The heir to the chewing gum brand Wrigley struck a deal to take a cannabis company public in a merger with a Canadian firm.
(Bloomberg) -- Bond traders have been saying for years that liquidity is there in the world’s biggest bond market, except when you really need it.Last week’s startling gyrations in U.S. Treasury yields may offer fresh backing for that mantra, and prompt another bout of soul-searching in a $21 trillion market that forms the bedrock of global finance. While stocks are prone to sudden swings, such episodes are supposed to be few and far between in a government-debt market that sets the benchmark risk-free rate for much of the world.Yet jarring moves occur periodically in Treasuries, forming a bit of a mystery as no two events have been the same. Some point to heightened bank regulations in the wake of the 2008 financial crisis. Scrutiny over liquidity shortfalls intensified in October 2014 when a 12-minute crash and rebound in yields happened with no apparent trigger. Panic selling during the pandemic-fueled chaos a year ago, exacerbated when hedge funds’ leveraged wagers blew up, brought the issue to the fore again.And then came last week, when the gap between bid and offer prices for 30-year bonds hit the widest since the panic of March 2020.The latest events “are a stark reminder what happens when liquidity suddenly vanishes in the deepest, largest bond market,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors.At issue is whether this vast market is more vulnerable to sudden bouts of turbulence thanks to measures that have made it more difficult for banks to hold Treasuries. Some analysts say the tumult last week was magnified by questions over whether the Federal Reserve will extend an easing of bank capital requirements, which is set to end March 31. Put in place early on in the pandemic, the measure is seen as making it easier for banks to add Treasuries to their balance sheets.The 2014 episode triggered a deep dive into the market structure, and regulators have pushed through some changes -- such as increased transparency -- and speculation has grown that more steps to bolster the market’s structure may be ahead.“While the scale and speed of flows associated with the COVID shock are likely pretty far out in the tail of the probability distribution, the crisis highlighted vulnerabilities in the critically important Treasury market that warrant careful analysis,” Fed Governor Lael Brainard said Monday in prepared remarks to the Institute of International Bankers.There are plenty of potential culprits in last week’s bond-market tumble -- which has since mostly reversed -- from improving economic readings to more technical drivers. Ultra-loose Fed policy and the prospect of fresh U.S. fiscal stimulus have investors betting on quicker growth and inflation. Add to that a wave of convexity hedgers, and unwinding by big trend-following investors -- such as commodity trading advisers.Based on Bloomberg’s U.S. Government Securities Liquidity Index, a gauge of how far yields are deviating from a fair-value model, liquidity conditions worsened recently, though it was nothing like what was seen in March.For Zoltan Pozsar, a strategist at Credit Suisse, the action began in Asia with bond investors reacting to perceived hawkish signs from the central banks of Australia and New Zealand. That sentiment then carried over into the U.S. as carry trades and other levered positions in the bond market were wiped out. A disastrous auction of seven-year notes on Thursday added fuel to the unraveling.Last week’s drama “brings to mind other notable episodes in recent years in which a deterioration in the Treasury market microstructure was primarily to blame,” JPMorgan & Chase Co. strategist Henry St John wrote in a note with colleagues.One key gauge of Treasury liquidity -- market depth, or the ability to trade without substantially moving prices -- plunged in March 2020 to levels not seen since the 2008 crisis, according to data compiled by JPMorgan. That severe degree of liquidity shortfall didn’t resurface last week.The bond-market rout only briefly took a toll on share prices last week, with equities surging to start this week, following a sharp retreat in Treasury yields amid month-end buying.The Fed cut rates to nearly zero in March 2020, launched a raft of emergency lending facilities and ramped up bond buying to ensure low borrowing costs and smooth market functioning. That breakdown in functioning has sparked calls for change from regulators and market participants alike.GLOBAL INSIGHT: Recovery? Yes. Tantrum? No. Yield Driver ModelFor now, Treasuries have settled down. Pozsar notes that the jump in yields has provided an opportunity for some value investors to swoop in and pick up extra yield, effectively helping offset the impact of the leveraged investors who scrambled for the exits last week.“Some levered players were shaken out of their positions,” Pozsar said in a forthcoming episode of Bloomberg’s Odd Lots podcast. “It’s not comfortable -- especially if you’re on the wrong side of the trade -- but I don’t think that we should be going down a path where we should redesign the Treasury market.”(Updates with details on Bloomberg’s liquidity index in 10th paragraph, and a 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.
Boeing Co has raised concerns over the design of arch-rival Airbus' newest narrow-body jet, the A321XLR, saying a novel type of fuel tank could pose fire risks. But it comes at a pivotal moment as Boeing emerges from a two-year safety crisis over its competing 737 MAX, and Airbus faces its own crucial test of the tougher mood expected from regulators worldwide following the MAX's 20-month grounding. In a submission to the European Union Aviation Safety Agency (EASA), Boeing said the architecture of a fuel tank intended to increase the A321XLR's range "presents many potential hazards."
- Simply Wall St.
The big shareholder groups in Lloyds Banking Group plc ( LON:LLOY ) have power over the company. Institutions often own...
The personal-finance superstar doesn’t want you running out of coin in your golden years.
- Yahoo Finance
Unprovoked attacks targeting Asian Americans and Pacific Islanders have skyrocketed in recent months, prompting the public to demand that brands and their leaders speak up to denounce these hate crimes.
Venezuelan intelligence services monitored six U.S.-based executives of state-owned refiner Citgo Petroleum for a year on U.S. soil to determine their involvement in a deal the government deemed fraudulent, leading to their 2017 arrest in Caracas on corruption charges, according to court testimony. The executives, known as the Citgo Six, were sentenced by a Venezuelan court in November to between eight and 13 years in prison for corruption in a procedure the U.S. State Department labeled a "kangaroo court". Five of the men are naturalized U.S. citizens.
International Business Machines (IBM) announces that Siemens will leverage Red Hat OpenShift platform for its industrial IoT solution, MindSphere.
Bitcoin rose nearly 7% on Monday as risk assets rallied after last week's bond rout cooled, with Citi saying the most popular cryptocurrency was at a "tipping point" and could become the preferred currency for international trade. With the recent embrace of the likes of Tesla Inc and Mastercard Inc, bitcoin could be at the start of a "massive transformation" into the mainstream, the investment bank said. Goldman Sachs, meanwhile, has restarted its cryptocurrency trading desk and will begin dealing bitcoin futures and non-deliverable forwards for clients next week, a person familiar with the matter told Reuters.
An American father and son accused of helping former Nissan Motor Co Ltd Chairman Carlos Ghosn flee Japan arrived in Tokyo on Tuesday to face questioning from prosecutors and the prospect of charges that could carry a three-year prison term. The plane carrying U.S. Army Special Forces veteran Michael Taylor and his son Peter, who were extradited by U.S. authorities on Monday, landed at Tokyo's Narita airport, and the two men were escorted on to waiting police buses, according to a Reuters witness. The Taylors will not be indicted immediately, but will likely face charges after an investigation is concluded.
President Joe Biden on Tuesday withdrew the nomination of Neera Tanden to be his budget director after she ran into stiff opposition over tweets that upset lawmakers, in the first Capitol Hill rebuff of one of his nominees. "I have accepted Neera Tanden’s request to withdraw her name from nomination for director of the Office of Management and Budget," Biden said in a short statement on Tuesday. The decision to withdraw Tanden's nomination reflected the tenuous hold his Democrats have on the Senate.
Goldman Sachs Group Inc has restarted its cryptocurrency trading desk and will begin dealing bitcoin futures and non-deliverable forwards for clients from next week, a person familiar with the matter said. The team will sit within the U.S. bank's Global Markets division, the person said. The desk is part of Goldman's activities within the fast-growing digital assets sector, which also includes projects involving blockchain technology and central bank digital currencies, the person said.
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Zoom is sitting on a monster cash pile. The company's CFO Kelly Steckleberg explains how they may spend some of the money.
(Bloomberg) -- After all the chatter about Fox News’s falling ratings and the rise of far-right competitors, the Fox Corp. channel found itself leading in prime time among cable news networks again in February, a position it has had for 19 years.Viewership of the Rupert Murdoch-controlled network tumbled after the election, which saw Republican Donald Trump lose to Democrat Joe Biden. Conservative audiences tuned in to Fox rivals Newsmax and One America News Network, as many Trump supporters promoted the idea that the election had been stolen.Rival CNN, meanwhile, had its most-watched day ever on Jan. 6, when Trump supporters stormed the U.S. Capitol.With Biden now in the White House, Fox News has returned to its regular position, with 2.47 million viewers in prime time, compared with 2.19 million for Comcast Corp.’s MSNBC and 1.69 million at AT&T Inc.’s CNN. Newsmax, which also subscribes to Nielsen ratings, averaged about 241,000 viewers a night for the month.All three of the big cable news networks have seen a decline in viewers since their highs around Election Day. MSNBC, which has been broadcasting news conferences daily by Biden Press Secretary Jennifer Psaki, led in total viewers throughout the day last month. It and CNN were up year-over-year in February, while Fox saw a decline.CNN’s prime-time drop since Election Day has been the steepest. Still, the network said it had its most-viewed month ever in February and led in the 25-to-54-year-old demographic that is most popular with advertisers.Fox News said Tuesday that it hired former White House Press Secretary Kayleigh McEnany as an on-air commentator. The shares were up 9% to $37.95 at the close, bringing their gain for the year so far to 30%.(Updates with McEnany hiring, share movement in last 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.
The U.S. Senate voted 84-15 on Tuesday to confirm Rhode Island Governor Gina Raimondo to head the U.S. Commerce Department, the agency that repeatedly sparred with China during the prior administration. Raimondo, a Democrat tapped by President Joe Biden, will oversee the Commerce Department and its bureaus, which have about 46,000 employees. The department includes the National Telecommunications and Information Administration, U.S. Census, National Oceanic and Atmospheric Administration, National Weather Service and the Foreign Commercial Service.
Global equity markets were little changed on Tuesday as Wall Street retreated and investors took stock of gains from Monday's surge, pausing to gauge whether a bond yield jump had run its course. "It was such a strong opening to the month yesterday that investors could be short-term focused and saying, 'Let's take some of the profits that we saw yesterday,'" said Sam Stovall, chief investment strategist at CFRA Research in New York. March began with a bang on Monday as global equities markets rose, the S&P 500 had its best day since June 5 and bond markets calmed after a month-long selloff.
- Motley Fool
Lawmakers had pushed for higher pay, but it's most likely not going to be part of new relief legislation.
- FX Empire
Price of Gold Fundamental Daily Forecast – Complacent Shorts Could Get Stuffed if Yields Ease Considerably
If you’re bullish gold then you should be hoping for the U.S. Senate to reduce Joe Biden’s $1.9 trillion coronavirus relief bill by at least half.
A U.S. national security commission on Monday recommended Congress tighten up "choke points" on chipmaking technology to prevent China from overtaking the United States in semiconductors in the coming years. The National Security Commission on Artificial Intelligence (NSCAI), led by former Google Chairman Eric Schmidt, recommended clamping down on China's ability to procure the manufacturing equipment needed to make advanced computing chips. "China is making an aggressive push to promote authoritarianism around the world," an NSCAI official told Reuters.
Looking forward, a Citi report suggests bitcoin could "become the currency of choice for international trade."
- Yahoo Finance
Warren Buffett, the billionaire head of Berkshire Hathaway, will probably go down as the greatest investor in history.