SPA allowing customers to pay using Bitcoin
The U.S. Federal Aviation Administration (FAA) on Tuesday ordered immediate inspections of 777s with Pratt & Whitney PW4000 engines before further flights, after an engine failed on a United Airlines 777 on Saturday. The planemaker and the FAA had been discussing potential fixes for about two years, following an earlier incident in 2018, according to the Journal.
Nvidia Corp forecast better-than-expected fiscal first-quarter revenue on Wednesday, with its flagship gaming chips expected to remain in tight supply for the next several months. While Nvidia was long known for its gaming graphic chips, its aggressive push into artificial intelligence chips that handle tasks such as speech and image recognition in data centers has helped it become the most valuable semiconductor maker by market capitalization.
(Bloomberg) -- New Zealand’s government will require the central bank to take account of rampant house prices when it sets interest rates, a change that may restrict its ability to run loose monetary policy.The Reserve Bank’s remit will be amended so that the bank considers “the impact on housing when making monetary and financial policy decisions,” Finance Minister Grant Robertson said in a statement Thursday in Wellington. The New Zealand dollar jumped to its highest since 2017 as investors ramped up bets on higher interest rates.The government is under political pressure to cool an overheating housing market, which has been fueled by record-low borrowing costs after the RBNZ responded to the coronavirus pandemic by slashing its cash rate and embarking on quantitative easing. Governor Adrian Orr pushed back against Robertson’s proposal when it was first made last year, saying that forcing the bank to consider house prices when setting rates could lead to below-target employment and inflation.“The more objectives you’ve got, the more complicated it can be to meet all those objectives,” said Nick Tuffley, chief economist at ASB Bank in Auckland. “Inflation and employment is what they will focus on, but they have to think harder about how their decisions impact on the housing market.”The kiwi dollar jumped about a third of a U.S. cent to 74.55 cents, its highest since August 2017. Bond yields and swap rates also rose on news of the changed remit, which comes into force on March 1. Investors are now pricing a 30% chance of a rate hike in November, even though the RBNZ yesterday sought to damp bets on tighter policy and said it could cut rates further if needed.Robertson ‘In Charge’“The market is saying no more rate cuts, so push the kiwi higher,” said Jason Wong, currency strategist at Bank of New Zealand in Wellington. “The RBNZ has shown its independence by saying ‘we don’t like this measure,’ but they are going to have to live with it because the finance minister’s in charge.”Robertson said today that the RBNZ’s objectives and mandate remain the same, which is to maintain price stability, support full employment and promote a sound and stable financial system.But a change to the Monetary Policy Committee’s remit will force it to “assess the effect of its monetary policy decisions on the government’s policy.” A clause has been added stating that the government’s policy “is to support more sustainable house prices, including by dampening investor demand for existing housing stock, which would improve affordability for first-home buyers.”“The committee retains autonomy over whether and how its decisions take account of potential housing consequences, but it will need to explain regularly how it has sought to assess the impacts on housing outcomes,” Robertson said.Robertson also issued a direction under the Reserve Bank Act requiring the bank to have regard to government policy on housing in relation to its financial policy functions.In a statement Thursday, the RBNZ said it “welcomes the direction it has received today from the Minister of Finance.” It said changes to financial stability policy are “in tune with our recent advice.”The bank acknowledged the change to its monetary policy remit but noted its targets “remain unchanged.”“The adjustments increase the focus on understanding and communicating the impact of the bank’s decisions on house price sustainability,” Orr said in the statement. “We have a long-standing commitment to transparency about our policy actions and approaches, and this will continue.”Soaring house prices have raised concerns that first-time buyers are being locked out of the market. Much of the surge has been attributed to investors taking advantage of low interest rates.The RBNZ, which predicts prices will rise 22% in the year through June, is reinstating mortgage lending restrictions and will tighten them further for investors from May 1.Orr in December recommended that the bank be required to address the issue of rapid house-price inflation via financial policy, and requested it be allowed to add debt-to-income ratios to its macro-prudential toolkit.Robertson said today he has asked the RBNZ to provide advice on interest-only mortgages and debt-to-income ratios. He would want the latter to apply only to investors, he said.“Today’s announcement is just the first step as the government considers broader advice about how to cool the housing market,” Robertson said. “We know the rapid increases we have seen in recent months are not sustainable, which has meant many first-home buyers are struggling to access the market. We’ll be making further announcements in the coming weeks on other policy responses.”(Includes 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.
- Yahoo Finance
Charlie Munger, vice chairman of Berkshire Hathaway and long-time business partner of Warren Buffett, issued a strong condemnation of the businesses he said enabled the recent frenzy of speculative trading by retail investors.
The U.S. Transportation Department's inspector general faulted "weaknesses" in U.S. government certification of the Boeing 737 MAX aircraft that was grounded for 20 months after two crashes killed 346 people, according to a report released Wednesday. The 63-page report said the Federal Aviation Administration (FAA) did not have a complete understanding of a Boeing Co safety system tied to both crashes and said "much work remains" to address outstanding issues. Boeing said it has "undertaken significant changes to reinforce our safety practices, and we have already made progress" on recommendations outlined in the report.
There are signs some of the excessive leverage had been wrung out of the market, implying the potential for a fresh more to the upside, analysts said.
Pfizer Inc and BioNTech SE said on Thursday they are testing a third dose of their COVID-19 vaccine to better understand the immune response against new variants of the virus. They are also in talks with regulatory authorities about testing a vaccine modified to protect specifically against the highly transmissible new variant found in South Africa and elsewhere, known as B.1.351, as a second arm of the same study. The companies believe their current two-dose vaccine will work against the South African variant as well as one found in the United Kingdom and elsewhere.
Gold prices might soar in 2021 as peak gold production looms, and it is junior miners that are best positioned to take advantage of this high risk/reward play
(Bloomberg) -- Kweichow Moutai Co. investors are selling their shares at the fastest pace in more than two years, a warning for a market that owes much of its rally to a handful of large caps.The biggest stock listed in mainland China has lost $80 billion since onshore markets reopened after the Lunar New Year holiday. Wednesday’s 5.1% drop put Moutai’s five-day decline at 16%, the biggest for such a period since October 2018. The company had rallied 30% this year through its Feb. 10 record close.Momentum trades are cracking after the CSI 300 Index briefly surpassed its 2007 closing peak. Chinese traders were griping about a lack of market breadth before the holiday and extreme valuations for some of the most-loved stocks. Less than 10 companies accounted for half of the returns on the benchmark -- including Moutai -- with foreign investors and domestic mutual funds compounding the problem by buying the most liquid megacaps.“This is the beginning of the end for baijiu’s outrageous valuations and the mark of a massive shift to value stocks,” said Dong Baozhen, fund manager at Beijing Lingtongshengtai Asset Management. The big baijiu gains of the past year “have become a prisoner’s dilemma - whoever sells first wins.”Triggers for the reversal include signals on tighter monetary policy from the central bank. The People’s Bank of China is withdrawing liquidity from the financial system, while local media ran a front-page editorial this week saying China’s economic recovery is creating the conditions for the central bank to “normalize” monetary policy.The CSI 300 ended 2.6% lower, with the consumer staples sector that includes baijiu down 4.5%. Health care, which had also been among the market’s best performers until the holiday, dropped 4.4% Wednesday to cap its biggest three-day drop since December 2018.Other makers of baijiu -- a popular liquor in China -- are among the worst performers on the CSI 300 in the past five days, with Shanxi Xinghuacun Fen Wine Factory Co. down 22% and Luzhou Laojiao Co. losing 21%. The Securities Times newspaper on Tuesday listed three major concerns around the baijiu trade, including record-high valuations, overly heavy positioning by institutional investors and the demise in popularity of the spirit among the younger generation.A high-profile fund managed by a star manager Zhang Kun, known for his outperformance in recent months and heavy allocation in the baijiu sector, suspended new orders starting Wednesday. The industry accounted for about 40% of the fund’s holdings, according to a fourth-quarter filing, with top positions including Moutai.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.
- Yahoo Finance
Charlie Munger: It's 'absolute insanity' to think owning 100 stocks instead of five makes you a better investor
Munger says the argument for diversification should be called 'diworsification.'
(Bloomberg) -- Alibaba Group Holding Ltd, once the most valuable company in China, is turning from a global hedge fund favorite to something less than desirable.Investors from hedge fund titans such as Point72 Asset Management and Moore Capital Management to Canadian and U.S. pension funds dumped 101 million of Alibaba’s American depositary receipts in the fourth quarter, cutting the market value of their holdings by $89 billion, according to filing data. It was the biggest investment reduction among U.S. traded companies, more than three times the second-most sold stock, Salesforce.com Inc..Once a symbol of China’s New Economy, the e-commerce giant founded by Jack Ma now finds itself at the forefront of the government’s campaign to rein in the sprawling power of tech giants. Alibaba’s shares, which are traded on the New York Stock Exchange, have slumped about 18% since November, when regulators in Beijing halted the $35 billion initial public offering of Alibaba’s affiliate Ant Group at the last minute. Government watchdogs have also ordered Ant to overhaul its business and began an antitrust investigation of Alibaba.Meanwhile, Alibaba, which has invested in a wide range of sectors from online grocery to ride-hailing and artificial intelligence, will face restraints on future expansion. Chinese antitrust watchdogs used to pay little attention to investment led by internet companies, but have begun strengthening enforcement amid Beijing’s push to root out monopoly power. In December, China’s antitrust watchdog fined Alibaba and two other companies over years-old acquisitions. Regulators said the e-commerce heavyweight should have sought government approval before increasing its stake in a department store chain in 2017.If someone were to make an example of how to take down a monopoly in China, they’ve got nothing better than Alibaba, said Rajiv Jain, who oversees $73 billion in assets as chairman of GQG Partners LLC in Fort Lauderdale, Florida. “The long-term growth trajectory is now different from what we thought.”GQG liquidated all of its 9.6 million ADRs in the fourth quarter, valued at $2.8 billion, according to filing data. Jain said he had owned Alibaba shares since the company’s initial public offering in 2014, when he was the chief investment officer at Vontobel Asset Management.An Alibaba spokesperson declined to comment on investors selling the stock.Investors are questioning whether Alibaba can sustain its meteoritic rise amid the regulatory scrutiny. It now could face penalties of as much as 10% of its revenue if it’s found to have violated antitrust rules. Those rules are against practices such as forced exclusive arrangements with merchants, known as “Pick One of Two,” predatory pricing and algorithms favoring new users. Tightening government oversight also threatens to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.Alibaba has said that it’s working with regulators on complying with their requirements as the antitrust investigations continue. Share prices have recovered somewhat since Ma resurfaced in late January after vanishing from the public sight following the government’s crackdown on his businesses. The shares fell about 1% to $250.34 in New York Wednesday. Alibaba sellers are Who’s Who of hedge fund stars. Steve Cohen’s Point72 dumped all its $413 million in holdings last quarter fourth quarter. Louis Bacon’s Moore Capital slashed its holdings by 99%, while Dan Loeb’s Third Point cut its stake by 45%.Other prominent investors cashing out include Hillhouse Capital Advisors, which sold its $1.2 billion holdings. Canada Pension Plan Investment Board reduced its stake by 31%, or $2.1 billion.Izzy Englander’s Millennium Management LLC was among a minority group of investors who scooped up Alibaba, counting it as its sixth-largest holdings.Representatives at these firms either declined to comment or didn’t reply to emails or calls.Rather than pulling out, some investors may have swapped their ADRs with shares traded in Hong Kong to avoid the risk of being caught in the political tension between the U.S. and China, said Brendan Ahern, chief investment officer at Krane Funds Advisors LLC, which runs several China-focused exchange-traded funds in the U.S.Former U.S. President Donald Trump signed legislation in December that could kick Chinese companies off of U.S. exchanges unless American regulators can review their financial audits. The administration had also considered banning U.S. investments in Chinese companies, including Alibaba and Tencent, before deciding against it.“Alibaba is a very well-managed company,” said Ahern. “We are a big believer in the company and management.”Analysts share Ahern’s upbeat sentiment. All but three of 61 analysts rate the company as a buy.For GQG’s Jain, the regulatory uncertainties mean the risk-reward calculation is stacking against Alibaba. For instance, it’s becoming much more difficult for the company to grow its business by acquiring smaller players.“There’s more downside than upside,” said Jain, whose Goldman Sachs GQG Partners International Opportunities Fund beat 83% of its peers over the past three years. “The regulatory risk is usually underappreciated until it’s too late. In other words, you cannot handicap that.”(Update with Ailbaba’s share price in ninth 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.
- Yahoo Finance
Berkshire Hathaway’s (BRK-A, BRK-B) Vice Chair Charlie Munger further detailed his deep admiration for Singapore’s first prime minister, Lee Kuan Yew, who governed for three decades.
- Simply Wall St.
Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the...
- Associated Press
All the groceries spoiled and the water was out for days. Then Melissa Rogers, a believer in the Texas gospel that government should know its place, woke up to a $6,000 energy bill before the snow and ice even melted. Now, the emerging response to a winter catastrophe that caused one of the worst power outages in U.S. history is not the usual one in Texas: demands for more regulation.
Electric-car maker Fisker Inc said it will work with Apple Inc supplier Foxconn to produce more than 250,000 vehicles a year beginning in late 2023, sending its shares up 18%. The deal, codenamed "Project PEAR" (Personal Electric Automotive Revolution), is looking at markets globally, including North America, Europe, China and India, Fisker said. Foxconn, Apple's main iPhone maker, has ramped up its interest in electric vehicles (EVs) over the past year or so, announcing deals with Chinese electric-car maker Byton and automakers Zhejiang Geely Holding Group and Stellantis NV's Fiat Chrysler unit.
Even after a price plunge of more than $10,000 over the past couple days, analysts see further selling ahead.
(Bloomberg) -- While the U.S. rushes toward a blockbuster fiscal stimulus package to accelerate its recovery from the coronavirus crisis, much of Europe is pootling along in the slow lane.President Joe Biden’s $1.9 trillion stimulus bill, if congressional leaders pass the full amount, would take his administration’s spending in 2021 to more than three times as much as euro-area countries have planned, according to UniCredit SpA.As a consequence, most economists expect the U.S. economy to reach its pre-pandemic size around the middle of 2021, roughly a full year before the currency bloc.JPMorgan Chase & Co. estimates the “fiscal thrust” — the boost from discretionary government spending minus the drag of expiring tax breaks and support measures — will add 1.8% to U.S. output this year. For the euro zone, it’ll subtract 0.1%.Europe’s go-slow is partly a result of its unwieldy makeup. The European Union’s 27 sovereign governments set their own fiscal policies, and it took months of negotiations last year to agree on a common 750 billion-euro ($910 billion) recovery fund. Proposals for how to spend the money are still being processed, and funds probably won’t start being distributed until the second half of the year.Such careful consideration has its benefits. Get it right, and the EU will have a well-structured suite of projects that enhance productivity and growth potential for years to come. Get it wrong though, and the continent could be blighted for just as long.“The question is what do we want to achieve,” said Carsten Brzeski, an economist at ING Germany. “Do we want this short-term momentum or do we want to use the money to improve the structure of the economy in a sustainable way? In Europe it’s the latter that we need.”The EU’s recovery fund, combined with a 1.1 trillion-euro multi-year budget, is a breakthrough package for the union. The money will be spent between now and 2027, with more than half intended for “modernization” such as digitization and fighting climate change.Not only is it the EU’s largest-ever stimulus package, the recovery fund is financed by jointly backed bonds — the first time the EU has agreed to such a measure.It’s temporary, but European Central Bank officials hope it will ultimately lead to a permanent joint fiscal capacity, effectively the equivalent of the U.S. federal budget.The bloc has long struggled with smoothing out economic differences between countries, and the pandemic has exposed that flaw once again. National fiscal programs have been far more generous in wealthy nations such as Germany than in weaker ones such as Italy and Spain.Not everyone is convinced Europe has got it right though. Erik Nielsen, UniCredit’s chief economist, says the difference in spending plans compared to the U.S. is “mind-boggling” and the euro-zone approach is “severely inadequate.” It’ll lead to a muted recovery, higher unemployment, deeper economic scars and weak inflation, he said in his report.Such an outcome would be all too familiar for the euro zone. Fixation on austerity to reduce debts after the 2008-2009 global financial crisis, rather than boosting growth through consumption, condemned the bloc to a sluggish recovery which turned into a sovereign debt crisis and double-dip recession.Nielsen cites the so-called output gap as a key indicator of the problem. That gauge of unused economic potential is hard to measure precisely, but it’s widely considered to be bigger in the EU than in the U.S. at the moment. That means Europe should be doing more, not less, to boost its economy.The International Monetary Fund estimates the U.S. output gap was 3.2% of gross domestic product in 2020, and 5.1% in the euro zone.U.S. stimulus is already rapidly reducing slack there, according to the Congressional Budget Office. Treasury Secretary Janet Yellen and high-profile economists such as Lawrence Summers have sparred over the risk that the Biden administration’s spending is too high, potentially fueling asset bubbles and overly high inflation. Still, some economists argue that the vagaries of the output gap make it a poor foundation for policy decisions. Maria Demertzis, deputy director at the Bruegel think tank in Brussels, said European countries are right to focus on support for struggling parts of the economy and investment. Measures to boost consumption aren’t targeted enough, she said.Experience from 2020 also indicates that European consumers will probably go out and spend as soon as they’re allowed to do so. Households are sitting on hundreds of billions of euros in savings they accumulated during lockdowns that could further fuel the recovery.“Generous government support through the pandemic means European economies are set to rally once restrictions are lifted — a big chunk of slack will vanish, even without an extra fiscal boost,” said Jamie Rush, chief European economist at Bloomberg Economics. “In an environment of rising global yields, I see targeted stimulus offering the best value for money.”Read more: Euro-Area Confidence Improves Amid Optimism on Vaccine Rollout Pandemic Sets Stage for Euro-Area Showdown Over Debt Rules France’s Latest Plan to Save Businesses Has Europe IntriguedFor 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.
- Yahoo Finance
Berkshire Hathaway vice chairman Charlie Munger unloaded on bitcoin, showing that his views haven't changed since Warren Buffett and Munger last opined on the digital asset.
- The Fiscal Times
In his second day of testimony before Congress this week, Federal Reserve Chair Jerome Powell told lawmakers that he is not worried about a persistent rise in inflation anytime soon. “We live in a time where there is significant disinflationary pressures around the world and where essentially all major advanced economy’s central banks have struggled to get to 2%,” Powell told the House Financial Services Committee Wednesday. Significant slack in the labor market plays a key role in the dynamic, Powell said, explaining that “our policy is accommodative because unemployment is high and the labor market is far from maximum employment.” While some asset prices have risen recently, including those for cars and some types of technology, the increases are likely temporary. “That doesn’t necessarily lead to inflation because inflation is a process that repeats itself year over year over year,” he told the committee. If short-term inflation does spike in the spring as the service economy reopens and consumers start spending down their ample savings, Powell assured lawmakers that the Fed has “the tools to deal with it.” A goal, not a worry: Powell reiterated that the Fed’s goal is to push inflation up to its 2% target range, something the central bank has been unable to do for decades. “I’m confident that we can and that we will, and we are committed to using our tools to achieving that,” he said. “We believe we can do it, we believe we will do it.” A team effort: Other Fed leaders expressed dovish stances on inflation Wednesday. Fed Vice Chair Richard Clarida told the American Chamber of Commerce in Australia that while the outlook is improving, “it will take some time for economic activity and employment to return to levels that prevailed at the business cycle peak reached last February.” In the meantime, the Fed will maintain policies that are intended to push inflation “above 2 percent for some time," Clarida said. Speaking to an economics class at Harvard University, Fed Governor Lael Brainard said that “the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress,” which would likely depend upon widespread vaccination distribution. “Inflation remains very low, and although various measures of inflation expectations have picked up recently, they remain within their recent historical ranges,” she said. “I will carefully monitor inflation expectations, it will be important to see a sustained improvement in actual inflation to meet our average inflation goal,” she added. Why it matters: The Fed chief once again is providing Democrats with a powerful defense against charges that their proposed $1.9 trillion Covid-19 relief bill will spark a destructive increase in inflation. Like what you're reading? Sign up for our free newsletter.
(Bloomberg) -- Stellantis NV will decide in the coming days whether to close a car factory in the U.K. that has been in limbo since last year due to Brexit-related uncertainty.The automaker is weighing three options for the plant in Ellesmere Port, England, according to people familiar with the matter. It either will invest in making a new version of the Vauxhall and Opel Astra compact car there, build a different model at the facility, or shut it down, said the people, who asked not to be identified because no decision has been made.The site employing about 1,000 workers has emerged as an early test case for the U.K.’s carmaking prospects after the Brexit trade deal reached in late December. Stellantis Chief Executive Officer Carlos Tavares froze investment in the factory earlier in the year due to uncertainty about Britain’s future trading relationship with the European Union. While a crisis was avoided, the CEO has raised concerns about additional costs and bureaucracy, as well as Prime Minister Boris Johnson’s 2030 ban of combustion-engine cars.“You put your investment close to the market where you sell the highest volume,” Tavares said in January. Given that, he asked rhetorically: “What is left for the U.K.?”Stellantis may announce a decision as soon as Wednesday evening after meeting on the matter, according to a spokesman, who declined to comment further. The company also formed from the merger of PSA Group and Fiat Chrysler makes commercial vehicles at a factory in Luton, England. That plant’s future is secure, the people said.After the U.K.’s passenger-vehicle production plunged to a 36-year low last year, automakers now face more onerous customs procedures and requirements to source higher portions of components locally to avoid tariffs. There’s scarce battery production in the country now, and Stellantis already has a 5 billion-euro ($6.1 billion) project to make them in France and Germany with oil giant Total SE.“If you look at it from a pure logistic perspective or from a paperwork perspective, perhaps it’s better to put it in continental Europe,” Tavares said last month, referring to the company’s EV investments. “It depends also on the U.K. government’s willingness to protect some kind of automotive industry in its own country.”(Updates to add reference to possible timing of announcement in the fifth 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.