improving the performance of its Latin America-focused international division.Bank of Montreal’s results were driven by strong cost controls and results in its U.S. operations, which could continue to benefit the business throughout the year because of the faster pace of vaccination in the country.“The expectation is that the economy is going to come back not necessarily stronger but sooner in the U.S. than in Canada,” James Shanahan, an analyst at Edward Jones in St. Louis, said in an interview. “Given that BMO and TD have more exposure there, that’s going to be a net positive for those two in particular.”Looking ahead to the rest of the year, the trends that will determine the banks’ performance include not just which geographies recover first, but which banks do the best job controlling costs, and which classes of borrowers resume taking out loans, said Gabriel Dechaine, an analyst at National Bank. Early signs are indicating that business lending may recover faster than consumer lending, a reversal of normal trends in an economic recovery, he said.“Whatever bank has exposure to those trends or can position themselves more favorably, that will determine who’s going to pull away from the pack,” Dechaine said in an interview. “What I’m looking for is loan growth in a low-loan-growth environment.”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 direction of the EUR/USD into the close is likely to be determined by trader reaction to 1.2197.
(Bloomberg) -- Germany’s financial regulator pursued criminal complaints over alleged manipulation of Wirecard AG shares even after a review of more than half of the overall trading volume found no clear evidence of wrongdoing.BaFin issued the complaints against short sellers and Financial Times journalists in April 2019, almost two months after the probe by a surveillance unit at the payment company’s main exchange in Frankfurt. It’s not clear why the regulator chose to pursue the complaints, although it does have access to more trading information.The report examined trading of stocks, options and certificates on Deutsche Boerse AG’s Xetra Classic, Xetra Frankfurt and Eurex, according to a copy seen by Bloomberg. Together, the three platforms accounted for about 59% of Wirecard share trading in 2019, data compiled by Bloomberg shows.The regulator sees more trading data than what was included in the report, according to a spokeswoman for BaFin. It has a lower threshold for notifications on short positions and access to reports of suspicious trading activities on exchanges outside Germany, she said, declining to specify the information that led to the complaints.Wirecard collapsed in June last year after saying that 1.9 billion euros ($2.3 billion) in cash probably never existed, sparking a parliamentary inquiry into how BaFin and other authorities handled one of the country’s biggest-ever corporate scandals. At issue is why the regulator took actions that benefited the member of Germany’s benchmark DAX Index, but failed to detect the fraud after multiple warnings.Officials from BaFin are scheduled to testify to the German parliament’s investigating committee on Friday.The legal fallout is still unfolding. Former Chief Executive Officer Markus Braun has been in a jail since last year awaiting trial. The probe into short sellers by prosecutors in Munich remains open, while the case against FT journalists has since been dropped.It emerged on Wednesday that Frankfurt prosecutors visited BaFin’s offices in Bonn to follow up on criminal complaints into staff responsible for overseeing the Wirecard scandal.Joined by federal police in an unusual show of force, they submitted a letter requesting information as they look into whether to open a probe over the regulator’s handling of Wirecard and allegations it didn’t do enough to prevent insider trading among its staff.The surveillance unit at the Frankfurt exchange began its review shortly after the FT published stories critical of the company in early 2019, which whipsawed the stock.The pursuit of Wirecard critics wasn’t the only example of BaFin actions that were at odds with other authorities. The regulator, whose president announced his resignation last month, banned short selling of Wirecard shares in February 2019, even though the Bundesbank had said it wasn’t needed for financial stability. BaFin said it was aimed at preserving “market integrity.”Internal documents of the German parliament’s investigation committee also show that BaFin inquired about a possible trading ban for Wirecard shares in February 2019, but was advised against such a move by the Frankfurt stock exchange’s surveillance unit.“BaFin wanted the ban on short sales no matter what,” said Danyal Bayaz, a member of the parliamentary committee from the Green party. “We think the short-sale ban was illegal. As the legal supervisor, the finance ministry bears responsibility here and should have reviewed the action and intervened.”Finance Minister Olaf Scholz, the Social Democratic party’s candidate for chancellor in September’s elections, is set to face the committee’s questions in the coming months. He’s said he will strengthen BaFin by hiring more people and create a task force for forensic probes and investigations into accounting fraud.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.
Bitcoin fell over 6% on Friday to its lowest in two weeks as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets. "When flight to safety mode is on, it is the riskier investments that get pulled first," Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note. Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.
(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. bought back a record $24.7 billion of its own stock last year and said there’s more to come, as the conglomerate struggled to find other ways to deploy its enormous pile of cash.The company’s purchase of $9 billion of shares in the fourth quarter matched a record set in the previous three-month period, Buffett said Saturday in his annual letter to investors.“Berkshire has repurchased more shares since year-end, and is likely to further reduce its share count in the future,” Buffett, 90, said in the 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’s letter, a closely-watched missive from one of the world’s most renowned investors, devoted large portions to the impact of repurchases, one of Berkshire’s biggest capital-deployment moves last year as it “made no sizable acquisitions.” He also shared his thoughts on the strategy of conglomerates, praising businesses such as Berkshire’s insurance operations and railroad.He shied away from some of the most controversial issues of the day, including politics, the pandemic and racial equality. But Buffett stood by his optimism for America, saying that progress on achieving a “more perfect union” was uneven but still moving forward.“Our unwavering conclusion: Never bet against America,” he said.There was 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.Apple Inc. is one of Berkshire’s top three most-valuable assets, at $120 billion, Buffett said. The technology company has said it intends to repurchase its own shares as well.“The math of repurchases grinds away slowly, but can be powerful over time,” Buffett said. “The process offers a simple way for investors to own an ever-expanding portion of exceptional businesses.”Separately, Buffett acknowledged that the $11 billion writedown Berkshire took last year was almost entirely due to what he conceded was a “mistake” in 2016, when he paid too much for Precision Castparts. Precision is a fine company, Buffett said, but he admitted he made a big error.“I was wrong, however, in judging the average amount of future earnings and, consequently, wrong in my calculation of the proper price to pay for the business,” Buffett said in the letter.Stock PortfolioSwings in Berkshire’s massive $281.2 billion stock portfolio feed into the company’s net income because of an accounting technicality. That drove the figure up 23% to $35.8 billion in the fourth quarter from a year earlier.Berkshire’s Class A shares gained roughly 2.4% last year, falling short of the 16% increase in the S&P 500.The billionaire only briefly touched on one of the largest questions looming over Berkshire -- how long he might stay at the helm. He once again referenced a favorite CEO, Mrs. Blumkin, who founded Nebraska Furniture Mart. She worked until she was 103 -- “a ridiculously premature retirement age as judged by Charlie and me,” Buffett wrote, referring to Charlie Munger, 97, a Berkshire vice chairman.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 has received approximately 21% more individual returns than the agency received last year by Feb. 7, which was 12 days into the tax season last year.
Here's what still has to happen, now that the U.S. House has given its OK.
The U.S. securities regulator on Friday suspended trading in the securities of 15 companies because of "questionable trading and social media activity," the latest in a string of temporary trading halts amid volatile trading in so-called "meme stocks." The Securities and Exchange Commission acted because none of the companies have filed any information with the regulator for over a year, it said in a statement. This is the regulator's third and largest wave of suspensions in response to social media activity.
CNBC host Jim Cramer has been vocal about the rise of SPACs. Cramer has criticized the large number of SPACs and recently went after celebrity SPACs. The host has featured interviews with executives from some of the companies going public via the SPAC route. On Wednesday’s “Mad Money” show, Cramer recommended to that they watch for some high-quality SPACs that are trading down with the entire SPAC industry. “The next time these higher-quality SPACs get hit ... you need to be ready to buy,” Cramer said. “I’m saying you should watch them on the way down because they do break to lower levels.” Here are the 10 SPACs to die for, according to Jim Cramer: MP Materials: Rare earth mining company MP Materials (NYSE: MP) has been a favorite of Cramer's. “It is high quality — I want you ready for the next pullback,” he said. The company could benefit from the push by China to ban exports of rare earth minerals to the U.S. For more on the opportunity MP Materials has, watch Benzinga’s interview with CEO James Litinsky here. Star Peak Energy: Cramer is a fan of Star Peak Energy Transition Corp (NYSE: STPK), a SPAC taking Stem public. “I think you’re going to get an even better buying opportunity once the deal closes.” Cramer said he would be a buyer of the SPAC under $30. Porch Group: Software company Porch Group (NASDAQ: PRCH) helps power the home services market. Benchmark recently initiated coverage with a Buy rating and $24 price target. “I actually think you can start buying Porch right here and maybe wait for a dip to buy some more,” Cramer said. Utz Brands: Salty snacks company Utz Brands Inc (NYSE: UTZ) completed its SPAC merger in August 2020. The company hasn’t received the attention that some electric vehicle SPACs and other industries have commanded. Shares have seen a steady rise in their price going from around $14 at the time of the merger close to around $25 today. “You’re not getting much of an entry point, but if it pulls back to closer to $20, you need to be ready to pull the trigger on Utz,” Cramer said. DraftKings: Online sports betting operator DraftKings Inc (NASDAQ: DKNG) is a favorite of Cramer’s. The CNBC host did clarify that he has a programming deal with the company, saying to take his advice “with a grain of salt.” The company is generating real revenue and growing like a weed, he said. Related Link: 10 Top SPAC Picks For Investors To Consider In 2021 Social Capital Hedosophia Holdings Corp V: The fifth SPAC under the IPOA to IPOZ umbrella from Chamath Palihapitiya is a favorite of Cramer’s due to the merger partner SoFi. Cramer called SoFi “the personalized online banking play that’s disrupted the entire industry.” The company is going public with Social Capital Hedosophia Holdings Corp V (NASDAQ: IPOE). Vertiv: Hardware and software company Vertiv Holdings (NYSE: VRT) is another company that went public via SPAC merger that Cramer likes. “You can put on a small position here, then hope it comes down to buy more,” Cramer said. The CNBC host said the company recently reported a strong quarter. Open Lending: Automated lending company Open Lending (NASDAQ: LPRO) has been a strong performing stock, with shares going from $13 to $40 over the last six months. “The stock is not cheap, but if Open Lending hits the numbers well this thing’s going to look like a steal,” Cramer said. Skillz: Mobile gaming company Skillz Inc (NASDAQ: SKLZ) helps companies monetize their games through offering person vs. person wagering and tournaments. Cramer said Skillz has a great story, and he would be a buyer if it falls below $30. Cramer also noted that Cathie Wood added Skillz to the Ark Funds ETFs. AppHarvest: Indoor agriculture company Appharvest (NASDAQ: APPH) wants to operate the world’s largest indoor and controlled farming portfolio to help Americans have access to fresh, affordable, healthy fruits and vegetables. “The stock’s down 22% from its highs, looking more enticing currently at $33,” Cramer said. “If it falls to the high $20s, nibble.” Photo by Tulane Public Relations via Wikimedia. See more from BenzingaClick here for options trades from Benzinga5 Things You Might Not Know About Churchill Capital's Michael KleinPokemon Announces Highly Anticipated Diamond And Pearl Remakes: Why Investors Should Watch Nintendo Stock© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Bitcoin’s rally hit a speed bump as the world’s largest cryptocurrency witnessed its worst weekly decline in almost a year amid wider losses in risk assets.The digital token slumped 20% this week, the most since the pandemic-fueled selloff last March. The wider Bloomberg Galaxy Crypto Index, tracking Bitcoin, Ether and three other cryptocurrencies, was down 23% for the same period. Bitcoin fell 5% to trade at $45,672 as of 5:00 p.m. in New York, according to consolidated pricing compiled by Bloomberg.“It is a market that was ridiculously overbought and will probably be so once again in the not-too-distant future,” Craig Erlam, a senior market analyst at OANDA Europe, said in a note Friday.The rough patch for Bitcoin comes amid increased volatility in global markets, as a surge in bond yields heralds growing expectations that growth and inflation are moving higher and forcing traders to reevaluate their positions across multiple asset classes. The tech-heavy Nasdaq 100 dropped the most since October this week as stocks like Tesla Inc. and Peloton Interactive Inc. slumped.“Risk-on assets are taking a hit at the moment -- we’re seeing stocks slide and crypto is following,” said Vijay Ayyar, head of Asia Pacific for cryptocurrency exchange Luno in Singapore. “The dollar is strengthening, which is a good indication to expect a slide in Bitcoin and crypto.”Bitcoin’s weakness in the face of market gyrations raises questions about its efficacy as a store of value and hedge against inflation, a key argument among proponents of its stunning rally over the past year. Detractors have maintained the digital asset’s surge is a speculative bubble and it’s destined for a repeat of the 2017 boom and bust.In a Flash, U.S. Yields Hit 1.6%, Wreaking Havoc Across MarketsWhile Bitcoin is often touted as the new “digital gold,” the yellow metal is winning out at the moment with spot gold trading at $1,734 per ounce, down about 3% for the week. The Bloomberg Dollar Spot Index is up 0.9% in the same period, its strongest gain since October.Heavy selling in the Grayscale Bitcoin Trust, the world’s largest such fund, as well as the expiry of Bitcoin options are also contributing to the volatility, Ayyar said. The trust has slumped 24% this week, with losses racing past its underlying asset, as a once-massive price premium over Bitcoin turned negative as investors cashed in on those gains, he said.Prominent figures across the financial world have also recently weighed in on Bitcoin.Tesla chief executive Elon Musk said the prices “seem high” on the weekend, seen by some as an initial catalyst for the week’s selloff. Ark Investment Management’s Cathie Wood later said in a Bloomberg interview she was “very positive on Bitcoin” but didn’t disclose whether Ark had made a purchase.Earlier this week, Microsoft Corp. co-founder Bill Gates said in a Bloomberg Television interview he wasn’t a fan of Bitcoin, while Treasury Secretary Janet Yellen said the token was an “extremely inefficient way of conducting transactions.”(Updates prices, chart)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.
Economic data from France and the U.S will be in focus later today. U.S inflation figures could deliver further upside to yields later today…
(Bloomberg) -- Ark Investment Management’s miserable week showed signs of easing on Friday, with its flagship exchange-traded fund halting a four-day slide.The ARK Innovation ETF (ticker ARKK) closed higher, after swinging between gains and losses throughout the session. It still dropped 15% this week amid a technology selloff that was triggered by rising Treasury yields, putting pressure on high-flying stocks. One of those shares is electric-car maker Tesla Inc., which remains as the ETF’s biggest holding and has faced intense volatility.The last time Ark founder Cathie Wood suffered a weekly run this bad was almost a year ago, during the worst of the Covid-fueled mayhem. Her main fund is now 11 times larger than it was then. It got close to erasing its gains for 2021 this week after soaring as much as 26% since the end of December.Assets in the ETF have slumped by $4.9 billion this week to $23.3 billion, according to data compiled by Bloomberg. The figure doesn’t include flows from Thursday, when ARKK dropped 6.4% for its worst day in almost six months. Investors pulled about $200 million from the fund in Wednesday trading. That brings total weekly outflows to $638 million, on pace to be the worst on record.“Money that is ‘easy come’ tends to be money that is ‘easy go’,” said Ben Johnson, Morningstar’s global director of ETF research. “You’re going to see similar, if not potentially greater, market impact on the way down, especially given that this is an actively managed ETF and a fully transparent one. The market is hanging on their every move, they’re watching their every move.”Bearish bets against the ETF continue to grow, with short interest now accounting for more than 4% of available shares, according to data from IHS Markit Ltd.Michael Purves, chief executive officer at Tallbacken Capital Advisors, said in a note Thursday that his firm is taking profits on ARKK puts, but “will look to re-enter a second bearish trade on a bounce.”Ark Investment slipped to the eighth place among the largest exchange-traded fund issuers in the $5.9 trillion industry, after becoming the seventh biggest earlier this month. Total ETF assets for the company are now just shy of $53 billion, down from more than $60 billion at the prior peak.Wood’s $10.6 billion ARK Genomic Revolution ETF (ARKG) lost $154 million on Wednesday, for its third straight day of outflows. At the same time, traders pulled another $48 million from ARK Next Generation Internet ETF (ARKW).“If one were still in agreement with Ark on their long-term investment thesis, a meaningful market correction might provide an opportunity to participate more,” Linda Zhang, founder of Purview Investments.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) -- Shares of GameStop Corp. doubled yesterday and jumped another 19% today. Options traders think the stock can do much better than that.The most-active option traded on the stock Thursday was a contract betting that GameStop shares would spike to $800 on Friday. Some 52,000 contracts changed hands during the session betting on this one-day gain of 636%For other options traders, it was a question of when GameStop would hit the $800 mark, not if. The seventh and eighth most-active contracts were call options wagering that the stock would reach $800 by next Friday or in three weeks. It’s hard to say whether the contracts were mainly bought or sold, two traders said.“It’s speculation gone wild, pure and simple,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “It is Exhibit A in the nuttiness that is associated with GameStop.”GameStop’s Reddit-driven roller-coaster ride that roiled markets last month is continuing this week, with shares more than doubling in the final 90 minutes of trading on Wednesday and rising as much as 101% on an intraday level on Tuesday. The rally came as popular tech names from Tesla Inc. to Zoom Video Communications Inc. were battered after U.S. 10-year Treasury yields spiked to 1.6%.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) -- Short bets are a tough sell.The Reddit-inspired short squeeze in GameStop Corp. and other stocks has spurred billions of dollars in losses for short sellers in recent weeks, prompting a rethink of the practice among some investors. Last Friday, Ken Griffin of hedge-fund Citadel declared after Congressional hearings the turmoil will diminish short selling for the foreseeable future.But the environment for short selling was already among the worst in decades even before the GameStop blowup. Even with this week’s sharp selloff, broad gains in equities in the past year have made it difficult to bet against almost any one stock.The most-shorted stocks have gained 112% since last March while the least-shorted names rose 40%, according to a Scotiabank analysis. In January, when GameStop gyrations gripped markets, a record was reached between the most- and least-expensive stocks to borrow with the most expensive outperforming the least by 29%, according to IHS Markit.“I think it would be fair to characterize the time from the late-March 2020 until now as being the worst period on record for short interest factors,” said Sam Pierson, director of Securities Finance at IHS Markit.It’s not unusual for the most-shorted stocks to outperform gains in the least-shorted companies when coming out of a bear market. But what is surprising this time is the extent of the current outperformance and the pain it has caused, even before the start of 2021, Scotiabank analyst Jean-Michel Gauthier said.“Typically when you see the high-profile shorts throw in the towel, it is a good time to be hunting. But in this environment it still seems too early,” said Adam Eagleston, chief investment officer of Formidable Asset Management, which manages over $600 million in assets.To be sure, short selling positions haven’t completely disappeared.Small caps are one example of where short bets by hedge funds have widened, according to net contracts data last week from the Commodity Futures Trading Commission. But short interest as a percentage of float for the Russell 3000 has continued to plunge, according to financial analytics firm S3 Partners.Russell 3000 short interest stands at 5.6%, which is the lowest in at least two years as funds continue to trim their positions. That’s down from at least a two-year high of 7.5% a month ago.Read more: Hedge Funds Reverse Course to Go Short Small Caps: Taking StockFor 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.
Borrowers are backing off, mortgage demand is falling — but what if rates go even higher?
Higher bond yields have arrived. Now investors have to consider what, if any, changes to make to their portfolios.
The cryptocurrency rose to $1.30, beating out its previous all-time high set in January 2018.