Jeff Ballabon, Trump 2020 campaign adviser and B2 Strategic CEO, and Parag Khanna, FutureMap Founder & fmr. adviser to Pres. Obama, join Yahoo Finance to discuss President Trump's State of the Union address to Congress.
Jeff Ballabon, Trump 2020 campaign adviser and B2 Strategic CEO, and Parag Khanna, FutureMap Founder & fmr. adviser to Pres. Obama, join Yahoo Finance to discuss President Trump's State of the Union address to Congress.
The traders on Wall Street continue to look at bad news as good news, as we have seen a disappointing jobs figure only to see Wall Street celebrate by buying more stocks.
After the initial reaction to the report and the surge to $1844.60, gold prices drifted lower then became rangebound into the close as yields firmed.
(Bloomberg) -- It’s all very simple. The economy isn’t strong enough for the Federal Reserve to taper stimulus, therefore stay-at-home tech shares will rally. And any efforts to heal the economy are likely to drive up inflation, meaning banks and airlines will benefit.Such is the can’t-lose logic underpinning American stocks in May 2021, almost 14 months since the pandemic crashed the market and left an 8 million-job hole in the U.S. labor market. To strategists at JPMorgan Chase, now is no time to doubt equities -- as long as Fed Chair Jerome Powell and President Joe Biden are in charge of the recovery.Anyone looking for confirmation need only recall Friday’s reaction to one of the largest downside misses on record for a U.S. employment report. Small caps surged, buoyed after President Biden used Friday’s numbers as justification for his multi-trillion fiscal aid package. The Nasdaq 100 also jumped as investors took April’s jobs whiff to mean that the Fed won’t be turning off the taps anytime soon, keeping rates low and helping to sustain sky-high tech valuations.“It doesn’t hurt equities to know the Fed is still the backdrop with lower rates for longer,” Ryan Detrick, chief market strategist at LPL Financial. “The stay-at-home and the tech names are going to get a little bit of a bid here on worries about the reopening but I think it’s more of a near-term blip and the bigger cyclical names will still take the baton over the coming months.”Federal Reserve Bank of Minneapolis President Neel Kashkari said as much, telling Bloomberg Television that Friday’s print validates the central bank’s new outcome-based approach -- the idea that policy makers won’t change anything based on economic forecasts, but actual data.Every sector in the S&P 500 rallied in the aftermath, with tech vying with cyclical energy and industrial shares for the top spot. The Russell 1000 Value Index and its growth counterpart both ended Friday 0.8% higher, after value outperformed every day this week.Meanwhile, JPMorgan strategists led by Marko Kolanovic are doubling down on the reflation trade. Just days after warning that many money managers need to quickly switch gears from their deflationary playbook or risk an “inflation shock,” Kolanovic recommended clients increase their tilt toward cyclical and value assets. He advised investors to cut holdings in cash and credit, using the money to buy commodities and stocks.“We expect a strong pickup in inflation this year, which the market will likely be slow to recognize and is poorly positioned for,” Kolanovic and his colleagues wrote in a note Friday. “A combination of boomy global growth and significant bottleneck price pressures should keep inflation on an upward trajectory while most central banks remain committed to their very accommodative stances and are looking through the inflation pickups.”And even for all the hand-wringing over inflation, the latest batch of quarterly reports suggests it’s already here and helping corporate America. Faced with rising prices for everything from lumber to oil to labor and computer chips, chief executive officers have cut costs and boosted prices for their products.As a result, first-quarter income from S&P 500 companies is jumping five times as fast as sales, data compiled by Bloomberg Intelligence show. Based on actual results and analyst estimates for those yet to report, profits probably surged to an all-time high of $48.21 a share. That’s 13% above the record set in 2018 of $42.79.The next test for the equity market’s cheer comes in Wednesday’s inflation data, which is expected to show that price pressures jumped by the most on an annual basis since 2011. But given that Fed chief Powell has said that the central bank will need to see a “string” of strong data before shifting their stance, it’s likely that April’s payroll miss was a big enough blow to keep them on the sidelines.“It justifies the Fed, it keeps them from having their tapering discussion or thinking about raising rates,” said Ross Mayfield, investment strategy analyst at Robert W. Baird & Co.. “That by and large is supportive for equity markets.”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.
Stocks traded mixed Friday as investors digested a disappointing April jobs report, which showed the U.S. economy added back far fewer jobs than expected last month despite easing stay-in-place restrictions.
LONDON (Reuters) -Europe's consumers will feel the hit from price rises this year as companies seek to recoup revenues and cover pandemic-related costs. Over the past year, the fallout from COVID-19 has contorted both the demand and supply sides of the global economy, creating bottlenecks in supply chains, havoc in freight markets and a rally in raw materials from corn to copper. Lockdowns, meanwhile, have deprived well-off consumers in Europe and elsewhere of the opportunities to spend their cash, creating record levels of savings and a window of opportunity for companies to push through price increases.
U.S. energy firms added oil and natural gas rigs for a second week in a row as higher oil prices prompted some drillers to return to the wellpad.
At least two private equity funds are seeking to acquire stakes in Venezuelan companies that have survived the country's economic crisis, spurred in part by optimism that the Biden administration could ease sanctions on the South American nation, according to a dozen sources familiar with the talks. The interest by funds, including Miami-based 3B1 Guacamaya Fund and Cayman Islands-based Knossos Asset Management, follows Venezuelan President Nicolas Maduro's abrupt 2019 liberalization of the economy https://www.reuters.com/article/us-venezuela-shops-idCAKBN1YK16X amid a sanctions program created by former U.S. President Donald Trump. Maduro's unexpected overhaul scrapped a price control system and permitted dollar transactions for the first time in decades, allowing a small group of firms to emerge from the wreckage of a four-year hyperinflationary crisis that prompted many multinationals to leave https://t.co/I8H1Kakhhs?amp=1 the country or sell subsidiaries.
(Bloomberg) -- Global central banks are starting to wind down the trillion-dollar money printing machines set in motion to rescue their economies in 2020. Getting ahead of them is becoming this year’s biggest currency trade.Early changes to bond-buying programs from Canada and Britain have been rewarding for foreign-exchange players. Meanwhile, Norway, which hasn’t needed to deploy more unconventional policy such as asset purchases, is already talking about raising rates. The trio’s currencies are leading the Group of 10 this year, posting gains of more than 4%.Yet that acceleration may already be losing momentum now that those policy makers have shown their hands. That has left traders on a mission to identify economies that are heating up too fast for comfort -- and those where tightening is a far-flung prospect -- in order to pick the next winners and losers.One strategy is to follow the commodity boom and bet on exporters such as Australia and New Zealand, where growth is roaring back. Another playbook involves buying the currency of a country likely to hike rates, while selling that of a country committed to ultra-low rates.“Some central banks outside the Fed like the Reserve Bank of Australia and the Reserve Bank of New Zealand may find themselves in a position similar to the Bank of Canada, where they could be tightening much sooner than what they’ve initially indicated,” said Mazen Issa, senior FX strategist at TD Securities. Canada’s move “may give a little bit more confidence to the policy community to begin making little tweaks to their own policy outlooks as well,” he added.Balancing ActLife in developed nations is returning to normal thanks to vaccines that have arrested the spread of coronavirus. But for central bankers, extricating themselves from the programs that staved off economic collapse last year is a delicate balancing act.The Federal Reserve, often called the central bank of the world, is taking a softly-softly approach toward policy normalization designed to avoid market chaos reminiscent of 2013’s taper tantrum. Ditto the European Central Bank, whose chief Christine Lagarde recently said talk of tapering is “premature.” But waiting as growth roars back runs the risk of falling so far out of step with economic reality as to provoke a policy overshoot.“The challenge for the Fed is that it should not wait too long because they may have to move faster, and that may shock the market,” said Athanasios Vamvakidis, head of G-10 FX strategy at Bank of America Corp. “It all depends on data.”The latest data may justify the Fed’s steady hand: April’s disappointing jobs report Friday recast inflation and rate-hike expectations.Tapering BeckonsWhether or not central bank chiefs are ready to talk about it now, tapering is drawing closer. Asset purchases from the Fed, the ECB, the Bank of Japan and BOE will likely slide to around $3.4 trillion this year from almost $9 trillion in 2020, before falling to just $400 billion in 2022, according to Bank of America.Traders are going all-in at signs of forthcoming policy tweaks: the euro gained Friday after ECB Governing Council member Martins Kazaks said the institution could decide to scale back its emergency bond-buying program as early as next month.“Growth is clearly accelerating in the G-10 countries, with vaccination campaigns picking up momentum. said Philippe Jauer, global head of FX at Amundi Asset Management. “This means policy could accelerate more than anticipated by the market.”North Meets SouthWhile those debates roll on, FX investors may get more joy betting that central banks Down Under take the lead of their northern Commonwealth peer.At Robeco Institutional Asset Management, fund manager Bob Stoutjesdijk cashed out of the Canadian dollar after the BOC’s taper last month. He’s got Australia and New Zealand on his radar, though he’s wary of lingering border controls that will sap tourism revenues and mixed signals from their central banks.Speculative investors, including hedge funds, held bullish bets on the New Zealand dollar for a sixth consecutive week through May 4, according to the latest data from the Commodity Futures Trading Commission. They increased net longs on the Aussie dollar for the first time in three weeks. Meanwhile, net shorts on the yen held near the most in two years. The divide between currencies backed by central banks taking steps toward pulling back support and those that are further off is also palpable in the options market.Sentiment on the Australian and New Zealand dollars versus their Japanese peer has turned less pessimistic this year, as seen in risk reversals. The premium on options betting on declines in the Aussie and kiwi against the yen has narrowed across the curve from end-2020 levels, for tenors starting at one-week all the way up to a year.There’s room for upside in the Canadian dollar versus the yen, and in the Norwegian krone against the Swiss franc and euro, given the contrast in their policy paths, according to Audrey Childe-Freeman, Bloomberg Intelligence chief G-10 FX strategist.The Aussie and kiwi dollars are likely to outperform based on higher yields alone, she said, even if their central banks have resisted adjusting to more hawkish policy language so far.While the RBA has been adamant that it will keep pumping monetary support into the economy until it is fully repaired, its most recent outlook showed upbeat trajectories for growth and jobs, showing it’s on track to drive faster pay gains and inflation back toward its target. Rising inflationary pressures and house prices have also been highlighted by the RBNZ.“No central banks want to shock the market, but they will have to watch data. If the data is strong, we would expect the Fed to normalize the policy. We expect the same for RBA and RBNZ,” said Vamvakidis at Bank of America. “They will be the ones to watch because of their potential to surprise to the upside.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) -- Abu Dhabi is seeking to create the largest steel and building materials company in the United Arab Emirates.ADQ, one of Abu Dhabi’s three sovereign wealth funds, plans to combine Emirates Steel Industries PJSC with Arkan Building Materials Co. and form an entity with total assets of about 13 billion dirhams ($3.54 billion). Arkan shares surged as much as 10% in Abu Dhabi.Abu Dhabi has been merging some companies as it looks to bolster the economy and diversify from hydrocarbon production. Since being founded in 2018, ADQ grew quickly to join the ranks of the world’s top 20 sovereign funds and is now the UAE capital’s third-largest after Abu Dhabi Investment Authority and Mubadala Investment Co.The wealth fund is betting that the combined group will be well placed to capitalize on an economic recovery as well as an acceleration in infrastructure projects on the back of government stimulus programs.As part of the offer, Arkan will issue a convertible instrument to ADQ-controlled Senaat, which owns Emirates Steel. The deal values Arkan at 1.4 billion dirhams and Senaat will own about 87.5% of the combined group post completion, the companies said on Sunday.“It would mark the first time that investors will have access to a steel producer on a UAE public market, which is expected to have a positive impact on overall demand and liquidity for the combined group’s shares,” Senaat said in a statement.Details of the offer:Conversion price is 0.798 dirham per Arkan share, the same as the stock’s close on ThursdayArkan shares have doubled from a July 2020 lowRothschild & Co. is the financial adviser to Senaat and its shareholderIf Arkan board recommends the offer, the transaction could close during the second half(Updates with Arkan share move in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The stage is set for an explosion in the amount of stock buybacks, says Goldman Sachs.
Barry Silbert, a power player in the digital-asset sector, said he's betting against dogecoin and is urging investors in one of the hottest trades in 2021 to convert their doge holdings into bitcoin.
(Bloomberg) -- Markets are vulnerable to “significant declines” should risk appetites falter, the Federal Reserve has warned. At the moment, there are very few signs of that happening.Stocks, in particular, seem able to shrug off any scenario the economy can spit out. Growth running hot? Banks and transports gain, as they did for all five days this week. Hiring hobbled? Big rebound in stay-at-home tech plays, like Friday’s in the Nasdaq 100 and Cathie Wood’s ARK Innovation ETF. Surging commodities sowing inflation angst? Buy materials makers, which just had their best week in six months.“That is amazing. No matter what, we’ve seen the market predominantly go up, not down,” Susan Schmidt, head of U.S. equities at Aviva Investors, said by phone. “The market overall is still saying, we believe in the business recovery and we’re still betting on it.”While the various twists have taken momentary tolls on all manner of peripheral indexes, they’ve all been virtual manna from the S&P 500, which just rose for its eighth week in 10 and is now up almost 13% year-to-date. More impressive is the index’s resilience in the face of valuation measures that are by many metrics as rich as they’ve been since the dot-com bubble.How precarious is the market’s altitude? Consider data from Leuthold Group, which compared prices today to their average levels since 1995, a starting point picked to correspond with a broad upward shift in valuations. When plotted against metrics like sales and earnings, the S&P 500 is at risk of falling 37%, should a reversion to the mean occur.Despite the drumbeat of bubble warnings, stocks march on. To skeptics, it’s a precarious perch riven with risks. Others simply see the persistent buoyancy underlining broad-based strength, allowing traders to find ways to stay invested as long as the economy holds up.“The psychological and the behavioral part of the market is that animal spirits are incredibly powerful this year,” said Omar Aguilar, chief investment officer of passive equity and multi-asset strategies for Charles Schwab Investment Management. “The more people get vaccinated, the more they feel comfortable that things will plug forward and that is reflected in the market.”With vaccines and policy support in place, consensus is building that the pandemic-ravaged economy will return to normal activity. What’s debatable is the pace of the recovery. The murky picture is pitting investors against each other, whipping up violent rotations among stocks.The phenomenon was on display over the week. Richly-valued tech stocks sold off Tuesday after Treasury Secretary Janet Yellen said interest rates may have to rise moderately to keep the economy from overheating. Even though it’s a point she later walked back, traders took the cue from a surge in commodity prices, bidding up cyclical stocks.That reflation narrative took a hit Friday, when hiring data significantly missed economist forecasts, casting doubt on the economic momentum. That sparked a rebound in the battered stay-at-home trade.The back-and-forth between investment styles -- value versus growth, or cyclical versus defensive -- has been playing out all year. In some way, the split view on the trajectory of the economy is dividing the market like never before. Take a look at the relationship between the Russell 1000 value and growth indexes. Over the past six months, they have shown the lowest correlation on record. In other words, they’ve never been decoupled like this.Professional investors have yet to fully embrace the reflation trade. Despite value’s outperformance this year, active funds still favor growth, according to data compiled by Bank of America strategists led by Savita Subramanian. They also avoid inflation beneficiaries such as energy and shun small-caps.ETF traders, on the other hand, take an opposite approach. They have favored value strategies over growth every month in the past year, data compiled by Bloomberg Intelligence show. The biggest ETF tracking the Nasdaq 100 has experienced redemptions after $1.7 billion of withdrawals in April, and is on course for its first back-to-back monthly outflows since early 2019.Whatever the preference is, the prevailing inclination among investors is: stick to stocks. They poured money into U.S. equity funds in 12 of the past 13 weeks, according to EPFR Global Inc. data.“As the world’s growth prospects recover and global growth improves, there are a lot of other places you can find companies growing earnings substantially and seeing a nice earnings recovery,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. “That is where investors are dedicating their capital right now.”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.
Sen. Elizabeth Warren (D-MA) has many concerns over cryptocurrencies, including concerns over its environmental impact.
While some technology stocks got a boost Friday after a disappointing U.S. jobs report, some portfolio managers say that blow-out earnings from several large technology companies over the last few weeks are not enough to keep making outsized bets on the sector. Instead, those fund managers say that they are continuing to rotate into value and cyclical stocks - whose fortunes are closely tied to economic conditions - in anticipation that the economic recovery will be longer and more gradual than originally anticipated. The notion that the U.S. jobs recovery has not yet peaked was reinforced by data from the Labor Department on Friday that showed U.S. employers hired far fewer workers than anticipated.
(Bloomberg) -- A cyber-attack has never taken down a U.S. fuel pipeline quite as big as the Colonial Pipeline. It’s the nation’s largest gasoline, diesel and jet fuel system and a critical source of fuel supply for the U.S. Northeast.But this isn’t the first time hackers have hit energy assets in America and beyond in recent years, at times disrupting services and upending operations.Two-Day Gas OutageIn February 2020, the U.S. Department of Homeland Security issued an alert about a ransomware attack that brought down a U.S. natural gas compressor facility for two days.The agency didn’t say which facility was targeted, when the attack occurred or who was behind it. But it did offer some details: Hackers sent emails with a malicious link, known as a phishing attack, to gain control of the facility’s information technology system.It appeared likely that the attacker explored the facility’s network to “identify critical assets” before executing the ransomware attack, Nathan Brubaker, a senior manager at the cybersecurity firm FireEye Inc., said at the time. This tactic, which has become increasingly popular among hackers, makes it “possible for the attacker to disable security processes that would normally be enough to detect known ransomware indicators,” he said.Pemex Systems DownMexico’s oil giant Petroleos Mexicanos reported a cyber-attack in November 2019 that crippled its computer systems. The company’s communication systems were affected for weeks afterwards.For some employees, Internet access was limited, some computer files weren’t accessible and they had difficulty receiving external emails, people in Pemex’s finance, legal and refining departments said at the time. The hacker behind the attack tried to squeeze almost $5 million out of the company. Pemex at the time refused to pay the ransom.Gas Communications TargetedIn April 2018, several U.S. natural gas pipeline operators including Energy Transfer Partners LP and TransCanada Corp. reported that a third-party electronic communications system had been hit with a cyber-attack. Five of the companies confirmed service disruptions from the hacking.Though the cyber-attack didn’t disrupt the supply of gas to U.S. homes and businesses, it showed how even a minor attack can have ripple effects. The attack forced utilities to warn of widespread billing delays and made it difficult for analysts and traders to predict a key government report on gas stockpiles.Ukraine GridIn December 2016, hackers took down almost a quarter of Ukraine’s power grid. Officials blamed Russians at the time for tampering with the utilities’ software and then jamming the power companies’ phone lines to keep customers from alerting anyone.The hack knocked out at least 30 of the country’s 135 power substations for about six hours. Cybersecurity firms working to trace its origins say the attack occurred in two stages. First, hackers used malware to direct utilities’ industrial control computers to disconnect the substations. Then they inserted a wiper virus that made the computers inoperable.Saudi AramcoIn 2012, Saudi Arabia blamed unidentified people based outside the kingdom for a cyber-attack against state-owned Saudi Arabian Oil Co. that aimed to disrupt production from the world’s largest exporter of crude.More than 30,000 computers were compromised or affected by a so-called “spear-phishing” attack, raising concerns about the threat hackers may pose to output at the company also known as Saudi Aramco. A spokesman for the Interior Ministry, declined at the time to identify any of the “several foreign countries” from which the attack originated.Energy companies from electric utilities, to power-grid operators to oil and gas pipeline operators have warned that cyberattacks are becoming more and more prevalent. The largest U.S. power grid operator, PJM Interconnection LLC, has warned regulators that it’s facing increasing attacks. Last May, the U.K.’s grid data system was hacked, although electricity supplies weren’t affected. And in March, an attack against Europe’s association of grid operators, ENTSO-E, affected its internal office systems.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.
It takes every cent I earn to get by and pay debt service. If I were to retire today, I would draw $1,200 a month in Social Security, or $1,400 a month if drawing against my ex-husband’s account (we were married 23 years). See: Confused about Social Security — including spousal benefits, claiming strategies and how death and divorce affect your monthly income?
(Bloomberg) -- The European Central Bank is set to reward some of the region’s biggest financial institutions with more than 1 billion euros ($1.2 billion) this year in return for keeping up the flow of credit during the pandemic.Six lenders including ING Groep NV and Deutsche Bank AG have disclosed their expected benefit from the central bank’s targeted longer-term loan programs. Together, the banks said they earned about 416 million euros in the first quarter while other lenders said they intend to book gains later in the year.Seven years after turning banking on its head with the introduction of negative interest rates, the ECB is dangling enhanced subsidies to get banks to pump cheap cash into an economy lurching from one crisis to another. The benefits help offset some of the pressure from the ECB’s other policies which have eaten into lending profits and introduced costs for client deposits.An ECB spokesman declined to comment on the payments. ECB President Christine Lagarde said in April that the program plays a “crucial role” in supporting bank lending to firms and households.The ECB has offered several rounds of such targeted long-term loans. The latest allotment was in March when it made 330.5 billion euros available to banks. The favorable rates are paid subject to conditions on the banks reaching specific targets regarding the amount of loans they make to the broader economy.The lenders benefit even more now than with similar operations in the past because the conditions were sweetened during the pandemic so that that they can borrow at an even lower rate than the ECB’s negative deposit rate. While the deposit rate acts as a charge on reserves, that’s more than outweighed by the generosity of the rate on the long-term loans.“We don’t earn the money for free,” Deutsche Bank finance chief James von Moltke told analysts on a conference call last week. “The business is executing on lending, supporting clients, that allows us to achieve those thresholds.”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.
Ethereum has outperformed major digital currency rivals this year, bolstered by the surge in decentralized finance (DeFi) and the anticipation of a technical adjustment this summer, but it faces hurdles that could stall its rise. With a jump of more than 350% in its price this year, ethereum has the second-largest market capitalization after bitcoin, but not as much cache and perhaps more operational challenges that could prevent it from eclipsing its major rival. In the crypto world, the terms "ethereum" and "ether" have become synonymous.
Families can get up to $50 off their bill to stay connected during the pandemic.
U.S. stock funds now are riding a river of new cash from investors — and that is not a bullish sign. In fact, fund flows are a contrarian indicator: the U.S. stock market in the past has performed better when there is a net outflow of cash. The evidence is summarized in the chart below, which plots net inflows of cash to U.S. stock funds (both open-end and exchange-traded funds) by year over the past decade.