Matthew Cheslock joins Yahoo Finance's Seana Smith from the floor of the New York Stock Exchange to discuss the latest market moves.
Matthew Cheslock joins Yahoo Finance's Seana Smith from the floor of the New York Stock Exchange to discuss the latest market moves.
(Bloomberg) -- Vodafone Group Plc shares fell as much as 8.3% after Chief Executive Officer Nick Read’s strategy showed higher capital expenditure on network investments will hit free cash flow.Although Read’s message is “spend more to grow more,” the “prospect of the improved growth may take longer for investors to absorb,” said Berenberg analyst Carl Murdock-Smith.Vodafone said it can increase margins in the medium-term and guided for adjusted earnings before interest, tax, depreciation and amortization after leases between 15 billion and 15.4 billion euros ($18.8 billion) in 2022, with adjusted free cash flow of at least 5.2 billion euros.Organic service revenue rose 0.8% in the fourth quarter versus an average analyst estimate of 0.4% compiled by Bloomberg.Key InsightsRead wants to do more with less. He’s sold some of the telecom group’s farther-flung units like New Zealand while cutting costs and consolidating operations in Europe and Africa.The centerpiece of this asset-squeezing strategy has been carving out and listing Vodafone’s masts in the form of Vantage Towers AG, which reported earnings in line with guidance on Monday.The Newbury, England-based telecom group will focus on fixed and mobile connectivity in Europe, and mobile data and payments in Africa, the company said in a statement Tuesday. That will mean upgrading fixed and wireless networks.In Africa, the group had 84.9 million data users and mobile money platform M-Pesa handled 15.2 billion transactions in 2021, an increase of 25%.Vodafone has been the subject of press reports and speculation about potential consolidation deals as rivals around Europe merge: Liberty Global Plc is set to combine its U.K. operations with Telefonica SA’s O2, while Spanish rival Masmovil Ibercom SA is snapping up Euskaltel SA.Market ContextVodafone shares have risen 5.4% in the 12 months to Tuesday versus a 13.1% rise in the Stoxx Europe 600 Telecommunications Index.Of 26 analysts surveyed by Bloomberg, 23 rate Vodafone buy, 1 hold and 2 sell.Get MoreStatementNOTE, May 17: Vantage Towers FY Adj. EBITDA AL EU524M Vs. EU513M Y/yNOTE, Apr. 30: Ethiopia Pledges to Allow Mobile Money for New Telecom Entrants(Updates with analyst reaction, shares, and M-Pesa details)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- A growing chorus of analysts is warning that high-quality company debt may have nowhere to go but down as investment-grade spreads approach levels last seen in the lead-up to the dot-com bubble.“The best days are behind” for corporate credit, Morgan Stanley strategists led by Srikanth Sankaran wrote in a May 16 midyear outlook. “The combination of extended valuations, less favorable technicals and a slower pace of balance sheet repair suggests that credit markets have progressed to a mid-cycle environment.”Spreads on BBB rated bonds, which account for more than half of the high-grade universe, narrowed to an average of 106 basis points over Treasuries on Monday, fueled by investor demand for the lowest-rated yet highest-yielding part of the asset class. Should spreads breach 100 basis points, it would be the first time since the dot-com era of the late 1990s.Morgan Stanley is calling for 17 basis points of widening for U.S. investment-grade bonds through the first half of 2022, and downgraded its credit outlook to neutral.Meanwhile, Bank of America Corp. expects another stretch of rising Treasury yields will “lead the market to price in a much faster rate-hiking cycle,” strategists led by Hans Mikkelsen wrote in a note distributed Monday. That will cause spreads to widen in the coming months as investors are pushed to either sell or sit on the sidelines.Still, some say BBBs, the best performing tier of high-grade credit this year, may continue to enjoy a tailwind despite the tight spreads. Citigroup Inc. notes that President Joe Biden’s bailout of multi-employer pensions may spur tens of billions of dollars in demand for corporate bonds with the lowest investment-grade ratings.Morgan Stanley’s bearish forecast for credit overall also favors BBBs due to their marginally higher yields, with expectations that returns will now be driven “by carry and credit-picking rather than beta and capital appreciation.”And duration is also working in the rating bucket’s favor. With shorter average maturities than higher-rated corporate debt, BBBs are less exposed to losses from rising rates.U.S.Seven companies are looking to sell fresh debt in the U.S. investment-grade bond market Tuesday, including Charter Communications and Microchip Technology. Monday’s session saw the week kick off with almost $20 billion in new sales from 10 issuers.Borrowers are growing increasingly frustrated at a perceived failure by banks to explain their Libor transition plans and offer products tied to replacement rates.For the first time since January 2020, U.S. bankruptcy courts saw no large Chapter 11 bankruptcy filings last week.Eric Cole’s Warlander Asset Management will combine with Ellington Management Group as the investment firms seek to expand their corporate credit capabilities, according to an investor letter seen by Bloomberg.For deal updates, click here for the New Issue MonitorFor more, click here for the Credit Daybook AmericasEuropeA triple-tranche sale from American Tower and the final SURE offering from the EU led a jam-packed day for deals in Europe’s bond market.Credit Suisse Group AG on Monday issued its first euro and sterling notes since the collapse of Greensill Capital and Archegos Capital Management. While the sales left demand for the bank’s debt in no doubt, they also highlighted increases in the bank’s funding costs since March.Lender calls for Carnival, Solera and Vocus term loans were Tuesday, while commitments were due for Azelis.AsiaChina Huarong Asset Management Co. has transferred funds to repay a $300 million bond maturing Thursday, according to a person familiar with the matter.Still, bondholders in the bad-debt manager may face significant losses, with China planning an overhaul that would hit both domestic and foreign creditors, according to a New York Times report.As the Huarong saga increases scrutiny of ‘bad bank’ debt globally, India’s version will keep a tight leash on its own debt financing, according to a top official of the association helping to finalize the details.Global banks are losing share in the $186 billion lending market for Chinese borrowers offshore, falling behind local rivals boosting their presence just as the nation’s corporate sector recovers from the pandemic.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Wall Street stocks fell on Tuesday, with technology shares turning lower in late New York trading, while the U.S. dollar touched its lowest level since late February. The Nasdaq also reversed course to end the day lower, while the Dow and S&P 500 added to declines late in the session. The S&P 500 technology index was the biggest drag on the benchmark S&P 500.
(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.As Bank of England officials consider how to unwind their emergency pandemic-era stimulus, markets have already made up their minds about what the first step will be. The conclusion could spell trouble for Chancellor of the Exchequer Rishi Sunak.Investors are penciling in the BOE’s first 15-basis-point interest-rate hike for September 2022, reversing its last cut, just nine months after the central bank is scheduled to wrap up its latest round of buying, and too soon to have allowed for any significant balance-sheet reduction.That would have major consequences for Sunak, who has run up the U.K.’s biggest-ever peacetime deficit to fund crisis aid, and relied on BOE stimulus to keep borrowing costs under control.The BOE slashed rates to 0.1% and more than doubled its asset-purchase target to 895 billion pounds ($1.26 trillion) during the crisis. Now, officials led by Governor Andrew Bailey are discussing whether their previous guidance -- that they’d hold onto to those bonds until interest rates hit 1.5% -- is still suitable.“The world has changed hugely” since the BOE last reviewed its stance on tightening, Bailey said following the central bank’s May decision. “It’s appropriate to review that again.”While the review is yet to be completed, Bailey himself last year suggested he was open to a major shift, and was prepared to reduce the institution’s balance sheet before raising interest rates.Aaron Rock, an investment director at Aberdeen Standard Investments, is holding to the view that rate hikes will precede any reduction of the balance sheet. He expects the BOE to halve the policy rate at which balance sheet reduction will be considered to around 0.75%, a level currently anticipated to be reached only in the second half of 2024.Flexible OptionHowever, Rock flagged a risk the review may decide on a more flexible option, allowing the balance sheet to be reduced “starting next year at the same time they are hiking policy rates from 0.1%.”The BOE’s holdings of bonds are financed at its key interest rate, and the massive expansion of quantitative easing since the pandemic began has left the nation twice as sensitive to a one-point move, according to the Office for Budget Responsibility.Even a small increase would immediately filter through to debt-servicing costs, with the buying having shortened the median maturity of public debt to less than two years, from more than seven before the financial crisis, according to the OBR.“I still believe that hikes are a long way off,” said Mike Riddell, portfolio manager at Allianz Global Investors. He doesn’t expect the central bank to ever reduce its balance sheet, despite this being its intention a decade ago.“Now that we have even more debt, which makes the economy even more sensitive to higher rates, then I’d be surprised if the U.K. or global economic backdrop is such that quantitative tightening would be deemed necessary,” Riddell said.That’s not the view of Goldman Sachs Group Inc., which expects balance-sheet reduction to push the first rate hike out as far as 2025.“We expect the Monetary Policy Committee to reverse the previous exit sequencing and adopt a ‘last in, first out’ approach for the process of monetary tightening,” wrote Goldman Sachs economists including Jari Stehn.The Treasury was happy to reap the rewards from QE, so “when the bank begins to tighten policy, it should be prepared to live with the consequences,” Nick Macpherson, former Permanent Secretary at the Treasury, said in a video seminar on Tuesday.(Adds former official’s comment in fina paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Copper rose toward a record as the potential for tighter regulation and higher taxes in Chile fuel concerns about the long-term supply outlook, while zinc jumped amid speculation about disruptions to Chinese output.The world’s biggest copper producer just elected an assembly that places the writing of a new constitution largely in the hands of the left wing. The makeup is likely to leave miners facing tougher rules around the environment and mineral rights, and it could add momentum to a bill that would create one of the heaviest tax burdens in the global industry. In Peru, the leading presidential candidate wants to impose a tax on copper sales.That’s adding to concerns about tight supply as demand surges. More immediately, the threat of labor disruptions hangs over the market after BHP Group requested a mediation process to avert a strike at a remote operations center in Santiago that serves Escondida and Spence copper mines.A high royalty tax could choke off investment, posing a risk of further reduction in a global mine-project pipeline that already “looks quite empty,” Bank of America Corp. analysts including Michael Widmer said in a note.Copper had stumbled with other industrial materials after climbing to a record last week as China stepped up efforts to cool the commodities surge that’s fanning fears of global inflation. Citigroup Inc. recommended buying on the dips as Beijing could “easily run out of options” to contain costs without making a U-turn in the ongoing domestic production crackdowns for environmental, energy and safety control purposes.“We do not foresee such a U-turn any time soon given the strategic priority of these agendas,” analysts including Tracy Liao, wrote in a note. The country’s measures to rein in prices appear “temporary,” with a potential exhaustion of policy options likely resulting in another round of commodity price rallies, fueled by solid end-use global demand and continued domestic supply curbs in some commodities, they wrote.Zinc surged to the highest since June 2018 amid speculation that smelters in China’s Yunnan province are reducing output due to a power shortage, according to Li Wenchang, an analyst with researcher Mysteel. Major smelters were asked to cut power consumption by 10%, which may lead to about 10% of refined zinc capacity being cut, according to estimate from Beijing Antaike Information Development Co.Yunnan’s monthly refined zinc output was about 75,000 tons, according to Antaike. China’s monthly output is around 600,000 tons. The Yunnan provincial development and reform commission didn’t immediately respond to a fax seeking comment.Copper rose as much as 1.5% to $10,525 a metric ton before settling at $10,405 at 5:54 p.m. on the London Metal Exchange. Zinc gained as much as 3.1% to $3,108.50 and nickel climbed as much as 1.7%.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Regulatory actions (and non-actions) have been important to crypto's development. How do the SEC's announcements shift prices?
USD/CAD settled below 1.2100 and is testing the support at 1.2080.
It's 2011. After a series of typical tech jobs, Bobby Lee decides to launch BTCChina, China's first Bitcoin exchange. It would be a wild ride.
AT&T's stock is the biggest loser in the S&P 500 on Tuesday. Its valuation depends on how much credit investors give the combined WarnerMedia/Discovery for its future streaming efforts.
‘Will she still be able to use our daughter as a tax deduction? My concern is also with the coming child tax credit this summer.’
A paper that my colleague Anqi Chen and I wrote last year — “How Much Taxes Will Retirees Owe on Their Retirement Income?” — keeps hitting the “top 10” list on a major listserv for social sciences research. As people approach retirement, they tend to add up their financial resources — Social Security benefits, defined benefit pensions, defined contribution balances, and other assets. The question we look at is just how large the tax burden is for the typical retired household and for households at different income levels.
The Biden administration has announced payments will be starting this week.
Learn the basic structure of a 401(k) and why it may not be enough to sustain you during retirement.
Amid the slump sweeping across crypto assets Tuesday, investors were turning their attention to a meme asset, SafeMoon, that has garnered increased attention was recently drawing fresh looks after comments made by Barstool Sports founder Dave Portnoy on Twitter.
Raoul Pal tells bitcoin investors that current volatility is to be expected, but big things are around the corner.
Experienced hands look to be buying the dip as a key bitcoin price indicator suggests the pullback may be coming to an end.
GameStop and AMC overcame rocky starts to the trading day as comments on social media surged and retail traders mused once again about “squeeze"s on both stocks.
‘Everybody wants to have asset prices forever going up and the cost of financing to be next to nothing,' Kerry Killinger says.
What does a weekend meltdown in bitcoin prices portend for U.S. stocks? Bitcoin (BTCUSD) is supposed to be an asset that isn’t highly correlated with equity markets, or any other traditional asset for that matter, but some analysts have pointed out that the cryptocurrency has traded in closer step with parts of the market amid the recent turbulence in equities as investors attempt to assess the most effective strategies for playing an economy recovering from the worst pandemic in more than a century. In a blog post on Sunday, Mott Capital’s Michael Kramer said that bitcoin’s recent breakdown could signal that risk appetite on Wall Street is in transition — presumably in a bearish direction.
The legislation would outlaw penalizing taxpayers until the IRS clarifies its policies.