DiGenova & Toensing’s Victoria Toensing and Joe diGenova on how the Supreme Court prevented a citizenship question from being added to the 2020 census.
DiGenova & Toensing’s Victoria Toensing and Joe diGenova on how the Supreme Court prevented a citizenship question from being added to the 2020 census.
U.S. technology and growth stocks have taken the market's reins in recent weeks, pausing a rotation into value shares as investors assess the trajectory of bond yields and upcoming earnings reports. Technology has been the top-performing S&P 500 sector in April, rising 8% versus a 5% rise for the benchmark index. Big tech-related growth stocks in other S&P 500 sectors such as Amazon Inc, Tesla Inc and Google-parent Alphabet Inc have also charged higher.
(Bloomberg) -- The Reddit user who helped fuel the surge in GameStop Corp.’s stock price this year has doubled down on his bet by exercising his call options and buying even more shares.Keith Gill, who goes by monikers “Roaring Kitty” and “DeepF___gValue,” posted a screenshot of his portfolio showing that he has exercised 500 GameStop call options expiring Friday at a strike price of $12, giving him 50,000 more shares. The stock closed at $154.69 on Friday.On top of that, Gill bought another 50,000 shares of the video-game retailer, effectively doubling his holdings to 200,000 shares from 100,000 at the beginning of the month. His total investment in GameStop is now worth more than $30 million, giving him a profit of nearly $20 million.Gill’s mother, Elaine Gill, reached by phone at his childhood home in Massachusetts, confirmed the Reddit screenshots posted by her son.Gill rose to fame this year as one of the most influential voices on Reddit and YouTube amid an effort by retail traders to squeeze GameStop short-sellers. He testified at a congressional hearing in February, where he said he didn’t call for anyone to buy or sell the shares for his profit.The comments came as he was hit with a lawsuit that accused him of misrepresenting himself as an amateur investor. The suit alleges that he was actually a licensed securities professional who manipulated the market for profit, which he denied.GameStop Chief Executive Officer George Sherman, who is expected to leave, disposed of almost $12 million in shares, with the proceeds earmarked by the company to pay compensation-related taxes, according to a regulatory filing Friday. Earlier this week, he forfeited about 587,000 shares after failing to meet performance targets.The company is looking for a new CEO as part of a shake-up spurred by activist investor and Chewy.com co-founder Ryan Cohen, a person with knowledge of the matter has said.As part of a corporate overhaul spearheaded by Cohen, the company has brought in new executives, including chief officers for growth and technology as it seeks to move away from its brick-and-mortar business.GameStop, based in the Dallas suburb of Grapevine, Texas, has suffered with the video-game industry’s shift to online distribution. With gamers downloading or ordering software and gear online, there’s less reason to make a trip to a physical store.Shares of GameStop are up 721% so far this year, though they are less than half of the peak level in January. On Tuesday, the company announced plans to retire senior notes due in two years, leaving it virtually debt free.(Updates with background on company’s debt. A prior version corrected description of GameStop CEO’s stock transactions.)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 frenzy around digital tokens is taking its zaniest turn yet in the price of a token created as a joke, buckling the crypto trading system at Robinhood Markets.Dogecoin, boosted by the likes of Elon Musk and Mark Cuban, rallied more than 110% Friday before dropping by 26% on Saturday, according to CoinMarketCap.com. It now has a market value of more than $36 billion and is still up 13,400% from a year ago, when it traded for $0.002 and was worth about $250 million.Demand was so brisk for the token that investors trying to trade it on Robinhood crashed the site, the online exchange said in a blog post Friday. Some $68 billion worth of Dogecoin changed hands in the prior 24 hours as of 4:45 p.m. Friday in New York, the most since June, CoinMarketCap.com data showed.Doge’s surge is part of a rise in altcoins, a term for all the digital tokens that have sprung up in imitation of Bitcoin. Like most of them, its use case is limited, making it a tool for speculators and raising concern that a bubble is inflating in a crypto world now worth more than $2.25 trillion.“This reminds me of the dot com days. We knew something big was going on, a lot of investors were chasing it hard. That led to a bubble,” Scott Knapp, chief market strategist at CUNA Mutual Group, said. “For every Amazon.com there were 10 pets.com that went bankrupt. Is Dogecoin the pets.com of the cryptocurrency era?”Interest in crypto is on the rise again after companies from PayPal to Square started enabling transactions in Bitcoin on their systems, and Wall Street firms like Morgan Stanley began providing access to the tokens to some of the wealthiest clients. All along, crypto die-hards who say the blockchain technology will rewire the financial community have been plugging crypto, getting rich in the process.The Shiba-Inu themed Dogecoin was created as a joke by software engineers Billy Markus and Jackson Palmer in 2013. Musk sparked a rally in it earlier this year when he posted a photo of a faux magazine “Dogue” featuring a dog in a red sweater.But Michael Novogratz, chief executive officer of Galaxy Digital Holdings, isn’t buying the hype, since Dogecoin “doesn’t really have a purpose.”“It’s reminiscent of GameStop,” he said in an interview with Bloomberg TV, referring to the meme stock mania that gripped markets in February. “I would be very, very worried if one of my friends was investing in Dogecoin at these prices.”With little to back up the case for buying cryptocurrencies, the likelihood of them cratering remains high, leaving novice traders who jumped in on the hype vulnerable to steep losses.“The government has pumped so much monetary and fiscal stimulus into the economy now, even worthless assets are being bid up,” said Michael O’Rourke, chief market strategist at JonesTrading.Yet alt-coin popularity is hard to ignore. While Bitcoin is worth more than $1 trillion, the total market cap of the token universe now exceeds $2.25 trillion, according to CoinGecko.com, which tracks more than 6,700 coins.Bitcoin’s dominance in the crypto world has declined 28% since the beginning of the year, according to OKEX Insights Analyst Robbie Liu, citing data from Tradingview. The waning influence started to accelerate this month, he said in an email Friday, and Bitcoin now accounts for less than 54% of the crypto market capitalization -- the lowest level in nearly two years.“On the altcoins front, we continue to see strong momentum,” said Pankaj Balani, the CEO of Delta Exchange, a leading crypto derivatives exchange, in a note Thursday. He noted Ether’s recent record and increased activity in decentralized finance or DeFi, adding that “decentralized exchange coins will be in focus in the next few days, given that the market has validated Coinbase at a $100 billion valuation.”Other tokens with shaky to no fundamentals are also rising. Cardano and Polkadot, both in the top 10 cryptocurrencies by market cap, have surged this week.“Polkadot and Cardano have very few ‘users’” currently, said Shashwat Gupta, founder of Altcoinbuzz.io, in an email Wednesday, though he added that there’s a substantial amount of development being built on them.And it looks like Coinbase CEO Brian Armstrong may have been on to something when he said after the listing that it marks a “shift in legitimacy” for crypto.The Coinbase listing “ultimately will deliver more ‘use cases’ for cryptos and should keep the crypto market growing,” said Edward Moya, senior market analyst for North America at Oanda Corp.(Updates with Dogecoin’s price decline on Saturday. A prior version of this story was corrected to show Dogecoin was created in 2013.)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.
French automaker Renault will seek to generate more than 1 billion euros ($1.20 billion) in sales from the so-called "circular economy" by turning its Flins factory outside Paris into a research, recycling and repair centre, its boss told French weekly Journal du Dimanche. "Our ambition, by 2030, is to achieve more revenue (from recycling and repair at Flins) than from assembling cars there," said Luca de Meo, Renault's chief executive.
(Bloomberg) -- Asia’s billionaires had only just started taking to blank-check companies, but now the SPAC boom is deflating on Wall Street.After a frenzy of listings by special purpose acquisition companies - 326 have raised over $101 billion this year -- the whole pipeline is now in limbo due to regulatory overhang, including a number of deals by Asian investment firms and tycoons.Gateway Strategic Acquisition Co., backed by buyout firm Gaw Capital Advisors Ltd., Artisan Acquisition Corp., backed by New World Development Co.’s Adrian Cheng and Hony Capital Acquisition Corp. are some of the Asian SPACs that are waiting in the wings to list in the U.S.They all filed over two weeks ago, meaning they can launch the initial public offering, but have yet to do so. But they are now waiting until market sentiment improves, according to people familiar with the matter, who are not authorized to speak publicly and asked not to be identified.The U.S. Securities and Exchange Commission this week put a dampener on the SPAC party by setting forth new guidance that warrants, which are issued to early investors in the deals, might not be considered equity instruments and may instead be liabilities for accounting purposes. That threatens to disrupt filings for blank-check companies until the issue is resolved.It’s bad timing for Asia’s entrepreneurs. In addition to those waiting to launch, more SPACs are being planned by the likes of Hong Kong’s richest property tycoon Li Ka-shing, New Frontier Group Ltd., backed by the China-focused Nan Fung Group and private equity firm EmergeVest.The latest moves by the SEC “no doubt mean that the clearing of SEC registration statements of Asian SPACs (and indeed SPACs elsewhere in the world) will likely take longer as the issuer considers their impact and addresses the likely related comments from the SEC staff,” said Thomas Vita, corporate finance partner at global law firm Norton Rose Fulbright.Asian SPACs have raised $3.1 billion this year, already exceeding the tally from such deals in all of 2020. While still small, the fast-expanding volume underscores the growing appeal of SPACs to the region’s business entrepreneurs.A cooling off in the SPAC market may not be all bad news, given the bubble-like quality it had garnered.“The SPACs which have listed in U.S. before the SEC flashed the amber light recently do not necessarily have the first-mover advantage over aspiring Asian sponsors and promoters,” said Robson Lee, partner at Gibson Dunn. The surge in the number of SPAC listings in the U.S. does not guarantee successful mergers with viable target businesses and it appears to be a phenomenon of market frenzy, he added.The U.S. regulator had also warned listing candidates that structuring as a SPAC isn’t an end-around to avoid disclosing key information to investors. To top it off, SPACs are no longer buzzing as they once were, going so far to even underperform traditional IPOs.“It will be interesting to see what happens in the U.S. on the regulatory front. Asian regulators and stock exchanges will be watching closely,” said Johannes Juette, partner at law firm Clifford Chance.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 catalysts behind gold’s strength were a sharp retreat by U.S. Treasury yields on Thursday and a generally softer U.S. Dollar.
(Bloomberg) -- Gold headed for its best week since December amid a retreat in bond yields and a report that top buyer China may import more of the metal.After weeks trading in a narrow range, gold has advanced as Treasuries yields and the dollar head for weekly losses. Lower yields boost the appeal of bullion, which doesn’t offer interest. Dollar declines helped spur a broad rally in raw materials, with the Bloomberg Commodity Index also on track for its best week of 2021.Bullion is showing tentative signs of breaking out of a slump following three straight monthly losses. Prices rose above the 50-day moving average on Thursday, a positive signal for traders who follow chart patterns. On Friday, bullion extended gains to the highest since February after Reuters reported that China has given banks permission to import a large amount of bullion to meet domestic demand.The overall robust performance in commodities this week was “being supported by a surprise drop in U.S. Treasury yields accompanied by a weaker dollar,” said Ole Hansen, head of commodities research at Saxo Bank. Gold, along with crude oil and copper, “broke higher, thereby potentially signaling renewed momentum attracting fresh buying from speculators.”Spot gold rose 0.8% to $1,778.17 an ounce by 1:43 p.m. in New York. Prices are up about 2% this week, on course for the biggest gain since Dec. 18. Futures for June delivery on the Comex rose 0.8% to settle at $1,780.20 an ounce.Federal Reserve Chairman Jerome Powell’s reiteration of his dovish stance on monetary policy also helped bullion this week. That helped offset the impact of improving U.S. and Chinese economic reports, which could otherwise diminish demand for the metal as a haven.“The economic data published in the U.S. yesterday afternoon turned out for the most part to be significantly better than the market had anticipated,” Commerzbank AG analyst Daniel Briesemann said. “It seems that market participants believed the U.S. Federal Reserve’s assertion this time that it would not react to good data and would tolerate economic overheating.”In other precious metals, silver and platinum advanced.Palladium rose 1.2% after reaching the highest in more than a year. The metal, which reached a record of $2,883.89 in February last year, has benefited from stricter emissions rules that boost usage in autocatalysts.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 Biden administration is evaluating the impact of new sanctions on Russia and is prepared to escalate those penalties if the Kremlin fails to rein in hacking attacks and attempts to interfere with the U.S. political process, according to people familiar with the matter.Options available to President Joe Biden include expanding the measures announced Thursday to bar U.S. financial institutions from the secondary market for ruble-denominated bonds issued by Russian state banks, said the people, who discussed the matter on condition of anonymity.Biden ordered the latest sanctions on Russia -- including limits on buying newly issued sovereign debt -- in response to allegations that Moscow was behind a hack on SolarWinds Corp. and interfered with last year’s U.S. election.The U.S. also sanctioned a number of entities and individuals, while expelling 10 Russian diplomats working in Washington, including some intelligence officers.Yet the moves were calibrated by the U.S. to punish the Kremlin for past misdeeds while keeping relations from deteriorating further, especially as tensions grow over a Russian military buildup near Ukraine.In another sign of worsening relations between the two countries, Russia on Saturday accused a Ukrainian diplomat of stealing information and gave him three days to leave the country on Saturday, the news agency Interfax reported. Ukraine hinted it would respond in kind. Two days before announcing the sanctions, Biden offered to meet Russian President Vladimir Putin later this year, even as he warned his counterpart about a litany of transgressions.White House communications staff didn’t immediately offer a comment.For now, U.S. officials are waiting to see how Putin responds. On Friday, Russia expelled 10 American diplomats and imposed sanctions on eight officials in tit-for-tat moves that stopped short of responding to U.S. restrictions on its sovereign debt.Foreign Minister Sergei Lavrov told reporters in Moscow that Russia could take steps that harm the interests of U.S. businesses but will hold those in reserve for now.Market ImpactThe Biden administration is also watching global markets to see the impact of its latest measures, including on the ruble, and any shifts in foreign ownership of Russian ruble bonds, according to the people. Interest rate decisions by Russia’s central bank and capital flows will also provide important clues, they said.The Bank of Russia’s next interest rate decision is scheduled for April 23.Under the sanctions unveiled Thursday, the Biden administration will bar U.S. financial institutions from participating in the primary market for new debt issued by the Russian central bank, Finance Ministry and sovereign wealth fund. Those limits would take effect starting June 14.Russian bonds fell and the ruble dropped the most since December on news of the impending penalties, but recovered their losses on Friday as investors concluded that the measures were milder than had been feared.White House officials sought to limit the sanctions’ fallout for the U.S. and global financial system while sparing the Russian civilian population from unnecessary harm, the people said. The Biden team now hopes to begin de-escalating tensions and believe that would benefit financial markets and the Russian economy, one of the people said.Still, U.S. officials are holding in reserve other potential escalations, including moves aimed at preventing secondary market trading in any ruble debt for the first 90 days or more after issuance, the person said.(Updates with Russia expelling Ukraine diplomat 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.
The big up move for the week was fueled by positive oil demand growth outlooks by both the IEA and OPEC and a bigger-than-expected draw from the EIA.
(Bloomberg) -- The U.S. struggled to emerge from the pandemic, and its biggest bank broke an earnings record. JPMorgan wasn’t alone -- Citigroup and Morgan Stanley did the same. And Goldman Sachs? Yes, Goldman too.Wall Street thrived during 2020’s year of global catastrophe, and it’s doing even better in 2021. JPMorgan Chase & Co.’s soaring investment-banking fees boosted profit to $14.3 billion, the most the centuries-old firm has ever earned in a single quarter. Citigroup Inc., where fees from underwriting shares quadrupled, saw record quarterly profit of $7.94 billion. And Morgan Stanley posted its highest net revenue yet.And Goldman Sachs Group Inc.’s $17.7 billion of revenue and $6.84 billion of earnings both set records in a quarter of Reddit-fueled stock-market mania. Fees from putting together deals for companies helped lift investment-banking revenue to a record $3.77 billion, while revenue for Goldman’s asset-management arm reached a high of $4.61 billion.Other lenders had records too. Bank of America Corp.’s investment-banking fees climbed more than 60% to a record $2.25 billion. It also helped that banks released money from the stockpiles they had set aside for loan losses. Even at Wells Fargo & Co., plagued for years by scandal, profit soared sevenfold -- but not to a record.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) -- As London’s shops and pub gardens reopen for the first weekend in three months, funds targeting smaller U.K. companies are among the best performers in Europe thanks to a rally in domestic stocks that benefit from Britain’s vaccine rollout success.Among Western European stock funds with $200 million or more in assets, the majority of the 10 best performers this year are focused on U.K. small caps, according to data compiled by Bloomberg. The FTSE Small Cap Index has gained 14% in 2021 versus a rise of 11% for a benchmark tracking small stocks on euro-area exchanges.The nation’s markets are benefiting from a confluence of factors: Valuations had been depressed by the overhang of the U.K.’s departure from the European Union, and during the worst of the pandemic, when there was no economic growth, investors were will paying to pay a premium for the few companies that were enjoying rapid increases in sales. With the Brexit cloud removed and the economy rebounding as virus restrictions ease, investors are turning back to domestic stocks and those that are cheap relative to earnings.“The ability to generate a return in the U.K. market compared with the most other stock markets is very, very attractive,” said Gervais Williams, co-manager of the Premier Miton U.K. Smaller Companies Fund. Previously, the U.K. had been “very much out of fashion.”U.K. smaller companies are still inexpensive: The FTSE Small Cap sells for about 14 times estimated earnings for this year, compared to a multiple of 20.8 for the Euro Stoxx Small Index.“I’ve been investing since ‘85; I don’t think I’ve ever known this mismatch, this disparity,” said Williams, whose fund has returned 26% in 2021 with holdings including appliances retailer AO World Plc, chilled-storage provider Norish Plc and insurance investor Randall & Quilter Investment Holdings Ltd.Small caps are a traditional way of gaining exposure to the economic cycle, said James Athey, a money manager at Aberdeen Standard Investments.“That end of the company spectrum is, by far and away, most likely to have been heavily and negatively affected by lockdown, because you tend to be talking about companies that deal with these sort of parochial face-to-face services which have been essentially banned for most of this period,” Athey said by phone.English consumers have been splashing out in shops, pub gardens and hairdressers since Monday after venues were allowed to reopen following almost 100 days of being closed to control the spread of Covid-19. Britain also hit its target a few days ahead of schedule of offering a first coronavirus vaccine shot to all over-50s, as its inoculation campaign progresses faster than those of its continental neighbors.In many countries around Europe, meanwhile, restrictions remain in place, with France keeping open-air cafes closed until at least May 15 and Germany taking steps to allow the federal government to impose tighter restrictions.To be sure, it’s not just small-cap funds that are outperforming, with the continued interest in cheaper value stocks instead of high-growth companies also benefiting U.K. mid- and large-cap funds.The U.K. market, with its heavy weighting in commodity companies, is tilted toward value and cyclical shares.“There’s been a colossal rotation that we’ve been enormous beneficiaries of,” said Ian Lance, co-manager of Temple Bar Investment Trust Plc, which has returned 24% year-to-date with bets on stocks like postal group Royal Mail Plc, high street bank Natwest Group Plc and retailer Marks & Spencer Group Plc.Many of Temple Bar’s holdings were cheap even before the pandemic, so recent rallies don’t mean they are now overvalued, Lance said by phone.One issue with small caps is that they often play just one theme -- in many cases right now, the reopening -- leaving them vulnerable to any potential hiccups in the vaccine roll-out, Alexandra Jackson, manager of the Rathbone U.K. Opportunities Fund, said in an interview.Slightly larger companies that might prove to be less “binary” in that sense include Softcat Plc, a technology infrastructure group that also offers work-from-home tech, and construction retailers like Howden Joinery Group Plc and Grafton Group Plc, which should benefit from an elevated interest in home improvements even after people get used to post-lockdown life, said Jackson, whose fund is up 7.4% this year.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.
BTC is roughly 7% lower from its all-time high, similar to the April 1 pullback.
(Bloomberg) -- European shares hit a fresh record, extending the longest streak of weekly gains since 2018, as investors embraced the solid start to the earnings season amid optimism for an economic recovery.The Stoxx Europe 600 Index rose 0.9% by the close in London, led by the automotive sector amid booming car sales and as Daimler AG climbed after its earnings “significantly” topped estimates. Basic resources stocks advanced after U.S. bellwether Alcoa Corp.’s results beat expectations, owing to a surge in aluminum.A positive start to the earnings season and robust economic data from the U.S. and China are providing investors with confidence that the global recovery is under way. The Stoxx 600 has risen for seven straight weeks on the back of generous monetary stimulus and a spending spree from governments across Europe, with investors betting that a gradual reopening of economies will lead to increased consumption.“The market is in risk-on mood and will continue like that for a few weeks as earnings have had a very strong start and the pandemic is set to be under control,” said Alfonso Benito, chief investment officer at Spanish asset manager Dunas Capital.Goldman Sachs Group Inc. strategists said in a note that they expect earnings-per-share for the Stoxx 600 to grow 40% this year, compared with 35% for the consensus view. Despite continued lockdowns across Europe, the strategists expect the economic reopening to start in May, paving the way for a “strong” recovery in the summer.Among individual moves, HelloFresh SE jumped 3.3% after boosting its sales forecast, while L’Oreal SA declined 1.8% from near record levels even after the beauty giant said sales rose in the first quarter. LVMH climbed 2.2% after its chief executive officer on Thursday said the luxury giant gained market share during the pandemic.For a daily wrap highlighting the biggest movers among EMEA stocks, click hereYou want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance.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) -- Investors betting against Treasuries -- or even just hiding out in cash waiting for lower prices -- just suffered a rough week, even after a robust slate of economic figures showed the rebound from the pandemic is gaining steam.The debate over the long-term outlook for the $21 trillion market is far from over. The bearish view has dominated in 2021, but it was just dealt a blow as Treasuries posted their biggest weekly rally since August. And some strategists see potential for yields to stage a brief foray to even lower levels.Ten-year yields tumbled to just above 1.5% Thursday, a stunning turnaround after the specter of a 2% breach swirled just a few weeks ago. The bond rally gained speed as evidence of robust international demand spurred some investors to exit short bets, a move that seemed to defy logic as it came amid an array of strong economic data.It doesn’t look like there’s much help straight ahead for the bears, with next week devoid of major data releases, Federal Reserve officials muzzled before their April 28 decision and geopolitical tensions brewing. What’s more, the fate of the next U.S. spending plan -- which may include a chunk of taxes -- is unclear, and the reopening push took a hit as regulators paused Johnson & Johnson’s Covid-19 vaccine rollout.“Lower yields, or even just no further pickup, seems to be the pain trade now,” said Chris Ahrens, a strategist at Stifel Nicolaus & Co. “A lot of financial institutions are very flush with cash and had been holding on and hoping for higher yields -- cheaper prices -- to come back into the Treasury market. Now they are being forced to buy Treasuries at higher prices.”After the worst quarter since 1980, the Treasuries market has gained around 1% this month, paring its 2021 loss to about 3.3%, according to Bloomberg Barclays index data through April 15.The 10-year note yields 1.58%, down about 20 basis points from the more than one-year high reached at the end of March. Hedge funds had been massive sellers of Treasuries since the start of January. With stocks surging of late, retail buyers have also been biased against bonds, pouring more cash into equity funds.Bullish ToneBut now there’s a bullish tone emerging in parts of the rate market, with demand surfacing for options targeting a drop in 5-year Treasury yields to as low as 0.55% ahead of their May expiry, and for the 30-year yield to sink to 2.1%. Those maturities yield 0.83% and 2.26%, respectively.Treasury yields could extend their decline, potentially taking the 10-year yield as low as 1.2% -- a level not seen since February, says Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter.“The market is ignoring really good economic data now, so the thing that is going to get yields moving higher again is either a surprise pop in inflation or a bit of a hawkish turn in tone from the Fed,” he said by phone. “I don’t see either of those things happening in the very short-term. Longer-term, I still think yields are headed higher -- but we are in this weird position now where the Fed has essentially said they aren’t changing their opinion of things no matter what the data is.”Fed Chair Jerome Powell has said that while the economy appears to have turned a corner, central bankers aren’t in a hurry to remove monetary support. BlackRock Inc. the world’s biggest asset manager, is among those predicting the Fed will begin communicating plans to taper its bond buying in June.Granted, the bears can take solace in views that surfaced at the end of the week, suggesting it’s time to get short again. Mark Cabana, head of U.S. interest rates strategy at Bank of America Corp., said on Bloomberg TV on Friday that he’s been encouraging clients to use the “little rate rally” to reset short positions.The median forecast in a Bloomberg survey is for the 10-year yield to end the year at 1.86%.What to WatchThe economic calendar:April 21: MBA mortgage applicationsApril 22: Chicago Fed national activity index; jobless claims; Langer consumer comfort; leading index; existing home sales; Kansas City Fed manufacturing activityApril 23: Markit U.S. PMIs; new home salesThe Fed calendar is empty ahead of the April 27-28 policy meetingThe auction calendar:April 19: 13-, 26-week billsApril 20: 52-week billsApril 21: 20-year reopeningApril 22: 4-, 8-week bills; 5-year TIPSFor 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 biggest fear for many crypto traders has always been that big governments might impose harsh restrictions on cryptocurrencies,” said one analyst.
Stocks traded higher Friday in another record-setting day on Wall Street, with a batch of stronger-than-expected economic data and corporate earnings results helping fuel a risk rally.
Evolv Technology CEO Peter George and NewHold Investment Corp. CEO Kevin Charlton Metal detectors and security checks may soon be a thing of the past. Evolv Technology, an AI security screening company, already uses its platform at amusement parks, concert halls and stadiums across the country to provide safety for large crowds. IPO Edge will host […]
The defense team for Huawei's chief financial officer, Meng Wanzhou, will ask a Canadian court to delay upcoming hearings in her U.S. extradition case, the court said on Friday. Meng's U.S. extradition hearings have lasted more than two years and she is scheduled to be back in the British Columbia Supreme Court on April 26. A source familiar with the matter told Reuters the application was a result of an agreement announced last week in a Hong Kong court between Huawei Technologies Co Ltd and HSBC regarding publication of internal documents relating to the fraud allegations against Meng.
(Bloomberg) -- Morgan Stanley surprised investors with a $911 million loss tied to the collapse of Archegos Capital Management, staining what was otherwise a record quarter for revenue and profit.“The current quarter includes a loss of $644 million related to a credit event for a single prime brokerage client, and $267 million of subsequent trading losses through the end of the quarter related to the same event,” Morgan Stanley said Friday in its first-quarter earnings statement.The hit was related to Archegos, Chief Executive Officer James Gorman said on a call with analysts. The CEO called the matter a “very complex event,” and said he was pleased with how the company handled it.The firm’s philosophy is to “cauterize bad stuff” and deal with it as quickly as possible, Gorman said. Archegos won’t change how Morgan Stanley views its prime-brokerage business, but it will be looking hard at certain types of family offices and the adequacy of their financial disclosures, he said.The Archegos hit leaves Morgan Stanley as the only major U.S. bank to be nursing losses from the flameout of Bill Hwang’s family office. The New York-based bank was one of the early backers of Archegos despite the legal taint tied to Hwang, who was previously accused of insider trading and in 2012 pleaded guilty to wire fraud on behalf of his predecessor hedge fund, Tiger Asia Management.“This amount is material and should have been disclosed earlier, especially given the degree of attention prior to earnings,” Mike Mayo, an analyst at Wells Fargo & Co., said in a note to clients. “We expect more from Morgan Stanley when it comes to governance, and are incrementally concerned about complacency based on the tone from today’s conference call.”Shares of the company fell 3.4% to $78.05 at 1:57 p.m. in New York, paring this year’s gain to 14%The Archegos collapse rattled investment banks across continents, with Credit Suisse emerging as the worst hit with almost $5 billion in losses from its exposure to the family office.In the wake of Archegos, Morgan Stanley’s equity traders gave up their No. 1 spot, falling behind Goldman Sachs Group Inc. and JPMorgan Chase & Co., which posted big trading wins earlier this week off a wild quarter for markets.Equities-trading revenue at Morgan Stanley nevertheless rose 17% to $2.88 billion, compared with the $2.6 billion average estimate of analysts surveyed by Bloomberg. Goldman Sachs and JPMorgan have been clawing away at Morgan Stanley’s lead in that business, but until now the firm has managed to stay ahead of the pack. Both rivals posted equities revenue in excess of $3 billion for the quarter.Gorman’s PayIn January, Gorman leaped past JPMorgan’s Jamie Dimon as the best-paid CEO of a major U.S. bank, after being awarded $33 million for the firm’s performance in 2020 while running a firm that’s a third the size of JPMorgan.One reprieve for Gorman’s firm was the timing of the fund’s blowup. In any other quarter, the losses would have stood out more starkly. Instead, the hit came at a time when the bank and all its major peers have smashed one record after another, helping dull the pain.“Such a shame we have to talk about the” Archegos hit, given the strong results throughout the rest of the firm, Glenn Schorr, an analyst at Evercore ISI, said in a report titled, “Other Than That, It Was a Great Quarter, Mrs. Lincoln.”Fixed-income trading revenue at Morgan Stanley rose 44% to $2.97 billion, compared with the $2.2 billion analysts were predicting before earnings season kicked off.Morgan Stanley’s investment bankers pulled in $2.61 billion in fees, compared to the $2 billion analyst estimate, as equity underwriting quadrupled. The quarter proved particularly lucrative with the continued explosion in blank-check companies, better known as SPACs, as well as public offerings from technology companies.Banks are also having to fend off fierce demand for their top talent, with venture-capital firm General Catalyst this month luring away Paul Kwan, Morgan Stanley’s head of West Coast technology investment banking.Wealth-management revenue totaled $5.96 billion, up from $5.68 billion in the previous quarter.The acquisition of E*Trade last year also proved timely, as average daily trading surged in the first quarter, well above its fourth-quarter record. The firm also announced the completion of the Eaton Vance takeover last month, adding another business likely to throw off consistent fee-based revenue.(Updates with analyst’s comment 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.
For context, Armstrong's holdings in the crypto exchange has been estimated at north of $7 billion.