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Despite ongoing difficulties for its commercial aviation business, there are real signs of progress at the industrial giant.
Central banks in Asia struggled to smother a selloff in global bonds on Friday, piling pressure on their bigger peers to do more, as spooked investors sold assets to cover deepening losses and rushed out of crowded positions in stocks. The erratic trade evoked memories of last March and comes as the pandemic recovery enters a delicate phase, with financial markets moving swiftly to price in an end to the cheap money that had lit a fire under world stocks for a year. Australia's central bank launched a surprise bond buying operation to try and staunch the bleeding, calming cash markets but barely taming the fear, evident in more liquid futures trade.
Gold tumbled 3% to an eight-month low on Friday en route to its worst month since November 2016 as a stronger dollar and elevated U.S. Treasury yields hammered non-yielding bullion's appeal. Spot gold was down 2.5% at $1,726.31 per ounce by 1:34 p.m. ET (1834 GMT), after touching $1,716.85, its lowest since June 2020. U.S. 10-year Treasury yields held near their highest in over a year, while the dollar index also jumped.
(Bloomberg) -- The U.K. should overhaul its stock listing rules and visa requirements to help the country’s fast-growing fintech industry compete after Brexit, a government-backed review has found.The report, led by former Worldpay boss Ron Kalifa, warned that Britain’s departure from the European Union gave Paris, Berlin and other cities “a window to capitalize on uncertain messaging” around immigration and other regulatory changes.“Without additional action, the U.K. risks having its market share eroded,” the review warned.The paper published on Friday is the first of several reviews intended to aid Prime Minister Boris Johnson’s government as it considers easing regulations on the financial industry, which was largely excluded from the British trade deal struck last year with the EU.Chancellor of the Exchequer Rishi Sunak is set to endorse the proposal for a new visa for tech talent in his budget next week, according to a person familiar with the matter.Kalifa’s review supports changing stock-listing rules to allow dual-class shares for fintech companies, a change meant to entice founders to list their companies in London while allowing them to retain control over their firms.Other recommendations include:allowing companies to join the top tier of London’s market by selling just 10% of their shares, down from 25%relaxing rules that give existing shareholders first refusal during fundraising, known as preemption rights, to allow companies to raise more capital quicklythe creation of stock indexes for fintech companies to attract investors.The Investment Association, which represents asset managers, welcomed the proposed reforms. “Any changes should, however, consider minority shareholder protections so that these fintechs can attract long-term investment,” Andrew Ninian, director for stewardship and corporate governance, said in an emailed statement. The U.K. is already investing heavily in this industry, accounting for nearly half of venture capital investment in Europe with $4.1 billion in 2020, according to the trade group Innovate Finance.Fintech firms employ an estimated 60,000 people in Britain and contribute 7 billion pounds ($10 billion) a year to the economy, with some of the biggest companies such as Wise, Monzo Bank Ltd. and Revolut already attracting billion-dollar valuations.The industry represents a growth opportunity as other parts of the U.K. financial industry lose ground. London has seen trading in European shares and derivatives leave for Amsterdam, Frankfurt, Paris and even rival financial hub New York since the start of the year.Kalifa’s review also recommends a government-backed but industry-led Centre for Finance, Innovation and Technology to coordinate fintech policies.(Adds chancellor plans, Investment Association comment from 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.
Vauxhall's parent company has previously said its fate depends on the government's commitment to the car industry.
Violet light bathed the club stage as 300 people, masked and socially distanced, erupted in gentle applause. For the first time since the pandemic began, Israeli musician Aviv Geffen stepped to his electric piano and began to play for an audience seated right in front of him. Governments say getting vaccinated and having proper documentation will smooth the way to travel, entertainment and other social gatherings in a post-pandemic world.
Toyota Motor Corp said on Friday it has developed a packaged fuel cell system module, as it hopes to expand its usage and accessibility of the zero-emission technology amid the industry's shift towards electric vehicles (EVs). The world's biggest automaker, which launched a revamped Mirai in December, has not been successful in winning drivers over to fuel cell vehicles (FCV). The FCV segment remains a niche technology despite Japanese government backing, amid concerns about lack of fuelling stations, resale values and the risk of hydrogen explosions.
(Bloomberg) -- A chaotic selloff in the Treasuries market was spurred by a massive exodus from popular trades, heightened by liquidity concerns that could inflict more pain in coming days.The exodus happened at a time when traders were already worried about the imminent disappearance of a support beam for the market -- a regulatory exemption that has allowed banks to accumulate more U.S. bonds.Treasury futures open interest across a range of maturities sank by a huge amount Thursday: the equivalent of $50 billion of 10-year notes. It didn’t help that this coincided with the Treasury Department selling $62 billion of seven-year notes, an auction that proved to be a disaster.The month ahead could be rocky, too. Back in April, the Federal Reserve tweaked its rules to exempt Treasuries from banks’ supplementary leverage ratios -- allowing them to expand their balance sheets with U.S. debt. But that relief ends March 31 and what happens next is something of a mystery.“It wasn’t an orderly selloff and certainly didn’t appear to be driven by any obvious fundamental continuation or extension of the reflation thesis,” wrote NatWest Markets strategist Blake Gwinn in a note to clients. A number of more technical factors were in the mix, against a backdrop of a good-old-fashioned buyers strike, he said. Here’s a look at some of the factors driving Thursday’s moves:The ProtagonistThe main protagonist in the bond market was the five-year Treasury note, a maturity often associated with long-term Fed rate expectations, where yields closed 22 basis point higher on the day. The so-called butterfly-spread index -- a measure of how the note is performing against its two- and 10-year peers -- jumped 24 basis points, the worst daily performance for the sector since 2002.The selling was triggered after a U.S. auction of seven-year bonds saw record low demand. The bid-to-cover ratio -- a gauge of investor interest -- came in at 2.04, well below the recent average of 2.35. That sent five-year yields surging through 0.75%, a crucial technical level watched by investors as a signal that any bond selloff could worsen.Unwind RushThe yield spike sent traders scurrying to manage their positions, in particular those linked to the popular reflation trade. Bets on a steeper yield curve were hit as the curve flattened thanks to heavy losses in shorter-dated bonds.Preliminary open interest in Treasury futures across the curve -- a measure of outstanding positions -- collapsed by an amount equivalent to $50 billion in benchmark 10-year notes. While there may be some muddiness to the data given potential contract rolls, it does suggest a significant unwind of positions.The selloff paused in Asia trading hours and remained calm during Friday in New York. Some Asian traders said they had worked through New York hours right through much of Friday.The 10-basis-point spike and subsequent retreat in benchmark Treasuries when they touched 1.5% also suggests some traders were hit with stop-losses on their long positions.Fundamental DecouplingThe bond market’s divergence from a fundamental backdrop was most evident at the shorter-end of the curve. Eurodollar contracts -- which are priced off Libor -- collapsed in record volumes as traders repriced their expectations for the path of Fed rates with few obvious catalysts.Markets now see a Fed hike by March 2023 compared to mid-2023 previously, and have priced in rates over 50 basis points higher by 2024.But in remarks this week, Fed Chairman Jerome Powell offered reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base. While Fed Vice Chair Richard Clarida expressed cautious optimism on the outlook, he said it would “take some time” to restore the economy to pre-pandemic levels.“Today’s market dynamics look to have been fueled by technical factors and the Fed may want to let the dust settle before it judges whether there is anything really problematic here,” said Evercore ISI’s Krishna Guha and Ernie Tedeschi. “But a change of tone at least seems warranted in our view and possibly more.”Liquidity DroughtA lack of bond market liquidity, just when traders needed it most, can also be at fault.“We think that a steep decline in market depth contributed to the outsized moves in yields,” wrote JPMorgan Chase & Co. strategist Jay Barry in a note to clients. Barry showed how the share of high-frequency traders in the Treasury market -- which has been on an increasing trend -- tends to retreat rapidly as volatility spikes.U.S. 3-month 10-year swaption volatility -- a gauge of price swings in the rates market -- jumped to highest in over a year on Thursday, having risen steadily all month.“Given the natural feedback loop between volatility and liquidity, it’s likely that a steep decline in depth contributed to the outsized moves in yields,” added Barry.Regulatory PurgatoryBond traders were already on edge as they waited for Fed guidance ahead of next month’s expiry of a regulation that has encouraged banks to buy Treasuries. Neither Powell nor Randal Quarles, the vice chair for supervision, gave an answer as to whether the measure would be extended, which likely helped extend a clearing of positions in the swaps market.Credit Suisse strategist Zoltan Pozsar said clarity on this situation is one of the things needed to calm long-term Treasury yields.No matter what the Fed decides, “both would offer clarity and direction to the rates market,” he said.(Updates with concerns from first 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.
Some hedge fund managers are getting concerned about the money that has flooded into high-flying stocks like Tesla and the popular ARK fund as bond yields spike and growth stocks take a hit. The popularity of stocks like Tesla helped Cathie Wood's $26.6 billion ARK Innovation ETF become the top-performing actively managed U.S. equity fund tracked by Morningstar last year. But even as shares of Tesla plunged this week and Wood's fund fell, she increased the fund's bet on the automaker.
(Bloomberg) -- Tech shares led a rout in U.S. stocks while the selloff in global bonds deepened, with the benchmark Treasury yield spiking to a one-year high and debt from the U.K. to Australia coming under pressure.The Nasdaq 100 tumbled 3.6%, the most since October, as investors rotated away from pandemic-era winners toward companies poised to benefit from an end to lockdowns. About 10 stocks fell for every one that gained on the S&P 500. Cathie Wood’s ARK Innovation ETF extended its decline, leaving it 15% lower for the week. Stocks popular with the day-trader crowd surged once again, with GameStop Corp. doubling at one point before ending 19% higher.Earnings that came after the close were mixed. Airbnb Inc. rose about 4% in late trading after reporting sales that beat estimates, while DoorDash Inc. fell about 14% after losses more than doubled from a year earlier. Beyond Meat Inc. added about 7% after announcing a partnership with McDonald’s.Ten-year Treasury yields spiked after tepid demand at an auction for government bonds, surging as much as 23 basis points to 1.6%, the highest since last February. The increase forced a crucial group of investors such as holders of mortgage securities to sell Treasuries, which in turn led to further increases in yields.Across markets, investors are betting on a sunnier outlook for the global economy, with U.S. jobless claims data the latest to support that idea. But some traders worry that resurgent growth is already priced into stocks, and they’re staring down the risk that accelerating inflation is just around the corner, a development that would dent the appeal of equities.“It’s all about interest rates,” said Randy Frederick, vice president of trading and derivatives for Schwab Center for Financial Research. Tech “has been a relative outperformer. As it led on the way up, it will likely lead on the way down too.”In remarks this week, Federal Reserve Chairman Jerome Powell offered reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base.That’s given the bond market enough reason to keep driving yields higher. The 10-year U.S. yield adjusted for inflation rose to its highest level since June, a warning sign for riskier assets that have benefited from exceptionally loose financial conditions amid the pandemic.Read more: Soaring U.S. Yields Send Risk Assets Warning as Real Rates RiseElsewhere in markets, Asian bourses closed broadly higher. Bitcoin traded just below $50,000.Some key events to watch this week:Finance ministers and central bankers from the Group of 20 will meet virtually Friday. U.S. Treasury Secretary Janet Yellen will be among the attendees.These are some of the main moves in markets:StocksThe S&P 500 Index fell 2.5% as of 4 p.m. New York time.The Stoxx Europe 600 Index fell 0.4%.The MSCI Asia Pacific Index surged 0.8%.The MSCI Emerging Market Index added 0.2%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.6%.The euro climbed 0.1% to $1.2173.The British pound fell 0.8% to $1.4024.The Japanese yen weakened 0.3% to 106.22 per dollar.BondsThe yield on 10-year Treasuries increased 15 basis points to 1.52%.Germany’s 10-year yield jumped seven basis points to -0.23%.Britain’s 10-year yield increased five basis points to 0.78%.CommoditiesWest Texas Intermediate crude rose 0.4% to $63.45 a barrel.Gold weakened 1.8% to $1,773.03 an ounce.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) -- The second time proved the charm for Saudi Arabia’s foray into electric vehicles.The kingdom’s main sovereign wealth fund is sitting on paper gains of over 30-fold from its investment in Lucid Motors Inc., with the value of its stake set to rise as part of a deal to take the company public.The result is a boost for the $400 billion Public Investment Fund after missing out on an epic rally in Tesla Inc. shares when it sold much of its 5% stake in the industry leader at the end of 2019.The PIF, as the fund is known, will hold a stake of 62% in Lucid once the acquisition of the automaker by special purpose acquisition vehicle Churchill Capital IV is complete. The holding would be valued at about $32 billion, based on the current share price of Church Capital IV.The deal would represent a jackpot for the PIF, which invested $1 billion in Lucid in 2018 and is expected to provide an additional $600 million in funding for the company before the SPAC deal is completed. It also participated in a $2.5 billion private investment in public equity, or PIPE, the largest of its kind on record for a SPAC deal.Under the leadership of Yasir Al-Rumayyan, the PIF has shifted investment priorities from holdings in state-owned companies to building up stakes in companies such as Uber Technologies Inc. and Jio Platforms Ltd., the digital services business controlled by Indian billionaire Mukesh Ambani.The fund’s returns on investment increased from about 3% between 2014 and 2016 to 8% from 2018 to 2020, according to the PIF website. It has more than doubled its assets in the five years since Crown Prince Mohammed bin Salman has been chairman.The investments are part of a strategy that aims to boost returns from the kingdom’s wealth while diversifying the Saudi economy and creating jobs.Bloomberg News reported in January that Lucid was in talks with the PIF to potentially build a factory near the Red Sea city of Jeddah, although the automaker’s CEO, Peter Rawlinson, said on Tuesday there were no imminent plans to build a factory in the kingdom.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) -- State Bank of India, the country’s largest lender, is preparing for its mutual fund joint venture for an initial public offering, according to people familiar with the matter.SBI plans to ask investment banks for proposals after discussions with its board and shareholder Amundi Asset Management and kick off the process in the next few months, the people said. The lender could raise about $1 billion from the offering, one of the people said, who asked not to be identified as the information is private. SBI’s mutual fund is currently valued at about $7 billion, another person said.At $1 billion, the first-time share sale could be India’s biggest since the $1.4 billion listing by SBI Cards & Payment Services Ltd. in March, according to data compiled by Bloomberg. The SBI mutual fund business would also be the third such listing of its kind in the country, joining UTI Asset Management Co. and HDFC Asset Management Co.Shares in SBI pared losses in Mumbai after the Bloomberg News story, ending the day 4.2% lower as the broader banking gauge was down 4.9%.SBI’s plans to list the mutual fund arm is part of its strategy to extract more value from its units after divesting some of its stakes in its life insurance and cards businesses last year.SBI’s mutual fund is the largest in India with 5 trillion rupees ($68.4 billion) of assets under management, according to its website. The fund house posted a net income of 4.98 billion rupees for the April-December period, according to an investor presentation. SBI holds a 63% stake in the mutual fund business, while Paris-based Amundi owns the rest.Deliberations are at an early stage and details of the share sale could still change, the people said. A representative for SBI didn’t immediately respond to requests for comment.(Updates to add SBI shares in 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.
Robocalls are exploding again, but there are some ways to stop these nuisances.
The owner of the Ellesmere Port factory, which employs about 1,000 workers, is in talks with the government.
The U.S. House votes Friday on a bill to give you a third payment. Could there be another?
Last night on MSNBC, Bloomberg reporter Tim O'Brien speculated that the lead accountant on the Trump Organization's taxes may turn state's evidence. Allen Weisselberg is the chief financial officer of...
Feb.25 -- Israel Health Minister Yuli Edelstein says the country is "crossing the line" of 50% of the population being vaccinated. He speaks on "Bloomberg Surveillance."
As you might know, Meridian Energy Limited ( NZSE:MEL ) recently reported its half-year numbers. Meridian Energy...
The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said. Robinhood did not immediately respond to a request for comment. Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.
The IRS has received approximately 21% more individual returns than the agency received last year by Feb. 7, which was 12 days into the tax season last year.
According to a Twitter account called @WaitingOnBiden, today is the 38th day that President Biden has not sent $2,000 stimulus payments to Americans, something he promised he would usher out immediately after he assumed office. The last relief bill passed in December, while Trump was still president. The relief bill before that was passed in late March 2020, and now we’re just a few days away from March 2021. The good news is that the House is finally voting on the Biden administration’s $1.9 trillion COVID relief plan today, which includes a $1,400 stimulus payment to those who fall within the income limits. It will pass in the Democrat-controlled House, and it is likely to pass in the Senate through a process called budget reconciliation, which essentially allows lawmakers to pass fiscal bills more quickly because it only requires a simple majority to pass, instead of 60 votes. Beyond the stimulus payments, the relief bill also contains a $400 per week federal unemployment boost. The current set of federal unemployment provisions are set to expire by March 14, essentially giving Congress a hard deadline by which to pass the relief bill. While $1.9 trillion might sound like a lot, economists generally agree that the government should spend as much as it needs to help its citizens — that is its mandate, after all — without handwringing over what-ifs such as inflation or “overheating” the economy. The bad news, though, is that a key part of the relief bill — a $15 federal minimum wage hike — will likely not be included. Senate Parliamentarian Elizabeth MacDonough ruled yesterday that the inclusion of a minimum wage raise broke the rules of what can and can’t be included in a reconciliation bill. But what is a Parliamentarian, you ask? Turns out, it is not someone who only smokes Parliaments. The Parliamentarian is a non-partisan advisor who interprets rules and precedents within the Senate. It is an appointment and not an elected position. The Senate also doesn’t have to listen to the Parliamentarian’s rulings; the “presiding officer” of the Senate — in other words, the Vice President — can ignore the Parliamentarian. There’s precedent for that. According to Washington Post reporter Jeff Stein, however, Vice President Harris will not be overruling MacDonough. That means that the minimum wage provision will be removed from the bill in the Senate and return to the House for another vote. It also means that any attempt to raise the federal minimum wage — which has not been raised since 2009 and remains at $7.25 — will need to be introduced in a standalone bill that won’t be able to pass via budget reconciliation, needing to clear the bar of 60 votes. Top Democrats have already announced an alternate plan that would impose a 5% tax on big corporations if they don’t raise their wages and even tax credits for small businesses that do raise wages. But some economists are concerned that a tax disincentive, or tax credits, would not do enough to actually raise wages for a broad swath of workers. While many conservatives have bristled at the idea of a $15 federal minimum wage, American wages have generally remained at a standstill for decades. If the minimum wage had kept pace with workers’ productivity and inflation, it would be around $20 per hour right now. We also need to acknowledge the huge impact a minimum wage hike would have on the people who have been most harmed by the pandemic. The Economic Policy Institute (EPI) recently released an analysis of wages in the past year and found that average, inflation-adjusted wages in the U.S. had actually gone up in 2020. Great news, right? Wrong. The EPI found that average wages had increased because the makeup of the American workforce had changed so drastically — a huge proportion of those who lost their jobs during the pandemic were those making low wages, or around $14 per hour or less. In contrast, people making $25 per hour and above actually saw job gains overall in 2020. With so many low-wage jobs having disappeared, we get the illusion that there’s been progress instead of a downslide. A $15 minimum wage would be life-changing to so many Americans, and its exclusion from the next stimulus bill is an enormous disappointment. Like what you see? How about some more R29 goodness, right here?New Stimulus Checks Will Go Out To Fewer PeopleWhat To Know About Biden's COVID-19 Relief PlanBiden Is Making Sweeping Changes To Minimum Wage