Small businesses struggle to recover from coronavirus pandemic

HOTWORX fitness studio co-owner Robert Lebus and Spartina restaurant owner Stephen Kalt detail the difficulties of business bouncing back from being locked down.

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  • Oil Hits Highest in More Than a Year With Global Supply Draining

    (Bloomberg) -- Oil climbed to the highest in more than a year amid optimism of swiftly depleting global oil inventories.Futures in New York closed 0.5% higher on Thursday. The oil futures curve continues to signal a tighter market. U.S. crude inventories are near the lowest levels in about a year, while exports of five key crudes in the North Sea fields are seen slumping in April. As a result, crude timespreads are strengthening in a bullish structure known as backwardation.“Looking forward in the market, we’re seeing a significant backwardation, which signals that there is an anticipation of an easing of virus restrictions coming,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy. “The market is looking toward more normal inventories heading into the summer, if we don’t see a flooding of markets.”U.S. crude futures are up nearly 22% in February with expectations of shrinking supplies and as economies worldwide begin to reopen, signaling a further rebound in consumption. Still, the market is facing a possible supply increase in April from OPEC+. The producer group meets next week to discuss its strategy with key members differing on the path forward.See also: North Sea Oil Field Work to Cut Supply From Already Tight Market“By the summer, leisure travelers who haven’t been able to travel who are now vaccinated,” will be driving an uptick in demand, said Jay Hatfield, CEO at InfraCap in New York. “Supply is not going to respond like it has in the past,” with U.S. production likely remaining restrained.Shale explorers reported almost 6 million barrels of combined oil-output losses during the freeze last week. Occidental Petroleum Corp. and Pioneer Natural Resources Co., two of the largest producers in the Permian Basin, alone had a combined loss of about 3.8 million barrels, according to Bloomberg News calculations based on fourth-quarter earnings reports and calls. Meanwhile, refineries along the U.S. Gulf Coast are in the process of restarting, though some plants are facing lengthy repairs to key processing units.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.

  • Biggest Contract Busts in NBA History

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  • Who Has Been Buying Good Drinks Australia Ltd (ASX:GDA) Shares?

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  • Bond yields are rising but “we’re not at taper tantrum levels yet': strategist

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  • Global Bond Rout Puts Australia’s Central Bank on Front Line

    (Bloomberg) -- Bond traders keep probing the limits of central banks’ patience, and nowhere is that clearer than in Australia, where policy makers are struggling to defend their yield target.The Reserve Bank of Australia bought A$5 billion ($4 billion) of bonds Thursday, matching the record last March when it began quantitative easing. That eventually brought the targeted three-year yield down, but only after it hit a two-month high. A selloff that began in New Zealand also widened to Treasuries and Japanese debt, as the world’s sovereign bonds head for their worst month since April 2018.“The Australian bond market is in many ways caught in the crossfire of what’s happening in U.S. Treasuries,” said Chamath De Silva, a portfolio manager at BetaShares Holdings in Sydney and a former fixed-income trader at the central bank. “I don’t see it as the market deliberately testing the RBA so much as global central bank dovishness in general.”A $9 trillion rescue mission by central banks to haul the global economy out of its coronavirus recession is being tested by inflation bets that are threatening their ability to keep borrowing costs down. The intensifying bond rout is forcing a rising tally of money managers to scale back market exposures while Wall Street strategists pare back their bullish playbooks.Read: When Listening to the Central Bank Goes WrongAustralia’s 10-year yield closed at its highest since 2019, having surged more than 75 basis points this year. The benchmark Treasury yield has hit 1.4%, and is headed for the steepest monthly advance since the November 2016 bond rout set off by President Donald Trump’s election win.Yields in every major market have jumped.Policy makers are trying to push back against the rising tide of yields, from Fed speakers stressing they will look through short-term inflation spikes to European Central Bank President Christine Lagarde “closely monitoring” government debt yields. The Bank of Korea warned it’ll intervene in the market if borrowing costs jump and the Reserve Bank of India is deploying a range of tools in the face of a market revolt.That’s not enough to stop the growing challenge from bond traders, who are pushing the limits of central banks’ patience while debt auctions are starting to struggle. Investment firms including BlackRock Inc.’s research arm and Aberdeen Standard Investments are retreating from government bonds.Read: Bond Backlash Spurs Tepid Demand at Five-Year Treasury SaleIn Australia, skepticism has grown that the RBA will maintain its guidance to keep borrowing costs steady into 2024. That’s been highlighted by the unraveling of a popular trade based on selling April 2024 bonds and buying November 2024 notes in anticipation that the central bank’s target will shift to the later maturity debt.Australia’s rapid economic recovery has emboldened traders, as the country suppresses Covid-19 and massive stimulus encourages households to spend and firms to hire. A further boost has come from the price of iron ore, Australia’s largest export, which crashed through $170 a ton and is closing in on a record.What Bloomberg Economics Says...“The RBA is pulling out the stops to counter a rise in bond yields, which have been swept up in a global updraft. In a surprisingly forceful move, it announced its largest purchase of Australian government bonds since it began the program in March.”-- James McIntyre, economistFor the full note, click here.Yet, there is wide disconnect with policy makers expectations.RBA Governor Philip Lowe does not anticipate any rapid recovery in inflation. He noted that before the pandemic, when unemployment had a 4 in front of it, it still failed to generate the sort of wage gains that would be needed to return CPI sustainably to the 2-3% target. Australia’s most recent annual inflation reading was just 0.9% and the jobless rate stands at 6.4%.The central bank is expected to keep policy settings unchanged when it meets on Tuesday.RBNZ MandateNew Zealand bonds kicked off the rout in Asia on Thursday after the government announced it will require the central bank to take account of house prices when it sets interest rates. The losses accelerated as the bid-to-cover ratio at an auction dropped to the lowest since 2012.Money markets are now pricing in a rate increase in New Zealand for mid-2022, suggesting it could be the first major central bank to hike.Yields on the 10-year benchmark surged 18 basis points -- the largest move since April -- to 1.87%. Japanese bonds were also sold, with the benchmark 10-year yield rising to the highest since 2018, while the yield curve steepened.“As yields look set to still rise gradually, this isn’t an environment where investors want to buy even if levels are attractive enough,” said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities Co.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.

  • Heathrow passenger numbers fall to 1970s' levels

    Covid "devastated" air travel in 2020, the UK's largest airport says, as it sinks to a £2bn loss.

  • Why Boeing Stock Just Jumped

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  • Air Taxi Start-Up Joby to Go Public Via SPAC Deal

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  • Electric Vehicle Maker Fisker Partners With Apple Supplier Foxconn

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  • BOE Dismisses Talk of Inflation Threat During Post-Covid Rebound

    (Bloomberg) -- Bank of England officials brushed aside suggestions that the economy is about to suffer from higher inflation anytime soon as it struggles with the fallout of the coronavirus pandemic.Answering questions from lawmakers on Wednesday, policy makers said data monitored by the central bank don’t show evidence of inflation overshooting its 2% target.A surge in household savings under lockdown has fueled speculation of a rapid increase in consumer demand as the government starts to unwind virus restrictions next month. Economists anticipate inflation to accelerate this year, driven by energy prices and the expiry of a sales tax cut for the hospitality industry in April.But BOE officials were cautious about the strength of the recovery, noting they expect a contraction in the first quarter and risks of the crisis leaving scars on the labor market. The annual pace of consumer price inflation bottomed out at 0.2% in August and was 0.6% in the most recent month, still well below target.“I don’t see any evidence across the piece that inflation expectations have moved to levels that would worry us in terms of the inflation target,” Deputy Governor Ben Broadbent said.The comments suggest the BOE is unlikely to tighten monetary policy in the face of a temporary spike in consumer prices. Minutes of the bank’s last meeting said the committee “does not intend to tighten monetary policy until there is clear evidence that significant progress is being made eliminating spare capacity.”What Bloomberg Economics Says...“We expect elevated unemployment to push inflation back below target in the first half of 2022. That’s likely to prevent the BOE from taking a hawkish turn this year.”-- Dan Hanson, senior economist. Click here for full INSIGHT. Jonathan Haskel, another member of the bank’s Monetary Policy Committee, pointed to a survey that showed that 70% of respondents intend to hold onto the savings they build up in the pandemic.Governor Andrew Bailey said the economic impact of the government’s plan to ease restrictions is broadly consistent with the latest BOE forecasts. He added that he had no concerns about inflation in the U.S., where President Joe Biden is pushing for a massive stimulus program.Gross domestic product shrank about 10% in 2020 and is set to contract at the start of this year. The central bank expects that to be followed by a 5.2% expansion in the second quarter and 4.6% in the following three months.Read More: Britons Saved on Record Scale During Coronavirus LockdownFor 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.

  • Biden Directs Staff to Address Chip Shortages Idling Auto Plants

    (Bloomberg) -- President Joe Biden said he’s directing his administration to address shortfalls in semiconductor production that have idled production at some auto plants as he signed an order to review U.S. supply chains.“We need to make sure that supply chains are secure and reliable,” Biden said Wednesday at the White House. “I’m directing senior officials in my administration to work with industrial leaders to identify solutions to this semiconductor shortfall.”Biden acknowledged the problem won’t be solved immediately. The issue has taken on urgency with a global chip shortage that’s threatening to harm U.S. growth just as Biden seeks to rebuild an economy battered by the coronavirus. Some automakers are cutting workers’ hours due to the shortfall and unions are raising alarm about the prospect of layoffs.Biden’s executive order seeks to end the country’s reliance on China and other adversaries for crucial goods. The administration’s 100-day review will cover chips along with large-capacity batteries, pharmaceuticals and critical minerals and strategic materials like rare earths.The order doesn’t directly call out China or any one country. Still, White House officials said an over-reliance on Beijing and other adversaries for critical goods is a key risk that must be addressed.Biden’s review could lead to financial incentives, tariffs or changes in procurement policies, among other options, said one of the officials, who spoke on condition of anonymity. The administration plans to consider ways to encourage production of key items in the U.S. or work with allies to manufacture the items, the official added.Biden met with a group of lawmakers from both parties at the White House Wednesday afternoon to discuss the semiconductor shortage, and ways to strengthen supply chains.Members of both parties praised the efforts of the president, who told the lawmakers he’d like to engage in regular such discussions.“It was refreshing to have a meeting that was truly bipartisan,” said GOP Representative Michael McCaul, who was among those meeting with the president. He said Biden is fully supportive of their efforts to fund semiconductor legislation, pledging to lawmakers “I want to back you, I’m all in,” McCaul said in an interview.Senate Majority Leader Chuck Schumer said he is asking the chamber’s top Democrats and Republicans to draw up legislation aimed at improving U.S. competitiveness with China in manufacturing and technology, including bolstering the supply of American-made semiconductors. He said lawmakers should consider “significant” emergency spending to rebuild U.S. semiconductor production capacity.Senator John Cornyn, who was among those meeting with Biden, told reporters that the topic of invoking the Defense Production Act to address the chip shortage came up in the Oval Office discussion.Biden’s top economic adviser, Brian Deese, last week sought the Taiwanese government’s help in resolving the chip situation. His appeal followed earlier pleas from Japanese and European officials for Taiwan’s assistance in ensuring supply.The Biden administration has also asked U.S. embassies around the world to identify how foreign countries and companies that produce chips can help address the global shortage and to map the steps taken to date.The shortages are tied largely to the pandemic. The stay-at-home era caused by the coronavirus pushed demand beyond levels projected by chipmakers. Lockdowns led to growth in sales of products such as laptops and home networking gear.The semiconductor industry has been pushing the president to include tax breaks and other financial incentives in his next legislative package to spur investment and research in the U.S. -- an effort that will take months to move through Congress.Biden’s order directs industry-specific reviews focused on defense, public health and biological preparedness, information-communications technology, transportation, energy and food production. Those assessments, to be completed within one year, will be modeled after reviews the Defense Department uses to regularly evaluate the U.S. defense industrial base.Manufacturing more drugs and their raw materials within the U.S. could run into a years-long approval process to start production in new factories. It could also lead to an increase in emissions of ethylene oxide, a carcinogenic chemical used to sterilize glassware and vials.It’s unclear exactly how much pharmaceutical manufacturing is done overseas, because drugmakers don’t have to disclose where their goods are made. As of 2019, 72% of facilities that make active pharmaceutical ingredients for the U.S. market were located in other countries, according to the Food and Drug Administration.The Biden team will draw on lessons from the current crisis on chips and the shortage of personal protective equipment that plagued the U.S. last year, one of the officials said. Wednesday’s order is designed to help the U.S. address future crises before they occur, the official said.The order calls for reviewing supply chains every four years and directs the administration to consult with outside groups, including businesses, academia, unions and state and local governments, according to the White House.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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  • GameStop Can Justify Its Valuation By Turning Into A '5,000-Store Introduction To Crypto,' Says Cramer

    CNBC host Jim Cramer said Thursday that GameStop Corporation (NYSE: GME) could justify its share price by turning into a cryptocurrency play. What Happened: The “Mad Money” host made references to other companies like Paypal Holdings Inc (NASDAQ: PYPL) and Nvidia Corporation (NASDAQ: NVDA), both of which are linked in some way or the other to cryptocurrency at the present. “If GameStop were to turn itself into a 5,000-store introduction to crypto, make it so that they sell $1 billion worth of stock ... and buy crypto with it, and then make it so it’s an international gaming place where you win bitcoin, I think you can justify the stock price,” theorized Cramer. “I have not been able to come up with anything else, but this works. And it doesn’t have to be bitcoin. We can make it crypto.” Cramer said if GameStop turns itself into a “crypto information place” and has worldwide games with no latency it would add to the credibility of GameStop investor and Chewy Inc. (NYSE: CHWY) co-founder Ryan Cohen. The former hedge fund manager also pointed to the upcoming resignation of GameStop CFO Jim Bell and said, “CFOs, they tend not to have bitcoin on their balance sheet. Perhaps Jim Bell, that’s what he didn’t want.” Cramer called Cohen a “big thinker” and said “I have a feeling that this is the way to get this stock higher. I can’t come up with another way.” Why It Matters: GameStop, AMC Entertainment Holdings Inc (NYSE: AMC), BlackBerry Ltd (NYSE: BB), and Nokia Oyj (NYSE: NOK) shares were buoyed in a short squeeze carried out by Reddit forum r/WallStreetBets. A notable poster on the forum — “Deep F---ing Value” — who has been credited by forum members for pointing out the short squeeze opportunity told U.S. lawmakers that he likes GameStop stock. “As far as I can tell, the market remains oblivious to GameStop’s unique opportunity within the gaming industry,” said the poster whose real name is Keith Partick Gill. On Wednesday, Cramer called the over 103% rise in the shares of GameStop “a mockery,” and questioned, “Where is the government?” Alma Angotti, a former Securities and Exchange Commission enforcement attorney said that heightened interest from regulatory bodies could be expected. “I think both Congress and the SEC will be studying that balance between orderly markets and letting people invest what they want to invest for whatever reasons they want to invest even if it doesn’t make sense to us,” CNBC reported. Price Action: GameStop shares closed nearly 18.6% higher at $108.73 on Thursday and fell 2.51% to $106 in the after-hours session. For news coverage in Italian or Spanish, check out Benzinga Italia and Benzinga España. Photo courtesy: EPIC via Wikimedia See more from BenzingaClick here for options trades from BenzingaTesla Stock Performance And WallStreetBets Mentions Have A 'Real' Connection: BarclaysWhy AMC Shares Spiked 20% Today© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Biggest Bitcoin Fund Sinks to a Discount as Traders Flee

    (Bloomberg) -- The world’s biggest Bitcoin fund is selling off faster than the cryptocurrency itself.The $32 billion Grayscale Bitcoin Trust (ticker GBTC) has plunged 20% this week, outpacing a 13% decline in the world’s largest cryptocurrency. GBTC’s once-massive premium to its underlying holdings has evaporated as a result, with the price of GBTC closing 0.7% below its underlying holdings on Wednesday -- the first discount since March 2017, according to data compiled by Bloomberg.The vanishing premium suggests that after billions poured into GBTC as investors sought exposure to Bitcoin’s dizzying rally, investors are looking for the exits as the climb stalls, according to Bloomberg Intelligence.“This is panic or profit-taking selling,” said Eric Balchunas, BI’s senior ETF analyst. “It’s almost like the price of GBTC is an amplified version of Bitcoin price.”Bitcoin surged to a record of over $58,000 last weekend, but has stumbled since. The cryptocurrency fell another 1.4% on Thursday, on pace for its worst weekly pullback in a year.Michael Sonnenshein, chief executive officer of Grayscale Investments, acknowledged the risk of GBTC’s premium disappearing while speaking in a panel for the Bloomberg Crypto Summit on Thursday.“It’s certainly a risk, no question about it, but ultimately price discovery in GBTC every day is driven entirely by market forces,” Sonnenshein said.(Updates with comments from Michael Sonnenshein of Grayscale in the sixth 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.

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  • GameStop Options Bet That the Stock Will Reach $800 on Friday

    (Bloomberg) -- Shares of GameStop Corp. doubled yesterday and jumped another 19% today. Options traders think the stock can do much better than that.The most-active option traded on the stock Thursday was a contract betting that GameStop shares would spike to $800 on Friday. Some 52,000 contracts changed hands during the session betting on this one-day gain of 636%For other options traders, it was a question of when GameStop would hit the $800 mark, not if. The seventh and eighth most-active contracts were call options wagering that the stock would reach $800 by next Friday or in three weeks. It’s hard to say whether the contracts were mainly bought or sold, two traders said.“It’s speculation gone wild, pure and simple,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “It is Exhibit A in the nuttiness that is associated with GameStop.”GameStop’s Reddit-driven roller-coaster ride that roiled markets last month is continuing this week, with shares more than doubling in the final 90 minutes of trading on Wednesday and rising as much as 101% on an intraday level on Tuesday. The rally came as popular tech names from Tesla Inc. to Zoom Video Communications Inc. were battered after U.S. 10-year Treasury yields spiked to 1.6%.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.