Stocks Retreat, U.S Futures Rally; Oil Bounces: Markets Wrap

Stocks Retreat, U.S Futures Rally; Oil Bounces: Markets Wrap
Emily Barrett and Andreea Papuc
·3 min read

(Bloomberg) -- Global stocks weakened from record highs Tuesday and struggled for direction as investors weighed corporate earnings and recent spikes in virus cases. Oil prices rose above $64 a barrel on the anniversary of their plunge below zero.

Shares were mostly lower in Asia, with the exception of South Korea and Hong Kong, where delivery giant Meituan raised $9.98 billion from a record top-up placement and a convertible bonds sale. U.S. futures rallied after the S&P 500 Index fell overnight and the tech-heavy Nasdaq 100 Index underperformed. European contracts edged lower.

A seventh-straight session of declines in the U.S. dollar helped oil prices rally to their highest levels in a month. The commodity-linked Australian dollar outperformed Group-of-10 peers.

Investors are awaiting further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace. The bright spot in the latest reports was the first revenue gain for International Business Machines Corp. in eleven quarters. Even with this latest pullback in major indexes, and the latest grim news on the spread of Covid-19, global stocks are not far from record highs.

“We do think the market is a little overextended here,” Dave Sekera, chief U.S. market strategist at Morningstar Investment Services, told Bloomberg TV, adding that broad U.S. equities look about 5% overvalued. “Having said that we do still see value in a couple of areas, the value category being one.”

Meanwhile, China President Xi Jinping used a speech to the annual Boao Forum Tuesday to pledge cooperation on global challenges from climate change to the pandemic, and called on the U.S. and its allies to avoid “bossing others around.”

Here are some key events to watch this week:

Apple’s first product unveiling of the year on Tuesday.EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data

These are some of the main moves in markets:

Stocks

S&P 500 futures were up 0.2% as of 7:30 a.m. in London. The S&P 500 fell 0.5%. The Nasdaq 100 dropped 1%Japan’s Topix Index slid 1.6%The Shanghai Composite was flatHong Kong’s Hang Seng Index was steadyKorea’s Kospi Index gained 0.7%Australia’s S&P/ASX 200 Index slipped 0.7%Euro Stoxx 50 futures were down 0.1%

Currencies

The yen slipped 0.1% to 108.31 per dollarThe offshore yuan was up 0.3% at 6.4916 per dollarThe Bloomberg Dollar Spot Index fell 0.1%The euro was 0.1% higher at $1.2052

Bonds

The yield on 10-year Treasuries gained two basis points to 1.62%

Commodities

West Texas Intermediate crude rose 1.1% to $64.08 a barrelGold was down 0.2% at $1,768.03 an ounce

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Recommended Stories

  • China's Meituan raises US$10 billion from sale of shares, convertible bonds in food-delivery giant

    Meituan, China's largest food delivery platform, is raising about US$10 billion in a flash sale on Monday of shares and convertible bonds. It is also offering up to US$3 billion worth of zero-coupon convertible bonds in two tranches, one due in 2027 and the other maturing in 2028. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Meituan plans to use the proceeds for the research and development of autonomous-delivery vehicles, drones delivery and other innovations, as well as for general corporate purposes. Drones are becoming an efficient way to carry packages on the "last mile" of delivery. alt=Drones are becoming an efficient way to carry packages on the "last mile" of delivery.> Shenzhen-headquartered technology giant Tencent Holdings has undertaken to subscribe up to US$400 million worth of Meituan shares at the same price as the top-up placement. The six-year convertible bonds come with an investor put in year four, while the seven-year convertible bonds are puttable in year five, the terms sheet showed. Revenues rose 35 per cent to 37.9 billion yuan in the quarter ended December, beating the 36 billion yuan estimated by a Bloomberg analyst survey, and up from 28 billion yuan during the same period in 2019. Meituan co-founder and chief executive Wang Xing acknowledged that community group buying was a drag on profits, but emphasised the company's commitment to the model, calling it a rare opportunity for growth. The company warned that continued investment in this segment would likely lead to losses in future quarters. Meituan has recently sought to consolidate its food delivery service and use community group buying to expand beyond China's biggest cities. Meituan Select is one of China's leading services in the market, which offers cheaper groceries for people who join together to buy in bulk, a popular service in lower-tier cities. The market continues to expand in China despite recent regulatory scrutiny. After the share placement is completed, Meituan and Wang are subject to a lock up on their remaining shares of 90 days. Chinese equity and equity-linked (ECM) proceeds witnessed a record start to the year with US$72.2 billion raised in the first three months, a 142.8 per cent increase compared to the same period last year. Follow-on share sales totalled US$24.2 billion, up 126.9 per cent year on year. Chinese convertibles, or equity-linked issuance, grew 81.7 per cent from a year ago and amounted to US$14.4 billion, the highest start since 2019, according to data provider Refinitiv. High technology accounted for 30.7 per cent of China ECM activity, raising US$22.1 billion in proceeds, a significant 621.9 per cent increase from a year ago. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

  • Japan's Subaru to suspend production in Indiana on chip shortage

    TOKYO (Reuters) -Japanese automaker Subaru Corp said on Tuesday that it was suspending production at its plant in Indiana through the end of April due to a global shortage of semiconductors. Automakers from Ford Motor to Nissan Motor have cut production due to the shortage of chips, used extensively in new cars for automatic windows, parking assistance and entertainment systems. A Subaru spokeswoman said 15,000 vehicles for North America would be affected.

  • Why Tesla Stock Dropped on Monday

    Shares of Tesla (NASDAQ: TSLA) were hit hard on Monday. The growth stock's decline is likely due to two primary factors, including a car crash over the weekend involving a Tesla and a generally bearish day in the overall stock market -- particularly for growth stocks. Two men died in a car crash involving a Tesla this weekend.

  • CEO Debacle at Danske Bank Draws Warning From Shareholders

    (Bloomberg) -- Danske Bank A/S has once again lost a chief executive, ushered out under yet another cloud of scandal. Denmark’s main shareholder group says the question now is whether there’s such a thing as a qualified CEO with a perfectly clean record.The biggest Danish bank stunned investors on Monday when it revealed it was parting ways with Chris Vogelzang, its third CEO in as many years. The 58-year-old is leaving Danske after becoming the subject of an investigation tied to his former employer, ABN Amro, and its alleged failure to live up to anti-money laundering laws.Read: Danske Bank CEO Quits After Being Named in ABN Amro Probe Mikael Bak, the head of the Danish Shareholders’ Association, says Vogelzang’s departure is “regrettable.” He also says it’s possible that the modern-day “code of ethics, in a way, makes it difficult to recruit top managers.”“It’s good for society that the ethical judgment is tough,” he said. “But when it becomes so tough that it limits the number of candidates for top managerial positions, it may become problematic from a shareholder’s point of view.”Danske’s board chose Vogelzang back in 2019, after a drawn-out and difficult process. The bank, which is itself being investigated in the U.S. and Europe for its role at the center of a vast Estonian laundering scandal, had fired Thomas Borgen as CEO in late 2018. Efforts to get Danske’s chief financial officer promoted to the top job backfired when the Danish regulator said he wasn’t experienced enough. An interim CEO was then kicked out after he got caught up in a separate scandal.‘Very Careful’Vogelzang was thoroughly vetted, according to Chairman Karsten Dybvad, whose predecessor was ousted for failing to prevent Danske’s laundering scandal. “We really looked into everything at that time. We were very careful.” So news of the Dutch criminal investigation was a “surprise,” Dybvad said by phone.Read: Ex-ABN Banker Running Danske Says He Knows Nothing of Dutch CaseDanske’s board has now promoted its chief risk officer, Carsten Egeriis, to the top job. The 44-year-old former Barclays Plc CRO points out that he’s had “more than 20 years of experience across various different financial services and institutions.”“I’m very comfortable in the work and the decisions that I have done in that career so far,” Egeriis said by phone. Dybvad said the Danish regulator has already told Danske that Egeriis can be CEO.Denmark’s financial laws and regulations, including those guiding qualifications for executives and board members, have been tightened considerably since Danske’s money laundering scandal erupted in late 2018. The bank admitted in September of that year that a large part of 200 billion euros ($240 billion) in non-resident funds that flowed through a now-shuttered Estonian unit was suspicious.‘Thin Ethical Line’Denmark’s government would be willing to look into making changes to existing financial legislation if the regulator deems it necessary, said Olav Hav, a spokesman for the ruling Social Democrats on the parliamentary committee overseeing bank laws.“If the Danish FSA sees a need to make adjustment to rules, I am confident that both parliament and the government will listen very closely to that,” he said. The regulator declined to comment.Meanwhile, Hav said that it’s “a concern that people with the necessary experience to enter Danske Bank at this level can only be recruited among people working very closely to the thin ethical line in the international world of finance.”Egeriis says bank CEOs have to accept the new rules of the game, which he says require being “hyper-vigilant” when it comes to the risk of financial scandals.“There is clearly a lot that’s happened in the banking industry in terms of improving controls and processes, and investments,” he said. “But it is not easy and it is something that takes up a lot of management time and will continue to do so.”(Adds comments from newly appointed CEO in final paragraphs)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.

  • China plans $3 billion supercomputing centre to analyse data from space

    China's southern space port of Wenchang will build a $3 billion supercomputing centre by year-end to analyse data obtained from space, according to state media on Tuesday. With a planned investment of 20 billion yuan ($3.1 billion), the supercomputing centre will provide big data services for industries including the aerospace and marine sectors starting in 2022, state-backed Hainan Daily said. In the next decade, China envisions massive constellations of commercial satellites that can offer services ranging from high-speed internet for aircraft to tracking coal shipments.

  • Scrutiny of latest Tesla crash may be a sign that regulation is coming

    The fiery crash of a Tesla near Houston with no one behind the wheel is drawing scrutiny from two federal agencies that could bring new regulation of electronic systems that take on some driving tasks.

  • EU seeks greater Taiwanese investment as chip shortage bites

    The European Union is seeking to encourage greater investment from Taiwan especially its semiconductor firms, the bloc's top diplomat in Taipei said on Tuesday, amid a global chip shortage that has impacted auto makers like Volkswagen. Tech powerhouse Taiwan, home to companies like Taiwan Semiconductor Manufacturing Co Ltd (TSMC), has become front and centre of efforts to resolve that shortfall, whose impact is now being felt in consumer electronics too. German Economy Minister Peter Altmaier wrote to Taiwan's government this year asking for help to ease tight chip supplies, and Europe is also encouraging more chip production at home.

  • Stocks Slump as Virus Cases Rise

    New Delhi was put into a week-long lockdown, as India reported its highest daily coronavirus infection toll since the Covid-19 pandemic started.

  • Tesla Stock Up As Musk Says Autopilot, FSD Not Involved In Crash

    A Tesla that appeared to not be driven by anyone crashed on Saturday, but CEO Elon Musk said driver-assistance features were not enabled.

  • Dow Jones, Nasdaq Trade Near Lows; Several Bank Stocks Break Out; Coca-Cola Rises On Earnings

    The Dow Jones Industrial Average traded moderately lower in today's stock market as major indexes eased after hitting record highs last week.

  • Elon Musk denies Autopilot to blame for fatal Tesla crash

    One victim was found in the front passenger seat and the other was in the back after the accident in Texas.

  • AUD/USD Forex Technical Analysis – Sustained Move Over .7728 Could Trigger Surge into .7770 – .7826

    The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.

  • Tesla Vs. Nvidia: Which Stock Chart Looks Like The Better Buy?

    Tesla Inc. (NASDAQ: TSLA) and NVIDIA Corp. (NASDAQ: NVDA) are two popular stocks among traders. Here’s a look at each stock’s chart to see which may be the better buy. Read more here about why the stocks are moving. Tesla Daily Chart Analysis: The stock recently bounced off the 50-day moving average (green). The stock is trading above the 200-day moving average (blue), indicating bullish sentiment. These moving averages may hold as support in the future. Key Levels To Watch: The $800 level previously held as resistance on the chart and could do so again in the future. The $600 level recently held as support and potentially will again in the future. The stock is in a channel between these two price levels and would need to cross one to possibly see a more powerful move. Nvidia Daily Chart Analysis: The stock is trading above the 50-day moving average (green). The stock is trading above the 200-day moving average (blue), indicating bullish sentiment. These moving averages may hold as support in the future. Key Levels To Watch: The $600 level previously held as resistance on the chart before breaking out, the stock needs to consolidate above this area to see another potential push upwards. The $475 level recently held as support and potentially will again in the future. The stock is in a channel between these two price levels and would need to cross one to possibly see a more powerful move. The Better Buy? Both stocks may be solid investments for long term holders. Traders need to decide themselves whether or not to buy a stock. Tesla needs to bounce and hold the support level, and Nvidia needs to consolidate above the previous resistance level. Photo courtesy of Nvidia. See more from BenzingaClick here for options trades from BenzingaAMD Vs. Nvidia: What Do The Charts Say Is A Better Buy Right Now?3 Robinhood Stocks Looking To Break Out Of Resistance Soon© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Meituan Raises $10 Billion to Fight Alibaba in Grocery Arena

    (Bloomberg) -- Chinese delivery giant Meituan has raised $9.98 billion from a record top-up placement and a convertible bonds sale as it doubles down on efforts to fight the likes of Alibaba Group Holding Ltd. in newer areas such as online groceries.The nation’s third-largest internet company has sold 187 million shares in a top-up placement at HK$273.80 each, near the top end of its marketed range, and also raised $400 million from shareholder Tencent Holdings Ltd., according to terms of the deal obtained by Bloomberg News. The $7 billion new stock issuance is the largest-ever such sale by a Hong Kong-listed company, data compiled by Bloomberg show. Meituan has also sold $2.98 billion in zero-coupon convertible bonds.Meituan’s shares were volatile on Tuesday, trading up 1.2% as of 10:28 a.m. in Hong Kong, after having fallen as much as 1.8% earlier. The placement price represents a discount of 5.3% to the stock’s closing price Monday. The convertible bonds are divided in two tranches -- $1.48 billion six-year notes and $1.5 billion seven-year paper, the terms showed.“There were some rumors about the placement last week, now that overhang is gone,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Demand for the placement was strong near the top end of the range. I heard the issue was taken up very quickly.”The stock and bond sales come as Meituan grapples with the cost of competing against the likes of Alibaba and Pinduoduo Inc. in newer spheres such as community e-commerce and online groceries. The company has warned it will remain in the red for several more quarters despite record revenues as it spends heavily on new initiatives.Meituan intends to use the proceeds from the offerings for technology innovations, including the research and development of autonomous delivery vehicles, drones delivery, and other cutting-edge technology, and general corporate purposes, the terms showed.“It makes sense to raise money to make more of a shift into autonomous delivery, seek to delve into more technology-focused areas especially under the backdrop of the anti-monopoly” drive, said Zhou Luyun, an analyst at Northeast Securities Co. in Shanghai. “The pricing shows that the market buys this blueprint.”Community buying is one of Meituan’s chief expansion areas, where buyers in the same neighborhood enjoy bulk discounts on fresh produce. But the firm faces entrenched competition from other Internet giants.All three main ratings agencies lowered their outlook on Meituan after it reported earnings last month, with S&P Global Ratings and Moody’s Investors Service saying that its large investments in community e-commerce would come at a heavy cost, generate negative free cash flow and dampen earnings.“After this placement, some short-term investors could sell the stock and shares could trade in a range of HK$250-HK$300 for a while,” said Paul Pong, managing director at Pegasus Fund Managers Ltd. “In the medium to longer term, online platform operators like Meituan and Tencent still have a solid growth outlook.”Meituan’s focus on developing fast-growing new businesses comes as China’s economic recovery has helped the world’s largest meal-delivery service increase orders, while its hotels and travel businesses have benefited from a rebound in domestic travel when the country reined in the pandemic.The company has begun using self-driving vehicles for grocery delivery in the Chinese capital since the Covid-19 outbreak last year, with at least 15,000 orders being completed so far, Wang Xing, the company’s chief executive officer, told analysts during a conference call in March. Wang said Meituan is also experimenting with how to deliver food using drones in the southern Chinese city of Shenzhen.Tencent is delving deeper into Meituan at a time global investors are souring on the Chinese tech sector due to heightened regulatory scrutiny. Meituan had lost some $123 billion of its value from a Feb. 17 high through Monday, pummeled by fears that Beijing’s crackdown on Jack Ma’s Internet empire will expand beyond Alibaba and Ant Group Co. to engulf other sector leaders like Tencent and Meituan.“They are going into new areas including group purchases and those need a lot of capital and they need a war chest to compete,” said Kerry Goh, chief investment officer at Kamet Capital Partners Pte. “Valuations are still pretty decent compared to a year ago.”Bank of America Corp. and Goldman Sachs Group Inc. are joint global coordinators and joint bookrunners for both the bond and equity offerings. CLSA Ltd. and UBS Group AG are also joint bookrunners for the top-up placement.(Updates Meituan’s share move in the third paragraph, adds another quote in the fourth 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.

  • Fitbit launches new fashion forward Fitbit Luxe tracker, its first under Google

    Fitbit's new Luxe tracker, its first since being acquired by Google, is designed to provide fitness and mental wellness tracking.

  • GameStop shares soar after CEO departure news, 'RoaringKitty' doubles stake

    GameStop shares were on a tear early Monday, as Kieth "RoaringKitty" Gill announced he was doubling his stake in the firm and CEO George Sherman said he is stepping down.

  • Afghanistan's war — and America's stakes in it — won't end when the troops leave

    The battle for Afghanistan began long before American troops arrived in 2001, and won't end when the last U.S. soldier is gone.

  • White House: No guarantees about Afghanistan's future post-pullout

    WASHINGTON (Reuters) -No one can offer guarantees about Afghanistan's future after U.S. troops leave, a top White House official said on Sunday, even as he stressed the United States would stay focused on terrorist threats emanating from the country. President Joe Biden announced on Wednesday that the United States will withdraw its remaining 2,500 troops from Afghanistan by Sept. 11, the 20th anniversary of the al Qaeda attacks that triggered America's longest war.

  • Coinbase Hangover Rattles Crypto Assets With Bitcoin Falling

    (Bloomberg) -- The mania that drove crypto assets to records as Coinbase Global Inc. went public last week turned on itself on the weekend, sending Bitcoin tumbling the most since February.The world’s biggest cryptocurrency plunged as much as 15% on Sunday, just days after reaching a record of $64,870. It subsequently pared some of the losses and was trading at about $57,000 at around 1:25 p.m. in Tokyo Monday.Ether, the second-biggest token, dropped below $2,000 over the weekend before also paring losses. The volatility buffeted Binance Coin, XRP and Cardano too. Dogecoin -- the token started as a joke -- bucked the trend and is up 25% over 24 hours, according to CoinGecko.The weekend carnage came after a heady period for the industry that saw the value of all coins surge past $2.25 trillion amid a frenzy of demand for all things crypto in the runup to Coinbase’s direct listing on Wednesday. The largest U.S. crypto exchange ended the week valued at $68 billion, more than the owner of the New York Stock Exchange.“With hindsight it was inevitable,” Galaxy Digital founder Michael Novogratz said in a tweet Sunday. “Markets got too excited around $Coin direct listing. Basis blowing out, coins like $BSV, $XRP and $DOGE pumping. All were signs that the market got too one way.”Dogecoin, which has limited use and no fundamentals, rallied last week to be worth about $50 billion at one point before stumbling Saturday. Demand was so brisk for the token that investors trying to trade it on Robinhood crashed the site a few times Friday, the online exchange said in a blog post.There was also speculation Sunday in several online reports that the crypto plunge was related to concerns the U.S. Treasury may crack down on money laundering carried out through digital assets. The Treasury declined to comment, and its Financial Crimes Enforcement Network (FinCEN) said in an emailed response on Sunday that it “does not comment on potential investigations, including on whether or not one exists.”‘Price to Pay’“The crypto world is waking up with a bit of a sore head today,” said Antoni Trenchev, co-founder of crypto lender Nexo. “Dogecoin’s 100% Friday rally was ‘peak party,’ after the Bitcoin record and Coinbase listing earlier in the week. Euphoria was in the air. And usually in the crypto world, there’s a price to pay when that happens.”Besides the “unsubstantiated” report of a U.S. Treasury crackdown, Trenchev said factors for the declines may have included “excess leverage, Coinbase insiders dumping equity after the direct listing and a mass outage in China’s Xinjiang province hitting Bitcoin miners.”Growing mainstream acceptance of cryptocurrencies has spurred Bitcoin’s rally, as well as lifting other tokens to record highs. Bitcoin’s most ardent proponents see it as a modern-day store of value and inflation hedge, while others fear a speculative bubble is building.Interest in crypto went on the rise again after companies from PayPal to Square started enabling transactions in Bitcoin on their systems, and Wall Street firms like Morgan Stanley moved toward providing access to the tokens to some of the wealthiest clients.VolatilityThat’s despite lingering concerns over their volatility and usefulness as a method of payment. Moreover, governments are inspecting risks around the sector more closely as the investor base widens.Federal Reserve Chairman Jerome Powell last week said Bitcoin “is a little bit like gold” in that it’s more a vehicle for speculation than making payments. European Central Bank President Christine Lagarde in January took aim at Bitcoin’s role in facilitating criminal activity, saying the cryptocurrency has been enabling “funny business.”Turkey’s central bank banned the use of cryptocurrencies as a form of payment from April 30, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses.(Updates prices in the second and third paragraphs.)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.

  • Steel Dynamics (STLD) Surpasses Q1 Earnings and Revenue Estimates

    Steel Dynamics (STLD) delivered earnings and revenue surprises of 6.06% and 8.21%, respectively, for the quarter ended March 2021. Do the numbers hold clues to what lies ahead for the stock?