The titans of finance were shaken last week by a subculture of day traders on the internet, whose viral machinations caused the stock price of computer game retailer GameStop to skyrocket in a matter of days, costing hedge funds billions of dollars. Correspondent David Pogue breaks down this complex controversy and examines the anti-Wall Street culture that has prompted calls to revise stock trading rules.
- FX Empire
Overall currency markets are confronted by a crucial yet extremely cautious week ahead. Price ranges this week are running at the widest points in many months and adds to the potential of big moves.
- FX Empire
It’s a busy week ahead on the economic calendar. Impressive economic indicators could fuel further concerns over inflation and monetary policy…
Last week's monstrous winter storm in Texas, which triggered millions of blackouts and "boil water" notices, is resulting in what could be "the largest claims event and costliest storm in the state's...
(Bloomberg) -- Oil demonstrated its resilience in the week’s opening session, rebounding from the biggest slump since November ahead of a key OPEC+ production-setting meeting.Futures in New York rose toward $63 a barrel after losing 3.2% on Friday. The alliance gathers on Thursday and is expected to return some barrels to a market off to its quickest ever start to a year. But it’s unclear how vigorously the group will act, with the Saudi Arabian energy minister calling for producers to remain “extremely cautious.” A weaker dollar also supported oil prices.See also: OPEC+ Faces Calls to Cool Oil Market Frenzy With Extra BarrelsIn addition to OPEC+ cuts, crude’s recovery from the impact of the pandemic has been driven by Asian demand, as well as fiscal and monetary stimulus in top economies. Data on Monday showed most key manufacturing economies gained ground last month, with China remaining in expansionary territory. In the U.S., President Joe Biden’s $1.9 trillion Covid relief package moved a step closer to realization after it passed the House of Representatives.Saudi Arabia’s output reductions, the improving demand outlook, and growing popularity of commodities as a hedge against inflation have pushed oil higher this year. There has been a raft of bullish calls in recent weeks predicting crude’s rally will continue as the producer response trails consumption, while maintenance in North Sea fields is set to reduce supply.“The OPEC+ meeting is very important,” said Michael McCarthy, chief markets strategist at CMC Markets Asia Pacific. The “market could remain easily positive in the face of a modest increase in OPEC+ production. If there is a large increase, then it could dampen the outlook in the short term,” he said.Oil has staged a strong rebound as a recovery in demand coincided with deep output cuts by OPEC+, amounting to just over 7 million barrels a day, or 7% of global supply. This week, the Saudis will confirm if they’ll return as scheduled an extra 1 million barrels that was taken offline. A continuation of current curbs, however, could trigger a further surge.Brent’s prompt timespread was 71 cents a barrel in backwardation, a bullish structure with near-dated prices above later-dated ones. That compares with 25 cents at the start of February and discount at the beginning of the year.Crude sank on Friday as a strengthening dollar damped the appeal of commodities priced in the currency, and amid escalating concerns around inflation and ructions in the Treasury market. Yet, the American benchmark still managed to rally nearly 18% in February for a fourth monthly gain.Investors are also tracking shifts in the Middle East as the Biden administration recalibrates the U.S. relationship with Saudi Arabia. In addition, an explosion struck an Israeli-owned cargo ship sailing out of the Middle East on Friday.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.
- FX Empire
Investors are selling bonds in anticipation of higher inflation, driving up interest rates while making the U.S. Dollar a more attractive asset.
The personal finance guru says plan now for the new $1,400 payment now before Congress.
(Bloomberg) -- Deals targeting logistics companies in China have delivered the best start to the year on record, generating bumper profits for private equity firms.About $5.5 billion worth of acquisitions of Chinese logistics firms have been announced so far this year, the strongest first quarter ever, according to data compiled by Bloomberg. Warburg Pincus LLC and MBK Partners are among the firms that have recently profited from selling their stakes in companies in the red-hot sector.Buyout firms have been betting heavily on assets like warehouse space well before China’s increasingly affluent consumers joined the shift toward e-commerce, which was turbo-charged by the coronavirus pandemic. Even after these latest transactions, dealmakers see investment in Chinese logistics assets continuing to rise.“We’re seeing an increase in valuation for logistics properties, particularly in higher growth areas around China’s first-tier cities,” said Justin Wai, a Hong Kong-based managing director of real estate at Blackstone Group Inc. “This is a reflection of the underlying strength of the warehouse leasing market as well as demand from e-commerce.”Blackstone began investing in logistics more than a decade ago, driven by conviction that e-commerce trends would spur the need for warehouses. Logistics is now the firm’s largest exposure overall, comprising more than a third of its real estate portfolio globally.Time To ExitWarburg Pincus, one of the biggest modern warehousing investors in Asia, capitalized early on its long-term investment in Chinese logistics. The firm reaped a return of more than 10 times on its investment in ESR Cayman Ltd., said a person familiar with the matter, after the company went public in Hong Kong in 2019. Last year, Warburg reduced its stake to less than 5%.The firm has also invested in New Ease China, which focuses on shipments through China’s airports and urban hubs, and Beijing Yunniao Technology Co., a short-haul logistics platform that matches shippers and truckers, according to Warburg Pincus’ website.The pandemic has helped spark more deals for warehouses needed to store goods ordered online as well as the transportation networks to deliver them. Chinese e-commerce revenue is set to surpass 50% of the country’s total retail sales this year, making it the first nation to do the majority of its shopping online, according to researcher EMarketer.“We’re seeing volumes at record highs, propelling earnings and share prices,” said Michael Hufton, head of Asia Pacific transportation and logistics at Morgan Stanley based in Hong Kong. “That’s given boards more confidence about pursuing deals.”Along with warehousing, transportation-related logistics assets are in demand. MBK Partners sold Apex International Corp. last week in a deal valuing the freight forwarder at about $1.5 billion, giving it a gain of about five times its investment, another person familiar with the matter said, asking not to be named as the information is private.Representatives for Warburg Pincus and MBK Partners declined to comment.Next StepsAs some firms take profits, others are pursuing deals to scale up, such as SF Holding Co.’s $2.3 billion takeover of tycoon Robert Kuok’s Kerry Logistics Network Ltd. or Blackstone’s purchase in November of a majority stake in a 1.2 million square meter logistics park in Guangzhou for $1.1 billion.The upcoming Hong Kong initial public offering of JD.com Inc.’s logistics arm, which is backed by private equity firms including Hillhouse Capital, Sequoia Capital China and Carlyle Group Inc., could raise about $5 billion, Bloomberg News has reported, arming the company with cash for potential acquisitions.“We’re poised to see more M&A deals in logistics over the coming years as companies seek to offer more integrated services,” James Teo, a Bloomberg Intelligence analyst based in Singapore, said in a phone interview. “There are still plenty of target opportunities for the bigger players to buy and build on their capabilities, especially many local and more niche players across China.”One path to expansion is to tap areas like cold storage, which has taken on critical importance as countries aim to roll out vaccines and other supplies to fight the coronavirus. It also supports grocery delivery, a contested battleground among e-commerce firms. FountainVest Partners bought a majority stake in cold chain specialist CJ Rokin Logistics Supply Chain Co. on Thursday for 733.8 billion won ($656 million).Shanghai ANE Logistics Ltd., a less-than-truckload shipping operator backed by Carlyle Group, is weighing a Hong Kong initial public offering that could raise about $500 million, Bloomberg News has reported.Read More: Alibaba, Pinduoduo Fight Against China’s Looming Food Crisis“Scale is important in logistics,” said Morgan Stanley’s Hufton. “Large Asian and international players are very keen on bulking up on certain geographic areas, including China and southeast Asia, and some specific areas including cold storage and freight forwarding.”(Updates with additional Warburg Pincus investments in seventh 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.
Japanese companies are ramping up the use of artificial intelligence and other advanced technology to reduce waste and cut costs in the pandemic, and looking to score some sustainability points along the way. Disposing of Japan's more than 6 million tonnes in food waste costs the world's No.3 economy some 2 trillion yen ($19 billion) a year, government data shows. With the highest food waste per capita in Asia, the Japanese government has enacted a new law to halve such costs from 2000 levels by 2030, pushing companies to find solutions.
- FX Empire
U.S mortgage rates were on the rise at the end of the month, with rising U.S Treasury yields driving rates up amidst a rising house price environment.
(Bloomberg) -- Turkey’s $736 billion economy outperformed major competitors in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed, data will likely show Monday.Gross domestic product probably rose 6.9% from a year earlier, according to the median of 20 forecasts in a Bloomberg survey, more than in any other G-20 nation, including China. The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year.The data will expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.“The key drivers of the economic activity in the last quarter were industrial production and credit growth,” said Can Ayan, an Istanbul-based economist at Aktif Bank, who ranks second among forecasters of Turkish GDP data. Consumption and government spending will support activity in the first quarter of 2021, lifting growth over the year to 5.2%, Ayan said.The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid-19 emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.Agbal has raised the benchmark interest rate by 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”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) -- Warren Buffett conceded a mistake with one of his biggest deals in recent years: the $37.2 billion purchase of Precision Castparts Corp. in 2016.“I paid too much for the company,” the billionaire investor said Saturday in his annual letter. “No one misled me in any way -- I was simply too optimistic about PCC’s normalized profit potential.”Buffett’s Berkshire Hathaway Inc. took an almost $11 billion writedown last year that was largely tied to Precision Castparts, the maker of equipment for aerospace and energy industries based in Portland, Oregon.Precision Castparts has struggled as the coronavirus pandemic slashed demand for flights, prompting airlines to park jets and reduce schedules. That means less need for replacement parts and a big drop in aircraft purchasing. Precision slashed its workforce by about 40% last year, according to Berkshire’s annual report.And the slump in travel is expected to persist, leading to more pressure on the supply chain, according to the International Air Transport Association. Passenger traffic may be limited to as little as a third of pre-pandemic levels, the group said.Buffett said in 2020 that the airline industry had probably changed for good, explaining his decision to drop his holdings in four major carriers.“Last year, my miscalculation was laid bare by adverse developments throughout the aerospace industry, PCC’s most important source of customers,” Buffett 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.
See the returns you would have gotten by investing your first, $1,200 payment last spring.
- Yahoo Finance
Buffett, 90, isn’t slowing down much and seems poised to lead Berkshire Hathaway into the post-pandemic world.
(Bloomberg) -- The U.K. is set to introduce a mortgage guarantee program to help people get on the property ladder, after the housing market enjoyed a recession-defying surge.The program will bring back 95% mortgages to help aspiring homeowners who have smaller deposits, the Treasury department said in a statement. Chancellor Rishi Sunak is expected to announce the scheme during Wednesday’s budget.The much-anticipated budget will be the first look into a post-pandemic economy after Prime Minister Boris Johnson announced his road-map out of lockdown earlier this month.The U.K.’s housing market has been bolstered by a moratorium on stamp duty charged on property purchases, which saved buyers up to 15,000 pounds ($20,900). That’s due to expire at the end of next month, but there are reports that Sunak could prolong the exemption. First-time buyers or current homeowners looking to buy a house for up to 600,000 pounds will just need a 5% deposit to secure a mortgage. The government will offer lenders the guarantee they need when the program starts in April.“Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder,” Prime Minister Boris Johnson said in a statement.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.
What do Tesla, Square, bitcoin, and Shopify have in common? Wood’s “disruptive innovation” fund has posted a 140% gain over the past year, blowing away the 21% gain of the broader US stock market. ARK’s most surprising forecast is of its own backlash: “I think it’s likely that at some point, people will think that ARK was a scam, and that we don’t know our left from our right,” research director Brett Winton told Bloomberg this month.
- Motley Fool
Part of the problem with investing in individual companies is that to do it well, it generally takes a lot of work. That's why ETFs can play such an important role in your plans. With a strong ETF, you can dramatically simplify the effort you need to make while still building a nest egg that can get you from $0 to millionaire status well within the span of a typical career.
India's conglomerate Reliance Industries has partnered with Facebook Inc, Google and fintech player Infibeam to set up a national digital payment network, Economic Times newspaper reported on Saturday, citing unnamed sources. Last year, India's central bank invited companies to forge new umbrella entities (NUEs) to create a payments network that would rival the system operated by the National Payments Council of India (NPCI), as it seeks to reduce concentration risks in the space.
The payments in President Biden's COVID relief plan will rely on an IRS formula.
As Washington awaits the House of Representatives' vote on the $1.9 trillion COVID-19 relief bill on Friday, California Governor Gavin Newsom signed a coronavirus aid package worth $7.6 billion,...
- Yahoo Finance
After last week's volatile bout of stock trading, investors this week are set to focus on new labor market data, as well as a dwindling batch of quarterly earnings results.