TORONTO, Feb. 6, 2021 /CNW/ -
Saturday 06/02/2021
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(Bloomberg) -- Wall Street veteran Peter Kraus said that investors shouldn’t be caught off guard by a market correction because some equities have been pushed into bubble territory, and many catalysts for expansion have already been factored in.“You’ve got to pay attention to those bubbles, and the market could easily have a consolidation of 10% to 15% and nobody should be surprised,” the Aperture Investors founder said Friday in a Bloomberg Television interview. Though many investors believe U.S. President Joe Biden will push through a large relief package, “a lot of the stimulus is already in the price.”Kraus joins those sounding an alarm about bubbles after retail investors pushed up stocks such as GameStop Corp. and AMC Entertainment Holdings Inc., creating volatility among various equities. The former co-head of Goldman Sachs Group Inc.’s asset-management arm and chief executive officer of AllianceBernstein Holding LP, Kraus formed his new firm more than two years ago, and his comments came as equities have hit new highs. He also renewed a warning about inflation.“The amount of stimulus that the U.S. government is going to actually put into the economy is likely to be north of $5 trillion. The Fed’s balance sheet has doubled,” he said. “That all can’t happen without affecting inflation. And as inflation rises, real rates could actually turn positive, and that will be an impact on those stocks that are overvalued.”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.
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(Bloomberg) -- Anger is building in the senior ranks at Bank of America Corp. after the company waived an unpopular new bonus policy for top traders and dealmakers while keeping the plan in place for other employees.At issue is a grant of company stock that high earners -- generally those making $1 million or more -- received for the first time as part of their 2020 compensation. Instead of vesting in equal parts over a set period, as such awards typically do, these bonuses have a “cliff vest” provision making the shares eligible for sale only at the end of four years.People familiar with the situation described an internal drama unfolding over the past couple of weeks.Initially, the bank planned to apply the new pay structure broadly. But veterans in investment banking and trading revolted upon hearing they’d have to stay through 2024 to reap bonuses for 2020, and management agreed to exempt them.Chief Executive Officer Brian Moynihan acknowledged the blowback in a Jan. 27 interview on Bloomberg Television, saying the change in policy “didn’t work the way some people wanted it to, so we fixed it.”Yet senior colleagues in corporate and commercial banking, a less powerful cohort, soon learned that their awards are still subject to the vesting restrictions. That’s when the grousing began, the people said. In recent days, employees have been gathering on calls to vent frustrations and discuss options.The decision touched a raw nerve. Bank of America is torn by long-simmering jealousies and divisions among its staff of more than 200,000, many dating back to the shotgun marriage with Merrill Lynch in the 2008 financial crisis. An uneven approach to compensation risks exacerbating those strains at a time when most of the company is working from home and collaboration is at a premium.While compensation on Wall Street is always a balancing act, the circumstances were unusually tricky for Moynihan. Many traders and bankers had a great year, thriving as markets swung, and they expected to be rewarded. But Bank of America tripled its provisions for credit losses to more than $11 billion, anticipating that borrowers battered by the pandemic may default. Net income for the year plunged 35%.“You’ve got to pay for performance, and the shareholder has to benefit, too,” Moynihan said in the interview.Wall Street has been mostly conservative with 2020 remuneration. JPMorgan Chase & Co. and Goldman Sachs Group Inc. held compensation per employee in check, and Citigroup Inc. cut bonuses for dozens of top executives after the bank was reprimanded by regulators.Throughout, Bank of America reduced cash payouts and lengthened the vesting periods for normal stock awards. Without the new bonuses, many executives would have faced pay cuts, according to the people.In the interview, Moynihan said the company would be divvying up a total of $10 billion to $11 billion of incentive compensation for 2020. Investment bankers and traders typically get a greater share of their pay in equity than employees elsewhere in the company.“Our bonus pools are down year-over-year, yet some teammates made more money and some made less money,” Moynihan said.The cliff-vest provision is especially problematic for long-serving executives in corporate and commercial banking who expected to qualify for what’s known internally as the “rule of 60.” Previously, Bank of America let staff retire with all deferred pay so long as their age plus a minimum of 10 years served at the company equaled 60. That treasured perquisite now excludes the new bonuses.Exacerbating those frustrations, the people said, is the decision to exempt investment bankers from the vesting restrictions, seen as a golden handcuff, but enforce them for corporate bankers. Both groups are part of the same division -- global corporate and investment banking -- run by Matthew Koder.Such resentments have divided big banks for years. Throughout the industry, rainmakers who land multibillion-dollar merger mandates or big-ticket corporate financings are lionized and can pull down eight-figure pay packages. Meantime, traditional bankers responsible for lower-margin activities such as lending or cash management earn less and feel like second-class citizens.Bank of America’s powerful chief operating officer, Tom Montag, who joined with the Merrill acquisition, is widely seen as loyal to traders and investment bankers. Some veterans in commercial banking feel they’re being punished unfairly for the pandemic, a calamity beyond their control, the people familiar with the situation said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Savita Subramanian, Bank of America’s widely followed strategist, points to opportunities in financials, energy, industrials, and health care.
Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios. This week we posed the following question to over 1,000 traders and investors about Microsoft Corporation (NASDAQ: MSFT): Over the next year, should Microsoft try to acquire AMD, Nvidia or Micron? Advanced Micro Devices, Inc. (NASDAQ: AMD) Nvidia Corporation (NASDAQ: NVDA) Micron Technology, Inc. (NASDAQ: MU) Buy none Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three main segments: productivity and business processes (Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server) and personal computing (Windows Client, Xbox, Bing search, display advertising, Surface laptops, tablets and desktops). At time of publication Microsoft’s market cap measures in at $1.83 trillion. For context, this figure exceeds the combined market caps of Nvidia ($336 billion), AMD ($106 billion) and Micron ($90 billion) three times over. See Also: How To Buy Microsoft Stock. Our survey found 32% percent of respondents saying Microsoft should move forward on an M&A with AMD in 2021. AMD designs and produces microprocessors for the computer and consumer electronics industries. The majority of the firm's sales are in CPUs and graphics processing units. Many traders and investors were vocal in their support of AMD, saying it has time and again proven itself with its processors and GPUs in the gaming industry. Respondents said AMD should be seriously considered as a top M&A contender with Microsoft, as the two tech companies have had several prior partnerships, including a recent Xbox Series X|S project which integrates full AMD RDNA 2 architecture. Next, 28% of traders and investors responded that Microsoft should complete an M&A with Nvidia this year. Nvidia is a leading designer of GPUs. The company’s chips are used in a variety of markets, including high-end PCs for gaming, in a GPU-accelerated AI shopping tool for Facebook, Inc. (NASDAQ: FB) and for autonomous driving tech in many Tesla Inc (NASDAQ: TSLA) electric vehicles. Respondents in this group cited Nvidia as an essential developer and leader in future chipmaking that has made a name for itself in the auto and bio-intelligence industries. An Nvidia acquisition would immediately bolster Microsoft’s mobile computing units. Only 6% of traders and investors saw a Microsoft-Micron M&A making sense during 2021. Respondents said Microsoft should look to acquire Micron’s ultra-bandwidth solutions, which are known to deliver maximum bandwidth to feed client’s data-hungry workloads like high-performance computing, artificial intelligence systems and professional visualization workstations, as traders believe these fields will continue to spike in demand amid a transition to long-term remote working conditions. Finally, 30% said Microsoft should not acquire any of the three companies. It’s worth noting that several respondents who were opposed to these M&As believed the Redmond-based tech giant would be better served focusing on research, development of cloud-based tech and a possible M&A in the cloud sector. This survey was conducted by Benzinga in February 2021 and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 1000 adults. Source Image: Wikimedia Commons by BenFranske See more from BenzingaClick here for options trades from BenzingaHere's Why Palantir, Pinterest, Ford, Activision Are MovingShould Amazon Try To Acquire Alibaba, Jumia Or eBay In 2021?© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
By John Jannarone and Jarrett Banks Electric aircraft startup Archer Aviation Inc. plans to go public by merging with a special purpose acquisition company, or SPAC, in a deal that will give the company a multibillion dollar valuation, according to people familiar with the matter. The announcement could come as early as next week, these people told IPO […]
Benzinga has examined the prospects for many investor favorite stocks over the past week. The week's bullish calls included the e-commerce, electric vehicle and online sports betting leaders. A COVID-19 vaccine maker and a struggling retailer were among the bearish calls seen. February started strong in the markets. Though the past week remained somewhat volatile, the three big U.S. indexes managed to post handy gains, led by the 6% or so rise in the Nasdaq. Hope for additional stimulus and a little improvement in the unemployment rate no doubt helped. Perhaps the week's biggest surprise, dropped among the remaining FAANG earnings reports, was news of a big tech management change that involved one of the world's richest persons. The GameStop kerfuffle moved on to its next chapter last week too, and another COVID-19 vaccine moved forward. Also, the electric vehicle leader was forced to recall cars. Finally, the new administration faced a fresh foreign policy challenge last week. And things were looking up for federal cannabis legalization. Through it all, Benzinga continued to examine the prospects for many of the stocks most popular with investors. Here are a few of this past week's most bullish and bearish posts that are worth another look. Bulls J.J. Kinahan's "Online Retail Sales Provide Strong Tailwinds For Amazon" discusses how Amazon.com, Inc. (NASDAQ: AMZN) may be under pressure to show continuous innovation for its retail business and beyond when the pandemic wanes, but it appears to be up to the challenge, at least in the foreseeable future. "Tesla Gets A Street High ,200 Price Target: 'The Fireworks Aren't Over Yet'" by Shanthi Rexaline examines why a key analyst is dissuading investors from selling Tesla Inc (NASDAQ: TSLA) stock. Will any downside catalyst that materializes be met with eager buying? In "Ark Funds Bet On Growth Of Sports Betting With DraftKings Addition," Chris Katje is focused on why a renowned fund manager is betting on DraftKings Inc (NASDAQ: DKNG). Could the fund take a larger position in this market leader? Will it add additional companies with exposure to the sports betting market? Priya Nigam's "Why This Comcast Analyst Is Turning Bullish: 'Best-In-Class Cable Business'" shows that Comcast Corporation (NASDAQ: CMCSA) seems to be moving in the right direction and its stock should outperform over the next 12 months. General Electric Company (NYSE: GE) has posted better-than-expected fourth-quarter industrial free cash flow. So says Wayne Duggan's "Analyst Raises General Electric Target Following FCF Deep Dive." But is the company being overly cautious with its guidance? For additional bullish calls of the past week, also have a look at the following: 5 Stocks That Could Make A Comeback In A Reopening Economy Top 5 Innovation Trends To Watch For In 2021 As More Countries Legalize Cannabis, A Booming Global Marketplace Will Follow Bears In Shanthi Rexaline's "Moderna Analyst: Unrealistic COVID-19 Vaccine Expectations Create Unfavorable Setup," find out how an extended Moderna Inc (NASDAQ: MRNA) rally has made the stock increasingly difficult to justify on a fundamental basis. The valuation of Bed Bath & Beyond Inc. (NASDAQ: BBBY) was too rich for one top analyst, according to "KeyBanc Downgrades Bed Bath & Beyond On Valuation, Competition" by Priya Nigam. This downgrade came even though the analyst thinks highly of the retailer's turnaround plan. In Jayson Derrick's "3 eBay Analysts On Q4 Beat, Valuation, 'Compelling Growth' In Shoes, Watches," see why some analysts remain cautious on eBay Inc (NASDAQ: EBAY) stock even though the company reported better than expected quarterly results. "JPMorgan Says Gogo's Stock 'More Than Fully Valued' After Flying Higher By 39%" by Jayson Derrick makes the case that Gogo Inc (NASDAQ: DASH) stock is "more than fully valued" according to a top analyst. See why there is unlikely to be a further short squeeze here. For more bearish takes, be sure to check out these posts: This 2009 Playbook Suggests Trouble Ahead For The S&P 500 10 Most Heavily-Shorted Stocks On The Russell 3000 At the time of this writing, the author had no position in the mentioned equities. Keep up with all the latest breaking news and trading ideas by following Benzinga on Twitter. See more from BenzingaClick here for options trades from BenzingaBarron's Latest Picks And Pans: Roundtable Picks, Quantumscape, Commodities And MoreBenzinga's Bulls And Bears Of The Week: Apple, Boeing, Netflix, Starbucks And More© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Congress has fast tracked the Biden stimulus plan. Stimulus progress helped fuel the stock market rally, but it's looking extended. Apple, Disney leads 5 actionable Dow stocks.
Ark Invest's Cathie Wood on her typical day.
Respected economists were quick to point out the lack of demand for money relative to rapidly expanding supply, slack in the lockdown economy, and prevailing expectations for deflation based on recent history. The warning signs of market mania are evident in Bitcoin (up 300% in a year), the deluge of SPAC IPOs (always a signal of a top), exorbitant P/E ratios, and rapidly rising real estate prices.
There are much better places an investor can put their hard-earned cash, whether they want an aggressive or a moderate name.
California Public Employees Retirement System disclosed the buying in a securities filing. Shares of both the EV maker and the videogame company took off last year.
Many utility stocks have remained unloved through much of the pandemic, their attractive yields and reliable dividends notwithstanding.
Advanced Micro Devices stock is trading near record-high territory on expectations for continued market share gains in processors for PCs and servers. Is AMD stock a buy right now?
The Dow Jones rallied as Kamala Harris cast her first tiebreaking vote in the Senate to advance a coronavirus stimulus package. GameStop stock rallied.
We’ve got a full month of 2021 behind us now, and a few trends are coming clearer. The coronavirus crisis may still be with us, but as vaccination programs expand, the end is in sight. With President Trump out of the picture, and the Democrats holding both Houses of Congress and the White House, politics is looking more predictable. And both of those developments bode well for an economic recovery this year. Looking back, at the year that was, we can also see some trends that stayed firm despite the pandemic, the shutdowns, and the supercharged election season. One of the most important is the ongoing rollout of 5G networking technology. These new networks bring with them a fuller realization of the promises inherent in the digital world. Faster connections, lower latency, higher online capacity, clearer signals – all will strongly enhance the capabilities of the networked world. And it won’t just be mundane things like telecommuting or remote offices that will benefit – 5G will allow Internet of Things and autonomous vehicles to further develop their potential. There is even talk of medical applications, of remotely located doctors performing surgery via digitally controlled microsurgical tools. And these are just the possibilities that we can see from now. Who know what the future will really bring? To this end, we pulled up TipRanks’ database to learn more about three exciting plays in the 5G space. According to the Street, we are likely to see further interesting developments in the next few years as this technology takes over. Skyworks Solutions (SWKS) The first 5G name we’re looking at, Skyworks, is a semiconductor chip manufacturer that brought in $3.4 billion in total revenues for FY2020. Skyworks, which is a prime supplier of chips for Apple’s iPhone series, saw a massive 68% year-over-year increase in 1QFY21 revenues – the top line reached $1.51 billion, a company record, and also much higher than analysts had forecast. Much of Skyworks’ fiscal Q1 sales success came after Apple launched the 5G-capable iPhone 12 line. Strong sales in the popular handset device meant that profits trickled down the supply line – and Skyworks channels a disproportionate share of its business to Apple. In fact, Apple orders accounted for 70% of Skyworks’ revenue in the recent quarter. iPhone wasn’t the only 5G handset on the receiving end of Skyworks’ chips, however – the company is also an important supplier to Korea’s Samsung and China’s Xiaomi, and has seen demand rise as these companies also launch 5G-capable smartphones. Finally, Skyworks supplies semiconductor chip components to the wireless infrastructure sector, specifically to the ‘small cell’ transmission units which are important in the propagation network of wireless signals. As the wireless providers switch to 5G transmission, Skyworks has seen orders for its products increase. In his note on Skyworks for Benchmark, 5-star analyst Ruben Roy writes: “SWKS significantly beat consensus estimates and provided March quarter guidance that is also well ahead of consensus estimates as 5G related mobile revenue and broad-based segment revenue continued to accelerate… In addition to continued strength of design win momentum and customer activity, we are encouraged with SWKS confident tone relative to the overall demand environment and content increase opportunities.” In line with his comments, Roy rates SWKS a Buy along with a $215 price target. At current levels, this implies an upside of 20% for the coming year. (To watch Roy’s track record, click here) Roy is broadly in line with the rest of Wall Street, which has assigned SWKS 13 Buy ratings and 7 Holds over the past three month -- and sees the stock growing about 15% over the next 12 months, to a target price of $205.69.(See SWKS stock analysis on TipRanks) Qorvo, Inc. (QRVO) Qorvo’s chief products are chipsets used in the construction of radio frequency transmission systems that power wifi and broadband communication networks. The connection of this niche to 5G is clear – as network providers upgrade their RF hardware to 5G, they also upgrade the semiconductor chips that control the systems. This chip maker has a solid niche, but it is not resting on its laurels. Qorvo is actively developing a range of new products specifically for 5G systems and deployment. This 5G radio frequency product portfolio includes phase shifters, switches, and integrated modules, and contains both infrastructure and mobile products. Qorvo posted $3.24 billion in total revenues for fiscal 2020. That revenue represents a 4.8% year-over-year increase – and the company’s sales have been accelerating in fiscal 2021. The most recent quarterly report, for the second fiscal quarter, showed $1.06 billion in revenues, a 31% yoy increase. Rajvindra Gill, 5-star analyst with Needham, is bullish on Qorvo’s prospects, noting: “Qorvo reported strong sales and gross margins as 5G momentum rolls into CY21 on atypical seasonality... The company is planning for 500M 5G handsets to be manufactured in 2021, with an incremental $5-7 of content/unit from 4G to 5G. Management believes that ultra-wideband adoption will be a key growth driver in for smartphones going forward..." To this end, Gill puts a $220 price target on QRVO shares, suggesting room for 31% upside in 2021. Accordingly, he rates the stock a Buy. (To watch Gill’s track record, click here) What do other analysts have to say? 13 Buys and and 6 Holds add up to a Moderate Buy analyst consensus. Given the $192.28 average price target, shares could climb ~15% from current levels. (See QRVO stock analysis on TipRanks) Telefonakiebolaget LM Ericsson (ERIC) From chipsets, we’ll move on to handsets. Ericsson, the Swedish telecom giant has long been a leader in mobile tech, and is well known for its infrastructure and software that make possible IP networking, broadband, cable TV, and other telecom services. Ericsson is the largest European telecom company, and the largest 2G/3G/4G infrastructure provider outside of China. But that is all in the background. Ericsson is also a leader in the rollout of Europe’s growing 5G networks. Ericsson is involved in 5G rollout in 17 countries in Europe, the Americas, and Asia, and its product line includes infrastructure base units and handsets, giving the company an interest in all aspects of the new 5G networks. Ericsson’s revenue performance in 2020 was not notably distressed by the corona crisis. Yes, the top line dipped in Q1, but that was in line with the company’s historical pattern of rising revenue from Q1 through Q4. While the company’s 1H20 revenues showed small yoy declines, the 2H20 gains were higher. In Q3, the $6.48 billion top line was up 8.7% yoy, and Q4’s $8.08 billion revenue was up 17% from the prior year. The company’s shares have also performed well during the ‘corona year,’ and show a 12 month gain of 64%. Raymond James’ 5-star analyst Simon Leopold bluntly assigns Ericsson’s recent gains to its participation in 5G rollouts. “Japan's awaited 5G roll-out has started. Share gains continue as Ericsson benefits from challenges facing its biggest competitors and more operators embrace 5G… it seems obvious that Ericsson should be gaining market share... Competitor Nokia shunned the Chinese 5G projects, citing profitability challenges, yet Ericsson appears to be profiting in the challenging region.” Leopold rates this stock an Outperform (i.e. Buy), and his $15 price target implies an upside potential of ~14% for the year ahead. (To watch Leopold’s track record, click here) The Raymond James analyst, while bullish on ERIC, is actually less so than the Wall Street consensus. The stock has a Strong Buy consensus rating, based on a unanimous 5 reviews, and the $16.50 average price target indicates 25% growth potential from the share price of $13.19. (See ERIC stock analysis on TipRanks) To find good ideas for 5G 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 analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Americans have questions about how to fund their retirement, prioritize their financial goals and pay off debts — and MarketWatch has answers. In a three-part series, “Mastering Your Money,” MarketWatch editors and reporters speak with panelists to help people get a handle on their finances. The next two sessions, held on Feb. 10 and Feb. 17, will include sessions about taxes, insurance, estate planning and retirement savings.
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