Executives, experts, and influencers join the Yahoo Finance team to discuss what's moving the world of finance.
Executives, experts, and influencers join the Yahoo Finance team to discuss what's moving the world of finance.
(Bloomberg) -- The Bank of Japan’s stock jumped by the daily limit for a fourth straight session, almost doubling in value over the course of this week.While Thursday’s trading volume of 11,600 shares is minuscule compared to most other listed companies in Tokyo, it was the highest on record for Japan’s central bank, according to data compiled by Bloomberg.The surge in the shares, or subscription certificates as the BOJ refers to them, has baffled market participants. While the BOJ is unusual in being a listed central bank, the stock pays a tiny dividend and holds no voting rights. In fact, the central bank doesn’t even hold shareholders’ meetings. The stock traded at an all-time low just in January.While technically a listed entity on the Tokyo Stock Exchange’s Jasdaq, the nature of the stock and its speculative moves are a long-standing mystery of Japan’s financial markets. A speculative surge was also witnessed in late 2012 and early 2013, when optimism over the Abenomics program of former Prime Minister Shinzo Abe was at its peak.The government holds a 55% stake, while individual investors have 40%. The subscription certificates can’t be bought at online securities firms, as they weren’t subject to the 2009 digitalization of traditional paper stock certificates. It’s the only issue for which Japan Securities Clearing Corp., the entity that clears transactions for all equities in the country, still requires physical delivery of paper certificates, which remain valid even now.Policy ReviewThe puzzling rally comes after the Nikkei 225 Stock Average briefly touched its highest levels since the bubble era of the 1980s. In those days, when the benchmark traded at around 70 times earnings, some investors collected BOJ’s stock, framing their certificates as a collectible. They were then worth 745,000 yen ($6,945) apiece -- around 14 times their current value -- despite the recent surge.The gains have come ahead of a closely-watched policy review by the central bank on March 19, which may lead to changes in how it buys exchange-traded funds -- because as well as being listed, the BOJ is itself the largest single owner of Japanese shares.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 Nasdaq ended sharply lower on Wednesday after investors sold high-flying technology shares and pivoted to sectors viewed as more likely to benefit from an economic recovery on the back of fiscal stimulus and vaccination programs. Microsoft Corp, Apple Inc and Amazon.com Inc dropped more than 2%, weighing more than any other stocks on the S&P 500. The S&P 500 financial and industrial sector indexes reached intra-day record highs.
(Bloomberg) -- Chancellor Rishi Sunak unveiled a fresh wave of support for home buyers across the U.K., adding further fuel to one of the economy’s only bright spots during the pandemic.The government postponed the deadline for a tax break on purchases for six months, and set out plans to enable buyers to put down a smaller deposit for their properties.The tax perk, which was due to end this month and allowed buyers to save up to 15 thousand pounds ($21,000), juiced the market during the lockdown that devastated other parts of the economy.Mortgage demand soared as buyers rushed to take advantage, and data this week showed annual home-price growth accelerated to almost 7% in February. But the extension merely staves off a cliff edge temporarily, and the market could suffer a setback once it ends.In his Budget on Wednesday, Sunak said the temporary level before so-called stamp duty kicks in will remain at 500,000 pounds ($698,000) until the end of June. It will then drop to 250,000 pounds before returning to its usual level of 125,000 pounds in October. U.K. homebuilders rose to session highs after the announcement.The three-month extension of the full benefit is likely to mainly benefit people who are already in the process of buying a home, rather than opening up the possibility of savings to new buyers, said Aneisha Beveridge, head of research at Hamptons International.“There is fairly limited time for it to make a difference for those not yet in the market,” she said. Still, property website Rightmove Plc estimates that an additional 300,000 transactions in England could beat the deadline at the end of June.Sunak also set out plans for government-backed mortgages that will allow house purchases of up to 600,000 pounds with only a 5% deposit.Lenders pulled similar low-deposit products from the market last year -- only eight were available in January, according to the Treasury. Sunak said lenders including LLoyds Banking Group Plc, Natwest Group Plc, Banco Santander SA, Barclays Plc, and HSBC Holdings Plc will be offering the mortgages from next month, with Virgin Money UK Plc to follow “shortly after.”(Updates with homebuilders, Rightmove estimates, lenders offering mortgages)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 president has agreed to a compromise making millions ineligible for the third checks.
The pandemic is costing the government hundreds of billions of pounds. Where will it all come from?
(Bloomberg) -- A firm hired to monitor Texas’ power markets says the region’s grid manager overpriced electricity over two days during last month’s energy crisis, resulting in $16 billion in overcharges.Amid the deep winter freeze that knocked nearly half of power generation offline, the Electric Reliability Council of Texas, known as Ercot, set the price of electricity at the $9,000-a-megawatt-hour maximum -- standard practice during a grid emergency. But Ercot left that price in place days longer than necessary, resulting in massive overcharges, according to Potomac Economics, an independent market monitor hired by the state of Texas to assess Ercot’s performance. In an unusual move, the firm recommended in a letter to regulators that the pricing be corrected and that $16 billion in charges be reversed as a result.Potomac isn’t the first to say that leaving electricity prices at the $9,000 cap for so long was a mistake. Plenty of power companies at risk of defaulting on their payments have said the same. But the market monitor is giving that opinion considerable weight and could sway regulators to let companies off the hook for some of the massive electricity charges they incurred during the crisis.The Arctic blast that crippled Texas’s grid and plunged more than 4 million homes and businesses into darkness for days has pushed many companies to the brink of insolvency and stressed the power market, which is facing a more-than $2.5 billion payment shortfall. One utility, Brazos Electric Power Cooperative, has already filed for bankruptcy, while retailers Griddy Energy LLC and Entrust Energy Inc. defaulted and have been banned from participating in the market.“The market is under quite a bit of duress,” Kenan Ogelman, Ercot’s vice president of commercial operations told Texas lawmakers Thursday. Moody’s Investors Service downgraded Ercot one notch from A1 to Aa3 and revised the grid operator’s credit outlook to “negative.”Retroactively adjusting the power price would ease the financial squeeze on some of the companies facing astronomical power bills in the wake of the energy crisis. EDF Renewable Energy and Just Energy are among those asking the Public Utility Commission to reset the power price for the days after the immediate emergency while others have also asked regulators to waive their obligation to pay until price disputes are resolved.“If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, the Ercot independent market monitor director at Potomac Economics. “It creates a cascading effect.”The erroneous charges exceed the total cost of power traded in real-time in all of 2020, said Bivens, who spent 14 years at Ercot, where she most recently was director of market operations before becoming its watchdog. “It’s a mind-blowing amount of money.”While prices neared the $9,000 cap on the first day of the blackouts, they soon dipped to $1,200 -- a fluctuation that the utility commission later attributed to a computer glitch. The panel, which oversees the state’s power system, ordered Ercot to manually set the price at the maximum to incentivize generators to feed more electricity into the grid during the period of supply scarcity. The market monitor argues that Ercot should have reset prices once rotating blackouts ended because, at the point, the emergency was over.It’s asking the commission to direct Ercot to correct the real-time price of electricity from 12 a.m. Feb. 18 to 9 a.m. Feb. 19. Doing so could save end-customers around $1.5 billion that otherwise would be passed through to them from electricity providers, Bevins said.But power generators that reaped substantial profits from the high prices during the crisis week are likely to push back. Vistra Corp. on Thursday submitted comments to the utility commission arguing against repricing. During a Texas senate hearing the same day, utilities South Texas Electric Cooperative and the Lower Colorado River Authority also voiced opposition.Texas Competitive Power Advocates, a trade association representing generators, said retroactively changing prices could discourage future investments in Texas’s electricity market. “Changing prices after the fact creates additional instability and uncertainty,” Michele Richmond, the group’s executive director, said in an email.Bivens acknowledged the market monitor isn’t typically in favor of repricing, but noted in her letter to the commission that the move wouldn’t result in any revenue shortfalls for generators. Instead, the new price would reflect the actual supply, demand and reserves during the period.“This isn’t some Monday morning quarterbacking,” she said in an interview. “Ercot made an error and we don’t let errors slide.”The utility commission on Wednesday adopted a prior recommendation made by the market monitor, voting to to claw back some payments to power generators for services they never actually provided during energy crisis. The commissioners also expressed support for capping the price of certain grid services -- a request made by several retailers -- but didn’t take action on it. Another commission meeting is scheduled for Friday.(Adds Ogelman quote, Moody’s downgrade 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.
Mortgage rates have risen past a psychological benchmark for the first time since they fell to historic lows during the pandemic. The average rate on a 30-year fixed-rate mortgage increased to 3.02% this past week, according to Freddie Mac’s Primary Mortgage Market Survey—the first time since July that the rate has risen above 3%. “Since reaching a low point in January, mortgage rates have risen by more than 30 basis points,” wrote Freddie Mac’s chief economist, in a release.
Cathie Wood's flagship ARK Invest ETF and a VanEck Vectors Social Sentiment backed by Wall Street bro Dave Portnoy are down by at least 4%. The VanEck Vectors Social Sentiment ETF was down 4.3% in Thursday afternoon trade, in its debut. Meanwhile, Wood's ARK Innovation deepened its slide into correction on Thursday, off 6.6%. Both ETFs focus on drawing interest from many of the growthy tech stocks which are in the market's crosshairs as bond yields rise, including electric-vehicle maker Tesla Inc. . On Thursday, bonds took a leg higher after Federal Reserve Chairman Jerome Powell said he was watching the rise in rates but offered no concrete steps the central bank was taking to tamp down rate moves. The 10-year Treasury yield jumped by 7 basis points in afternoon action, hitting around 1.54% and accelerating a sell-off in stocks that are viewed as pricey and that don't offer a coupon. The tech-heavy Nasdaq Composite Index was down nearly 10% from its Feb. 12 peak, meeting the commonly used definition for a correction. The Dow Jones Industrial Average was down more than 400 points, or 1.3%, and nursing a 0.8% year-to-date gain. The S&P 500 index was down 1.6% and holding on to a 2021 gain of less than 0.1%. The Nasdaq Composite was negative for the year, down 1.4%.
Congress is nearing passage of the third economic stimulus check it will send out to you and other taxpayers as part of its Covid-19 relief bill.
It’s a relatively busy day on the economic calendar. With inflation worries lingering, the ECB Economic Bulletin will draw plenty of interest ahead of U.S stats.
The team will soon be accepting the crypto as part of a deal with payment services provider BitPay.
(Bloomberg) -- A string of poorly-received bond auctions in the past week is driving home a message -- the Treasuries-led global rout is leaving investors scarred and governments staring at higher borrowing costs.U.S. yields resumed their rise Wednesday after a brief lull that followed a disastrous sale of seven-year Treasury notes last week. Sovereign bond offerings from Indonesia to Japan and Germany have drawn tepid demand and at least one sale was scrapped. The push for higher rates comes as central bankers attempt to ease investors’ discomfort over the pace of the recent rise.Investors are demanding higher yields to compensate for the risk of further volatility, which may complicate efforts to finance $14 trillion worth of fiscal stimulus globally. Concerns that central banks may withdraw policy support has soured sentiment, amid mounting evidence of a faster-than-anticipated economic recovery.“Investors will be increasingly differentiating countries based on their fundamentals and prospects,” said Tuuli McCully, head of Asia Pacific economics at Scotiabank. “Considering elevated debt levels in some countries, higher funding costs could dampen their economic recovery momentum further.”Clear MessageThe message from Europe and Asia Pacific markets this week is clear. Even though global bonds have stabilized somewhat, investors are still rattled by the prospect of more volatility.In Germany, a sale of 15-year bonds on Wednesday received the weakest demand since the tenor was launched last summer. Japan’s auction of 10-year debt the previous day recorded the lowest bid-to-cover since February 2016.Indonesia’s Finance Ministry agreed to sell 13.6 trillion rupiah ($951 million) of non-Islamic bonds on Tuesday, the least since March 2020, according to data compiled by Bloomberg. Including bills, the sale totaled 17 trillion rupiah, below the government’s revised target of 30 trillion rupiah.There were ominous signs even before last week’s ill-fated U.S. auction, including a drop in coverage ratios for debt sold in Thailand and Australia. Signs of distress also emerged in Italy, while New Zealand ended up accepting just over half of the bids it received for a sale as yields soared.“If there is still no reversal in sentiment, the government may need to accept higher bid yields, or cut down on planned spending,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. in Singapore.Mexico’s Finance Ministry declared a local-currency sovereign debt sale void last week despite demand that was triple the amount offered. In a statement, the ministry blamed high rates due to market volatility for sinking the 3.7 billion-peso ($178 million) sale.A couple of offerings bucked the global trend. A sale of Italian green bonds racked up 76 billion euros of orders, boosted by its environmentally-friendly tag. In Russia, the Finance Ministry sold the most fixed-coupon notes since June, as mild sanctions from the U.S. failed to deter investors.The U.K. delivered an annual budget Wednesday that tried to balance the need for prolonged economic aid with calls to control the deficit, with Finance Minister Rishi Sunak saying he intends to raise the tax burden to its highest level in over 50 years. While the Debt Management Office’s projected bond sales for 2021-22 were well below the record this fiscal year, the total is higher than expected at 295.9 billion pounds ($413 billion).“We are in an uncomfortable spot where attention is shifting toward elevated asset prices,” said Eugene Leow, a rates strategist at DBS Bank Ltd. in Singapore. “Even as central banks try to reassure, there is this lingering fear that less-loose policy may be on the way.”PerspectiveFor all the jitters, optimists say that higher yields are a sign of confidence and emerging economies continue to enjoy inflows and improved current-account positions. In Asia, central banks have built up their foreign-exchange holdings by the most since 2013.“We remain of the view that fears of a 2013-like Taper Tantrum for emerging markets are overblown,” said Sameer Goel, Deutsche Bank’s global head of EM research in Singapore. “Central banks stand readier as part of fiscal-monetary coordination to quarterback term premia and the cost of capital to governments.”Central banks are clearly on their guard. Federal Reserve Governor Lael Brainard warned Tuesday that bond-market volatility could further delay any pullback in asset purchases while European Central Bank Executive Board member Fabio Panetta said the recent jump in yields “is unwelcome and must be resisted.” Still, the institution as a whole sees no need for drastic action to combat rising yields, according to officials familiar with internal discussions.While the Federal Reserve’s guidance is that a hike is unlikely until at least 2024, money markets in the U.S. are positioned for interest rates to start rising again by the end of next year.“That’s a significant difference, a big gap between the Fed’s message and where the market is, and they will push back against that,” said Kathy Jones, chief fixed income strategist at Charles Schwab & Co. in New York.(Adds details of Treasury selloff in second paragraph and U.K. budget in 12th 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) -- As the leader of crypto exchange Kraken, Jesse Powell is bound to be bullish on Bitcoin. Yet he’s projecting a disruptive future that would stretch the imagination of even the most ardent crypto fans.In a Bloomberg Television interview, Powell said Bitcoin could reach $1 million in the next decade, adding that supporters say it could eventually replace all of the major fiat currencies.“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”The CEO also said San Francisco-based Kraken is considering going public, possibly next year.Extreme predictions are nothing new in the world of Bitcoin, where adherents stand to profit from convincing a wider audience that crypto is a legitimate asset class, rather than a speculative fad. The dollar remains the world’s reserve currency and is the benchmark for global trade, though its value has softened in the past year.Powell said Bitcoin bulls see it one day exceeding the combined market cap of the dollar, euro and other currencies.The dollar “is only 50 years old and it’s already showing extreme signs of weakness, and I think people will start measuring the price of things in terms of Bitcoin,” he said.The digital currency slipped 3% in early U.S. trading on Thursday, hovering around $49,000. Prices have surged almost 600% since the start of 2020 on the back of wider mainstream adoption, with bulls seeing it as both an inflation hedge and speculative asset.Critics argue that Bitcoin is in a giant, stimulus-fueled bubble destined to burst like the 2017 boom and bust cycle.Kraken benefits from higher prices as it reaps fees from increased trading. Bloomberg reported last month that the exchange was in talks to raise new funding, which would double the company’s valuation to more than $10 billion.“Personally, I think $10 billion is a low valuation,” Powell said. “I wouldn’t be interested in selling shares at that price.”The CEO did acknowledge the potential for wild market swings, saying prices can “move up or down 50% on any given day.” That kind of volatility has long been one of the negatives of Bitcoin, relegating the market to one of speculation, rather than a means of doing business.“If you are buying into Bitcoin out of speculation, you should be committed to holding for five years,” Powell said. “You have to have strong convictions to hold.”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) -- A new exchange-traded fund seeking to ride the companies most loved by investors online has found plenty of its own positive sentiment in its first day of trading.About $438 million worth of shares in the VanEck Vectors Social Sentiment ETF (ticker BUZZ) changed hands on Thursday, making it the third best ETF debut on record, according to data compiled by Bloomberg.“Normally, this kind of blow-the-roof-off volume for the first day is for ETFs that open up a new asset class like gold or Bitcoin,” said Eric Balchunas, ETF analyst for Bloomberg Intelligence.The fund, which has been promoted by Barstool Sports Inc. founder Dave Portnoy, follows an index that uses AI to scan online sources like blogs and social media to identify the 75 most favorably mentioned equities.Because of its criteria for inclusion, the hottest names among the day-trading crowd like GameStop Corp. and AMC Entertainment Holdings Inc. don’t actually make it into the gauge. Its top holdings currently are Ford Motor Co., Twitter Inc. and DraftKings Inc.Nonetheless, the rapid uptake suggests VanEck has succeeded in tapping into the increasingly powerful retail investing cohort.“Given the explosion of individual, younger retail traders, it makes sense to see a pile of volume,” said Dave Lutz, macro strategist at JonesTrading. “Whether it is the WSB crowd embracing Dave Portnoy’s marketing of the ETF, or institutions playing it to bet on the direction of the trend (or hedge) -- we won’t know for a bit. I suspect it’s a bit of both.”The fund opened at $24.40. It was down 1% at $24.15 at 12:02 p.m.(Updates with latest figures, analyst comments.)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.
U.S. Treasury yields Thursday after Federal Reserve Chairman Jerome Powell said he was monitoring the rise in bond yields and that he would be concerned if financial conditions did tighten. "I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals," Powell said during a webinar hosted by The Wall Street Journal. The 10-year Treasury note yield climbed 7.1 basis points to 1.541%. Bond prices fall as yields rise. Many investors had said that if Powell didn't offer more explicit pushback on higher government bond rates, it could fuel Treasury market weakness. Powell stressed again that the Fed would be "patient" with higher inflation expected this year, saying it was likely to be a "one time" effect and not price gains that continue year-after-year.
Stock benchmarks finished sharply lower Thursday as Federal Reserve Chairman Jerome Powell said he was monitoring the recent rise in bond yields but added that the inflation expected this year was unlikely to last
Even as Indian tech workers make up the bulk of H-1B recipients, it's not Indian companies that are hiring them.
Oil prices shot as much as 5% higher on Thursday as OPEC and its allies agreed to extend most of their production cuts through April, a sign that high prices could be here to stay. Oil company stocks jumped, too, often much more than the commodity, because prices this high will give many of them operating leverage. Because capital costs are high in the industry, oil company margins expand considerably once prices rise above $50 and companies have fully paid for the cost of the equipment and labor they need to extract oil.
36% of taxpayers said the Recovery Rebate Credit was the 'most confusing' part of taxes this year.
Despite the hashtags, the stock market is far from “crash” territory, as anyone with a working memory of last year's pandemic-inspired selloff would recall. But a rotation away from the market's recent leaders does appear to be under way.