TORONTO, March 7, 2021 /CNW/ -
Sunday 07/03/2021
PICK-2: 3 8
PICK-3: 8 5 8
PICK-4: 1 0 3 9
ENCORE: 5695131
DAILY KENO
1, 4, 10, 14, 15, 16, 22, 26, 34, 37,
46, 48, 58, 59, 62, 64, 65, 66, 68, 70.
SOURCE OLG Winners
View original content: http://www.newswire.ca/en/releases/archive/March2021/07/c7928.html
(Bloomberg) -- Apple Inc. has slumped 15% since late January. Tesla Inc. has lost more than a quarter-trillion dollars in market value in three weeks. And more than $1.5 trillion has been wiped off the Nasdaq 100 in less than a month.And yet, none of it has been enough to rattle the retail investor.Instead, to borrow a Reddit phrase describing bullish gumption, they’ve had diamond hands. Since the market peaked a few weeks ago, retail traders have plowed cash into U.S. stocks at a rate 40% higher than they did in 2020, which was a record year. They’re opting for parts of the market that have suffered the most, doubling down in arguably risky ways with triple-leveraged tech funds and options galore.A year out from the Covid-19 stock crash, with individual traders now making up nearly a quarter of U.S. volume on any given day, battle lines are forming. Some of the favored speculative bets that minted money on the way up -- electric-vehicle stocks, special purpose acquisition companies and green energy plays to name a few -- are the same securities that are buckling now as bond yields rise.Retail traders, many of them newbie investors, have consistently held strong, buying virtually every dip during what’s been the best start to a bull market in nine decades. But now the world is wondering how much it’ll take for them to call it quits, especially after a year in which retail traders were right way more often than wrong.“Historically it’s been a bad signal that retail investors are piling into the market and a signal of a top,” said Arthur Hogan, chief market strategist at National Securities Corp. “And every time we tried to call a top in 2020 because of retail participation, it was wrong.”As stocks swooned over the last three weeks, retail investors snapped up an average of $6.6 billion in U.S. equities each week, according to data from VandaTrack, an arm of Vanda Research that monitors retail flows in the U.S. market. That’s up from an average $4.7 billion in net weekly purchases in 2020.They’ve doubled down on areas of the market that have been hit the hardest. Apple, which has plunged 15% since late January, was the most-popular retail buy this past week. NIO Inc., the electric-vehicle maker down almost 40% since Feb. 9, was the second-most popular. Next up were exchange-traded funds tied to the Nasdaq 100, the Invesco QQQ Trust Series 1 (ticker QQQ) and a triple leveraged version (ticker TQQQ).On Thursday, when the Nasdaq 100 fell as much as 2.9%, almost 32 million bullish call options traded across U.S. exchanges, the fifth-most on record. The other four have all occurred within the last four months.Equity ETFs added almost $7 billion of fresh money during the first four days of March, building on a record $83 billion that flooded in last month, data compiled by Bloomberg Intelligence show. In fact, even before March began, flows into U.S.-listed ETFs were off to their best start to a year on record, out-pacing the prior best start -- which was in 2017 -- by over 74%, according to Matt Bartolini, State Street Global Advisors’ head of SPDR Americas Research.“There’s a lot of excess liquidity and we just had this $600 check going to many families in January,” said Jimmy Chang, chief investment officer of Rockefeller Global Family Office. “We’re going to get an additional liquidity injection in the $1,400 check and part of that money is going into risk assets.”Karim Alammuri, a 31-year-old marketing strategy manager, is one of many retail investors who’s been snapping up stocks. In recent days, he bought shares of fuboTV Inc. and SPAC Churchill Capital Corp IV. Fubo TV has plunged more than 50% since a December peak. Churchill Capital has lost almost 60% of its value in 11 trading sessions.“I plan on sticking around because I don’t want to take a loss,” he said by phone from New York. “A lot of very attractive stocks are on crazy discount right now, so I’m just looking to see how I can re-shuffle things to be able to buy them.”With an army of retail investors standing ready to buy any dip, those declines have grown shallower and shallower. The S&P 500 has gone without a 5% pullback since early November, or 83 straight days, the longest streak in a year.The end result of persistent dip buying is a market with little downside. At its lowest closing level of 2021, the S&P 500 was only down 1.5% year-to-date. That’s the smallest drawdown at this time of a year since 2017.If past is precedent, that could mean the sell-off has more room to run. Retail investors tend to buy the initial dips, and it’s not until they capitulate and sell that markets ultimately bottom, according to Eric Liu, co-founder and head of research at Vanda Research. The firm’s data show that was the case in both selloffs in 2018, as well as roughly a year ago during the Covid crash.To Victoria Fernandez, chief market strategist for Crossmark Global Investments, their continued presence in the markets likely means elevated volatility will persist. Still, that doesn’t mean retail investors’ efforts are misguided.“Is there some dumb money in retail trades? Yes. But not all of it,” she said. “Some of these people are doing their homework, looking for opportunities and trying to take advantage of it. Some win, some lose -- it’s really not that different than what professionals do on an institutional basis.”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) -- It’s in the air again, on Reddit, in Congress, in the C-suite: Hedge funds that get rich off short-selling are the enemy. The odd thing is, the biggest players in the game are getting a pass.Those would be the asset managers, pension plans and sovereign wealth funds that provide the vast majority of securities used to take bearish positions. Without the likes of BlackRock Inc. and State Street Corp., the California Public Employees’ Retirement System and the Kuwait Investment Authority filling such an elemental role, investors such as Gabe Plotkin, whose Melvin Capital Management became a piñata for day traders in the GameStop Corp. saga, wouldn’t have shares to sell short.“Anytime we short a stock, we locate a borrow,” Plotkin said Feb. 18 at the House Financial Services Committee hearing on the GameStop short squeeze.There’s plenty to choose from. As of mid-2020, some $24 trillion of stocks and bonds were available for such borrowing, with $1.2 trillion in shares -- equal to a third of all hedge-fund assets -- actually out on loan, according to the International Securities Lending Association.It’s a situation that on the surface defies logic. Given the popular belief that short sellers create unjustified losses in some stocks, why would shareholders want to supply the ammunition for attacks against their investments? The explanation is fairly straight forward: By loaning out securities for a small fee plus interest, they can generate extra income that boosts returns. That’s key in an industry where fund managers are paid to beat benchmarks and especially valuable in a world of low yields.The trade-off is simple: For investors with large, diversified portfolios, a single stock plummeting under the weight of a short-selling campaign has little impact over the long run. And in the nearer term, the greater the number of aggregate bets against a stock -- the so-called short interest -- the higher the fee a lender can charge.In the case of GameStop, short interest was unusually high and shares on loan were generating an annualized return of 25% to 30%, Ken Griffin testified at the Feb. 18 hearing. Griffin operates a market maker, Citadel Securities, as well as Citadel, one of the world’s largest hedge funds.“Securities lending is a way for long holders to generate additional alpha,” said Nancy Allen of DataLend, which compiles data on securities financing. “Originally, it was a way to cover costs, but over the last 10 to 15 years it’s become an investment function.”Not everyone is comfortable with the inherent conflict. In December 2019, Japan’s $1.6 trillion Government Pension Investment Fund stopped lending its international stock holdings to short sellers, calling the practice inconsistent with its responsibilities as a fiduciary. At the time, the decision cost GPIF about $100 million a year in lost revenue.The U.S. Securities and Exchange Commission has regulated short-selling since the 1930s and polices the market for abuses such as naked shorting, which involves taking a short position without borrowing shares. Proponents of legal shorting argue that its use enhances liquidity, improves pricing and serves a critical role as a bulwark against fraud and hype.Chief executives, whose pay packages often depend on share performance, routinely decry short sellers as vultures. More recently, shorting has come under fire in the emotionally charged banter on Reddit’s WallStreetBets forum. Some speculators ran up the prices of GameStop, AMC Entertainment Holdings Inc. and other meme stocks in January to punish the hedge funds that bet against them, and they delighted when the rampant buying led to bruising losses at Melvin, Maplelane Capital and Citron Research.Many of the key actors in the GameStop frenzy testified at the Feb. 18 hearing. Plotkin was grilled by committee members over Melvin’s short position. Citadel’s Griffin and others faced broader questions about short-selling. Yet no one asked about the supply of borrowed shares and there were no witnesses called from the securities-lending industry.There’s a symbiotic relationship between hedge funds and the prime-brokerage units of Wall Street firms, much of it built on securities lending. Prime brokers act as intermediaries, sourcing stocks and bonds for borrowers who want to short them and facilitate the trades. According to DataLend, securities lending generated $2.9 billion of broker-to-broker revenue in 2020, almost the same as in 2019.Demand for short positions was already expected to drop as stock prices surged to all-time highs. Now, with the threat of retribution from the Reddit crowd, it may weaken even further. Griffin said he has “no doubt” there’ll be less short-selling as a consequence of the GameStop squeeze.“I think the whole industry will have to adapt,” Plotkin said at the hearing. “I don’t think investors like myself want to be susceptible to these types of dynamics.”This could not only threaten the dealers who broker stock lending but also the holders who supply the securities and share in the revenue. They reaped $7.7 billion globally in 2020, down from a record of almost $10 billion in 2018, according to DataLend. Lending fees increased by 4.2% on a year-over-year basis in February after the GameStop onslaught, DataLend says.While securities lending accounted for $652 million, or just 4%, of BlackRock’s revenue in the fourth quarter of 2020, there’s little cost involved and the risks are low because borrowers have to put up collateral that equals or exceeds the value of the loan. At both BlackRock and State Street Corp., the second-largest custody bank, the value of securities on loan as of Dec. 31 jumped at least 20% from a year earlier, to $352 billion and $441 billion, respectively.“Every little bit counts with indexes,” said John Rekenthaler, vice president of research at Morningstar. “You’re scraping nickels off the street, but there’s a whole lot of nickels.”Others could take a hit, too. Just as Robinhood Markets is able to offer zero-commission trades by selling its order flow to Citadel and other market makers, asset managers typically pass on some of their securities-lending revenue as a type of client rebate.“It’s very important to remember that institutional investors earn substantial returns from participating in the securities-lending market,” Citadel’s Griffin said at the GameStop hearing. “That accrues to the benefit of pension plans, of ETFs, of other pools of institutional lending that participate in the securities lending market.”(Adds data on lending fees after the short-interest chart.)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) -- Barclays Plc economists expect several developing nations to see “some tangible benefits” of the International Monetary Fund’s proposal to allocate $500 billion in reserve assets known as special drawing rights.The IMF’s chief said earlier this month that the institution is proceeding with work on the plan after the Group of 20 urged it to propose a fresh allocation of the fund’s reserve assets.Emerging-market countries will probably account for “no more than” $206 billion of the new SDR allocations, Barclays economists including Ercan Erguzel said in a report to clients.Bahrain could exchange its SDR holdings with Saudi Arabia to boost reserves, according to BarclaysThe distribution may also benefit Turkey, “where the central bank aims to reverse the downtrend in reserves”Barclays estimates that Zambia’s additional allocation could reach around $1.1 billion, or some 6% of gross domestic product, “thus placing the country in a less fragile position as it embarks on its debt restructuring talks”Countries including Egypt and South Africa also stand to gain from the increase in reservesFor South Africa, Barclays estimates that its foreign-exchange holdings may be boosted by the equivalent of some $3.2 billionThe government “could in fact come to some arrangement” with the South African Reserve Bank where the central bank “keeps the SDRs but Treasury liquidates an equivalent amount from its excess reserves at the SARB to fund its external borrowing commitments for the year”Momentum has been building for the injection of funds after U.S. Treasury Secretary Janet Yellen leaned toward supporting the action, reversing opposition last year under President Donald Trump. Her predecessor, Steven Mnuchin, blocked the move in 2020, saying that because reserves are allocated to all 190 members of the IMF in proportion to their quota, some 70% would go to the G-20, with just 3% for the poorest developing nations.“The Covid-19 pandemic has morphed into a global health crisis, necessitating closer global policy coordination to rein in infection spread,” the Barclays economists said in the note. “This has brought the IMF’s role as global ‘firefighter’ back to the centre stage.”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 report, which was produced in February 2021 and obtained by CoinDesk Friday, has been distributed to clients of JPMorgan Private Bank, which requires a minimum balance of $10 million to open an account.
(Bloomberg) -- Risk assets are poised start the week with a spring in their step as the $1.9 trillion economic stimulus plan approved by the U.S. Senate and a surge in China’s exports boost confidence in the global recovery.But it’s all likely to point to further gains in Treasury yields.President Joe Biden’s Covid-19 relief legislation, which passed on Saturday, exceeded many Wall Street estimates given the Democrats’ thin margin of control in the Senate. Though the measure next goes back to the House for a final vote, expected Tuesday, economists are already boosting their forecasts for growth.“The House and Senate plans still have to be reconciled before the bill becomes law, but financial markets will focus on the large headline number in the Senate’s version on Monday,” said Mansoor Mohi-uddin, chief economist at Bank of Singapore Ltd. “The news is likely to put upwards pressure again on yields at the start of the week as the Biden administration’s $1.9 trillion proposal is close to being passed in full, rather than being reduced as earlier expected.”The yield on the 10-year Treasury note reached 1.62% on Friday, the highest in more than a year, following stronger-than-expected U.S. jobs data -- putting the 2% level on the market’s radar.Almost exactly a year after the spread of the coronavirus ripped its way through global markets, traders are betting that the rollout of vaccines and additional government stimulus will all but guarantee an economic recovery -- as well as faster inflation. Still, Treasury Secretary Janet Yellen on Friday played down any concern that the recent surge in U.S. yields reflects expectations for an outsize breakout in inflation.The gyrations in U.S. real yields -- nominal yields minus inflation -- will set the tone for global markets, according to Eaton Vance Corp. The 10-year real yield ended the week at minus 0.67%, compared with about minus 1% a month ago.“To me the number one thing to focus on for broader markets is real yields,” said Eric Stein, chief investment officer of fixed income at Eaton Vance in Boston. “Nominal yields matter, but real yields are really what is driving things across financial markets.”All of which could mean declines in the U.S. dollar.“I still believe we have the conditions in place to see dollar weakness,” Stein said. “However, if U.S. Treasury yields continue to sell off and particularly at a pace and with the volatility we have seen recently, the weaker dollar trade will be challenged.”Federal Reserve Chairman Jerome Powell did little last week to indicate that the central bank might step in to assuage concerns about rising inflation, sparking a selloff in Treasuries. With policy makers in blackout ahead of the Fed’s next meeting on March 16-17, investors will focus on whether other monetary authorities “will follow the Fed’s relaxed stance on rising yields,” said Bank of Singapore’s Mohi-uddin.Bank of England Governor Andrew Bailey will be delivering a speech on Monday, while European Central Bank officials will set policy on Thursday.“If Bailey signals the BOE is willing to start slowing down its quantitative easing, then global bond yields will rise as the BOE will be the second major central bank after the Fed not to push back on rising yields,” Mohi-uddin 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.
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(Bloomberg) -- Brent crude now trades above fiscal breakeven prices for the four biggest oil producers in the Middle East after Saudi Arabia convinced fellow OPEC+ members to keep output largely unchanged.The shock move by OPEC+ triggered a rally in Brent prices, which rose to almost $70 a barrel. That’s higher than annual average levels needed for the cartel’s largest producers, including Saudi Arabia, to balance their budgets this year.If oil prices stay at current levels, “we would see fiscal surpluses for the larger Gulf Cooperation Council economies,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “This provides more fiscal space to support economic activity and recovery.”Analysts at Goldman Sachs Group Inc. and JPMorgan Chase & Co. raised their price forecasts for Brent after the OPEC decision, while Citigroup Inc. said crude could top $70 before the end of this month.Budget deficits in the Arab Gulf, where economies are reliant on oil, widened after prices crashed in 2020. OPEC+ agreed last year to take about 10% of global supply off the market to stem the plunge and while the group has slowly rolled back some of those cuts, it is curtailing more than 7 million barrels of daily production.Still, Brent prices have averaged just over $59 so far this year -- below the breakeven level for most gulf countries. Saudi Arabia, the Arab world’s largest economy and OPEC’s biggest producer, has posted successive budget shortfalls in the past seven years, a trend expected to continue into 2024, according to projections from the International Monetary Fund.Despite higher oil prices, “key non-oil sectors will continue to be impacted by the pandemic,” Malik said. “It will also be a balancing act for oil producers to manage the tightening in the oil market, whilst not halting the global recovery outlook.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The prospect of rising inflation and U.S. Treasury yields may damp emerging-market sentiment, even as encouraging Chinese trade data points to a speedier global recovery from last year’s lockdown.Exports from the world’s second-biggest economy soared in the first two months of the year, data showed Sunday, reflecting a recovery in external demand and providing a much-needed boost for risk assets after a turbulent start to March. Meantime, the U.S. Senate passed a $1.9 trillion stimulus package Saturday that may offer an additional spur to countries such as Mexico whose economies are most sensitive to U.S. growth.Though equities may get a lift, anxiety remains high in the bond market after Federal Reserve Chairman Jerome Powell’s dovish message last week stopped short of trying to rein in the surging yields. An index of dollar-denominated debt in the developing world dropped for a fourth week in its longest losing streak since 2018. Local-currency notes also slid amid selloffs from Poland to Hungary and Mexico.“All fixed-income assets face a challenging market as rates and inflation become more of a threat,” said Abdul Kadir Hussain, the Dubai-based head of fixed-income asset management at Arqaam Capital. “Emerging markets are no different. We have already seen outflows from emerging-market fixed-income funds, and I suspect that will continue in the near term.”Inflation data this week will offer evidence of whether that caution is merited. Economists expect consumer prices to have picked up in nations including Taiwan, India and Brazil. Elsewhere, Peruvian policy makers will probably keep the nation’s key interest rate at a record low of 0.25%.Inflation WatchTaiwan’s consumer prices probably rose last month after declining in January, according to a Bloomberg survey before the report on Tuesday. Export figures the same day may reveal growth slowed in February after the island exported a record the previous monthThe improving global trade outlook and backdrop for exports will probably buoy the Taiwan dollar, according to Gao Qi, a currency strategist at Scotiabank in SingaporeIndia’s consumer-price inflation probably accelerated further above the central bank’s 4% target, a Bloomberg survey showed. That could limit its capacity to keep monetary conditions accommodativeThose figures may put further upward pressure on Indian bond yields, which are already at a 10-month highA reading of Brazil’s February consumer-price inflation on Thursday will be the last before the central bank meets later this month to decide on the key policy rateEconomists expect that inflation climbed last monthMexico’s February inflation probably increased amid higher non-core prices, data on Tuesday may showArgentina is likely to report another month of high inflation when it releases February figures on ThursdayInvestors will also monitor Chile’s February inflation data on Monday, which will probably be slightly above the midpoint of the 3.0% +/- 1 percentage point target, according to Bloomberg EconomicsKey DataChinese data due this week will provide another update on the nation’s economy after authorities announced a conservative growth target for this year at the National People’s Congress on FridayAfter containing the pandemic and becoming the only major economy to expand in 2020, officials now want to address imbalances such as a dependence on investment in property and infrastructure funded by corporate debtAggregate financing numbers for February due between March 9 and 15 may show a slowdown due to seasonal factors. Inflation figures on Wednesday are expected to show consumer prices dropped for a second month in February, further enhancing the allure of Chinese bondsBrazil’s January economic activity and retail sales figures will also be released next week, offering clues on the pace of a rebound in Latin America’s largest economyIn politics, traders will watch for progress on an emergency spending bill as it moves through the lower house. Jitters over fiscal spending have contributed to the real becoming the worst-performing currency in emerging markets this yearTurkey’s January current-account deficit due Thursday may narrowThe lira has posted losses for two straight weeksREAD: Economist Who Called 2018 Turkey Crash Sees New Boom, BustSouth Africa will report its fourth-quarter current-account surplus on Thursday, which is forecast to have narrowedThe country is also expected to report manufacturing production data on the same dayOn Friday, Mexico will post January industrial production figures, which will give investors a better look at how activity is recoveringPeruvian policy makers will probably keep a dovish outlook on Thursday by holding borrowing costs at 0.25%, the lowest among major Latin American economies, according to a forecast by Bloomberg EconomicsFor 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) -- It’s not just in meme stocks that the fate of short sellers is a key theme. Short bets are increasingly in vogue in the $21 trillion Treasuries market, with crucial implications across asset classes.The benchmark 10-year yield reached 1.62% Friday -- the highest since February 2020 -- before dip buying from foreign investors emerged. Stronger-than-expected job creation and Federal Reserve Chair Jerome Powell’s seeming lack of concern, for now, with leaping long-term borrowing costs have emboldened traders. In one telltale sign of which way they’re leaning, demand to borrow 10-year notes in the repurchase-agreement market is so great that rates have gone negative, likely part of a move to short the maturity.The trifecta of more fiscal stimulus ahead, ultra-easy monetary policy and an accelerating vaccination campaign is helping bring a post-pandemic reality into view. There are of course risks to the bearish bond scenario. Most prominently, yields could rise to the point that they spook stocks, and tighten financial conditions generally -- a key metric the Fed is focused on for guiding policy. Even so, Wall Street analysts can’t seem to lift year-end yield forecasts fast enough.“There’s a lot of tinder being put now on this fire for higher yields,” said Margaret Kerins, global head of fixed-income strategy at BMO Capital Markets. “The question is what is the point that higher yields are too high and really put pressure on risk assets and push Powell into action” to try and tamp them down.Share prices have already shown signs of vulnerability to increasing yields, especially tech-heavy stocks. Another area at risk is the housing market -- a bright spot for the economy -- with mortgage rates jumping.The surge in yields and growing confidence in the economic recovery prompted a slew of analysts to recalibrate expectations for 10-year rates this past week. For example, TD Securities and Societe Generale lifted their year-end forecasts to 2% from 1.45% and 1.50%, respectively.Asset managers, for their part, flipped to most net short on 10-year notes since 2016, the latest Commodity Futures Trading Commission data show.Auction PressureIn the days ahead, however, BMO is eyeing 1.75% as the next key mark, a level last seen in January 2020, weeks before the pandemic sent markets into a chaotic frenzy.A fresh dose of long-end supply next week may make short positions even more attractive, especially after record-low demand for last month’s 7-year auction served as a trigger to push 10-year yields above 1.6%. The Treasury will sell a total of $62 billion in 10- and 30-year debt.With expectations for inflation and growth taking flight, traders are signaling that they anticipate the Fed may have to respond more quickly than it’s indicated. Eurodollar futures now reflect a quarter-point hike in the first quarter of 2023, but they’re starting to suggest that it could come in late 2022. Fed officials have projected they’d keep rates near zero until at least the end of 2023.So while the market is leaning toward loftier yields, the interplay between bonds and stocks is bound to be a huge focus going forward.“There’s definitely that momentum, but the question is how well risky assets adjust to the new paradigm,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. “We’ll be watching next week, when the dust settles after the payrolls data, how Treasuries react and how risky assets react to the rise in yields.”What to WatchThe economic calendarMarch 8: Wholesale trade sales/inventoriesMarch 9: NFIB small business optimismMarch 10: MBA mortgage applications; CPI; average weekly earnings; monthly budget statementMarch 11: Jobless claims; Langer consumer comfort; JOLTS job openings: household change in net worthMarch 12: PPI; University of Michigan sentimentThe Fed calendar is empty before the March 17 policy decisionThe auction calendar:March 8: 13-, 26-week billsMarch 9: 42-day cash-management bills; 3-year notesMarch 10: 10-year notesMarch 11: 4-, 8-week bills; 30-year bondsFor 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) -- Elon Musk set records last year for one of the fastest streaks of wealth accumulation in history. The reversal is underway, and it’s steep.The Tesla Inc. chief executive officer lost $27 billion since Monday as shares of the automaker tumbled in the selloff of tech stocks. His $156.9 billion net worth still places him No. 2 on the Bloomberg Billionaires Index, but he’s now almost $20 billion behind Jeff Bezos, who he topped just last week as world’s richest person.Musk’s tumble only underscores the hard-to-fathom velocity of his ascent. Tesla shares soared 743% in 2020, boosting the value of his stake and unlocking billions of dollars in options through his historic “moonshot” compensation package.His gains accelerated into the new year. In January, he unseated Bezos as the world’s richest person. Musk’s fortune peaked later that month at $210 billion, according to the index, a ranking of the world’s 500 wealthiest people.Consistent quarterly profits, the election of President Joe Biden with his embrace of clean technologies and enthusiasm from retail investors fueled the company’s rise, but for some, its swelling valuation was emblematic of an unsustainable frothiness in tech. The Nasdaq 100 Index fell for the third straight week on Friday, its longest streak of declines since September.Bitcoin InvestmentMusk’s fortune hasn’t been solely subject to the forces buffeting the tech industry. His net worth has risen and slumped recently in tandem with the price of Bitcoin. Tesla disclosed last month it had added $1.5 billion of the cryptocurrency to its balance sheet. Musk’s fortune took a $15 billion hit two weeks later after he mused on twitter that the prices of Bitcoin and other cryptocurrencies “do seem high.”Extreme volatility has roiled many of the world’s biggest fortunes this year. Asia’s once-richest person, Chinese bottled-water tycoon Zhong Shanshan, relinquished the title to Indian billionaire Mukesh Ambani last month after losing more than $22 billion in a matter of days.Read more: Ambani Again Richest Asian as China’s Zhong Down $22 BillionQuicken Loans Inc. Chairman Dan Gilbert’s net worth surged by $25 billion on Monday after his mortgage lender Rocket Cos. was said to be the next target of Reddit day traders. His fortune has since fallen by almost $24 billion. Alphabet Inc. co-founders Sergey Brin and Larry Page are among the biggest gainers on the index this year. They’ve each added more than $13 billion to their fortunes since Jan. 1.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.
As U.S. technology shares stumble, investors are debating whether the decline is an opportunity to scoop up bargains or a sign of more pain to come for stocks that have led markets higher for years. The Nasdaq Composite, an index heavily populated by tech and growth names, has slumped 8.3% since its Feb 12 closing record, over three times the decline for the S&P 500. Drops in popular growth stocks have been even steeper, with Tesla shares off 27% and Peloton down 32%.
(Bloomberg) -- The rally in oil prices has all but expunged any likelihood that Saudi Aramco will fail to meet its $75 billion dividend payout next year, according to Bank of America Corp.Far from missing the payment, the company may even boost it in 2022 as it increases production and benchmark crude prices head back toward $70 a barrel, the bank said.Aramco’s pledge to pay an annual $75 billion to shareholders during its first five years as a publicly traded company was thrown into doubt last year as oil tumbled amid the Covid-19 pandemic, prompting the company to slash spending and increase borrowing. It also put an additional strain on Saudi Arabia’s finances. The government, which owns 98% of Aramco after selling shares in a December 2019 initial public offering, has depended on the dividend to help plug its budget deficit.“Aramco would be well-placed to implement its higher dividend distribution guidance given during the IPO and even increase dividends beyond its minimum $75 billion pledge,” Bank of America analysts including Houston-based Doug Leggate and Karen Kostanian in Moscow said in a report. “Aramco is one of the few companies globally that can substantially boost output without committing additional capex.”Saudi Arabia, the world’s largest crude exporter, is benefiting as oil rebounds from last year’s slump amid OPEC+ production limits and signs of a global economic recovery. Brent, a benchmark for more than half the world’s oil, jumped 4.9% last week to $69.36 a barrel as of Friday, its highest close in almost two years.The potential for higher dividend payouts is already priced into Aramco’s stock, according to Bank of America, which left its target for the shares unchanged at 35 riyals. The shares rose as much as 2.3% to 36 riyals in Riyadh on Sunday. They have gained 2% this year.The bank’s report was published on Thursday, before a decision by the Organization of Petroleum Exporting Countries and partners like Russia to continue with its policy of supply restraints, which gave a further boost to prices.Saudi Arabia also said last week it would delay by an extra month plans to start returning 1 million barrels a day to the market, which gave a further boost to prices.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.
Personal finance guru Suze Orman said the receipt of a tax refund indicates "something's radically wrong," since the money returned to filers could otherwise have accrued value over the period it stood in the government's possession.
Confusion over building safety rules has left many people unable to move home without hard-to-obtain checks.
(Bloomberg) -- European Central Bank officials will set policy this week against a backdrop of investors betting on a global upturn even as the euro zone remains mired in pandemic lockdowns and painfully slow vaccinations.President Christine Lagarde will need to test her institution’s current stimulus plans against the challenges presented by those contrasting situations. While some of her colleagues have signaled concern over rising global bond yields, driven partly by the faster vaccine drive and bigger stimulus plans of the U.S., others are taking it in their stride for now. Investors will be watching Monday’s bond-buying data to see if the ECB ramped up purchases last week.Meanwhile the ECB will assess the damage to growth from another lost quarter, with lockdowns throughout the euro region freezing activity as health authorities’ immunization efforts struggle to gain traction compared with the U.K. and U.S. Along with the decision on Thursday, Lagarde will unveil new quarterly forecasts at a press conference.Where the Frankfurt institution can take some comfort is that it already has extensive stimulus in place. The centerpiece of that is its pandemic purchase program, whose original aim was to keep yields in check. That’s currently set to last at least another year.But sooner or later, as officials observe how a recovery takes shape, they are going to have to decide whether the support currently pledged with that tool is enough.What Bloomberg Economics Says:“The ECB has emphasized its intention to maintain favorable financing conditions in an effort to support the recovery. We anticipate a clear message from the Governing Council that higher bond yields are triggering an unwarranted tightening of conditions.”--Maeva Cousin, David Powell and Jamie Rush. For full preview, click here.Elsewhere, Canada, Serbia and Kazakhstan are among countries with interest-rate decisions, the OECD presents its latest economic forecasts, and the U.K. will release data that may show the initial impact of post-Brexit trading.Click here for what happened last week and below is our wrap of what is coming up in the global economy.U.S. and CanadaInvestors in the U.S. are watching for the latest consumer price data Wednesday as debate heats up over fears of inflation rising in pockets of the economy. Other reports due out this week include updates on the federal budget, weekly jobless claims and consumer sentiment. Federal Reserve policy makers are in blackout ahead of the central bank’s next meeting on March 16-17.President Joe Biden’s signature $1.9 trillion Covid-19 relief bill passed the Senate on Saturday, following a more than 25-hour marathon of amendment votes that was completed only after a lengthy interruption while Democrats settled an intra-party dispute over unemployment aid. The measure, the American Rescue Plan Act, now heads back to the House, where Majority Leader Steny Hoyer said a vote will be held Tuesday.Bank of Canada policy makers meeting Wednesday are likely to indicate they have no plans to withdraw stimulus from the economy any time soon, even as they prepare to adjust their quantitative easing program.For more, read Bloomberg Economics’ full Week Ahead for the U.S.Europe, Middle East, AfricaA turning point in the U.K.’s pandemic response is due on Monday, when schools in England reopen. The measure is an initial step unveiled as part of Prime Minister Boris Johnson’s plan to unlock the economy as vaccinations roll out.Britain’s other pressing economic challenge, its exit from the European Union, may feature in gross domestic product for January. That report on Friday will reveal a glimpse of the growth impact from the country’s new trading relationship with the bloc as of the start of this year, in addition to the third lockdown.The U.K.’s two most senior economic policy makers will also speak, with Bank of England Governor Andrew Bailey delivering a speech, and Chancellor of the Exchequer Rishi Sunak testifying to Parliament’s Treasury Committee about last week’s budget.In the euro region, policy makers will be bound to a quiet period before the ECB decision later in the week. German industrial production data for January on Monday will signal how the factory base there is weathering the global slump and a continuing lockdown.Elsewhere on the European continent, Serbia’s central bank will release its latest policy decision on Thursday, showing whether officials will keep the interest rate on hold at 1% for a third month after a surprise cut to that level in December.Data on Tuesday will probably show the South African economy still contracted from a year earlier in the three months through December, even as it’s expected to reflect strong quarter-on-quarter annualized expansion. Israel will move into the next stage of reopening its economy from lockdown restrictions, with restaurants and cafes that will be allowed to open for full service in the world’s most vaccinated country.For more, read Bloomberg Economics’ full Week Ahead for EMEAAsiaChinese inflation numbers on Wednesday and credit figures for February will all be closely watched after PMIs pointed to slowing momentum for the world’s No. 2 economy. Trade data on Sunday showed exports surged in the first two months of the year, reflecting strong global demand for manufactured goods, though figures were partly skewed by the low base in 2020 when the economy was in lockdown.Bank of Japan Deputy Governor Masayoshi Amamiya speaks on Monday ahead of a policy review later this month. The words of one of the principal architects of yield-curve control will be closely scrutinized for possible signaling from the central bank of what is in the pipeline.A raft of data including household spending, wages and bankruptcies will show how the Japanese economy was faring during the state of emergency, while revised GDP figures for the last quarter may show slightly slower growth after the release of weaker capital spending data last week.For more, read Bloomberg Economics’ full Week Ahead for AsiaLatin AmericaIn Chile on Monday, look for year-on-year inflation data to come in right around the 3% target, where expectations appear well-anchored, yet again.On Tuesday, Mexico’s inflation reports are the next-to-last price readings before the central bank’s March 25 meeting. The figures here may keep a quarter-point interest rate cut in play.In Brazil events have overtaken policy, with the February report out Thursday expected to show inflation bumping up against the top of target range. Economists see a strong likelihood of a half-point interest rate increase at next week’s central bank meeting while swap traders have priced that in with six more to follow by year-end.Later in the day, Argentina’s statistics agency posts consumer price data, and Peru’s central bank is expected to keep the key rate unchanged at 0.25%.The week concludes with January reports on Brazilian retail sales and Mexico’s industrial production.For more, read Bloomberg Economics’ full Week Ahead for Latin AmericaFor 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.
Is the market telling us that in the not too distant future, oil will no longer be sine qua non for Exxon, or even that Exxon will be driven out of business? Maybe to both, though not quite yet.
We could see a counter-trend rally by the Aussie and Kiwi over the near-term ahead of the Fed’s March 17 monetary policy announcements.
The legislation is advancing quickly. Here's how much you're likely to get, and when.
(Bloomberg) -- More than a third of Australian homeowners are planning to sell in the next five years, according to a report by Westpac Banking Corp., as they look to cash in on a booming market driven by low mortgage rates and an improving economy.The report showed 35% of households surveyed were considering selling, more than double the amount seen prior to the pandemic. More than one in ten were already in the process of putting their property on the market, or planning to do so in the next twelve months.“It is absolutely a seller’s market at the moment,” Matt Hassan, a senior economist at Westpac, said in a media release. “The research suggests the situation will rebalance in coming months as more sellers come onto the market, however demand is still expected to remain strong, driving a sustained lift in prices this year and next.”Australia’s housing market in February posted its biggest monthly price gain in 17 years, dispelling fears of a Covid-induced downturn. Economists think the gains can continue: Goldman Sachs Group Inc. said Friday that prices will rise 10% this year, fueled by low interest rates and improved sentiment, although the bank also noted there are risks ahead including a potentially more hawkish Reserve Bank.The Westpac report also pointed to lingering caution, with 51% of respondents saying they’re actively holding off from listing their property straight away, while 66% said high moving costs were a big barrier to selling.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) -- It’s the curse of a strengthening economy. With bond yields rising, chasing recent winners in the stock market has morphed from a slam-dunk strategy to a historically painful one.High-flyers from Tesla Inc. to Zillow Group Inc. and Chewy Inc. tumbled this week as the spike in rates put pressure on richly valued companies. Along with cannabis plays and solar stocks, these poster children for market froth are enduring losses that exceed 20% from recent highs, meeting one definition of a bear market.Thrust to the top have been oil producers and banks, laggards during last year’s lockdown that are coming back to life on hopes of an economic recovery. While winners and losers have to some degree offset each other, limiting damage in the broad bull market that has its one-year anniversary approaching, the violent rotation speaks to the agony of faulty stock picking, which right now means standing in the way of the reflation trade.“There’s probably more investors that still need to make that rotation,” said Tony Bedikian, head of global markets at Citizens Bank. “We’ve had such a strong run-up in many of these tech sectors. As the economy reopens and somewhat normalizes, that rotation will continue.”Down another 11% this week, shares of Tesla have lost almost one third of their market value since peaking in January. Star manager Cathie Wood’s Ark Innovation ETF, which counts Tesla as its top holding, shed 10% over past five days, wiping out all its 2021 gains that at one point swelled to 26%.Zillow, whose growing popularity in the online home listing market earned the company record profits during the fourth quarter, dropped 16% for its worst week since last April. Chewy, an online pet retailer whose shares tripled last year, slumped 18%, the biggest weekly decline on record.As oil rebounded, clean energy lost favor. An ETF tracking solar stocks suffered its worst week in a year, falling 14%.The pain from the reversal of fate is demonstrated by a Dow Jones market-neutral index that buys the past year’s winning stocks while selling losers at the same time. Down four weeks in a row, the momentum gauge has extended its decline from its August peak to 29%, the largest continual drawdown since 2009.At the center of the unwind are software and internet stocks, many of them newly minted companies whose role in stay-at-home commerce made them the only businesses generating earnings growth last year. Now, as profits are roaring back for everyone from automakers to banks, the allure of the safety trade is losing some luster. The tech-heavy Nasdaq 100, which surged 48% in 2020, this week briefly fell into a correction of 10%.“Clearly, with the emergence of real post-pandemic economic growth, investors are re-allocating capital,” said Andrew Ross, a managing member of Confluence Global Capital. “It’s totally reasonable that as the economy reopens, interest rates will rise further and that growth stock multiples will contract further. They are kind of toxic -- they became bond proxies.”Thanks to gains from energy and financial shares, the S&P 500 fared better. Up for the first week in three, the benchmark has avoided a 5% pullback from a peak for four months. The Dow Jones Industrial Average performed the best, adding almost 2% over five days.A key driver of stock performance is valuation. The more expensive a stock is, the worse it’s doing. Going by price-sales ratios, the top quintile of Russell 3000 shares dropped 5.1% on average over the week, compared with a gain of 3.6% for the cheapest cohort, data compiled by Bloomberg shows.“Pick whatever your prototypical momentum stock is -- the long-term earnings picture hasn’t changed in the last few weeks. What’s changed is the 10-year” yield, said John Porter, head of equities at Mellon Investments. “Those higher-growth, long-duration assets are the ones most sensitive to changes in interest rates.”To Anastasia Amoroso, global investment strategist at JPMorgan Private Bank, while the selloff in these darling stocks may feel unpleasant, it’s a healthy process for the market to squeeze out excesses.“Parts of the market like some tech names, as much as we like these, we have to admit there were some exuberance in those sectors,” she said in an interview on Bloomberg Television. “Those are some of the sectors we like the most but it was really hard to add to the sectors when we were looking at some of those eye-popping multiples.”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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