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WSJ Opinion: Hits and Misses of the Week

Journal Editorial Report: The week's best and worst from Kim Strassel, Jason Riley and Dan Henninger. Images: Everett Collection/Bloomberg News Composite: Mark Kelly

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  • Oil Posts Worst Week in Three With Demand Recovery in Focus

    (Bloomberg) -- Oil posted its worst week in three amid concerns that rising global coronavirus cases are slowing the economic recovery.West Texas Intermediate futures ended the week down 3.5%, the biggest weekly loss since mid-March. With the Organization of Petroleum Exporting Countries and its allies planning to start raising output, markets are now focused on whether the demand recovery will be enough to absorb growing supplies.While consumption is climbing in India and the U.S., rising virus cases and the possibility of stricter travel limits in Europe are muddying the forecast and putting pressure on crude. Oil plunged Monday after the U.K. said it may delay global travel beyond May 17.“The Covid situation has really not had a strong recovery in Europe and across many emerging markets, and that’s really weighed down the demand outlook for oil,” said Edward Moya, senior market analyst at Oanda Corp.A stronger dollar also weighed on oil Friday, reducing the appeal of commodities priced in the currency. A higher-than-expected rise in U.S. March producer prices stoked inflation concerns.“If we get some hotter inflation readings, that could send Treasury yields higher again,” negatively impacting oil, according to Moya.Saudi Arabia said it remains confident that OPEC+ made the right decision to increase production over the next three months, and there are signs of better days ahead for demand that could soak up the additional barrels.India’s oil-products demand in March rose to the strongest since late 2019, while Germany reiterated support for a short, strict lockdown in the country. In the U.S., traffic is roaring back in some cities, an indication of stronger demand this summer.Making the calculation even more complex are ongoing talks between Iran and world powers to resuscitate a 2015 nuclear deal, which would set the stage for the Persian Gulf to increase supply. Negotiations are set to continue next week, though no direct contacts between Iranian and U.S. envoys have yet been made.Crude in New York has around $60 a barrel since mid-March, with market volatility slumping to the lowest in a month. Prices haven’t broken out of a $5 trading range over recent weeks, and have oscillated in smaller and smaller bands with each passing day -- creating a technical pattern some see as indicative of a breakout higher.“We’re toward the lower end of the range on concerns over the global economic recovery,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy. “Until we start to see some jet fuel demand come back, Asian demand pick up and European countries ease restrictions,” prices may not surge much higher in the near term.(A previous version of the story corrected size and scope of India oil-products consumption in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Student loan forgiveness: What $10,000 in cancellation would look like by U.S. state

    As the president mulls Democrat calls to cancel up to $50,000 in federally-backed student loan debt via executive order, a new analysis shows how $10,000 in forgiveness would affect borrowers in each U.S. state.

  • Exxon Mobil Will Keep Paying Its Dividend, And May Be Worth 30% More

    Exxon Mobil Corp. (NYSE:XOM) is not going to lower its dividend no matter what it costs the company. That point came out loud and clear from the company’s latest earnings conference call. This means that XOM stock will continue to have a “strong” dividend yield of about 6.15%. It’s worth at least 32% more, or $74.63 per share, based on its historical dividend yield. Source: Harry Green / Shutterstock.com For the past two years (8 quarters) Exxon has paid 87 cents per share in quarterly dividends. That works out to $3.48 per share each year. Exxon clearly intends to maintain that dividend. Therefore, at today’s price (April 9) of $55.87, the dividend yield is very healthy at 6.2%. Target Price Based on Historicals Moreover, based on the company’s historical dividend yield, this is much higher than its average. For example, Morningstar reports that over the past 5 years, its trailing 5-year dividend yield has been 4.96% (almost 5%).InvestorPlace - Stock Market News, Stock Advice & Trading Tips We can use this to estimate the normalized target value for XOM stock. For example, if we divide the dividend per share of $3.48 by the average yield of 4.96%, the result is a target price of $70.16 per share. This represents a potential gain of $14.29 or about 26% more based on today’s price of $55.87. 7 Infrastructure Stocks Excited For The $2 Trillion Biden Plan We can do the same thing with the company’s earnings-per-share (EPS). Applying Morningstar’s 5-year avg. price-to-earnings (P/E) ratio of 25.62 times (over the last 5 years) to Exxon’s EPS for this year ($2.87) produces a target price of $73.53. That is over 30% above today’s price. Similarly using the Morningstar forward P/E average of 21.75 times Exxon’s $3.88 EPS for 2022 produces a target price of $84.39. Now we have three different price targets based on dividend yield and price-to-earnings. To round things out we can also derive a price based on its historical price-to-sales. Morningstar says this is 1.25 times over the last five years. Analysts predict sales of $245.5 billion for 2021, so the price target works out to $306.875 billion. This is 29.7% above Exxon’s existing market cap of $236.5 billion. In other words, XOM stock is worth nearly 30% more or $72.46 per share. That means that, on average, XOM stock is worth about 34% higher, or $75.14 per share. These ratios are based on earnings and sales estimates provided by Seeking Alpha on their Earnings tab for Exxon Mobil stock. The estimates can vary depending on which aggregation service is used. But this gives you an idea that XOM stock is undervalued based on its historical metrics. One thing to note is that although the $3.48 dividend exceeds the forecast earnings of $2.87 this year (2021). But next year analysts predict EPS of $3.88 per share, which will cover the dividend, assuming oil and gas prices stay high. Moreover, management said on the fourth-quarter 2020 conference call that cash flow from operations should cover the dividend payments this year. This coincides with their intention to maintain a “strong” dividend, mentioned 10 times on the conference call. What To Do With XOM Stock Most analysts have higher price targets for Exxon stock, but not by much. For example, TipRanks.com says that 18 analysts have an average price target of just $60.68. Similarly, Yahoo! Finance says that 25 analysts believe on average XOM stock is worth $61.18. However, Marketbeat.com reports that 24 analysts have a lower target of $52.73, whereas Seeking Alpha says that 27 analysts have an average target of $61.36. Click to EnlargeSource: Mark R. Hake, CFA You can see in the table on the right that the median analyst price target is $60.63, or 7.1% above today’s price. So, on the one hand, this is much lower than my price target using historical metrics. But on the other hand, keep in mind that my price target could take several years to achieve, whereas most analysts are just looking out one year. For example, if my 34% higher price target takes two years, the average annual return will be just 16% each year on a compounded basis. Moreover, the dividend yield is 6.15%. Therefore the total return, even if the analysts’ target price pans out will be 13.25% (i.e., 7.1% price gain plus 6.15% dividend yield). My target price produces an expected return of 21.95% (i.e., 14.8% gain plus 6.15% yield). Any way that you look at it, XOM stock looks like a good bargain here, assuming oil stays high and the stock returns to its normal historical value metrics. On the date of publication, Mark R. Hake did not hold a long or short position in any of the securities in this article. Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post Exxon Mobil Will Keep Paying Its Dividend, And May Be Worth 30% More appeared first on InvestorPlace.

  • Charlie Munger Prefers Alibaba Stock to Treasury Bills. Here’s Why.

    Daily Journal Chairman Charlie Munger says a new investment in Chinese internet giant Alibaba is part of a move into stocks because returns on Treasury bills are so low.

  • China Fines Alibaba Record $2.8 Billion After Monopoly Probe

    (Bloomberg) -- China slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. after an anti-monopoly probe found it abused its market dominance, as Beijing clamps down on its internet giants.The 18.2 billion yuan penalty is triple the previous high of almost $1 billion that U.S. chipmaker Qualcomm Inc. had to pay in 2015, and was based on 4% of Alibaba’s 2019 domestic revenue, according to China’s antitrust watchdog. The company will also have to initiate “comprehensive rectifications,” from protecting merchants and customers to strengthening internal controls, the agency said in a statement on Saturday.The fine -- about 12% of Alibaba’s fiscal 2020 net income -- helps remove some of the uncertainty that’s hung over China’s second-largest corporation. But Beijing remains intent on reining in its internet and fintech giants and is said to be scrutinizing other parts of billionaire founder Jack Ma’s empire, including Ant Group Co.’s consumer-lending businesses and Alibaba’s extensive media holdings.Alibaba used its platform rules and technical methods like data and algorithms “to maintain and strengthen its own market power and obtain improper competitive advantage,” the State Administration for Market Regulation concluded in its investigation. The company will likely have to change a raft of practices, like merchant exclusivity, which critics say helped it become China’s largest e-commerce operation.“The high fine puts the regulator in the media spotlight and sends a strong signal to the tech sector that such types of exclusionary conduct will no longer be tolerated,” said Angela Zhang, author of “Chinese Antitrust Exceptionalism” and director of Centre for Chinese Law at the University of Hong Kong. “It’s a stone that kills two birds.”Alibaba’s practice of imposing a “pick one from two” choice on merchants “shuts out and restricts competition“ in the domestic online retail market, according to the statement.The government action sends a clear warning to the tech sector as the government scrutinizes the influence that companies like Alibaba and social media giant Tencent Holdings Ltd. wield over spheres from consumer data to mergers and acquisitions.The investigation into Alibaba was one of the opening salvos in a campaign seemingly designed to curb the power of China’s internet leaders and their billionaire founders. The company has come under mounting pressure from authorities since Ma spoke out against China’s regulatory approach to the finance sector in October. Those comments set in motion an unprecedented regulatory offensive, including scuttling Ant Group Co.’s $35 billion initial public offering.Alibaba said it will hold a conference call Monday morning Hong Kong time to address lingering questions around the antitrust watchdog’s decree.“China’s record fine on Alibaba may lift the regulatory overhang that has weighed on the company since the start of an anti-monopoly probe in late December,” Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam said, describing the fine as a small price to pay to do away with that uncertainty.”Further ActionStill, it remains unclear whether the watchdog or other agencies might demand further action. Regulators are said for instance to be concerned about Alibaba’s ability to sway public discourse and want the company to sell some of its media assets, including the South China Morning Post, Hong Kong’s leading English-language newspaper.The Hangzhou-based firm will be required to implement “comprehensive rectifications,” including strengthening internal controls, upholding fair competition, and protecting businesses on its platform and consumers’ rights, the regulator said. It will need to submit reports on self-regulation to the authority for three consecutive years.“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination. To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation,” the company said in a statement on Saturday.Faced ChallengesChief Executive Officer Daniel Zhang said in a memo to employees on Saturday that Alibaba always reflected and adapted when it faced challenges. He called for unity among staff, saying the company should “make self-adjustments and start over again.”The Communist Party-run People’s Daily newspaper said in a commentary on Saturday that the punishment involves specific anti-monopoly measures regulatory authorities take to “prevent the disorderly expansion of capital.”“It doesn’t mean denying the significant role of platform economy in overall economic and social development, and doesn’t signal a shift of attitude in terms of the country’s support to the platform economy,” the newspaper said. “Regulations are for better development, and ‘reining in’ is also a kind of love.”(Updates with company’s comment from 14th 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.

  • Fourth stimulus check: Lawmakers press Biden to say yes to more payments

    The president is being urged to roll more direct aid money into his infrastructure bill.

  • Traders Opting for Cash and Carry Strategy as Bitcoin’s ‘Contango’ Widens

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  • Must-Know Rules for Converting a 401(k) to a Roth IRA

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  • How much money does Nigeria owe China?

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  • ‘This is the single worst time to be a passive investor’: veteran investor

    Stock picking is ripe for a shift away from passive investing, which could suffer a decade of low or nonexistent returns, says Bill Smead.

  • QuantumScape’s Long-term Battery Prospects Will Hold Charge

    Most Special Purpose Acquisition Companies (SPAC) are trading well below their highs. QuantumScape (NYSE:QS) is the exception. If investors ignored the massive December 2020 run-up that sent QS stock to a high of $132.73, the SPAC is trending steadily. Source: Michael Vi / Shutterstock.com Investors are hungry for electric vehicle (EV) component suppliers. Companies that offer innovations in EV batteries will fare the best. Investments in QuantumScape are a vote of confidence for the battery firm. Volkswagen Investment Lifts QS Stock QS announced that it met Volkswagen’s (OTCMKTS:VWAGY) technical milestone on March 31. This triggers a milestone payment from VW. The second and final closing will reward QS with another $100 million by VW. The $100 million investment will give the firm the additional liquidity needed for the growing firm. Chief Executive Officer Jagdeep Singh said, “we look forward to working jointly to bring solid-state lithium-metal battery technology into industrialized mass-production.”InvestorPlace - Stock Market News, Stock Advice & Trading Tips 7 Great Stocks to Buy Under $10 Investors wary of investing in a novel company having no product will want to avoid QS stock. Yet the VW-QS deal lowers the uncertainties considerably. The automotive firm needs the battery. It is a key component in its EV strategy. VW’s EV shift is ambitious. It wants battery-powered vehicles to account for 70% of European sales and 50% in both the U.S. and China. QuantumScape’s Moat QuantumScape is a leader in developing next-generation solid-state lithium-metal batteries. It has ambitious plans in revolutionizing the EV battery industry. It spent ten secretive years developing the product. In Dec. 2020, QS held a video call to present the battery performance. The company said that its single-layer pouch cells could charge to 80% capacity in only 15 minutes. None of the lithium batteries in current EVs charge that fast. Since there is no dendrite formation, QS does not need to throttle back on charging. In 2019, dendrite formations caused battery shortages in Tesla (NASDAQ:TSLA) EVs. Conversely, an ex-Tesla engineer said that “solid-state batteries are a false hope.” Experts will continue to argue the merits of QuantumScape’s prospects, given QS figured out how to store more energy by weight and volume without giving up its durability. Using ceramic materials that resist the formation of dendrites gives QS a strong moat. For now, the market is not panicking on QuantumScape’s advancements. Nio (NYSE:NIO) has battery sharing as a service workaround. This lowers the price of its EVs and gives its customers a ready-charged battery swapping solution. Tesla’s valuations did not change by much, either. Opportunity President Joe Biden’s massive $2 trillion infrastructure and stimulus plan re-ignited investor interest in EVs. The plan includes investments worth $174 billion in EV initiatives. Besides investing in TSLA or NIO stock, investors may look at Chargepoint Holdings (NYSE:CHPT) or Blink Charging (NASDAQ:BLNK). QuantumScape’s commercially available battery is still a few years away. Impatient investors may consider charging station companies in the short term. But continued coverage on QS’s prospects in the next few years should attract investors. The company will act like a biotechnology stock on the markets. Just as shareholders wait for clinical results, they will need to wait patiently for QS to bring a product to market. Experts said that the EV market is poised for record sales in 2021. Consumers have a wide variety of choices. Add the government’s pledge to electrify automobiles and the demand for EV batteries will climb. By the time QuantumScape has a product on the market, it will have billions of dollars worth of pre-orders. Most SPACs will lose money for investors. QS shares are bucking the trend. Markets have a strong demand for companies offering clean energy solutions. The battery EV is in the early phases of strong growth for the next few years. On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get original insight that helps improve investment returns. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post QuantumScape’s Long-term Battery Prospects Will Hold Charge appeared first on InvestorPlace.

  • Consumer Brands Are Getting Squeezed by China Tensions. Here Are 14 to Watch.

    A handful of retailers and apparel makers have encountered a backlash in China in recent weeks, and more could soon be in the same boat.

  • Churchill Capital IV Stock May Continue to Recover in the Near-Term

    Two factors knocked the wind out of Churchill Capital IV (NYSE:CCIV) stock. First, when the rumors of this SPAC’s (special purpose acquisition company) merger with Lucid Motors became fact, investors sold on the news. That’s why the stock, which skyrocketed more than six-fold ahead of the announcement, plunged in late February. Source: T. Schneider / Shutterstock.com Second, the EV stock correction, which started around the same time. With investors bidding up the sector many times in 2020 and early 2021, it seemed nothing was going to stop this popular investing trend. But, rising interest rates, and concerns about valuation, convinced many it was time to hit the “sell” button. Yet, now, the dust has settled on both these issues. The sector is far from back to its recent highs. But, major names are starting to mount a rebound. And, that includes CCIV stock. Finding support at around $22 per share, the EV SPAC stock is starting to trend higher once again.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Sure, it may be too early to call this the start of a recovery. Concerns over whether it can beat out incumbents like Tesla (NASDAQ:TSLA), and dominate the luxury EV market, remain on the table. But, recent news is helping to back up the bull case. If more positive developments come out, it may be enough to send it back above $30 per share. Subsequent News Could Sustain Upward Price Moves for CCIV Stock Better-than-expected delivery numbers have helped Tesla stock start to recover. Recent delivery numbers are also helping to support shares in China-based EV maker Nio (NYSE:NIO). But, for an early-stage electric name like this one, what’s going to help sustain a recovery for its stock price? 7 Great Stocks to Buy Under $10 Recently disseminated information, such as details of its manufacturing capabilities, and its reservation numbers, may be starting to renew confidence that it can someday dominate the premium EV space. As I discussed previously, Lucid has more than enough “ingredients of success” on its side. These additional signs of progress are just icing on the cake. Of course, it’s not guaranteed that Lucid is destined to become the king of high-end EVs. Tesla already has established itself in this space. With an existing economic moat, it may still have an edge over this upstart. Yet, it may not be wise to assume Tesla is unsinkable. It may have many advantages when it comes to large-scale manufacturing. But, its moves to expand its user base may Lucid an opening for a large piece of the luxury market. Lucid vs. Tesla Will Lucid Motors start eating Tesla’s lunch? Or, does the established EV maker have the power to prevent this from happening? First, let’s look at the side of this argument that’s bearish on Lucid’s prospects. Recently, a Seeking Alpha contributor made the case why this company isn’t the next Tesla. Believing Lucid’s “destined for failure,” the commentator lists many ways why this company won’t usurp the EV top dog. Chief reasons include a more competitive environment, plus its relative inexperience in large-scale production. Given this company still needs to prove itself, both are valid points. Plus, as the bearish commentator pointed out as well, buying in at today’s implied post-merger valuation ($30 billion) makes little sense, given the stock’s priced on what could happen, rather than what has happened. Okay, how about the more bullish case. That is, Lucid lives up to Wall Street’s current expectations, and turns Tesla into a relative dinosaur? On Apr 6, InvestorPlace’s Josh Enomoto pointed out how Lucid could beat out Tesla when it comes to the higher end of the premium market. Namely, while Tesla is trying to become a mass market vehicle, Lucid is focusing just on making EVs for the rich. This could pay off, as per Enomoto’s thesis, current economic factors do not bode well for the middle-income bracket. There’s Enough in Play to Send This SPAC Higher Ahead of Its Merger Adding to Enomoto’s thesis above, I can see another way Tesla’s mass-market strategy could backfire, in a way that benefits Lucid. I’m talking about the risk Tesla loses some of its brand cache, as it expands its customer base with lower-priced models. If Teslas become more of a mass-market car, its current owner base could ditch it for something that better conveys high social status. This may allow the EV upstart to grab a major share of the premium market, and live up to expectations. Of course, it’s a bit too early to say it’s set in stone Lucid will beat Tesla at its own game. But, with more pointing to this SPAC deal paying off for investors, there’s enough in motion to help send CCIV stock back towards $30 per share and above ahead of the deal close. On the date of publication, Thomas Niel did not (either directly or indirectly) hold any positions in the securities mentioned in this article. Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post Churchill Capital IV Stock May Continue to Recover in the Near-Term appeared first on InvestorPlace.

  • Pivotal Week Confronts Emerging Markets at Mercy of U.S. Yields

    (Bloomberg) -- That the immediate fate of emerging markets is likely to be determined by the path of the dollar and Treasury yields is barely in dispute.But what is less clear is which direction the U.S. currency and bond market will take, as investors weigh the competing forces of Covid-19 infections and the prospects of a global economic rebound. Another uncertainty is which developing economies are best-placed to ride the recovery.This week “will continue to be dominated by rate volatility, issuance and Covid resurgence,” said Abdul Kadir Hussain, the head of fixed-income asset management at Arqaam Capital in Dubai. “If rate volatility declines, supply is constrained and the Covid resurgence in places like India is controlled we can go tighter in spreads. Otherwise, I think we will continue to see weakness in fixed income.”Last week’s performance provided plenty of pointers. Emerging-market dollar bonds had their best week since December, while local-currency debt rose by the most in two months, according to Bloomberg Barclays indexes. Meantime, developing-nation stocks fell 0.6% amid concerns about rising inflation, while the implied volatility for currencies declined for a second week.Chinese data will take the spotlight this week as a slew of releases including first-quarter gross domestic product will be watched for clues on the strength of its economic recovery. Inflation data from the U.S. and developing economies from India to Russia will also garner scrutiny as investors seek guidance on the path for monetary policy.Turkey’s interest-rate decision on Thursday will be in focus as the new central bank governor seeks to win over investors with a commitment to tight monetary policy after his predecessor was fired last month. The Bank of Korea is likely to hold its benchmark rate too.On HoldTurkey’s central will probably keep the benchmark one-week repo rate unchanged at 19%, according to most economists surveyed by BloombergTurkish central bank Governor Sahap Kavcioglu said last month markets shouldn’t take for granted that he’ll cut interest rates as soon as AprilThe lira slumped 10% last month after President Recep Tayyip Erdogan’s shock decision to replace the country’s central bank chief.The benchmark rate was raised by a larger-than-expected 200 basis points at Naci Agbal’s final rate-setting meeting as governor on March 18“President Recep Tayyip Erdogan would like the new-look central bank to lower interest rates, but market forces will likely delay the delivery of his orders,” with inflation rising and the lira weakening, Bloomberg Economics said in a reportBank of Korea is likely to hold its benchmark rate at 0.5% at its Thursday meeting. In late March Governor Lee Ju-yeol dismissed calls to tighten policy early to tackle rising financial risks, even as he said he expects faster inflation and economic growth this yearSouth Korea is scheduled to announce its unemployment rate for March on Wednesday. Bloomberg Economics forecasts the seasonally-adjusted jobless rate to slide further to 3.8% in March from 4% in the previous monthElection WatchA Sunday presidential runoff vote in Ecuador will be closely watched by bondholders as the nation decides between a career banker or the protege of self-exiled former President Rafael CorreaAny impact on the nation’s recently restructured dollar bonds will be monitored as the votes are countedPeruvians also head to polling stations on Sunday for the first round of their presidential electionThe Peruvian sol led last week’s currency gains on speculation that pro-market economist Hernando de Soto will secure enough support in Sunday’s presidential election to advance to the June runoff. An Ipsos poll showed that de Soto, a former central bank governor and presidential adviser, gained support to become the second most-favored candidatePeru Vote Key to Bonds After Biggest Sol Rally Since 2008China CheckData on Friday is set to show China’s economy accelerated by a record 18.3% in the first three months of 2021, according to the median estimate of analysts surveyed by BloombergBefore that, trade figures are forecast to show a continued export boom while industrial production, retail sales and aggregate social financing are also expected to jumpThe People’s Bank of China is also seen injecting cash in the banking system via medium-term lending facilities on Thursday as 100 billion yuan ($15.2 billion) of one-year loans come due. Traders will be on the watch for any additional cash injection as liquidity is expected to tighten this quarter due to a surge in local government bond sales and tax payments“Looking ahead to April and May, we expect liquidity to stay on the tight side,” said David Qu, who covers China for Bloomberg Economics. “In our view, the PBOC is trying to avoid fueling financial risks -- without putting a choke on the economy. We think the central bank will need to inject more liquidity into the banking system”What Else to WatchTraders will watch out for further escalation between Russia and Ukraine after Russia warned that growing violence in Ukraine could set off a broader military conflictJPMorgan Chase & Co. moved to market-weight from overweight on the ruble and Russian rates due to escalating geopolitical tensions and asset underperformanceThe ruble was the second-worst performing emerging-market currency last week amid the tensionIndia will release March consumer prices on Monday and inflation is expected to rebound further above the central bank’s 4% mid-point targetThe Reserve Bank of India will probably look past the near-term surge however and continue its hold on interest rates, according to Bloomberg IntelligenceIndia’s benchmark 10-year yield fell 15 basis points last week after the RBI announced 1 trillion rupees ($13.4 trillion) of debt purchasesIndustrial production is expected to decline further in February; India will also release trade figures alongside IndonesiaThe Philippines will release February overseas remittances data on ThursdayThe Czech Republic and Poland will report March’s consumer prices data on Tuesday and Thursday, respectivelyThe koruna and the zloty were among the best-performing emerging-market currencies last weekTraders will watch a reading of Peru’s economic activity gauge for February, which is expected to add to evidence that recovering growth lost momentum early in the first quarter, in line with increasing infections and lockdowns, according to Bloomberg EconomicsIn Brazil, investors will be watching for news on the nation’s 2021 budget gridlock, a significant local drivers this monthFebruary retail sales data on Tuesday, and unemployment figures on Friday will offer more information on how rising coronavirus cases has affected the economy.Colombia will post retail sales figures for February on ThursdayThe nation has had to return to lockdowns to fight the spread of Covid-19, which may imply downside risk for March, according to Bloomberg EconomicsBloomberg Economics expects Argentina’s March CPI data to show persistent inflationary pressure, despite price and currency controlsFor 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.

  • Budget Carrier Startup Avelo Airlines Launches With $19 Fares

    Avelo Airlines, a startup budget carrier, will inaugurate service on April 28 from its base at Hollywood Burbank Airport in California. What’s Happening: The start-up airline will offer nonstop service to smaller airports in 11 West Coast locations, using 189-seat Boeing 737-800 aircraft accommodating 189 seats. To launch its service, Avelo is offering a promotion with one-way fares beginning at $19. “After more than 20 years of steadily shrinking consumer choice, the American flying public wants and deserves more options and lower fares,” said Avelo Founder and CEO Andrew Levy, former chief financial officer at United Airlines Holdings Inc (NYSE: UAL) and former president, chief financial officer and chief operating officer at Allegiant Travel Company (NASDAQ: ALGT). Related Link: French Government Gives .7B Infusion To Ailing Air France: What You Need To Know Why It Matters: Avelo is the second start-up U.S. carrier launching this year, joining Breeze Airways as a newcomer to the skies. Avelo is also entering an industry that is more than eager to move beyond the financial trauma created by the COVID-19 pandemic. Several major carriers have announced new routes and the resumption of pandemic-paused services, and two companies — Frontier Airlines and Sun Country Airlines — have also announced plans for initial public offerings. Related Link: American Airlines Flight Encounters UFO Over New Mexico (Photo courtesy Avelo Airlines) See more from BenzingaClick here for options trades from BenzingaDMX, Rapper With Troubled Life, Dies At 50Wall Street Crime And Punishment: Joseph P. Kennedy, The Crooked Dynasty Patriarch© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Judge hands Amazon a setback in New York lawsuit over COVID-19 shortfalls

    NEW YORK (Reuters) -A federal judge on Friday ruled against Amazon.com Inc as the company defends against New York Attorney General Letitia James' lawsuit claiming it prioritized profit over worker safety during the COVID-19 pandemic at two New York City warehouses. U.S. District Judge Jed Rakoff in Manhattan granted James' request to return her lawsuit to a New York state court, and rejected Amazon's bid to move it to Brooklyn federal court, where the online retailer had sued James to stop her from suing.

  • Stimulus check update: When will ‘plus-up’ payments arrive? Answers to your COVID relief questions

    Americans have tons of questions about their stimulus checks and 2020 taxes. Here’s what you need to know about 2021 COVID-relief payments and more.

  • XPeng to Produce Its Own Chips; Analyst Weighs In

    The latest noises coming out from China suggest XPeng (XPEV) is keen to produce its own chips in-house. According to Chinese news outlet 36kr, using a small team of less than 10 engineers, the Chinese EV maker is developing its own autonomous driving chip. The production started a few months ago and is taking place in both the US and China. Xia Heng, XPeng’s Co-President and Chief Technology & Operation Advisor Benny Katibian, whose prior jobs include leading the tech dept at Qualcomm's ADAS team, are at the helm of the new project. “Industry sources indicate XPeng is actively recruiting chip engineers,” said Deutsche Bank’s Edison Yu, who believes this suggests “there are plans to grow this effort moving forward.” “In our view,” Yu further noted, “We do not expect any near-term changes as both XPILOT 3.5 and 4.0 will use Nvidia chips (Xavier and Orin), but believe similar to Tesla/NIO, XPeng wants to ultimately use a custom designed chip purpose built to train its neural net (to use in XPILOT 5.0) rather than a general purpose chip, in order to maximize performance/ efficiency and lower cost.” Yu thinks local rival Nio, is “likely” fast at work on a similar project after poaching Xiaomi's chip division manager. Looking at the wider picture, Yu believes it is all part of an effort by the industry/government to lower the dependence on foreign chips. Earlier this year, backed by BYD and Great Wall Motor, Horizon Robotics raised $900 million in a Series C round. The 5-year-old, local start-up was recently selected by SAIC (GM and VW’s main JV Chinese partner) to supply its ADAS/AD chipset. Horizon is targeting the shipment of 1 million chips this year and Yu believes it is a good example of the local industry’s chip manufacturing ambitions. To this end, Yu rates XPEV shares a Buy along with a $48 price target. The implication for investors? Upside of 39%. (To watch Yu’s track record, click here) XPEV stock has a resounding “yes” on Wall Street. 6 Buys and 1 Hold assigned in the last three months add up to a Strong Buy analyst consensus. At $49.50, the average price target implies upside potential of 43.5%. (See XPEV stock analysis on TipRanks) To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Whether you’re retiring in 30 years or 5 years, you still need to do this one thing religiously

    Investing is a crucial part of accumulating enough money in retirement — and the best results come with proper asset allocation. Retirement tip of the week: Check the asset allocation of your retirement portfolios, and if you’ve done it recently, make it a regularly scheduled task once a year. “The time to review your asset allocation and overall retirement investment strategy should be a proactive process throughout the year,” said Jon Ulin, chief executive officer of Ulin & Co. Wealth Management.

  • Arm Battle With China CEO Escalates, Complicating SoftBank Sale

    (Bloomberg) -- The battle for control of Arm Ltd.’s China business is escalating with new lawsuits aimed at keeping the unit’s controversial chief executive in power, further complicating SoftBank Group Corp.’s efforts to sell the business to Nvidia Corp.The dispute erupted almost a year ago in June after the board voted to oust Arm China Chief Executive Officer Allen Wu for conflicts of interest, but he refused to leave. Now the Chinese unit, which remains under Wu’s control, has filed lawsuits against three senior executives the board designated to replace him, according to people familiar with the matter. The previously unreported suits could take years to resolve, suggesting Wu may remain entrenched.Wu fired the three men -- including co-CEO Phil Tang -- but they were subsequently reinstated by the board. In the new lawsuits, Arm China is suing the trio, demanding they return company property, according to the people.Arm China declined to comment on any ongoing legal cases or possible settlement talks. It did say the three executives had caused “material damages” to the company and they had been terminated for legitimate reasons.Tang didn’t return requests for comment. Arm Ltd. declined to elaborate, saying it won’t comment on pending legal matters.The complex tussle has thrown into question the future of Arm, whose semiconductor technology is the world’s most widely used for smartphones and is increasingly deployed in computers. SoftBank founder Masayoshi Son agreed to sell the British chip designer to Nvidia for $40 billion last year, but the path for completing that transaction is growing increasingly difficult.The China dispute also raises questions about Beijing’s willingness to protect foreign investment in the world’s second-largest economy. Arm Ltd. sold a majority stake in the China unit to a consortium of investors, including Beijing-backed institutions. That has complicated the British firm’s efforts to manage Arm China and Wu, who has support from local authorities in Shenzhen.Both sides appear to be at a stalemate. Wu, a Chinese-born U.S. citizen, pulled back from signing settlement agreements worth tens of millions of dollars if he would leave the company, the people said, asking not to be identified talking about legal matters. At the same time, two minority shareholders in Arm China linked to Wu have filed lawsuits to overturn his June 4 dismissal, they said.SoftBank opened negotiations with him last year and had hoped to reach some sort of resolution, they said. Instead the court battles are deepening and the Japanese company has soured over the increasingly complicated dispute, the people said. SoftBank is now resigned to letting the legal proceedings take their course and there are no current negotiations with Wu, according to one of the people.“We are going through a leadership change in China; it’s taking time to resolve,” said Arm Ltd.’s Chief Executive Officer Simon Segars in an interview with Bloomberg Television recently. “It’s hard. But we are confident that’s going to get resolved.”SoftBank and Nvidia declined to comment on the dispute in China.Arm China said in a statement that Wu’s position “is compliant with legal registration and confirmed by China law and regulations.”Read more: Arm Takes Aim at Intel Chips in Biggest Tech Overhaul in DecadeThe standoff accords a relatively unknown executive outsized influence over one of the industry’s most important pieces of technology, in the world’s biggest internet and semiconductor market. Chinese companies need unfettered access to Arm’s products to push forward with the country’s attempts to make itself more independent in chip technology, an area where it’s largely reliant on imports. Beyond resolving the stalemate, Nvidia and SoftBank also need Beijing’s signoff to seal their deal, and it’s unclear whether Wu’s presence would complicate that.Wu’s hold on Arm China is partially due to local laws which make it difficult to change control of a company unless you’re physically in control of the company stamp and registration documents. He’s refused to give them up and has used company funds to pay for legal fees incurred in his attempt to fight off his dismissal, the people said.Arm China said payment of legal fees “is made in compliance with company policies as well as China laws and regulations.”His ultimate goals appear to be a large cash payoff and immunity from subsequent legal action, according to people who’ve spoken with him. Inside Arm China, which is responsible for selling licenses to its chip designs and fundamental technology in the country, Wu has told local staff he’s not going anywhere. He recently gave employees Chinese New Year cash presents in a red envelope with his surname on it.Arm China said the money came from Wu personally to show his appreciation to colleagues, a tradition at Chinese New Year in the country.Hearings in the case against the three executives are expected to take place in late May, one of the people said. Separately, two minority shareholders in Arm China have sued the Chinese entity in Shenzhen to nullify the board’s decision to oust Wu. These two cases are now being merged and hearings are slated for late April, the people said.Son told investors as recently as February that he expects to close the Arm sale and “I don’t have any Plan B.”Arm, for its part is trying to make sure that its technology remains pervasive in China despite U.S. sanctions intended to curb the supply of American technology to major companies like Huawei Technologies Co. While Arm is a U.K.-based company part of its operations are in the U.S. making its products subject to controls.The Chinese government has not stated its position on the Arm China leadership struggle, but the unit has several government-backed shareholders including sovereign wealth fund China Investment Corp. and the Silk Road Fund.In his interview with Bloomberg Television, Arm Ltd. CEO Segars said that the ten-month standoff hasn’t hurt Arm’s business in China. Lack of travel for face-to-face meetings during the pandemic has prolonged the process of changing leadership in China, he said.“When we announced the deal in September, we said it would take about 18 months,” he said. “We remain confident in that timeline.”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.