Victoria Toensing and Joe DiGenova of DiGenova and Toensing, LLP join FOX Business' Lou Dobbs to discuss ex-FBI Deputy Director Andrew McCabe's indictment.
Victoria Toensing and Joe DiGenova of DiGenova and Toensing, LLP join FOX Business' Lou Dobbs to discuss ex-FBI Deputy Director Andrew McCabe's indictment.
The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at .7145.
ISTANBUL (Reuters) -Turkey's central bank held rates steady at 19% as expected on Thursday and dropped a pledge to tighten policy further if needed, in its first decision since President Tayyip Erdogan fired the hawkish former governor and sparked a market selloff. In a statement, the bank also ditched last month's pledge to "decisively" maintain a tight monetary policy "for an extended period" to address inflation, which has risen above 16% and been in double-digits for most of the last four years. The lira slipped as much as 0.7% to 8.125 versus the dollar after the bank under new governor Sahap Kavcioglu replaced the hawkish guidance with a softer assessment of risks to inflation that analysts said signalled interest rate cuts were on the way.
World stock markets extended a five-day run of fresh highs on Thursday, fueled by upbeat earnings and strong U.S. economic data that herald a solid recovery ahead, while Russian markets tumbled at the prospect of the harshest U.S. sanctions in years. Major stock indexes posted record highs, including MSCI's global benchmark, Europe's broad STOXX 600, the Dow Industrials and the U.S. benchmark S&P 500, as bonds yields tumbled. The 10-year U.S. Treasury note slid below 1.6% to yield 1.563%, a fall of 7.4 basis points that helped spur renewed buying of big tech stocks in the biggest single-day decline in the benchmark's yield in almost three months.
(Bloomberg) -- Cryptocurrency exchange Coinbase Global Inc. soared above a $112 billion valuation in its trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board.The massive valuation, which dwarfs more traditional financial companies including Intercontinental Exchange Group Inc. and Nasdaq Inc. itself, is a landmark moment for the crypto industry and for Coinbase, which was started almost a decade ago when few people had even heard of Bitcoin, and many exchanges were run by amateurs from their garages and homes.Coinbase shares closed at $328.28, down 14% from the $381 opening price on Nasdaq after earlier climbing as high as $429.54. At the closing price, the company’s valuation on a fully diluted basis is about $86 billion.Bitcoin, which along with Ethereum made up 56% of Coinbase’s 2020 trading revenue, dipped below $62,000 after earlier hitting a record price.The debut isn’t just a mark of success for Coinbase, which was valued at just $8 billion in its most recent funding round in 2018. It’s also a win for Nasdaq, which hosted its first direct listing after beating out the New York Stock Exchange for Coinbase’s debut. Coinbase is the biggest company to take the direct listing route to market.Coinbase Chief Financial Officer Alesia Haas said in an interview Wednesday morning that one of the reasons that the company picked Nasdaq was because the bourse offered the ticker symbol “COIN,” which wasn’t part of the New York Stock Exchange’s pitch.“Ultimately that they had the ticker COIN, and that was a really great ticker for us to get,” Haas said.Nasdaq on Tuesday set a reference price of $250 a share for Coinbase’s direct listing, a number that’s a requirement for the stock to begin trading, but not a direct indicator of the company’s potential market capitalization. Every major direct listing has so far opened significantly above its reference price, with Roblox shares debuting at $64 each –- 42% higher than the number set by the exchange.Coinbase shares changed hands at a roughly $90 billion valuation in early March, Bloomberg News reported at the time, in what was one of the last chances for investors to trade its private stock before the company went public.Digital Currency Group founder Barry Silbert, who’s built an empire that spans the crypto world, tweeted Tuesday that his shares would definitely not be changing hands at the reference price, in an early sign that the stock was set for a pop at the open.Direct listings are an alternative to a traditional initial public offering that has only been deployed a handful of times. Until Wednesday, every company to pursue one -- including Slack Technologies Inc., Palantir Technologies Inc. and most recently Roblox Corp. -- listed on the New York Stock Exchange.As well as the ticker, Nasdaq’s ability to provide a private market for the shares, as well as services it offers such as investor relations work, were among its selling points to Coinbase, according to a person familiar with the matter.Appropriately for a company that in May said it was committing to a “remote-first” work culture and doesn’t list a headquarters on its filing, Coinbase’s pitch meetings with Nasdaq happened virtually, the person added.“We evaluated both NYSE and Nasdaq and ultimately felt that the Nasdaq platform was aligned with our value as a tech company,” Haas said.In a direct listing, a company’s shares begin trading without it issuing new shares to raise capital. That avoids diluting the shares and also, unlike a traditional IPO, often allows the company’s existing investors to put their shares on the market without waiting for lockup period -- typically six months -- to expire.Luring Coinbase was a win for Nasdaq, whose years-long fight for a larger share of mega listings gained traction in the past year. Half of the 10 largest U.S. IPOs, excluding blank-check companies, were on on Nasdaq, according to data compiled by Bloomberg. That included the third largest, Airbnb Inc.’s $3.8 billion IPO in December, which was the biggest listing on Nasdaq since Facebook Inc.’s $16 billion monolith in 2012.Crypto UpstartsPutting his trust in the stock exchange is Coinbase Chief Executive Officer Brian Armstrong, who started the company with Fred Ehrsam in 2012. Unlike most rivals, Coinbase’s founders always envisioned strict regulatory compliance as a cornerstone of the operation, which has helped the exchange to grow in the U.S., where many early Bitcoin traders and investors were located.Ehrsam left the company in 2017, and is now investing in crypto startups. Both Armstrong and Ehrsam own huge swaths of Coinbase.Coinbase last week said it expects to report a first-quarter profit of $730 million to $800 million, more than double what it earned in all of 2020.“They are going to build out a full financial services company,” said Barry Schuler, a co-founder of Coinbase investor DFJ Growth who until last year sat on the company’s board. “Like a crypto version of a Goldman Sachs or a Morgan Stanley.”Skeptics, RegulationThe company’s rapid growth hasn’t been without controversy, ranging from frequent outages during periods of heavy trading to new restrictions Armstrong placed on employee discussions of politics last fall. In March, Coinbase also settled with the Commodity Futures Trading Commission for $6.5 million, after the agency said the company reported inaccurate data about transactions and that a former employee engaged in improper trades.Then there are the crypto skeptics, as well as the regulators around the world who are stepping up oversight and casting doubt on Bitcoin’s usefulness as a currency.European Central Bank executive board member Isabel Schnabel, in an interview this month with Der Spiegel, called Bitcoin “a speculative asset without any recognizable fundamental value.”A publicly traded Coinbase was unimaginable several years back when Wall Street was full of crypto bears including JPMorgan Chase & Co.’s Jamie Dimon, who once called Bitcoin “a fraud.”Dimon later said he regretted saying that. His bank as well as Goldman Sachs Group Inc. advised on Coinbase’s direct listing.“I don’t think we sought Wall Street’s approval but we did seek to bring more transparency to crypto and to introduce crypto to more and more users,” Coinbase’s Haas said.Crypto Partners“Wall Street can become trader of crypto. They are going to be partners of us going forward,” she said.Coinbase’s early investors are celebrating.“I think Coinbase is this decade’s Microsoft, Netscape, Google or Facebook,” Garry Tan, founder and managing partner at Initialized Capital and an early-stage Coinbase investor, said in an interview with Bloomberg Television Tuesday.(Updates with closing share price in 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) -- Bond veteran Greg Wilensky has seen hype about a surge in inflation crushed too many times to get carried away with this year’s great reflation trade.“I’ve been managing bond portfolios for 25 years, through very large monetary programs, big deficits, and the Fed trying to raise inflation expectations,” the Janus Henderson money manager said in an interview. “As much as I can see legitimate reasons why it might happen this time -- I could have said that very often over the last 12 years too.”Wilensky’s skepticism epitomizes the cooling investor enthusiasm for bets linked to a rapid economic recovery and higher prices. Trades favoring economically-sensitive value stocks, steeper yield curves and a rebound in commodities have faltered after a stellar first quarter.The MSCI AC World Value Index has lagged its growth counterpart by about 6 percentage points since March 8. Benchmark Treasury yields have retreated some 13 basis points already this quarter, even as U.S. inflation data begin to beat expectations. And Tuesday’s strong 30-year Treasury auction suggested demand for even the most interest rate-exposed bonds is returning.One of the biggest questions money managers confront now is whether the stimulus-fueled rebound in growth and inflation -- in particular in the U.S. -- can transition to a sustainable expansion that will keep pushing equities and bond yields higher. The International Monetary Fund recently upgraded its 2021 global growth forecast to the strongest in four decades, but the outlook beyond that is less clear-cut.Envisaging a trajectory for price levels beyond this year is even harder for investors given the warping effect of coronavirus shutdowns, temporary supply bottlenecks and base effects from last year’s disinflation. A surge in five-year U.S. breakevens-- a gauge of inflation expectations -- has petered out since they hit their highest since 2008 in mid-March.Simple Math Is About to Cause an Inflation Problem: QuickTake“Inflation and rates, especially as a bond investor right now, is the call that you have to make,” said Elaine Stokes, fixed income portfolio manager at Loomis Sayles. “It’s the make-or-break call of your year.”The response to the stall for many investors has been to pare back some trades geared to the sharpest stage of the economic rebound. Vishal Khanduja, fixed income fund manager at Eaton Vance Management, has halved his portfolio’s overweight in U.S. inflation-linked bonds from the start of the year.“Inflation expectations were dislocated in 2020” in a “surgical recession,” Khanduja said. “The typical post-recession positioning that you see happen over multiple years is quickly going through the market.”Franklin Templeton’s Gulf Arab bond fund has removed its hedges against the risk of accelerating U.S. inflation, as it sees another spike in Treasury yields as “possible, not probable,” according to its Dubai-based manager.As for some traditional inflation hedges in the commodities markets, the story is about to get more complicated than the year-to-date rebound in oil and copper prices would suggest. Strategists at the BlackRock Investment Institute anticipate a divergence within the asset class, as factors such as climate risks are more fully captured in pricing.“The lift for oil from the economic restart is likely to be transitory, while some metals may benefit from structural trends such as the ‘green’ transition for years to come,” a team including Wei Li wrote in a note this week.Tremendous ChallengeMeanwhile, in the bond market, traders are not reacting to signs of inflation as one might expect. On Tuesday, data showed U.S. consumer prices climbed in March by the most in nearly nine years, yet 10-year Treasury yields fell five basis points to their lowest in three weeks.“The tremendous challenge right now, especially this year is that the quality of almost any of the numbers we’re looking at, whether it’s the short-term inflation numbers, the economic growth numbers, these things are being very much distorted by the economic volatility,” Janus Henderson’s Wilensky said.(Adds Franklin Templeton move in 10th 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.
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.
(Bloomberg) -- Administrators to the Australian holding company of Greensill Capital have asked it to clarify a series of payments linked to the brother of founder Lex Greensill, amounting to $174 million.In a report prepared ahead of a creditor meeting scheduled for April 22, Grant Thornton says it’s seeking details on several transactions identified as “payment of proceeds PG Family Trust.”Transactions were recorded between October and December 2019 in a liability account labeled “Repayable Within a Year,” according to the report.“Management have indicated that these transactions in part relate to the sale of shares by Peter Greensill, however at this stage we are not in possession of sufficient documentation to confirm,” the administrators said.“We have made additional inquiries of the directors and management in relation to this account,” they said.A New York-based spokesman for Greensill Capital declined to comment.The report also states administrators couldn’t find record of payment for transferring ownership of the Greensill’s family farming company to Peter Greensill in April last year.The administrators took charge of Greensill Capital Pty Ltd. last month after the lender failed to extend insurance on some of the loans it sourced and packaged. They are now looking to recover cash for creditors, including employees, the Greensill family trust, Credit Suisse Group AG and Softbank Group Corp. They also recommended creditors wind up the company at next week’s meeting.The holding company has $777 million of receivables owed by the U.K. operating unit, and $1.1 billion of external debt, according to the report.The 37 employees of the unit are likely to be paid in full, while any payment to unsecured creditors will depend on the recovery of assets in the U.K. and Germany.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.
Cryptocurrency exchange Coinbase Global Inc was set to be valued at more than $94 billion in a stock market debut on Wednesday that marked another milestone in the development of bitcoin and other digital assets. Coinbase's launch, done through a direct listing where no shares are sold ahead of the debut, marks a victory for digital currency advocates in a year that has seen a clutch of mainstream, top-tier firms dive into the space. Coinbase's listing is expected to accelerate that process by boosting awareness of digital assets among investors.
The brand saw a social media backlash after a nurse claimed staff were being turned away for beauty treatments.
The dollar has gained this year as Treasury yields rose on expectations of faster growth and higher inflation. “The whole pro dollar trade is based upon the yield story and given the fact that the yield story has backed off the highs, the dollar has pretty much done the same thing,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. “Until the bond market gets the heebie-jeebies over the inflation fears again, I think the long dollar position remains under assault,” he said.
(Bloomberg) -- Gold rose to the highest since late February, putting the metal on course for a second straight weekly gain on help from declines in the dollar and bond yields.A gauge of the dollar fell as much as 0.2%, and 10-year Treasury yields slumped to lowest in a month. The declines came after U.S. retail sales accelerated in March by the most in 10 months as business reopenings, increased hiring and a fresh round of stimulus checks emboldened shoppers, while U.S. March industrial production rose less than expected.“Gold finally trades above recent highs behind a cocktail of lower yields, a soft dollar and a weaker-than-expected industrial production and capacity-utilization report,” said Tai Wong, head of metals derivatives trading at BMO Capital Markets. The production report “indicates the real economy remains uncertain, while the strong retail sales report was purely stimulus-based and transitory.”Bullion has been confined to a narrow trading range this month, with shifts largely driven by movements in the dollar and bond yields. The precious metal has declined more than 7% this year as gold-backed exchange-traded funds witnessed sustained outflows, after playing a crucial role in 2020’s record rally. Net sales continued yesterday.“Gold is unable to make any further significant and sustainable gains due to a lack of support from financial investors,” Daniel Briesemann, an analyst at Commerzbank AG, wrote in a note. “There is still no sign of any trend reversal in gold ETFs.”Spot gold rose as much as 1.9% to $1,769.67 an ounce, the highest since Feb. 26. Futures for June delivery on the Comex rose 1.8% to settle at $1,766.80 an ounce. Spot silver, platinum and palladium also advanced. The Bloomberg Dollar Spot Index declined 0.1%.Bullion rose above its 50-day moving average, but “a decisive move above $1,760 is still required to open a path to $1,800,” said BMO’s Wong.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.
(Reuters) -Citigroup Inc trounced first-quarter profit expectations, thanks to a rebound in the broader economy and a jump in investment banking activity, and said it will exit some overseas businesses as new chief executive Jane Fraser starts to make her mark on the country's third-largest lender. Citigroup's share price was broadly flat in afternoon trading. "Our first impression is the incoming CEO Jane Fraser is striking the right cord on messaging a sense of urgency to undertake strategic changes that enhance the profitability profile," UBS analyst Saul Martinez wrote in a note.
(Bloomberg) -- Just last year, the world’s most valuable startup, ByteDance Ltd., was being squeezed from all sides.The Trump administration wanted the Chinese firm, which owns the ubiquitous TikTok video-sharing platform, to get rid of assets. Beijing was cracking down on tech businesses, and India blacklisted some of its social-media apps.For all the obstacles, ByteDance kept growing. Now its founder, 38-year-old Zhang Yiming, is among the world’s richest people -- a distinction that lately has carried increased risks in China.Shares of the company trade in the private market at a valuation of more than $250 billion, people familiar with the dealings have said. At that level, Zhang, who owns about a quarter of ByteDance, could be worth more than $60 billion, placing him alongside Tencent Holdings Ltd.’s Pony Ma, bottled-water king Zhong Shanshan and members of the Walton and Koch families in the U.S., according to the Bloomberg Billionaires Index.ByteDance, famous for its short-video apps and news aggregator Toutiao, more than doubled revenue last year after expanding beyond its core advertising business into areas such as e-commerce and online gaming. It’s now weighing options for the initial public offering of some businesses.“Zhang is someone who’s known for thinking long-term and not easily dissuaded by short-term setbacks,” said Ma Rui, partner at venture-capital firm Synaptic Ventures. “He is set on building an enduring, global business.”Surging ValuationDuring its last fundraising round, ByteDance reached a $180 billion valuation, a person with knowledge of the matter said. That’s up from $20 billion about three years ago, according to CB Insights. But in the private market, some investors recently were asking for the equivalent of a $350 billion valuation to part with their shares, people familiar have said. The company’s value for private-equity investors is approaching $400 billion, the South China Morning Post reported. That would mean an even bigger fortune for Zhang.ByteDance representatives didn’t respond to requests for comment.It’s a tough time to be wealthy in China as the government seeks to rein in the country’s most powerful corporations and their billionaire founders. Just ask Jack Ma: After opening an antitrust probe, regulators fined Alibaba a record $2.8 billion and the central bank ordered an overhaul of his Ant Group Co. fintech empire so it’d be supervised more like a bank. On Tuesday, China ordered 34 internet companies to rectify their anti-competitive practices in the coming month.While ByteDance hasn’t been singled out as a target, its dominance in social media and war chest for deal-making are sensitive areas the government is looking into.“There are no more silly games in the U.S. with Trump and potential bans or forced asset sales,” said Kirk Boodry, founder of investment research firm Redex Holdings. “But the pressure on tech-share prices and China in particular might make $250 billion a tough sell,” he added, referring to ByteDance’s value in private transactions.Born in the southern Chinese city of Longyan, Zhang, the only son of civil servants, studied programming at Tianjin’s Nankai University, where he built a following on the school’s online forum by fixing classmates’ computers. He joined Microsoft Corp. for a brief stint after graduating, later calling the job so boring he often “worked half of the day and read books in the other half,” according to an interview with Chinese media. He went on to develop several ventures, including a real estate search portal.His breakthrough came in 2012, when working in a four-bedroom apartment in Beijing he created ByteDance’s first hit -- a joke-sharing app later shut down by censors. It then turned to news aggregation before winning over more than 1 billion global users with its short-video platforms TikTok and Chinese twin app, Douyin. In the process, it attracted big-name investors such as SoftBank Group Corp., Sequoia Capital and proprietary-trading firm Susquehanna International Group, making it a rarity among Chinese internet startups that usually get absorbed into the wider ecosystems of Tencent and Alibaba Group Holding Ltd.Novel ConceptOne of Zhang’s earliest supporters, Susquehanna has become ByteDance’s largest outside backer with a 15% stake, according to a Wall Street Journal story in October. The initial bet was made at the start of 2012, when ByteDance’s news app Toutiao was just a concept that Zhang had drawn up on napkins, according to a 2016 blog post by Joan Wang, who led that investment for Susquehanna’s Chinese venture-capital unit.With TikTok facing scrutiny in the U.S. and India, Zhang has put more effort into ByteDance’s nascent and fast-growing Chinese businesses, which range from gaming to education to e-commerce. That helped it increase sales to about $35 billion last year and operating profit to $7 billion, a person familiar with the results said.Investors are eyeing the IPO of some of ByteDance’s businesses after Chinese competitor Kuaishou Technology raised $5.4 billion in February in the biggest internet listing since Uber Technologies Inc., with its market value now nearing $140 billion. Last month, ByteDance hired former Xiaomi Corp. executive Chew Shou Zi as its chief financial officer, filling a long vacant position that will be crucial for its eventual market offering.But for Zhang, it’s not all about immediate payoffs. The affable founder is known for his business philosophy of “delaying satisfactions” as he puts the focus on long-term growth -- a message he stressed again during his spiel to employees at the company’s ninth anniversary celebration last month.“Keep an ordinary mind, that’s something that sounds easy but important to do,” he said. “Put in the plainest words, when hungry, eat, when tired, sleep.”(Adds latest on China crackdown 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.
Reuters News on Thursday unveiled a new subscription website as part of a broad initiative to court business professionals. In addition to targeting its current global readership, the newly revamped Reuters.com https://www.reuters.com is hoping to attract professional audiences prepared to pay $34.99 per month for a deeper level of coverage and data on industry verticals that include legal, sustainable business, healthcare and autos. In an emailed statement, Josh London, Chief Marketing Officer, Reuters and Head of Reuters Professional, called the launch "the largest digital transformation at Reuters in a decade."
(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 real estate, 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. fell even following news that three funds at Cathie Wood’s Ark Investment Management bought shares at Wednesday’s debut of the largest digital asset exchange. Oil edged higher in the wake of Wednesday’s surge.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 1.1% to a record high as of 4:02 p.m. New York timeThe NASDAQ Composite Index rose 1.3%, more than any closing gain since April 5The Dow Jones Industrial Average rose 0.9% to a record highThe MSCI World Index rose 0.9% 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 0.2%, rising for the fourth straight day, the longest winning streak since Feb. 22BondsThe yield on 10-year Treasuries declined 8.1 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 0.3%, climbing for the fourth straight day, the longest winning streak since Feb. 25Gold futures rose 1.7%, the most since March 30For 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.
NEW YORK (Reuters) -Oil prices edged up to fresh four-week highs on Thursday on positive U.S. economic data and higher demand forecasts from the International Energy Agency (IEA) and OPEC as countries start to recover from the COVID-19 pandemic. After rising almost 5% on Wednesday, Brent futures rose 36 cents, or 0.5%, on Thursday to settle at $66.94 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 31 cents, or 0.5%, to settle at $63.46. "Oil is beginning to reconnect with strong equities with further assistance from a weakening dollar," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
(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) -- 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.
(Bloomberg) -- The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.”The unspoken message to Ma and his cohorts was the decade of unfettered expansion that created challengers to Facebook Inc. and Google was at an end. Gone are the days when giants like Alibaba, Ant or Tencent could steamroll incumbents in adjacent businesses with their superior financial might and data hoards.“Between the rules for Ant and the $2.8 billion fine for Alibaba, the golden days are over for China’s big tech firms,” said Mark Tanner, founder of Shanghai-based China Skinny. “Even those who haven’t been targeted to the same extreme will be toning down their expansion strategies and adapting many elements of their business to the new bridled environment.”Tech companies are likely to move far more cautiously on acquisitions, over-compensate on getting signoffs from Beijing, and levy lower fees on the domestic internet traffic they dominate. Ant in particular will have to find ways to un-tether China’s largest payments service from its fast-growth consumer lending business and shrink its signature Yu’ebao money market fund -- once the world’s largest.Even companies that have been less scrutinized so far -- like Tencent or Meituan and Pinduoduo Inc. -- are likely to see growth opportunities curtailed.The watershed moment was years in the making. In the early part of the last decade, visionary entrepreneurs like Ma and Tencent co-founder Pony Ma (no relation) created multi-billion dollar empires by up-ending businesses from retail to communications, elevating the lives of hundreds of millions and serving as role models for an increasingly affluent younger generation. But the enormous opportunities coupled with years of hyper-growth also fostered a winner-takes-all land-grab mentality that unnerved the Communist Party.Regulators grew concerned as the likes of Alibaba and Tencent aggressively safeguarded and extended their moats, using data to squeeze out rivals or forcing merchants and content publishers into exclusive arrangements. Their growing influence over every aspect of Chinese life became more apparent as they became the conduits through which many of the country’s 1.3 billion bought and paid for things -- handing over vast amounts of data on spending behavior. Chief among them were Alibaba and Tencent, who became the industry’s kingmakers by investing billions of dollars into hundreds of startups.All that came to a head in 2020 when Ma -- on the verge of ushering in Ant’s record $35 billion IPO -- publicly denigrated out-of-touch regulators and the “old men” of the powerful banking industry.The unprecedented series of regulatory actions since encapsulates how Beijing is now intent on reining in its internet and fintech giants, a broad campaign that’s wiped roughly $200 billion off Alibaba’s valuation since October. The e-commerce giant’s speedy capitulation after a four-month probe underscores its vulnerability to further regulatory action.Chinese titans from Tencent to Meituan are next up in the cross-hairs because they’re the dominant players in their respective fields. Regulators may focus on delivery giant Meituan’s historical practice of forced exclusivity -- particularly as it expands into burgeoning areas like community e-commerce -- while investigating Tencent’s dominant gaming service and whether its messaging platform WeChat excludes competitors, Credit Suisse analysts Kenneth Fong and Ashley Xu wrote Tuesday.“The days of reckless expansion and wild growth are gone forever, and from now on the development of these firms is likely going to be put under strict government control. That’s going to be the case in the foreseeable future,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “Companies will have to face the reality that they need to streamline their non-core businesses and reduce their influence across industries. The cases of Alibaba and Ant will prompt peers to take the initiative to restructure, using them as the reference.”The revamp of Ant -- a sprawling financial titan once worth as much as $320 billion -- is a case in point. In its ruling, the People’s Bank of China said it wanted to “prevent the disorderly expansion of capital” and ensure that all of Ant’s financial business will be regulated under a single holding company.What Bloomberg Intelligence SaysAnt Group’s prospects could wane further after China halts improper linking of Alipay payments with Ant’s other products. New curbs on Yu’ebao also hurts its wealth business. Alipay’s 711 million active users are its potential fintech-product buyers. Ant’s valuation could now be near banks we cover (average 5x forward earnings) compared with over 30x at its IPO attempt.- Francis Chan, analystClick here for the research.Ma’s company will likely have to apply and register to get into any new areas of finance in future -- a potential ordeal given the infamously creaky wheels of Beijing bureaucracy. It faces restrictions in every key business -- from payments and wealth management to credit lending.The company’s most lucrative credit lending arm will be capped based on registered capital. It must fold its Huabei and Jiebei loan units -- which had 1.7 trillion yuan ($260 billion) of outstanding loans between them as of June -- into a new national company that will likely raise more capital to support its operations. And Ant must reduce its Yu’ebao money market wing, which encompasses a self-operated Tianhong Yu’ebao fund that held $183 billion of assets as of the end of 2020, making it one of the largest pools of wealth in the world.Alibaba appears to have got off lightly in comparison. While the $2.8 billion was triple the previous record set by Qualcomm Inc.’s 2015 penalty, it amounts to under 5% of the company’s annual revenue. Far more insidious however is the threat of future action and the dampening effect it will have on Alibaba.The fine came with a plethora of “rectifications” that Alibaba will have to put in place -- such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform. Executives also volunteered to open up Alibaba’s marketplaces more, lower costs for merchants while spending “billions of yuan” to help its clients handle e-commerce.Ant will likewise have to tame its market share grab in payments. Changes to that business, which is fending off Tencent’s WeChat Pay, were among the top priorities regulators outlined. Ant pledged to return the business “to its origin” by focusing on micro-payments and convenience for users.The most amorphous yet dire threat lies in the simple principle implicit in regulators’ pronouncements over the past few days: that Beijing will brook no monopolies that threaten its hold on power.The central bank warned in draft rules released previously that any non-bank payment company with half of the market for online transactions -- or two entities with a combined two-thirds share -- could be subject to antitrust probes. If a monopoly is confirmed, the State Council or cabinet has powers to levy a plethora of penalties, including breaking up the entity.That’s an entrepreneur’s ultimate nightmare.“Everyone is on the regulators’ radar, and it really depends on each one’s reaction next,” Chanson & Co.’s Shen said. “It’s better to take the initiative to self-rectify, rather than having to go through restructuring ordered by the regulators, which may not have your best interests in mind.”(Updates with a graphic of this week’s stock gyrations in fifth 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) -- Oil extended its climb out of a month-long trading range with further signs of an accelerating rebound taking shape in the U.S.Futures in New York inched up alongside a broader market rally, wiht prices trading at a one-month high. U.S. jobless claims fell to a new pandemic-era low, while retail sales in the country accelerated by the most in 10 months -- providing the latest signs of the economic comeback gaining pace there.“Prices are taking a little breather from the run-up we saw in the prior day,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago. “But overall, increasing vaccinations and easing fears over the pandemic are giving the market a “good shot at having a decent, steady rise.”Oil remains firmly above its most recent trading range, where it had been stuck near $60 a barrel since mid-March as some regions faced a resurgence in virus cases. Continued signs of a stronger U.S. market are also pushing prices higher. In the last week, the number of miles driven on the country’s interstates rose versus the same period in 2019 for the first time since the pandemic began.Still, even after U.S. crude stockpiles fell to the lowest since February, portions of West Texas Intermediate’s forward curve continue to point toward near-term weakness. The nearest contract still trades at a discount to the following month in a bearish pattern known as contango, which points toward oversupply.“The demand outlook is brighter than it was, but there’s still plenty of spare capacity,” said Stewart Glickman, energy equity analyst at CFRA Research. “If demand picks up considerably, producers can open the spigots and start to fill in the gaps.”Crude’s sharp rally has been accompanied by gains in the market’s structure that continued into Thursday. The much-watched spread between the nearest two December contracts is on track for its strongest close since late March. That’s a sign that traders are growing more bullish on the market.There are reasons to be cautious, however. The pandemic is raging in countries such as India, which posted its largest one-day surge in new cases since the pandemic started. Another wild-card is Iran, which is seeking to revive a 2015 nuclear deal that could pave the way for a return of more of the country’s down the line, though progress remains uncertain. The demand picture in Europe is also wobbly, with toll road traffic in France last week the weakest since May.The impact of the uneven global demand recovery is showing up in crude flows from Canada. Canadian oil sellers are sending exports to the U.S. West Coast for the second time this month as a swift vaccine rollout in the U.S. is boosting consumption there while others face a more muted recovery.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.