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Hostess Brands CEO Andy Callahan joins On The Move to discuss the company's Q4 earnings report and what the growth opportunities are for snack cake brand.
Hostess Brands CEO Andy Callahan joins On The Move to discuss the company's Q4 earnings report and what the growth opportunities are for snack cake brand.
(Bloomberg) -- Oil snapped a four-day gain as a key U.S. pipeline restarted and China said that it would push back against elevated commodity prices.West Texas Intermediate lost 1.3%, after closing Wednesday at a two-month high, while Brent fell. The Colonial Pipeline Co. -- a key source of gasoline for the East Coast -- is returning to service after a cyberattack last Friday. That’ll bring relief to motorists after panic-buying emptied out some gas stations.China Premier Li Keqiang urged the country to deal effectively with the commodity price surge and its impact, according to a state television report, echoing previous comments from officials. Asia’s top economy is a key user of of raw materials, and copper and iron ore also lost ground on Thursday.Oil is a among commodities that have rallied hard this year as investors wager that the economic recovery from the coronavirus outbreak will spur consumption. The roll-out of vaccines in the U.S., Europe and China has allowed governments to pare back social-distancing measures, permitting a return to work and much greater mobility. Still, Covid-19 flare-ups in many parts of Asia, as well as pushback from China, have complicated the global picture.“The moves today feel like a consolidation phase, there may also be some investors removing bullish trades following the resumption of the Colonial pipeline,” said Daniel Hynes, senior commodities strategist at Australia and New Zealand Banking Group Ltd. “But ultimately, strong demand globally should keep the uptrend intact.”On Wednesday, a U.S. government report showed domestic oil inventories fell to the lowest since late February, adding to signs of market rebalancing. In addition, the International Energy Agency said the world has now largely worked off the surplus that accumulated when the pandemic routed demand.Separately, Yemen’s Shiite Houthi rebels claimed a drone and missile attack against targets in Saudi Arabia including oil facilities, according to a statement on a rebel-run television channel. Such attacks have risen this year, though they rarely cause much damage.Brent’s prompt timespread was 18 cents a barrel in backwardation. While that remains a bullish pattern -- with near-term prices above those further out -- it has dropped to the lowest level since late March.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) -- Chinese corporations are defaulting on local bonds at the fastest pace on record, as authorities ramp up efforts to introduce more financial discipline and transparency in the world’s second-largest debt market.Firms so far this year have failed to make payments on 99.8 billion yuan ($15.5 billion) of onshore bonds, according to Bloomberg-compiled data. While 2021 is set to be the fourth straight year the 100 billion yuan level has been topped, it previously hadn’t happened before September. For all of 2015, when China’s stock market crashed, defaults totaled just 8.9 billion yuan.Missed payments are running at a record pace this year, following the late 2020 defaults of some state-linked firms which affirmed convictions that authorities in China are increasingly willing to not bail out weak firms. The recent tumult surrounding bad debt manager China Huarong Asset Management Co. raised fresh questions about support for central state-owned firms, even as the risk of contagion remains relatively contained. Signs of a maturing credit market have helped Chinese officials’ effort to refocus on financial risks in areas like asset prices and debt levels.Ultimately, more defaults are part of a healthy credit market with a genuine high-yield onshore sector and adequate pricing of risk, according to Jean-Charles Sambor, head of emerging-market debt at BNP Paribas Asset Management.“Policy makers are willing to draw a line in the sand between what is systemic and what is not,” he said. “They want to inject more credit risk in the system and change the mindset of investors, forcing them to look more at stand alone credit risk rather than speculating on the likelihood of support from the central government.”Delinquencies are crucial in helping develop a mature and efficient market that improves transparency, reduces moral hazard and prompts a reassessment of risk. Increased financial discipline for companies and improved credit ratings serves Beijing’s longer-term goal of attracting more foreign cash to the country’s capital markets-- especially from more stable sources like pension funds and insurers instead of hot money flows.Payment failures also help deepen regulation, as well as create a more standardized process and better assumptions in terms of recovery rates, Sambor said. “This short-term pain will translate into medium-term gain.”China’s central bank, in its first-quarter monetary report published Tuesday, urged establishing a mechanism that holds local party and government leaders accountable for major financial risks.Developer DefaultsReal estate firms are leading this year’s surge in onshore bond defaults, as authorities tighten access to funding in the debt-laden sector. Developers have made up about 25% of those missed payments with the government’s “three red lines” policy increasingly weighing on these borrowers. Payment failures at China Fortune Land Development Co. and Tianjin Real Estate Group Co. topped 10 billion yuan in the first quarter, according to Bloomberg-compiled data. They also did for chipmaker Tsinghua Unigroup Co. and Hainan Airlines Holding Co.Defaults on offshore bonds have also ramped up -- logging a combined $3.7 billion in January and February but none since, according to Bloomberg-compiled data. Still, that’s nearly half of 2020’s full-year $8.3 billion.(Adds quote in the seventh 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) -- After this week’s selloff that erased more than $1 trillion in value from the S&P 500, investors are rushing to add to their bearish bets.A Cboe put-to-call ratio that tracks the volume of options tied to everything from single stocks to indexes, including the S&P 500 and the VIX fear gauge, reached 0.99 this week in its highest level since November. Short bets against the largest S&P 500 ETF, ticker SPY, have also spiked, as have those on the tech-focused Invesco QQQ fund.Read more: Rout Lands on Nasdaq Where Shorts Are Massing, Bulls Getting OutThe bearish bets come as the S&P 500 fell for a third day on Wednesday amid concerns inflation could stifle a recovery in the U.S. economy. Many investors worry price pressures could be persistent enough to force the Federal Reserve to tighten its policy sooner than it’s previously telegraphed. The benchmark index has lost roughly 3.5% since Friday. Richly-valued technology shares have also declined -- the Nasdaq 100 is more than 6% off its April peak.“I would be hesitant to be a buyer here,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab. “This hasn’t played out yet and it may go down further. The momentum was already to the downside.”Still, the spike in the put-call ratio could be seen as a contrarian signal. It was likely affected by fewer call purchases from retail traders who have become less active, in addition to more put trading, said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group.The S&P 500 has posted a median two-week return of around 3% following the 10 highest put-call readings over the past 12 years, Murphy said.“History has shown more often than not a peak in put-call ratios comes before a market rebound,” he said. “We certainly could keep selling off, but this is a data point for the rebound camp.”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.
A tech stock rout has swept through Wall Street this week. Here's why.
Elon Musk said on Wednesday that Tesla would stop accepting Bitcoin in car purchases.
(Bloomberg) -- A few years back, a private equity firm hired the cybersecurity company Mission Secure Inc. to inspect its oil and gas operations in West Texas to make sure they were secure.Everyone from the facility managers to the private equity owners assumed that the plant’s computer network was “air-gapped” -- a term referring to computers that aren’t connected to the internet or another unsecured network. But when Mission Secure installed monitoring devices to check, they discovered that a worker on the night shift was connecting his Roku device to the internet to watch episodes of “CSI: Miami.”The incident reflects a historically lax cybersecurity culture in the oil and gas industry -- one that is now in the spotlight after the massive ransomware attack against Colonial Pipeline snarled fuel supplies along the East Coast. The sector has long resisted cybersecurity regulation or substantial investments in part because they haven’t seen much of a need, according to industry and cybersecurity experts.The oil and gas industry, which includes the companies that own wells, pipelines and refineries, has long been a laggard in security spending and that gap has only widened in the last three years versus financial services and telecom industries, said Brian Walker, a principal at The CAP Group in Dallas, a risk advisory firm.Small energy companies spend about 0.25% of their revenue on security, compared to 0.75% for big electric companies, Walker said. Big tech companies and banks, which generate significantly more revenue, spend about 1.5%.“The industry is struggling with self motivation to initiate action to defend themselves,” Walker said, adding that there is no “real” regulation. “There is still only discussion and arm waving.”Colonial Pipeline became aware of the attack about May 7, after attackers had stolen nearly 100 gigabytes of data and encrypted at least a portion of the company’s IT network -- the portion of its network most of its employees use to check their email, review contracts or write and distribute invoices. However the company also took much of its operational systems offline – the side of the network where machines talk to machines to actually push gas up and down the pipeline. There is no evidence Colonial’s operational technology systems -- which isn’t connected to its IT system -- were compromised by the attack, the company said.A ransomware group called DarkSide is believed to be behind the attack.In a response to questions from Bloomberg, Colonial, which operates the biggest U.S fuel pipeline, defended its cybersecurity practices, saying it has increased overall spending on information technology by 50% since 2017, when a new chief information officer was appointed. Colonial uses more than 20 different and overlapping cybersecurity tools to monitor and defend the company’s networks, and its third-party investigator “has acknowledged many of the best practices we had in place prior to the incident,” according to a statement provided to Bloomberg.“Colonial Pipeline takes its role in the United States infrastructure very seriously,” according to a statement. “We had and continue to have robust protocols in place to detect and address threats proactively and reactively.”In addition to relatively meager spending on cybersecurity, the oil and gas industry is governed by different agencies and rules. The Federal Energy Regulatory Commission was given authority to set cybersecurity standards for electric grids by Congress in 2005. Fuel pipelines, meanwhile, fall under the jurisdiction of the Transportation Security Administration -- part of the Department of Transportation -- which has provided voluntary cybersecurity guidelines.“The power sector at least has defensible infrastructure, even if it’s not being adequately defended across the board,” said Rob Lee, founder of the infrastructure security firm Dragos Inc. “The gas sector is under-resourced and hasn’t been as high a priority for the federal government.”Tom Fanning, chief executive officer of the electric utility Southern Co. and a member of the Cyberspace Solarium Commission, said it would be better if the energy sector all fell under the umbrella of the Department of Energy and had the same reliability standards. He said he worries that the problem may get worse as solar and wind get integrated into the system, making the job of avoiding cyber-attacks more complex.“Because of the interconnectedness, we need to reimagine how we work together and how we defend ourselves in conjunction with -- this is a joint relationship between the private sector and the federal government. That’s the big point,” he said.Attacks on energy infrastructure have been a persistent worry of U.S. officials for the better part of the last decade, as foreign adversaries have shown the desire and ability to do it.In 2013, for instance, Iranian hackers breached the control system of a small dam in Rye Brook, New York, but weren’t able to operate the gate that controls water levels because it had been manually disconnected for maintenance. Russia, meanwhile, has repeatedly hacked into Ukraine’s electrical system.It’s not yet clear whether the ransomware attack against Colonial Pipeline will force major changes in the oil and gas industry, either with additional regulations or cybersecurity spending. David Drescher, co-founder and board member of Mission Secure, was skeptical that it would become a “digital Pearl Harbor.”“You’ve got to get the culture change at the top where the board is getting updated on their cybersecurity posture as often as production and revenues and EBITDA,” he said.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 stock gained downside momentum at the start of this week and made an attempt to settle below the $600 level.
The Dow Jones fell in today's market while the Nasdaq led on the downside. The tech-heavy index continued deeper below its key 50-day moving average.
Some of your favorite consumer brands want more of your money because of surging inflation.
(Bloomberg) -- Volvo Cars said it’s considering an initial public offering months after calling off earlier plans to merge with Geely Automobile Holdings Ltd., the Chinese manufacturer owned by its parent.The board of the Swedish carmaker has decided to evaluate a possible listing on the Nasdaq Stockholm stock exchange later this year, according to a statement. Bloomberg News reported in March that owner Zhejiang Geely Holding Group Co. was considering an IPO that could value the business at around $20 billion.Volvo’s more than a decade under Chinese control has been a success story. While pandemic disruptions snapped a six-year streak of record sales, demand came roaring back and fueled record deliveries and profit in the second half. Geely has been a supportive owner, helping fund construction of the company’s first-ever U.S. car plant and the investment it will take to go fully electric by the end of the decade.“We have supported the transformation and growth of Volvo Cars for the last 10 years, enabling the company to become a true premium brand with improved profitability,” Eric Li, Geely Holding’s chairman, said in the statement. “Volvo Cars is especially well positioned to deliver continued growth and harness the full potential of electrification and the delivery of safe autonomous drive functions.” Geely Holding would remain a major shareholder of Volvo, which also announced that it has extended the contract of Chief Executive Officer Hakan Samuelsson to the end of next year. He’s led Volvo since 2012, two years after Geely acquired the company from Ford Motor Co. for just $1.8 billion.For all its success boosting Volvo’s value, Geely has struggled to cash in on its investment. It pursued an IPO in 2018 but shelved the idea after investors balked at its proposed valuation of as much as $30 billion, people familiar with the matter said at the time.(Updates with context in the 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) -- Gold is set to snap its longest rally since January, hurt by gains in the dollar and Treasury yields after a higher-than-expected reading on U.S. inflation.U.S. consumer prices climbed in April by the most since 2009, according to Labor Department data Wednesday. Rising yields reduce the appeal of non-interest-bearing bullion, and a stronger dollar makes bullion more expensive for investors holding other currencies.Markets were already concerned that rising inflation amid surging commodity prices could prompt the Federal Reserve to boost rates earlier than expected. Gold had shrugged off that concern, rising to the highest in three months earlier this week after a report Friday showed a surprise slowdown in U.S. job growth, supporting the case for continued economic stimulus.“Gold is approximately 50% correlated with Treasuries, so it gets hit as interest rates rises,” said Jay Hatfield, president of Infrastructure Capital Management. “On top of that, the dollar is rallying. The stock market dipping on the inflation data showed that investors fear that the Fed may need to tighten soon.”Policy makers at the central bank have been unified in supporting the case for low interest rates.“The outlook is bright, but risks remain, and we are far from our goals,” Governor Lael Brainard told a virtual event Tuesday. Cleveland Fed President Loretta Mester and James Bullard of St. Louis voiced similarly dovish views.Spot gold fell 0.9% to $1,821.07 at 3:21 p.m. in New York. The metal gained for five straight sessions through Tuesday, the longest rally since Jan. 5.Futures for June delivery on the Comex declined 0.7% to settle at $1,822.80 an ounce. Spot silver, platinum and palladium slid.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 crypto market is primarily focused on Ethereum and the catapulting DeFi sector right now,” said one analyst.
The British pound initially pulled back during the trading session on Wednesday, perhaps in a bit of profit-taking and then again in a short-term reaction to CPI numbers in the United States.
(Bloomberg) -- The surging cost of commodities to industries and households is a threat to China’s economic growth and the purchasing power of its citizenry.As prices soar for everything from the copper and steel used in construction, to the coal that heats homes and powers factories, to the corn that feeds animals, what can Beijing do to control the record-breaking rally?The answer is complicated by several factors, including policies on pollution and imports that have only served to exacerbate supply constraints. Beijing has imposed output curbs on metals like steel and aluminum to reduce emissions as part of President Xi Jinping’s commitment to deliver a carbon neutral economy by 2060. And it has cut purchases of coal and other commodities like copper from major supplier Australia as relations between the two nations have soured.Moreover, the world’s biggest consumer of commodities is being forced to compete for materials just as global economies bounce back from the pandemic, driven by massive government stimulus, particularly in the U.S.That can only dilute China’s efforts to rein in markets. Still, short of imposing price controls, Beijing has options that range from precise strikes on individual commodities to blunter tools that would affect the whole economy.Trading RestrictionsChina’s busy commodities bourses are a usual suspect for Beijing whenever the government feels price moves are getting a bit too wild. True to form, Monday’s dramatic jump in iron ore triggered a stern response. The Dalian Commodity Exchange vowed to “severely punish” unspecified violations in iron ore trading as it raised margin requirements and narrowed daily trading bands. The Shanghai Futures Exchange also pledged to tighten trading on steel, while the Zhengzhou bourse made a similar move on thermal coal.The goal is to cool speculative flows that can draw in waves of investment and generate dizzying price spikes. The trouble is that this approach doesn’t necessarily help to manage a physical market with its own momentum. Steel prices are rallying worldwide without having a really significant futures market, for example. Still, iron ore futures in Dalian dropped slightly on Tuesday, while rebar and hot-rolled coil in Shanghai marched to new highs ahead of the new restrictions. Thermal coal also forged a fresh record.Inducing SupplyChina is able to lean on its vast state sector to ease shortages, an effort that has recently met with only mixed results at best. Last month, the top economic planning agency told coal miners to produce at their maximum winter output levels, which has barely put a dent in the market’s subsequent rise to all-time highs. For gas, unusually cold winter weather led to an official dressing down for importers following their inability to meet demand, which seems to have motivated some to bring forward their purchases for this year.The efforts to boost energy supplies have been upset by diplomatic tensions with Canberra. China has banned Australian coal imports, one of a number of restrictions on a swathe of goods from barley to wine. And at least two of China’s smaller gas importers have been told to avoid purchasing additional gas from Australia for delivery over the next year.Releasing StockpilesChina has considered selling about 500,000 tons of aluminum from its state reserves to cool the market. Prices plunged initially on the plan before rising again to their highest level in a decade. China’s output of the lightweight metal was 37 million tons last year, more than half the world’s total.The nation holds stockpiles of materials like copper to foodstuffs like soybeans, as well as massive crude oil reserves, but the amounts are undisclosed. Any indication that the reserves bureau is a buyer or seller has the potential to dramatically move markets. The longer-term plan might include adding more base metals to strategic reserves to ensure domestic supply and cushion potential shortfalls, although any state-purchasing program now would risk adding fuel to the current rally.Stockpiling FoodChina is building up its agricultural buffer as well. The government has bought huge amounts of U.S. corn for state reserves and may release them to quell any price spikes ahead of the domestic harvest in the fourth quarter. Authorities have also imposed curbs on state wheat sales amid concern that increased purchases by feed mills to replace expensive corn could push up prices of the new wheat crop, which will be reaped in June.Beijing is also replenishing its soy reserves, adding locally grown soybeans for the first time since 2017 to curb any possible food inflation. The domestic crop isn’t genetically modified and is used for foods such as tofu rather than animal feed. China has also frequently released pork reserves to cool rising prices of the nation’s most widely consumed meat.Fiscal StimulusTo rescue an economy that had cratered because of the pandemic, China reached for its usual play book: massive state-funded construction to stimulate demand and an expansion in credit that fed through into the real estate market. That helped put a rocket under the price of steel and other building materials like copper and aluminum.China has trimmed this year’s quota for the debt sales that typically fund infrastructure, and local governments have been slow off the mark in terms of new issuance. Metals traders will be looking for further evidence that fiscal policy is tightening as the government shifts its focus to preventing asset bubbles.Monetary PolicyThe broadest concern is that record commodities prices will fuel inflation globally and central banks will act too slowly to stem the tide. Last month saw the fastest growth in Chinese factory-gate prices since October 2017, a surge that’s likely to have furrowed brows at the People’s Bank Of China.All of China’s financial markets are on tenterhooks for any indication that the PBOC will accelerate monetary tightening as the nation completes its recovery from the pandemic. For metals, tougher lending requirements would affect demand across sectors, from real estate to autos and consumer goods. Still, Bloomberg Economics doesn’t think the central bank will be motivated to act quite yet, as consumer prices remain relatively subdued.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.
Inflation fears are dogging Wall Street at a time when the U.S. rebound is picking up speed.
Inflation fears are dogging Wall Street at a time when the U.S. rebound is picking up speed.
(Bloomberg) -- Few things evoke fear in equity markets like a margin call. On Wednesday that fear turned into panic in Taiwan, offering another warning for the world on what can happen when leverage unwinds.The trading day started out quiet in Taipei’s $2 trillion stock bourse. But before the morning was over, the local benchmark index had plummeted almost 9% in the worst one-day performance in its 54-year history.There were reasons to sell. New data showed a worsening Covid-19 outbreak in an island where almost no one is vaccinated. A deepening slump in global tech shares also undermined the appeal of a market dominated by the industry. But the swiftness of the plunge that followed suggests bigger forces were at play.For months, bull market skeptics around the world have warned that surging leverage is making equity markets riskier -- and the blowup of Archegos Capital Management in March served as a reminder of that. Yet stocks have continued to rise, with the MSCI All-Country World Index closing at a record as recently as Friday. In the U.S., margin debt topped $822 billion by the end of March -- the latest available data. That’s up 72% year on year.On a smaller scale, the same happened in Taiwan. Armed with conviction, and with history on their side, investors took on increasing amounts of leverage. The result was a 46% expansion in margin debt this year to about NT$274 billion ($9.8 billion) two weeks ago, the highest since 2011. By comparison, the Taiwan benchmark was up just 19% in that period, an indication that people were taking out loans faster than stocks were appreciating.Local investors had little reason to fear losses. Taiwan’s economy became one of the biggest winners from U.S.-China rivalry. Its chipmakers flourished as Washington sought to hobble Beijing’s efforts to build a domestic chip industry. During President Donald Trump’s four-year term, the Taiex benchmark became the world’s best performing stock gauge, gaining more than 90% in U.S. dollar terms.Gains extended this year as the pandemic created a shortage of chips, with the index rising for seven straight months through April.The euphoria began to unravel this week as the threat of inflation sank the Nasdaq, with tech stocks around the world following suit. As the Taiex slid 3.8% on Tuesday in Taiwan, the level of margin debt fell by NT$12.6 billion, the most since October 2018. That suggests traders faced margin calls by brokers to cover losses in their stock accounts.Wednesday’s record rout is likely to have spurred a bigger unwinding of leverage. (Comparatives are skewed by the widening of daily price limits for individual stocks in 2015.)“Margin trading boosted the Taiex over the past few months, which may add to declines if they face margin calls,” said MasterLink Securities Investment Advisory President Paul Cheng.The fear of further losses was evident in a stock market where individual investors account for about 60% of transactions. The derivatives market burst with activity: more than 1.75 million options tracking the Taiex changed hands on Wednesday, the third-busiest day since 2016. Traders snapped up bearish contracts even as dozens of short-term options expired, with the price of one put surging as much as 7,757%.KGI Securities’ trader Kevin Lee, who has been a local stocks trader for a decade, said clients started to panic as the morning wore on.“There were non-stop orders coming in,” Lee said. “Investors were crazy as there were lots of news during trading hours and we didn’t know if they were true or not.”By the end of the day, the index had pared its losses to 4.1%. But the damage to investor confidence was already done.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.
Huawei Chief Financial Officer Meng Wanzhou and her legal team are set to return to court for three more weeks of extradition hearings starting Aug. 3, following a fourth attempt by Meng’s lawyers to introduce new evidence, a Canadian court heard on Wednesday. Meng, 49, was arrested at Vancouver International Airport on a U.S. warrant for bank fraud in December 2018. Meng maintains she is innocent of the charges and has been fighting her extradition while living under house arrest in Vancouver.
(Bloomberg) -- Tesla Inc.’s Chief Executive Officer Elon Musk said the electric-vehicle manufacturer is suspending purchases using Bitcoin, triggering a slide in the digital currency.In a post on Twitter Wednesday, Musk cited concerns about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” while signaling that Tesla might accept other cryptocurrencies if they are much less energy intensive. He also said the company won’t be selling any of the Bitcoin it holds.The largest cryptocurrency dropped as much as 15% to just above $46,000, before paring some of the retreat. It was down about 6% to $51,210 as of 7:03 a.m. in London on Thursday. Other tokens such Ether and Dogecoin also slid. The rush to sell briefly caused outages at some cryptocurrency exchanges. Bitcoin is still up more than fivefold in the past year.Musk’s move comes after Tesla disclosed in February that it had purchased $1.5 billion in Bitcoin and planned to accept it as a payment. That announcement added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and an investment, especially coming from a large member of the S&P 500 with a high-profile CEO who commands a big following among retail investors and the general public.Tesla’s website, which had a support page dedicated to Bitcoin, noted that the token was the only cryptocurrency that Tesla accepts in the continental U.S. Musk has also tweeted frequently about Dogecoin, a cryptocurrency started as a joke in 2013 -- and he quipped about being the “Dogefather” before and during his stint hosting the “Saturday Night Live” show on May 8. He tweeted on Tuesday, “Do you want Tesla to accept Doge?”Tesla’s addition of Bitcoin to its balance sheet was the most visible catalyst during this year’s rally in the digital currency. Bitcoin jumped 16% that day, the biggest one-day gain since the Covid-19 induced financial markets volatility in March 2020.Optimism grew after Mastercard Inc., Bank of New York Mellon Corp. and other firms moved to make it easier for customers to use or invest in cryptocurrencies, fueling the mainstream resurgence that took Bitcoin from about $29,000 at the end of last year to as high as almost $65,000 in April.Bitcoin mining is consuming 66 times more electricity than it did back in late 2015, and the carbon emissions associated with it will likely face increasing scrutiny, according to a recent Citigroup Inc. report.Musk is no stranger to considering the issue of crypto’s environmental impact.Musk Splits From Cathie Wood’s Ark on Bitcoin Environmental CostCathie Wood’s Ark Investment Management LLC published a report last month saying cryptocurrency mining can drive investment in solar power and make more renewable energy available to the grid. Twitter Inc.’s Jack Dorsey retweeted a post on the white paper with the comment that Bitcoin “incentivizes renewable energy.” Musk replied to Dorsey’s tweet, saying simply, “True.”‘Confusing’Musk’s tweet on Wednesday took many in the cryptocurrency community by surprise, including Nic Carter, founding partner at Castle Island Ventures, and a leading voice among defenders of Bitcoin’s energy use.“Surely he would have done his diligence prior to accepting Bitcoin?” Carter said. “Very odd and confusing to see this quick reversal.”It’s unclear what prompted the decision and Musk and Zachary Kirkhorn, Tesla’s chief financial officer, didn’t immediately respond to an email inquiry for comment. Kirkhorn in March added the tongue-in-cheek title “Master of Coin,” according to a regulatory filing.Tesla’s first-quarter earnings were bolstered by the sale of 10% of its Bitcoin holdings. Musk said last month the disposal was intended to demonstrate the token’s liquidity, and added that he’s retained his personal investment in the cryptocurrency.Kirkhorn said on the firm’s earnings call in late April that Tesla believed in Bitcoin’s long-term value and planned to accumulate the tokens from transactions with customers.(Updates markets in the third paragraph. An earlier version of this story corrected the company name in the 11th 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.
GBP/USD failed to settle above the resistance at 1.4150 and declined towards 1.4120.