Feb.22 -- Patrick Zhong, founding managing partner at M31 Capital, discusses the selloff in tech stocks in the U.S. and Asia, his investment strategy and his outlook for the industry. He speaks on “Bloomberg Markets: China Open.”
Feb.22 -- Patrick Zhong, founding managing partner at M31 Capital, discusses the selloff in tech stocks in the U.S. and Asia, his investment strategy and his outlook for the industry. He speaks on “Bloomberg Markets: China Open.”
Chinese private equity firm Boyu Capital, an investor in Chinese technology titans including billionaire Jack Ma's Ant Group, is raising a new, China-focused fund targeting as much as $6 billion, three people with knowledge of the matter said. Boyu did not immediately respond to a request for comment. The fundraising by a firm widely associated with tech startups amounts to a high-profile test of investor appetite at a time when heightened oversight of China's tech giants clouds the near-term outlook of those companies.
Today's mortgage rates are up across all loan products. Yesterday, the average 5/1 ARM rate was lower than the average 30-year loan rate, but today, that's not the case, and as such, an adjustable-rate mortgage makes little sense.
The robotics revolution in farming is set to continue as the autonomous crop cultivation company FarmWise looks to add new capabilities to its autonomous farming equipment. The San Francisco-based company is currently testing the application of fungicides and insecticides to row crops as an additional capability for its weed-killing robots, according to company chief executive Sébastien Boyer. It's the latest advancement in robotics for the farm -- a market that's becoming increasingly crowded with the launch of new companies like Future Acres, which launched its support robot Carry today, and Mineral, the spinout from Alphabet (Google's parent company) that provides crop analysis.
New products include a phone that fully charges in 20 minutes and an under-screen selfie camera.
Federal Reserve Chair Jerome Powell underscored the U.S. economy's ongoing weakness Tuesday in remarks that suggested that the Fed sees no need to alter its ultra-low interest rate policies anytime soon. (Feb. 23)
Hyundai Motor Co will replace battery systems in some 82,000 electric vehicles globally due to fire risks - a costly $900 million recall that lays bare the thorny issue of how car and battery makers split the bill when problems arise. The recall is one of the first mass battery pack replacements conducted by a major automaker. The recall mostly concerns the Kona EV, Hyundai's biggest-selling electric car which was first recalled late last year for a software upgrade after a spate of fires.
Image source: Getty Images As February draws to a close, average mortgage rates have been on the rise. Today is no exception.Although rates have been trending up from historic lows, they are still very competitive.
Image source: Getty Images Mortgage refinance rates have risen since yesterday. While refinance rates tend to be a little higher than the rates you'll see for a new purchase mortgage, they're still very competitive.
Stocks fell on Tuesday as tech stocks extended their declines.
(Bloomberg) -- Federal Reserve Chairman Jerome Powell signaled that the central bank was nowhere close to pulling back on its support for the pandemic-damaged U.S. economy even as he voiced expectations for a return to more normal, improved activity later this year.“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” he told the Senate Banking Committee Tuesday.He also played down concerns of an inflationary outbreak from another big fiscal stimulus package or from an unleashing of pent-up demand as a growing number of Americans are vaccinated against the virus. And he called the recent run-up in bond yields that has unsettled the stock market “a statement of confidence” in a robust economic outlook.The Fed is currently buying $120 billion of assets per month -- $80 billion of Treasury securities and $40 billion of mortgage-backed debt -- and has pledged to keep up that pace “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation.The chairman “gave absolutely no indication that the Fed is thinking about changing its very dovish policy stance,” Cornerstone Macro analysts Roberto Perli and Benson Durham wrote in a note to clients.Powell’s testimony occurred against the backdrop of growing optimism about the economy as vaccines against the coronavirus are more widely disseminated and expectations of further fiscal stimulus from President Joe Biden and Congress mount.Bond yields have risen on the economy’s better prospects and in anticipation of faster inflation. Some traders have also brought forward their expectations for the Fed’s first interest-rate increase since it slashed rates effectively to zero last year.Powell said it was important to determine what was behind the higher bond yields, namely expectations of a return to a more normal economy.“In a way, it’s a statement on confidence on the part of markets that we will have a robust and ultimately complete recovery,” he said.Market price action was volatile in the aftermath of Powell’s opening statement text release, with 10-year yields initially rising a couple of basis points to 1.3875% session highs, before the move quickly faded and yields dropped back lower by about the same amount.Interest-rate swap markets are pricing the first 25 basis point of Fed hikes around mid-2023, versus the early-2024 time frame priced in at the beginning of this month.Read More: Traders See Earlier Fed Hikes, Even as Goldman Cautions on PaceTechnology company shares led a decline in U.S. stock prices on Tuesday on concern that valuations had gotten out of hand amid higher bond yields and bets on faster inflation. Even with recent weakness, though, the S&P 500 index is still up more than 70% from lows struck last March.Powell said he didn’t have an opinion on whether that constituted an equity market bubble, noting that there were opinions expressed on both sides of that proposition. “No one can really identify” a bubble, he said.Powell allowed that loose monetary policy has played a role in pushing up asset prices. But he said that other forces were also at play, including expectations of faster economic growth.“While we should not underestimate the challenges we currently face, developments point to an improved outlook for later this year,” Powell said. “In particular, ongoing progress in vaccinations should help speed the return to normal activities.”In response to a question, the Fed chair said growth could come in this year at 6%. The economy contracted by 2.5% last year.The economy started 2021 on a strong note, as retail sales and factory output accelerated. In the wake of the firmer data, Bloomberg Economics last week boosted its 2021 growth forecast to 4.6% from 3.5% and said that could rise toward 6%-7% if Biden’s $1.9 trillion aid package is enacted.What Bloomberg Economics Says...Federal Reserve Chair Jerome Powell’s prepared remarks before the Senate Banking Committee showed little if any deviation from the tone of recent public statements. But “no news” is news in and of itself because it shows the Fed to be unwavering in its policy stance, despite rising Treasury yields and an improving tone in much of the economic data.--Carl Riccadonna and Yelena Shulyatyeva, economistsFor the full note, click hereThe jobs market though has softened, with claims filed for unemployment benefits jumping to a four-week high in the most recent reporting period. Payrolls last month barely rose, by 49,000, after a 227,000 decline in December, and while unemployment dropped to 6.3%, that partly reflected more people leaving the workforce.“The high level of joblessness has been especially severe for lower-wage workers and for African Americans, Hispanics, and other minority groups,” Powell said. “The economic dislocation has upended many lives and created great uncertainty about the future.”He reiterated the Fed’s pledge to keep short-term interest rates pinned near zero until the labor market has reached maximum employment and inflation has accelerated to 2% -- and is on track to moderately exceed that level for some time.The personal consumption expenditures price index rose 1.3% in December 2020 from a year earlier, well below the Fed’s 2% inflation target. After stripping out volatile food and energy costs, core inflation clocked in at 1.5%.“I really do not expect that we’ll be in a situation where inflation rises to troubling levels,” Powell said.Temporary InflationHe said inflation will pick up in coming months as current price levels are compared to depressed readings a year ago, when the economy was virtually shut down, but that effect will be temporary.Prices may also be pushed up later in the year by pent-up demand released as a growing number of Americans get vaccinated against the virus. But he said that the increase in inflation was unlikely to be large or long-lasting.Some economists, most prominently former Treasury Secretary Lawrence Summers, have warned that Biden’s $1.9 trillion stimulus plan could lead to an overheating of the economy and much faster inflation -- a concern that administration officials have pushed back on as exaggerated.While Powell studiously refrained from commenting on the Biden package, he did say that there hasn’t been a strong connection between bigger budget deficits and inflation recently.(Adds Powell bubble comments in 13th, 14th paragraphs)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) -- One Japanese financial firm is riding the crypto wave like no other.Shares of Monex Group Inc. have been tracking the ups and downs of Bitcoin, and have more than tripled since the cryptocurrency’s rally gained momentum in October. The online brokerage owns crypto exchange Coincheck Inc., whose profit has soared as clients flock to digital assets.“People are starting to re-evaluate us” by realizing Monex isn’t just about stockbroking, said Chief Executive Officer Oki Matsumoto. “Our stock was underrated to begin with,” the former Goldman Sachs Group Inc. partner said in an interview on Feb. 18.Investors have been pushing up shares of firms closely linked to digital tokens around the world, from U.S. crypto miner Marathon Patent Group Inc. to the U.K.’s On-Line Blockchain Plc. Bitcoin’s fivefold jump in the past year has come amid a flood of money pumped into the global financial system during the coronavirus pandemic.Even after a pullback during a sell-off in Bitcoin in recent days, Monex is the most expensive stock on an index of Japanese securities companies, with a price of more than three times the book value of its assets.The stock fell 6.4% at 10:36 a.m. in Tokyo on Wednesday, paring this year’s gain to 136% -- still the second-best performance on the benchmark Topix.“There has been sharp growth in earnings at Coincheck,” SMBC Nikko analyst Takayuki Hara wrote in a Feb. 22 note, raising his target price for Monex shares. “The soaring price of Bitcoin has spurred trading activity and encouraged more individual investors to jump into the fray.”Monex has been diversifying into crypto as intensifying competition dims prospects of its mainstay stock brokerage business. It bought Coincheck in 2018, when the exchange was regrouping after a costly hack. It received a license two years ago.Crypto business, domestic brokerage services and U.S. trading operations now represent Monex’s “three main pillars” of growth, Matsumoto said.Its crypto asset segment earned 2.4 billion yen ($23 million) in pretax profit in the quarter ended Dec. 31, reversing year-earlier losses and accounting for half of total group income, according to filings.What Bloomberg Intelligence Says:Share gains by Monex and Remixpoint top those of SBI, GMO Financial and other Japan bitcoin stocks year-to-date partly due to strong performances by the Coincheck and BITPoint bourses. But competition is becoming fiercer: online broker SBI offers a broader range of crypto services, and more global exchanges may seek inroads into Japan.Francis Chan, senior BI analystWhile Matsumoto, 57, said it’s hard to assess the sustainability of Coincheck’s earnings growth, the unit is unlikely to post losses even in a calm market because of cost cuts and other steps taken in recent years.“If they become able to secure a good volume of orders from clients even when crypto trading becomes sluggish overall, we can see it as evidence of revenue diversification,” said Kengo Sakaguchi, an analyst at Japan Credit Rating Agency. He rates Monex as BBB, two levels above junk.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.
What Happened: The largest crypto exchange in Southeast Asia, Philippines-based PDAX, experienced a technical failure that led to Bitcoin trading at $6,000 – an 88% discount to its current price. Following the incident, PDAX asked its customers to return their Bitcoins, threatening legal action, a local news outlet Bitpinas has reported. According to the exchange’s CEO, the system error was not due to a hack but a technical “glitch” caused by a massive surge in trading activity. Why It Matters: The initial outage is said to have taken place on February 18; however, since then, reports have surfaced on social media of customers being locked out of their exchange accounts and being asked to “return their Bitcoin.” “After almost 24 hours, they sent me a demand letter and SMS, requesting me to transfer back the BTC, or they “may” be compelled to take legal actions against me.” said one trader who believed his purchase was well within his rights without violating any laws or regulations of the trading platform. Rafael Padilla, an attorney representing the affected users who are currently locked out of their accounts, commented on the issue on Facebook. “Our client’s trade transaction was legitimate under applicable laws, decided cases, and of course according to PDAX’s very own terms and conditions/user agreement.” According to Padilla, PDAX has opted to lock users out of their accounts because it cannot unilaterally reverse the transactions. An official statement from PDAX claims that 95% of accounts have been restored, but according to the report, many users are still locked out of their accounts. “It’s very understandable that a lot of users will feel upset they were able to buy what they thought an order was there for Bitcoin at very low prices. But unfortunately, the underlying Bitcoins were never in the possession of the exchange, so there’s never really anything there to be bought or sold, unfortunately.”, said PDAX CEO Nichel Gaba in a press conference earlier today. Image: vjkombajn via Pixabay See more from BenzingaClick here for options trades from BenzingaElon Musk's Tweet About Dogecoin Sends Price Up 10% In 30 Minutes AgainMicroStrategy Buys Additional .026B Worth Of Bitcoin, Surpasses Tesla's Bitcoin Holdings© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Warren Buffett’s business partner and vice chairman of Berkshire Hathaway, in a Wednesday interview with Yahoo Finance, said the GameStop chaos was encouraged by a gambling mentality on Wall Street.
The legislation, which goes to a vote on Friday, could put thousands back in your pocket.
Here's what still has to happen, following the big vote scheduled for Friday.
(Bloomberg) -- Li Ka-shing, Hong Kong’s richest property tycoon, is planning to raise funds for dealmaking by listing a special purpose acquisition company in the U.S., people with knowledge of the matter said.A company backed by Li’s family is working with advisers on the potential SPAC initial public offering, according to the people, who asked not to be identified because the information is private. They are considering seeking around $400 million, though the exact terms haven’t been finalized, the people said.The blank-check company could file registration documents with the U.S. Securities and Exchange Commission as soon as this week, the people said.Li is lionized by the public in Hong Kong, where he’s been nicknamed “Superman” for his investing prowess. The 92-year-old businessman became famous for his well-timed bets on everything from real estate to social media as he built a corporate empire spanning 50 countries.His family controls CK Hutchison Holdings Ltd., a $29 billion conglomerate that owns one of the world’s biggest port operators and has telecommunications, retail and infrastructure operations across Asia and Europe. They also run CK Asset Holdings Ltd., which is one of Hong Kong’s largest developers and also has investments in hotels, utilities and aircraft leasing. Both companies are now led by Li’s elder son, Victor.Li’s younger son, Richard, has already raised about $900 million via two U.S.-listed SPACs with tech mogul Peter Thiel. Richard is considering setting up a third blank-check company, Bloomberg News reported last week.No final decisions have been made, and details of the transaction could change, the people said. Representatives for Li didn’t immediately respond to emailed queries.(Adds details about Richard Li’s SPAC plans in sixth 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.
Costco has a leg up on e-commerce behemoth Amazon (AMZN) on at least one measure, according to Charlie Munger, vice chairman of Berkshire Hathaway.
(Bloomberg) -- A flurry of buying that saw GameStop Corp. shares almost quadruple from Tuesday’s close spread to a host of other meme stocks at the center of last month’s day trader-fueled boom and bust.GameStop jumped 104% in Wednesday’s cash session, spurred by a final-hour surge that brought its biggest advance since Jan. 29, the day Robinhood Markets restricted trading in it and 49 other stocks at the height of the frenzy. An equally weighted Bloomberg basket of those rose more than 5%, the most since late January. AMC Entertainment Inc. rallied 18% to push a three-day climb toward 59%. Express Inc. surged 41%, Naked Brand Group gained 31% and Koss Corp. jumped 55%.The activity inflated trading volumes in the meme stocks and caused an outage on Reddit’s WallStreetBets forum, the hub of the January volatility. The tumult continued in late trading, where GameStop rallied another 120% before paring the advance. At $135, the stock is up more than 200% from its close on Tuesday. Express jumped 30% while AMC was up 21%.“It seems like the Reddit crowd is still active and when you see a bit of news like that they’re pressing again,” Keith Gangl, portfolio manager at Gradient Investments, said in a phone interview. “Though I’m not sure how that’ll last,” he added.The sudden revival in left-for-dead stocks recalled an episode last month that captured the attention of Wall Street, regulators and eventually Congress, as members of Reddit’s WallStreetBets forum egged on retail hordes in an attempt to take on professional short sellers.Various explanations circulated as to what spurred the rallies. The GameStop frenzy came after Bloomberg News reported late Tuesday that the company’s chief financial officer Jim Bell was pushed out in a disagreement over strategy to make way for an executive more in line with the vision of activist investor and board member Ryan Cohen, the co-founder of online pet-food retailer Chewy.com. His addition to the board in early January underpinned the first flurry of moves in the stock after capturing the attention of WallStreetBets.The clearinghouse whose demands for increased margin collateral from Robinhood forced the brokerage to restrict trading last month published a white paper Wednesday that laid the grounds for speeding up the stock settlement process. It proposed cutting settlement to one day from two, prompting some chest puffing among the retail crowd on Reddit.The now infamous WallStreetBets forum, which boasts 9.2 million members, saw so much demand that the site would not load. When attempted, a page read “www.reddit.com is currently unable to handle this request” as of 4:43 p.m. in New York.(Updates late trading moves 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.
Home Depot has fared better than Macy’s during the pandemic as consumers have chosen home improvements over new clothes, but they say that could change if the health crisis eases.
We’re in a volatile period right now, as stocks slipping after starting the year on a strong note. Big Tech, which boomed during the pandemic lockdowns and the move to remote work, is leading the declines. Investors have taken the measure of the vaccination programs, and now, in fueled by both a belief and a hope that economies will soon return to a more normal footing, they are seeking out those stocks that will gain we revert to a ‘pre-corona’ market situation. There is also inflation to take into account. Oil prices are up this year, and that’s one commodity whose price fluctuations are certain to trickle down the supply chain. Along with rising consumer demand, there’s an expectation that prices are going to increase, at least in the near term. All in all, this is the moment to take the old market advice: buy low and sell high. With stock prices falling for now, and volatility up, the low is covered. The key is finding the stocks that are primed to gain when the bulls start running again. Wall Street’s analyst corps know this, and they are not shying away from recommending stocks that may have hit bottom. Using TipRanks database, we pinpointed two such stocks. Each is down significantly, but each also has enough upside potential to warrant a Buy rating. TechnipFMC Plc (FTI) We’ll start in the hydrocarbon sector, where TechnipFMC operates two divisions in the oil and gas business: subsea, and surface. The company’s projects, until recently, included oil and gas exploration and extraction, rig and platform operations, crude oil refining, petrochemical (ethylene, benzene, naphtha, hydrogen) production, and both on- and offshore liquified natural gas (LNG) plants. Earlier this month, the petrochemical and LNG operations were spun off as Technip Energy, a separate independently traded company. TechnipFMC retains the subsea and surface hydrocarbon activities, allowing the company to better focus its efforts. TechnipFMC may need that focus, as the company has had a difficult time gaining traction in the stock markets. Like most of its peers, TechnipFMC saw share value fall steeply last winter at the height of the coronavirus crisis, but since then the stock has only regained about half of the losses. Over the past 12 months, shares of FTI are down 53%. Q4 results are due out today, after market close, and should shed more light on the company’s full-year performance. The company has reported quarterly earnings in 2020 that are in-line with the previous year’s results. The second quarter showed a year-over-year loss; Q1 and Q3 both showed yoy gains. Covering FTI for JPMorgan, analyst Sean Meakim writes, “Since the spin-off of Technip Energies was placed back in motion on 1/7, after outperforming considerably in the first days, FTI shares are now down… With newfound visibility to an exit from “spin purgatory”, investors are giving FTI another look with some still taking a “wait and see” approach until post-spin... We view the completion of the spin as a re-rating opportunity… allowing for broader investor participation. Monetization of TechnipFMC’s stake in Technip Energies helps the balance sheet and provides optionality on capital allocation.” To this end, Meakim rates FTI an Overweight (i.e. Buy) and his $20 price target suggests the stock has room to more than double in the year ahead, with a 172% upside potential. (To watch Meakim’s track record, click here) Overall, there are 13 recent reviews on FTI, breaking down 8 to 5 in favor of Buy versus Hold. This makes the analyst consensus rating a Moderate Buy, and suggests that Wall Street generally sees opportunity here. Shares are priced at $7.35, and the $12.18 average price target implies a bullish upside of ~65% over the next 12 months. (See FTI stock analysis on TipRanks) CoreCivic, Inc. (CXW) Next up, CoreCivic, is a for-profit provider of detention facilities for law enforcement agencies, primarily the US government. The company owns and operates 65 prisons and detention centers with a total capacity of 90,000 inmates, located in 19 states plus DC. Effective on January 1 of this year, the company completed its switch from an REIT to a taxable C-corporation. The move was made without fanfare, and the company reported its Q4 and full-year 2020 results – which covers the preparation period for the switch – earlier this month. CXW showed a top line of $1.91 billion for the ‘corona year’ of 2020, a small drop (3%) from the $1.98 billion reported in 2019. Full-year earnings came in at 45 cents per share. During the fourth quarter, the company reported paying off some $125 million of its long-term debt; CoreCivic’s current long-term liabilities are listed as $2.3 billion. The company showed liquid assets on hand at the end of 2020 as $113 million in cash, plus $566 million in available credit. The heavy debt load may help explain the company’s share performance, even as revenues and earnings remain positive. The stock is down 50% in the past 12 months, having never really recovered from share price losses incurred in the corona panic last winter. 5-star analyst Joe Gomes, of Noble Capital, covers CoreCivic, and remains sanguine on the stock despite its apparent weaknesses. “We view the fourth quarter as continuation a trend, one across the last three quarters of 2020. In spite of COVID, the large reduction in detainees, the reduction in normal operations of the court system, and other impacts, CoreCivic posted relatively flat revenue and sequential adjusted EPS growth. We believe this illustrates the strength of the Company's operating model,” Gomes noted. In line with his optimistic approach, Gomes keeps his Outperform (i.e. Buy) rating and $15 price target as is. This target puts the upside potential at 97%. (To watch Gomes’ track record, click here) Some stocks fly under the radar, and CXW is one of those. Gomes' is the only recent analyst review of this company, and it is decidedly positive. (See CXW stock analysis on TipRanks) To find good ideas for beaten-down stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.