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Brightline ridership surpasses pre-pandemic levels

Ticket sales are 72% higher than they were in 2019, it says......»»

Category: topSource: bizjournalsNov 24th, 2022

3 Stocks That Popped Yesterday

We're in the middle of earnings season, so it would be natural to assume that earnings reports are the biggest drivers of stocks during the season. But that isn't the case with a bunch that soared yesterday. We’re in the middle of earnings season, so it would be natural to assume that earnings reports are the biggest drivers of stocks during the season. But that isn’t the case with a bunch that soared yesterday, at least not for all of them.First among them is the maker of the Impella heart pump Abiomed, Inc. ABMD, which is being acquired by Johnson & Johnson JNJ. The stock soared nearly 50% on the news to $377.82, close to the offer price of $380 a share (total consideration $16.7 billion). Additionally, stock holders get to make another cool $35 a share if certain sales and development milestones are reached.The solid premium that Johnson & Johnson is offering is a great exit for Abiomed shareholders and says something about JNJ’s medical technology ambitions. Abiomed also reported quarterly results, posting a 23.8% EPS beat on revenues that missed by 2.7% (impacted by currency, as nearly a fifth of revenue is generated overseas).  Impella adoption continues to increase.Next, we move to Carvana Co. CVNA, which jumped nearly 13% on a JP Morgan upgrade that was more conciliatory than actual optimism. The main point to note was that Carvana has sufficient assets (even a slice of its $2 billion in real estate can tide over this difficult patch). Therefore, it wouldn’t need to go bankrupt as some were expecting.However, this online retailer of used cars is in deep water because of increasing inventories, decreasing prices and a more cautious buyer given the level of inflation. The increase in borrowing costs also isn’t helping. The analysts warned that Carvana wasn’t “out of the woods.” The company has yet to make a profit. While the estimated per share loss for 2023 is lower than this year, it has increased in the last 7 days. It is slated to report tomorrow, so there could be further volatility in the shares.  The stock dropped sharply when the pandemic hit but then picked up in a V-shaped recovery, staying stable through most of 2021, as social distancing had more people buying cars. But they’re down 95% over the past year, as supply chain concerns and inflation took a toll.Shares of Uber Technologies, Inc. UBER gained nearly 13% after the company reported encouraging commentary.Earnings missed estimates by a mile and then some while revenues were just around 3% ahead. Granted, the bar was set rather high given that revenues represented a 72% jump from last year. The increase in per share losses from 23 cents to 61 cents was attributed partly to its equity in Didi.But management commentary sent the shares soaring. For one thing, ridership continued to increase, exceeding pre-pandemic levels, which means that while consumers are avoiding buying stuff, eating out and traveling remain relatively high on their priority lists, after the drought of the last two years. This must be music to investors’ ears.  Second, it isn’t just that riders are getting back in droves, but its efforts to lure drivers back appear to be paying off as well. Management said that Uber’s ride hailing driver base at the end of September was comparable with the pre-pandemic level in September 2019.Third, Uber is now selling ads to its 124 million strong user base, promoting one brand per ride. With the third quarter runrate at $350 million, management confirmed their billion-dollar revenue target by 2024.Uber’s diversification into other revenue streams (including food delivery and freight, which didn’t do anything exciting in the last quarter) is a big positive for its future profitability and cash flow.Abiomed carries a Zacks Rank #2 (Buy), Uber a Zacks Rank #3 and Carvana a Zacks Rank #4 (Sell).One-Month Price PerformanceImage Source: Zacks Investment Research Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ): Free Stock Analysis Report ABIOMED, Inc. (ABMD): Free Stock Analysis Report Carvana Co. (CVNA): Free Stock Analysis Report Uber Technologies, Inc. (UBER): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 2nd, 2022

CTA looks to address hiring, spending on security in 2023 budget proposal

CTA is planning no changes to base fares or pass prices in 2023, as ridership remains below pre-pandemic levelsCTA is planning no changes to base fares or pass prices in 2023, as ridership remains below pre-pandemic levels.....»»

Category: topSource: chicagotribuneOct 20th, 2022

Subway hits three consecutive pandemic ridership milestones

Record levels of straphangers traveled the system last week.....»»

Category: blogSource: crainsnewyorkSep 14th, 2022

Futures Head For Another Monthly Drop, As Oil Slumps, Yields And Dollar Rise

Futures Head For Another Monthly Drop, As Oil Slumps, Yields And Dollar Rise After three days of steep declines, S&P futures traded between modest gains and losses as global markets headed for the third consecutive weekly decline and another monthly drop on concerns that aggressive central bank tightening will push the global economy into a hard recession. At 7:15am ET, futures were up 0.2% and Nasdaq futures rose 0.7%, after trading both higher and lower earlier in the session. The dollar rose, Treasury yields jumped after another record CPI print in Europe, while the bizarre oil slump extended. In premarket trading, Bed Bath& Beyond plunged after the home-goods retailer filed a form to sell an unspecified number of shares. HP also fell 6.8% after the company reported quarterly sales that missed estimates and cut its annual profit forecast as demand for personal computers and printers slowed. Analysts noted that the PC maker will need a couple of quarters to correct its inventory. Here are other notable premarket movers: Robinhood (HOOD US) falls 2.3% as Barclays cut its rating to underweight from equal weight ChargePoint (CHPT US) shares rose as much as 2.1% in US premarket trading, after the electric vehicle charging network operator’s second-quarter revenue came in ahead of estimates, with analysts positive on the company’s gross margin performance amid supply-chain woes HP Enterprise (HPE US) narrowed its full-year adjusted earnings per share forecast and reported in-line revenue for the third quarter. Analysts were bracing for the worst, after Dell’s disappointing outlook last week. Shares fall 1% in premarket trading PayPal shares rise 2.9% in premarket trading after Bank of America upgraded its rating on the payments stock to buy from neutral previously Morgan Stanley resumes coverage of Welltower (WELL US) at overweight and a $90 PT with the broker bullish on a recovery for the US senior housing market “What’s clear is that predicting this market is not clean cut,” Angeline Newman, a managing director at UBS Global Wealth Management, said on Bloomberg Television. “We are living in a world where conflicting economic signals are making the path of monetary policy very difficult to determine.” Market bets on a shallower trajectory for Federal Reserve tightening are receding, raising the prospect of more losses for stocks and bonds in an already difficult year. Investors are scouring incoming data for clues on the policy path, with August US jobs figures on Friday the next key report. European shares reversed earlier gains to trade at the lowest level in more than six weeks, after Euro-area inflation accelerated to another all-time high, strengthening the case for the European Central Bank to consider a jumbo interest-rate hike when it meets next week. ECB Governing Council member Joachim Nagel urged a “strong” reaction, hinting at a 75bps hike just as Europe braces for an energy disaster with winter coming. Paradoxically this pushed the EUR to session lows. In Europe, the Stoxx 50 fell 0.7%, with the FTSE 100 lagging, dropping 1%. Energy and autos slump while utilities is the worst-performing sub-index in the European gauge on Wednesday, extending their selloff to a fourth session as investors fret over Russian gas supplies at the start of a three-day halt of the key Nord Stream pipeline. Slump is lead by Drax (-4.3%), National Grid (-4%), Italy’s Terna (-2.3%), Germany’s Uniper (-4%) and Fortum (-3%). Some renewables also take a hit, including Orsted (-2.4%) and Verbund (-1.4%). Citi says utilities had to put up more than EUR100b of additional collateral versus 2020 levels because of record levels of future power and gas prices. Here are the biggest European movers: ASML rises as much as 3.4%. It is among the “most attractive names” in the current uncertain macro environment, UBS says in a note upgrading the semiconductor-equipment company to buy from neutral. Stadler Rail shares climb as much as 6% after reporting mixed results, with 1H sales beating estimates and a strong order intake, offset by more cautious comments on margins and a negative currency impact, according to analysts. CFE shares surge as much as 23% after the Belgian construction and development company’s 1H results, with Degroof raising its estimates. Ackermans & van Haaren rises as much as 7.5% after KBC upgrades its rating on the industrial holding company to buy from hold following first-half results, which the broker describes as “resilient” in tough times. Lundbergforetagen shares rise as much as 5.5%, the most since May, after DNB reiterated its buy recommendation for the Swedish real estate investment firm, while trimming its PT to SEK485 from SEK530. Utilities are among the worst-performing sub-index in the European gauge on Wednesday, extending their selloff to a fourth session as investors fret over Russian gas supplies at the start of a three-day halt of the key Nord Stream pipeline. European energy stocks underperform for a second day after oil erased initial gains on Wednesday to head for a third monthly decline as rate hikes by major central banks and China’s Covid Zero strategy increase the likelihood of a global economic slowdown. Brunello Cucinelli shares fall as much as 7.2% after the Italian luxury fashion company reported 1H results; Deutsche Bank says the update is “largely as expected” with guidance appearing “relatively conservative.” Europe's weakness was sparked by the ongoing rout in oil, which headed for a third monthly drop - the longest losing run in more than two years - hampered by the likelihood of slower global growth, yet which as Goldman says is now the best asset to own having priced in a recession more than any other asset class. European natural gas advanced after a two-day slump, with traders weighing risks to Russian supplies against the continent’s drastic efforts to curb the energy crisis. Earlier in the session, Asian equities climbed in a mixed day that saw tech shares advance but Japan’s bourses retreat as traders digested China’s weak economic data while technology stocks rebounded. BYD Co. plunged in Hong Kong after Warren Buffett’s Berkshire Hathaway Inc. trimmed its stake in the electric vehicle maker. The MSCI Asia Pacific Index erased an earlier loss to trade up as much as 0.6%. Chinese benchmarks underperformed the region after factory activity contracted on power shortages spurred by a historic drought. Stocks were also weak in Hong Kong as Warren Buffett’s sale of shares in BYD Co. fueled general risk-off sentiment, countered by advances in the city’s tech shares. Traders also weighed US job and consumer confidence numbers, which were seen backing the Federal Reserve’s rate-hike plans. “The dented risk sentiment from tighter-for-longer central bank policies is likely to weigh on sentiment in the region,” Jun Rong Yeap, a market strategist at IG Asia Pte, wrote in a note. He added that further headwinds including Covid lockdowns may weigh on Chinese equities. Taiwanese stocks rose, even amid a potential escalation of cross-strait tensions, while South Korean shares also advanced on gains in tech names. Indian and Malaysian markets were closed for holidays. Investors are also contending with mounting friction between Beijing and Taipei after Taiwanese soldiers fired shots to ward off civilian drones and evaluating the latest Chinese data, which indicated factory activity shrank for a second month. Power shortages, a property sector crisis and Covid outbreaks all took a toll. In Japan, stock dropped amid concerns over the potential for Federal Reserve tightening and data that showed weak factory activity in China.  The Topix fell 0.3% to 1,963.16 as of the market close Tokyo time, while the Nikkei 225 declined 0.4% to 28,091.53. Sony Group Corp. contributed the most to the Topix’s decline, decreasing 1.7%. Out of 2,169 stocks in the index, 683 rose and 1,381 fell, while 105 were unchanged. “US stocks, which plummeted on the Jackson Hole meeting last week, have fallen further and Japan stocks are matching that,” said Kiyoshi Ishigane, a chief fund manager at Mitsubishi UFJ Kokusai Asset Management. In Australia, the S&P/ASX 200 index fell 0.2% to close at at 6,986.80, weighed by losses in mining and energy shares.  Asia-Pacific energy-related stocks fell as oil headed for its third straight monthly decline, the longest losing run in more than two years, on prospects for slower global growth. In New Zealand, the S&P/NZX 50 index fell 0.4% to 11,601.10 In FX, the Bloomberg dollar spot index rose again, up 0.2%, as it reversed a loss as the greenback rebounded, with most Group-of-10 peers swinging to a loss in the European session. AUD and JPY are the strongest performers in G-10 FX, NOK and CHF underperform. The euro fell to a session low of $0.9974 as euro-area inflation accelerated to another all-time high of 9.1% from a year ago, exceeding the 9% median estimate in a Bloomberg survey. Norway’s krone plunged by 1% against the euro and even more versus the dollar after news that the nation’s central bank will ramp up its purchases of foreign currency to 3.5 billion kroner ($350 million) a day in September from 1.5 billion in August as it deposits energy revenue into the $1.2 trillion sovereign wealth fund. The pound neared the lowest since March 2020 against the greenback that was touched yesterday, yet options suggest a short-squeeze could be due. The Australian and New Zealand dollars held up well amid month-end demand after earlier gains in US stock futures following China PMI data. The yen was steady. Board member Junko Nakagawa said that the Bank of Japan’s forward guidance for interest rates isn’t necessarily directly linked with its Covid funding program. In rates, Treasuries are off session lows as US trading gets under way Wednesday, selloff paced by gilts with UK yields higher by 9bp-13bp. US 2Y barely exceeded Tuesday’s multiyear high. US yields are higher by 3bp-5bp, 2- year rose as much as 5.3bp to 3.275%, Treasury 10-year yield adds 4bps to around 3.14%.  Curve spreads are little changed, inverted 5s30s around -5.7bp, near lowest level since mid June; month-end index rebalancing at 4pm New York time will extend the duration of Bloomberg Treasury index by an estimated 0.12 year. European bonds slide across the curve, led by gilts, after hotter-than-expected euro-area inflation data. Gilts 10-year yield is up 11 bps to 2.82%, while German 10-year yield rises 3.6bps to 1.55%. Peripheral spreads widen to Germany with 10y BTP/Bund adding 2.2bps to 233.4bps. Bitcoin has managed to reclaim USD 20k after slipping to a USD 19.7k low, overall the crypto remains in fairly tight sub-1k parameters. In commodities, crude futures extend declines. WTI drifts 2.6% lower to trade near $89, while Brent falls 3% to the $96 level. Base metals are mixed; LME tin falls 2.5% while LME nickel gains 1.4%. Spot gold falls roughly $10 to trade near $1,714/oz. Spot silver loses 1.5% near $18. Looking to the day ahead now, data releases include the flash CPI reading for the Euro Area in August, as well as the country readings for France and Italy. On top of that, there’s the ADP’s new report of private payrolls for August and the MNI Chicago PMI for August. Finally, central bank speakers include the Fed’s Mester and Bostic. Market Snapshot S&P 500 futures little changed at 3,986.25 STOXX Europe 600 down 0.6% to 417.39 MXAP up 0.2% to 158.39 MXAPJ up 0.3% to 519.46 Nikkei down 0.4% to 28,091.53 Topix down 0.3% to 1,963.16 Hang Seng Index little changed at 19,954.39 Shanghai Composite down 0.8% to 3,202.14 Sensex up 2.7% to 59,537.07 Australia S&P/ASX 200 down 0.2% to 6,986.76 Kospi up 0.9% to 2,472.05 German 10Y yield little changed at 1.54% Euro down 0.1% to $1.0003 Gold spot down 0.5% to $1,715.78 U.S. Dollar Index up 0.14% to 108.92 Top Overnight News from Bloomberg Forget about a soft landing. Federal Reserve Chair Jerome Powell is now aiming for something much more painful for the economy to put an end to elevated inflation. The trouble is, even that may not be enough. It’s known to economists by the paradoxical name of a “growth recession.” France said the nation’s natural gas storage will be full in about two weeks, enabling the country to ride out the coming winter even as Russia turns the screw on deliveries of the fuel UK statisticians decided that a £400 ($466) government grant to help households with energy won’t lower headline inflation numbers, a move that will protect the returns of some bond holders but increase payments made by both the Treasury and consumers Sweden’s Riksbank hopes to be able to avoid a recession as it is prepared to do what is necessary to bring soaring inflation back to the central bank’s 2% target, deputy governor Anna Breman said The People’s Bank of China set stronger-than-expected yuan fixings for six sessions to Wednesday and people familiar with the matter said at least two local banks pushed back against the weakness when submitting data for the reference rate. Traders still expect it to weaken past the psychological 7 per dollar level, even if the moves slowed the decline China’s retail activity flatlined in August with e-commerce demand especially weak, according to satellite data, suggesting that consumer caution due to the ongoing Covid Zero policy and elevated unemployment remain major drags on the world’s second-largest economy Russia’s seaborne crude shipments to Asia have fallen by more than 500,000 barrels a day in the past three months, with flows to the region hitting their lowest levels since late March A more detailed look at global markets courtesy of Newsquawk Asia-Pacific stocks were mostly negative following the losses across global counterparts owing to recent hawkish central bank rhetoric and with geopolitical concerns stoked after Taiwan fired warning shots at a Chinese drone. ASX 200 was subdued by weakness in commodity-related stocks with the energy sector the worst hit after the recent slump in oil prices, while a surprise contraction in Construction Work added to the headwinds and feeds into next week’s GDP release. Nikkei 225 declined but held above 28k after encouraging Industrial Production and Retail Sales. Hang Seng and Shanghai Comp were pressured amid a heavy slate of earnings releases and with US regulators said to have selected a number of US-listed Chinese companies for audit inspections including Alibaba, while participants also reacted to the Chinese PMI data in which the headline Manufacturing PMI topped estimates but remained in contraction territory. Top Asian News Japanese PM Kishida said he has fully recovered from COVID-19 and returned to normal duty. Kishida added that they will begin administering Omicron variant targeted vaccines earlier than planned, while he announced to increase the daily upper limit of entrants to Japan to 50k on September 7th and will look into further loosening of border controls. South Korean vice-Finance Minister says they received "positive signs" during talks with FTSE Russell, FX environment has not emerged as a hurdle in discussions. Possibility is high for S. Korea's inclusion to the FTSE's WGBI watch-list in September Chinese NBS Manufacturing PMI (Aug) 49.4 vs. Exp. 49.2 (Prev. 49.0); Non-Manufacturing PMI (Aug) 52.6 vs Exp. 52.2 (Prev. 53.8) Chinese Composite PMI (Aug) 51.7 (Prev. 52.5) Japanese Industrial Production Prelim. (Jul P) 1.0% vs. Exp. -0.5% (Prev. 9.2%); Retail Sales YY (Jul) 2.4% vs. Exp. 1.9% (Prev. 1.5%) Australian Construction Work Done (Q2) -3.8% vs. Exp. 0.9% (Prev. -0.9%) Initial upside in Europe faded as broader price action took another hawkish turn amid inflation data, Euro Stoxx 50 -1.0%. Stateside, futures are mixed around the unchanged mark, ES -0.2%, though are similarly well off best levels with data and Fed speak due. Top European News UK's ONS rules that energy bill rebate does not directly affect inflation statistics directly; "concluded that payments under the scheme should be classified as a current transfer paid by central government to the households sector." i.e. the payment is being treated as a fiscal transfer as opposed to a price adjustment. UK government could reportedly fast-track nuclear power projects to help ease the energy crisis, according to The Telegraph. UK government is considering caps on rent to protect social housing tenants as part of a wider effort to ease the soaring costs of living, according to FT. Former UK Chancellor Sunak warned that Foreign Secretary Truss's campaign promises could increase inflation and borrowing costs, according to FT. German Economy Minister Habeck said they would reject the idea of 'capping' energy prices; Finance Minister Lindner says the hurdle to an excess profit tax is high (re. energy); Chancellor Scholz says the early steps on energy means we will get through the winter period, will take measures to ensure energy prices "do not go through the roof". FX A session of gains for the DXY with upside spurred by haven bids, as the broader market sentiment deteriorated shortly after the European cash open. EUR/USD sits as one of the laggards with minimal immediate reaction seen in wake of hotter-than-expected August flash CPI for the EZ, although the upside for the pair may be capped by Nord Stream 1 jitters. The antipodeans are mixed as AUD leads the gains as the outperforming G10 peer on the back of better-than-expected Chinese official PMI metrics; Petro-currencies are softer as the slide in crude oil resumes. The JPY remains somewhat resilient in the face of the USD strength, likely amid the risk aversion across the market. Fixed Income Core benchmarks experienced a fairly contained start to the session, though this proved to be shortlived and pronounced action occurred on inflation release. Bunds remain sub-147.50, though off worst, as initial French-CPI induced upside was reversed following hot Italian and subsequent EZ-wide Flash August HICP; market pricing for 75bp remains just above 50%. Gilts are the standout laggard as on the ONS treats the Energy Support as a fiscal transfer, thus Ofgem Energy adj. will be fully reflecting in CPI; Gilts sub-130 ticks in wake. USTs are directionally downbeat but comparably contained in terms of magnitudes, ADP and Fed's Bostic/Mester due. Commodities WTI and Brent futures resumed selling off in tandem with the broader risk-mood. Dutch TTF futures are on a firmer footing today following yesterday’s near-10% slump. Spot gold is pressured by the firmer Dollar and approaches USD 1,700/oz to the downside. 3M LME copper has been extending on gains with a boost from the above-forecast Chinese PMI metrics, but the contract remains under USD 8,000/t. OPEC+ JTC upgrades 2022 oil market surplus forecast by 100k BPD to 900k BPD, according to a report via Reuters; sees market surplus rising to 1.4mln BPD in November from 0.6mln BPD in October. OPEC+ JTC report says rising energy costs "may lead to a more significant reduction in consumptions towards year-end", via Reuters. US Private Inventory Data (bbls): Crude +0.6mln (exp. -1.5mln), Cushing -0.6mln, Gasoline -3.4mln (exp. -1.2mln), Distillates -1.7mln (exp. -1.0mln). Oman crude OSP calculated at USD 97.00bbl for October vs. USD 103.21bbl in September, according to DME data. Central Banks BoJ's Nakagawa says the central bank decided to maintain easy policy bias in July, and hopes to discuss at the September meeting whether it should continue doing so based on data. Must remain vigilant to downward economic pressure from pandemic. BoJ is to conduct fixed-rate purchase operations for the cheapest-to-deliver 357th JGB notes for an extended period of time as of September 1st. ECB's Rehn says the economic outlook has darkened, normalisation of monetary policy progressing consistently. Rates will increase in September, will be necessary to hike further at future gatherings. Riksbank's Bremen says it is of the utmost importance to defend the inflation target as anchor for price setting and wage formation; adds inflation is too high. Inflation outcomes have been higher than expected recently, inflation risks are on the upside. Does not rule out a 50bps or 75bps hike at the 20th September meeting. Norges Bank Currency Purchases (Sep) NOK 3.5bln (prev. NOK 1.5bln) US Event Calendar 07:00: Aug. MBA Mortgage Applications -3.7%, prior -1.2% 08:15: ADP resumes publication of jobs report with new methodology 08:15: Aug. ADP Employment Change, est. 300,000 09:45: Aug. MNI Chicago PMI, est. 52.1, prior 52.1 Central Banks 08:00: Fed’s Mester Discusses Economic Outlook 18:00: Dallas Fed Holds Event to Introduce New President Lorie Logan 18:30: Fed’s Bostic speaks on role of fintech in financial inclusion DB's Henry Allen concludes the overnight wrap Was back in the office yesterday after a two-week break but needed an extra day recovery before I started the EMR again as Monday was the twin's 5th birthday. To say they were excited would be an understatement. More is to come as they have their birthday party and 30-40 kids coming round our house on Sunday. After another dry spell Sunday brings rain again apparently! We're used to this adversity as the first day of our Cornwall holiday saw a dramatic storm and the first rain for 2-3 months. A few days of typically chilly, breezy, and slightly wet UK beach weather followed. In my second week off back home I played 5 rounds of golf so that was the proper holiday. My handicap is now the lowest it's ever been so there's life in the multiple operated on old dog yet! Back to the real world now though and not only has the world got darker since I've been off but so have work hours. I always take these two weeks off every year and it always marks a depressing reality that winter is coming. Before I go away it's just about light when I get up. However, by the time I get back from holiday it's firmly dark waking up for the EMR. It'll be a good 7-8 months before I see light again on the early EMR shift. The dark mirrors the mood in markets which has seen a rapid deterioration since Jackson Hole, with the S&P 500 shedding a further -1.10% yesterday to move back beneath the 4000 mark. The index is now -7.85% below its mid-August intra-day highs and -5.08% since last Thursday's pre Jackson Hole close. We're still +8.71% above the June lows though. Ironically, strong US data releases prompted the latest sell-off, as they showed that consumer confidence was more resilient and the labour market was tighter than expected. But in today’s high-inflation environment, good economic news is enabling the Fed to be even more aggressive on rate hikes, and the market developments yesterday were very much in keeping with that theme. We actually reached an important milestone yesterday too, as the futures-implied Fed funds rate for December ticked up +3.0bps to 3.73%, which surpasses the previous high of 3.72% seen back in June after the bumper CPI report for May came in. So for 2022 at least, markets are pricing in their most aggressive pace of hikes to date which makes a lot more sense than where we were a few weeks ago. In terms of the specifics of those data releases, an important one was the JOLTS data, which showed that job openings unexpectedly rose to 11.239m in July (vs. 10.375m expected). That marked a break in the trend of 3 consecutive declines, and shows that the Fed still have significant work to do if they want to bring labour demand and labour supply back into balance. Another indicator we’ve been tracking is the number of job openings per unemployed worker. That also bounced back up to 1.98 in July, which is just shy of its record high of 1.99 in March. So even with 225bps of Fed hikes by the July meeting, that measure of labour market tightness has barely budged. Then we got the Conference Board’s consumer confidence data for August, which came in at a 3-month high of 103.2 (vs. 98.0 expected), with rises for both the expectations and the present situation indicators. This positive news on the economy gave investors growing confidence that the Fed are set to keep hiking into 2023, and sent yields on 2yr Treasuries up +1.8bps to 3.44%. That’s their highest closing level since the GFC, and on an intraday basis they even hit 3.49% at one point. Longer-dated yields also increased, albeit to a lesser extent, with those on 10yr Treasuries flat. FOMC Vice Chair and New York Fed President Williams emphasised the point, saying that rates will need to stay in restrictive territory “for some time”, so the days of pricing rate cuts early next year are over for now. The fed funds futures curve currently has policy rates peaking around 3.90% in the second quarter of next year, with the first full -25bp cut from those highs not until November of next year, as of last night's close. The trend towards increasing hawkishness was echoed at the ECB as well yesterday, where the prospect of a 75bps move next week is being increasingly discussed by officials. In the last 24 hours alone, we heard from Estonia’s Muller, who said that “75 basis points should be among the options for September given that the inflation outlook has not improved”. Furthermore, Slovenia’s Vasle said that he favoured a hike “that could exceed 50 basis points”. Germany’s Nagel echoed the ECB chatter from last week, that they should not delay rate hikes just for fear of recession, instead arguing the call for earlier rate hikes to prevent later pain. Further, Pierre Wunsch of Belgium argued the current bout of inflation had structural roots, which called for a quick move to restrictive policy. While neither Nagel nor Wunsch explicitly endorsed a 75bp hike, their comments don't push back on it. So overall it’s clear that officials are contemplating a larger hike, and overnight index swaps continue to price a 75bps move as more likely than 50bps for the September decision, closing yesterday pricing +65.8bps worth of hiking for next week’s meeting. It's set to be a big one! We should get some additional clues on how fast the ECB might hike with the release of the flash CPI data for the Euro Area this morning. But there weren’t any big surprises in either direction from the country readings ahead of that yesterday. In Germany, the EU-harmonised reading rose to a fresh high of +8.8%, but that was as expected, and it was a similar story in Spain where the harmonised reading fell back to +10.3% as expected. A complicating factor for the ECB relative to the Fed is the stagflationary impulse coming from the ongoing energy shock, where prices have soared to new records in the last week. However, the last 24 hours brought some further declines that built on Monday’s moves lower, with natural gas futures coming down -7.21% to €253 per megawatt-hour. German power prices for next year came down by an even bigger -21.05%, on top of the -22.84% decline on Monday, although even that -39.09% total decline hasn’t erased the previous week’s gains. One other thing to keep an eye out for from today will be the start of maintenance on the Nord Stream pipeline, which is set to last for 3 days if you take the statement at face value. But as with the shutdown in July, there are concerns that gas flows won’t resume again afterwards, so that’s definitely one to watch. Oil futures took a big slide, with brent futures down -4.79% and WTI down -5.54%. The proximate cause appeared to be unsubstantiated rumours that the US and Iran had reached a deal to reinstate the nuclear deal. However, a US State Department spokesperson later denied the rumours, and we’ve already heard from OPEC+ that any supply increase from Iran would be offset by supply cuts among the cartel. So if oil prices stay around these levels, perhaps the market is pricing in more global demand slowdown than unmitigated supply expansion. For sovereign bond yields, the more hawkish noises from the ECB outweighed the effect of falling energy prices yesterday, with the 2yr German yield up +6.1bps. Similarly to the US, the increases in yields were concentrated at the more policy-sensitive front end of the curve, with longer-dated yields seeing smaller moves, including those on 10yr bunds (+0.8bps), OATs (+0.7bps) and BTPs (+1.7bps). On the equity side, the risk-off tone took the major indices lower on both sides of the Atlantic, with the S&P 500 (-1.10%) experiencing a 3rd consecutive decline. The more cyclical sectors led the moves lower, and the more interest-sensitive megacap tech stocks continued to struggle, with the FANG+ index down a further -2.04%. In Europe, the STOXX 600 was down -0.67% yesterday, although that decline was somewhat exaggerated by the fact that London equities were returning after Monday’s declines. Indeed, the DAX actually ended the day up +0.53%, although that was the exception as the CAC 40 (-0.19%) and the FTSE MIB (-0.08%) both posted modest declines. The more negative mood of the last few days has continued into today’s Asian session, with the Nikkei (-0.40%), Hang Seng (-0.39%) and the Shanghai composite (-1.18%) all losing ground this morning despite earlier better-than-expected economic data from China and Japan. Starting with the former, both manufacturing (49.4 vs 49.2 expected) and non-manufacturing PMI (52.6 vs 52.3 expected) were ahead of estimates but the manufacturing gauge stayed in contraction territory. In Japan, we got strong beats for industrial production (+1.0% vs -0.5% expected, MoM) and retail sales (+0.8% vs +0.3% expected, MoM). US Treasury yields are up across the curve, with the 2y yield (+2.1bps) gains ahead of 10y ones (+0.9bps). To the day ahead now, and data releases include the flash CPI reading for the Euro Area in August, as well as the country readings for France and Italy. On top of that, there’s German unemployment for August, Canada’s GDP for Q2, and in the US there’s the ADP’s report of private payrolls for August and the MNI Chicago PMI for August. Finally, central bank speakers include the Fed’s Mester and Bostic. Tyler Durden Wed, 08/31/2022 - 07:44.....»»

Category: blogSource: zerohedgeAug 31st, 2022

Is A Great Reset Of Monetary Policy Coming After Massive Money Supply Expansion?

Is A Great Reset Of Monetary Policy Coming After Massive Money Supply Expansion? Authored by Andrew Moran via The Epoch Times (emphasis ours), In response to the coronavirus pandemic, the Federal Reserve took extraordinary and unprecedented action to cushion the economic blows resulting from the global health crisis. The Federal Reserve Board building on Constitution Avenue is pictured in Washington, on Mar. 27, 2019. (Brendan McDermid/Reuters) Over the last two years, the central bank expanded the money supply by more than $6 trillion. The pandemic-era round of quantitative easing led to the creation of nearly 50 percent of all new U.S. dollars ever created in the nation’s history. When Congress approved trillions of dollars in new government spending, whether it was the $2.1 trillion CARES Act or the $1.9 trillion American Rescue Plan (ARP), the Treasury Department issued fresh debt to cover the enormous shortfall. This prompted the central bank to issue new units of currency to purchase the debt. The Fed did not stop with just buying Treasury debt. The institution also acquired mortgage-backed securities and corporate bonds. This increased its balance sheet to a record $8.9 trillion. In a March 2020 interview with “60 Minutes,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, noted that the Fed has “unlimited cash,” assuring the public that the financial system possesses enough money. Uncle Sam’s Wallet Critics charge that the Fed has enabled officials to embark upon enormous deficit-financed spending efforts by monetizing the debt. This could exacerbate America’s finances, resulting in fiscal consequences for the federal government and the American people. A Peterson Foundation billboard displaying the national debt is pictured on K Street in downtown Washington, on Feb. 8, 2022. (Jemal Countess/Getty Images for Peter G. Peterson Foundation) The national debt has topped $30 trillion, the federal deficit is projected to remain above $1 trillion for the next decade, and the government is contending with $200 trillion in unfunded liabilities and expenditures. But financial experts warn that debt-servicing payments could skyrocket in the coming years, especially if the Fed keeps raising interest rates to combat inflation. Last year, for example, the U.S. government spent more than $500 billion on interest for debt held by the public. With the benchmark fed funds rate projected to reach 3.4 percent by the end of 2022, officials will be paying more to service the national debt. By 2031, Washington’s net interest costs are predicted to increase to nearly $1 trillion per year (based on a 2.8 percent interest rate on the 10-year Treasury by the current administration). In addition, debt can become a massive burden on the country when it swallows the nation’s production. Economists warn that a country’s red ink reaches a tipping point when the debt-to-GDP ratio surpasses 77 percent. Today, the debt-to-GDP ratio is about 125 percent. If there is a hint of concern surrounding the national debt, Treasury investors will demand higher compensation for the heightened risk. Moreover, this can threaten the greenback because the dollar’s value diminishes if there is lower demand for U.S. bonds. Market analysts purport that the Fed is performing a juggling act: fighting inflation while maintaining economic growth. But there might be another feat the central bank needs to accomplish: combatting higher prices without severely hemorrhaging the federal government’s finances. Suffice it to say, the more the national debt grows—it is forecast to hit approximately $40 trillion over the next decade—the greater the challenge for the Fed to raise rates exceeding inflation levels. Is the Debt Sustainable? Experts have been ringing alarm bells about unsustainable debt levels. “National debt may be sustainable in the short run, but at some point, rates will rise and deficits and debt will have to be tackled through spending cuts or tax increases,” wrote Meera Pandit, the global market strategist at JPMorgan Chase, in a January 2021 note. Before the COVID-19 public health crisis, Fed Chair Jerome Powell told Congress that the national debt was on an “unsustainable” path. “The U.S. federal government is on an unsustainable fiscal path,” Powell told the Senate Banking Committee in November 2019. “Debt as a percentage of GDP is growing, and now growing sharply … And that is unsustainable by definition. We need to stabilize debt to GDP. The timing the doing that, the ways of doing it—through revenue, through spending—all of those things are not for the Fed to decide.” During a webinar sponsored by the Economic Club of Washington, D.C., in April 2021, Powell explained that the economy could handle the elevated debt load. However, he warned that the long-term trajectory of the U.S. budget is unsustainable. Powell also told Sen. John Kennedy (R-La.) earlier this year that debt cannot grow faster than the national economy indefinitely. But the central bank chair noted the U.S. government should only grapple with massive debt levels once the economy has stabilized. According to the Congressional Budget Office (CBO), the federal debt is projected to top 150 percent of the gross domestic product (GDP) within 30 years. The budget watchdog warned that if policymakers refuse to act, the soaring debt will weigh on long-term economic growth, prevent crucial investments, accelerate a fiscal crisis, and stop officials from responding to unforeseen events. “The benefits of reducing the deficit sooner include a smaller accumulated debt, smaller policy changes required to achieve long-term outcomes, and less uncertainty about the policies lawmakers would adopt,” the CBO wrote in its 2022 Long-Term Budget Outlook. What About the Broader Economy? Since the Fed’s tightening cycle began this past spring, money supply growth has been flat. But has the damage already been done to the U.S. economy? Traders on the floor of the New York Stock Exchange look on as a screen shows Federal Reserve Chairman Jerome Powell’s news conference after the Federal Reserve interest rates announcement, on July 31, 2019. (Brendan McDermid/Reuters) The 8.5 percent annual inflation rate is the highest it has been in 40 years. The Producer Price Index (PPI) is still hovering near levels unseen since the 2008–09 financial crisis. The growing cost of living has consumers transforming their buying habits, from consuming less to altering their demand patterns. Many economists note that the labor market has been fractured: real wage growth is still in negative territory, productivity is tumbling, the number of people quitting remains elevated, job openings continue to be above 10 million, and 7.5 million Americans work two jobs. Asset bubbles have been the next notable consequence of the Fed’s historic monetary expansion. From stocks to cryptocurrencies, these assets reached record highs before crashing into a bear market. It is uncertain if the latest gains are part of a bear market rally or if the bottom has been touched and a bullish cycle has started. But the equities arena is hanging onto every word from the Federal Reserve, be it Chairman Powell or St. Louis Fed Bank President James Bullard. The consensus on Wall Street is that the U.S. economy will slip into either a sharp or mild economic downturn, if it has not already. The country slipped into a technical recession after two consecutive quarters of negative GDP growth. If economic conditions worsen, there is an expectation that the Fed will reverse its hawkish tightening campaign and begin to cut interest rates. Fed officials have stated that this is not happening. Instead, they aver: the institution will likely lift rates and leave them there, until there is concrete evidence that inflation is substantially coming down. What’s Next for the Fed? Will the present monetary system remain intact, or will it experience an overhaul? Many developments are unfolding that could result in long-term consequences for households, policymakers, and geopolitical pursuits. Countries are partaking in a de-dollarization initiative. The Fed is assessing a central bank digital currency. Higher inflation and rising borrowing costs are weighing on consumers. Trust in the Federal Reserve has eroded considerably over the last couple of years. Whether or not the central bankers hit the reset button on the monetary system remains to be seen. But the pandemic might have ushered in a new era for the economy and fiscal and monetary policy, one that Powell’s successor might facilitate and install into the fabric of the Federal Reserve’s infrastructure. Tyler Durden Tue, 08/23/2022 - 07:20.....»»

Category: worldSource: nytAug 23rd, 2022

OUTFRONT Media Reports Second Quarter 2022 Results

Revenues of $450.2 million Operating income of $79.9 million Net income attributable to OUTFRONT Media Inc. of $48.0 million Adjusted OIBDA of $125.3 million AFFO attributable to OUTFRONT Media Inc. of $93.2 million Quarterly dividend of $0.30 per share, payable September 30, 2022 NEW YORK, Aug. 3, 2022 /PRNewswire/ -- OUTFRONT Media Inc. (NYSE:OUT) today reported results for the quarter ended June 30, 2022. "Q2 was another strong quarter, with 32% revenue growth driving a 79% increase in Adjusted OIBDA. The majority of this growth was driven by billboard pricing as well as continued improvement in transit," said Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media. "Despite some current macroeconomic uncertainty, our business remains healthy, and we expect continued attractive growth throughout the second half of 2022." Three Months EndedJune 30, Six Months EndedJune 30, $ in Millions, except per share amounts 2022 2021 2022 2021 Revenues $450.2 $341.0 $823.7 $600.2 Organic revenues 447.8 340.4 821.3 599.6 Operating income (loss) 79.9 29.1 108.4 (1.9) Adjusted OIBDA 125.3 70.0 195.5 81.1 Net income (loss) before allocation to non-     controlling interests 48.4 (0.7) 48.5 (68.3) Net income (loss)2 48.0 (0.9) 47.9 (68.6) Net income (loss) per share1,2,3 $0.28 ($0.05) $0.25 ($0.57) Funds From Operations (FFO)2 92.4 39.7 134.2 9.3 Adjusted FFO (AFFO)2 93.2 39.6 128.7 15.1 Shares outstanding3 164.6 145.6 158.8 145.2 Notes: See exhibits for reconciliations of non-GAAP financial measures; 1) "per share" means per common share for diluted earnings per weighted average share; 2) References to "Net income (loss)", "Net income (loss) per share", "FFO" and "AFFO" mean "Net income (loss) attributable to OUTFRONT Media Inc.", "Net income (loss) attributable to OUTFRONT Media Inc. per common share", "FFO attributable to OUTFRONT Media Inc." and "AFFO attributable to OUTFRONT Media Inc.," respectively; 3) Diluted weighted average shares outstanding. Second Quarter 2022 Results ConsolidatedReported revenues of $450.2 million increased $109.2 million, or 32.0%, for the second quarter of 2022 as compared to the same prior-year period. Organic revenues of $447.8 million increased $107.4 million, or 31.6%. Reported billboard revenues of $354.0 million increased $66.7 million, or 23.2%, due primarily to higher average revenue per display (yield) compared to the same prior-year period, as we have experienced an increase in demand for our services, as well as the impact of acquisitions. Organic billboard revenues of $351.6 million increased $64.8 million, or 22.6%. Reported transit and other revenues of $96.2 million increased $42.5 million, or 79.1%, due primarily to an increase in yield compared to the same prior-year period, as we have experienced an increase in demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract. Organic transit and other revenues of $96.2 million increased $42.6 million, or 79.5%. Total operating expenses of $226.5 million increased $36.9 million, or 19.5%, due primarily to costs associated with higher billboard and transit revenues and higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the "MTA"). Selling, General and Administrative expenses ("SG&A") of $106.9 million increased $18.0 million, or 20.2%, due to higher compensation-related expenses, including commissions and salaries, higher professional fees, increased business travel resulting in higher travel and entertainment expense, and a higher provision for doubtful accounts, partially offset by the impact of market fluctuations on an equity-linked retirement plan offered by the company to certain employees. Adjusted OIBDA of $125.3 million increased $55.3 million, or 79.0%, compared to the same prior-year period. Segment Results U.S. MediaReported revenues of $422.5 million increased $100.7 million, or 31.3%, due primarily to an increase in yield compared to the same prior-year period, as we have experienced an increase in demand for our services. Billboard revenues increased 22.2% and Transit and other revenues increased 80.8% for the same reason. Organic revenues increased $98.3 million, or 30.5%. Operating expenses increased $35.4 million, or 20.0%, due to higher transit franchise and billboard lease costs associated with higher revenues, higher minimum annual guarantee payments to the MTA, and other various costs associated with greater business activity. SG&A expenses increased $16.7 million, or 25.9%, due primarily to higher compensation-related costs, including commissions, salaries and bonuses, increased business travel resulting in higher travel and entertainment costs, as well as a higher provision for doubtful accounts. Adjusted OIBDA of $129.2 million increased $48.6 million, or 60.3%, compared to the same prior-year period. OtherReported revenues of $27.7 million increased $8.5 million, or 44.3%, due primarily to an increase in yield compared to the same prior-year period, as we have experienced an increase in demand for our services. Organic revenues increased $9.1 million, or 48.9%. Operating expenses increased $1.5 million, or 11.7%, due primarily to costs associated with higher billboard and transit revenues. SG&A expenses increased $0.8 million, or 16.7%, driven primarily by higher compensation-related costs, including commissions in Canada. Adjusted OIBDA of $7.8 million increased $6.2 million compared to the same prior-year period. CorporateCorporate costs, excluding stock-based compensation, decreased $0.5 million, or 4.1%, to $11.7 million, due primarily to the impact of market fluctuations on an equity-linked retirement plan offered by the company to certain employees, partially offset by higher compensation-related expenses and higher professional fees. Interest ExpenseNet interest expense was $31.6 million, including amortization of deferred financing costs of $1.7 million, as compared to $32.1 million in the same prior-year period, including amortization of deferred financing costs of $1.9 million. The decrease was primarily due to a lower outstanding average debt balance, partially offset by higher interest rates. The weighted average cost of debt at June 30, 2022 was 4.6% and at June 30, 2021 was 4.3%. Income TaxesThe provision for income taxes was $1.2 million compared to a benefit of $2.4 million in the same prior-year period. Cash paid for income taxes in the six months ended June 30, 2022 was $2.9 million. Net Income (Loss) Attributable to OUTFRONT Media Inc.Net income attributable to OUTFRONT Media Inc. was $48.0 million compared to a Net loss attributable to OUTFRONT Media Inc. of $0.9 million in the same prior-year period. Diluted weighted average shares outstanding were 164.6 million compared to 145.6 million for the same prior-year period. Net income attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share was $0.28 compared to a Net loss attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share of $0.05 in the same prior-year period. FFO & AFFOFFO attributable to OUTFRONT Media Inc. increased $52.7 million, or 132.7%, compared to the same prior-year period, due primarily to higher operating income and higher amortization of both real estate-related intangible assets and direct lease acquisition costs. AFFO attributable to OUTFRONT Media Inc. increased $53.6 million, or 135.4%, compared to the same prior-year period, due primarily to higher operating income. Cash Flow & Capital ExpendituresNet cash flow provided by operating activities increased $87.5 million, for the six months ended June 30, 2022, compared to the same prior-year period. Total capital expenditures increased $16.3 million, or 63.9%, to $41.8 million for the six months ended June 30, 2022, compared to the same prior-year period. DividendsIn the six months ended June 30, 2022, we paid cash dividends of $102.9 million, including $98.4 million on our common stock and vested restricted share units granted to employees, $4.4 million on our Series A Convertible Perpetual Preferred Stock (the "Series A Preferred Stock") and $0.1 million on our Class A equity interests of a subsidiary that controls our Canadian business. We announced on August 3, 2022, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on September 30, 2022, to stockholders of record at the close of business on September 2, 2022. Balance Sheet and LiquidityAs of June 30, 2022, our liquidity position included unrestricted cash of $117.0 million and $495.9 million of availability under our $500.0 million revolving credit facility, net of $4.1 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility. During the three months ended June 30, 2022, no shares of our common stock were sold under our at-the-market equity offering program, of which $232.5 million remains available. As of June 30, 2022, the maximum number of shares of our common stock that could be required to be issued on conversion of the outstanding shares of the Series A Preferred Stock was approximately 7.8 million shares. Total indebtedness as of June 30, 2022 was $2.7 billion, excluding $25.1 million of debt issuance costs, and includes a $600.0 million term loan and $2.1 billion of senior unsecured notes. COVID-19 ImpactThough we remain able to continue to sell and service our displays with no significant disruption, governmental restrictions have eased in most of our markets and most of our markets have commenced their economic recoveries, our transit businesses are still experiencing the significant impact of the ongoing novel coronavirus ("COVID-19") pandemic. There still remains uncertainty around the severity and duration of the COVID-19 pandemic and the measures that may be taken in response to the COVID-19 pandemic. If the measures that were taken in response to the COVID-19 pandemic in 2020 and 2021 are reimplemented in a manner that reduces foot traffic, roadway traffic, commuting, transit ridership and overall target advertising audiences in the markets in which we do business, there could be a significant impact on our business. We continue to monitor the evolving situation and guidance from federal, state and local public health authorities and may take actions based on their recommendations. When the COVID-19 pandemic subsides, there can be no assurances as to the time it may take to generate total revenues, particularly in our U.S. Media segment and with respect to our transit and other business, at pre-COVID-19 pandemic levels. Accordingly, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material. As a result of the impact of the COVID-19 pandemic on our business and results of operations, we expect our key performance indicators and total revenues to incrementally improve in 2022 as compared to 2021, but some key performance indicators will continue to be materially lower in 2022 than pre-COVID-19 pandemic levels. We expect total revenues in 2022 to surpass pre-COVID-19 pandemic levels based on our current expectation of strong performance in total billboard revenues in our U.S. Media segment. We expect total transit and other revenues in our U.S. Media segment to incrementally improve in 2022, but still remain materially below pre-COVID-19 pandemic levels until 2023. We also expect Adjusted OIBDA to incrementally improve in 2022, driven by improvements in our transit and other business, and be comparable to pre-COVID-19 pandemic levels. We expect total expenses to increase in 2022 as compared to 2021, and exceed pre-COVID-19 pandemic levels. In particular, we expect billboard property lease expenses, such as rental expenses, and posting, maintenance and other expenses, as a percentage of revenues, to be slightly lower than pre-COVID-19 pandemic levels. We expect transit franchise expenses, such as transit franchise payments, as a percentage of revenues, to decrease in 2022 as compared to 2021, but be higher in 2022 than pre-COVID-19 pandemic levels, primarily due to the guaranteed minimum annual payment amounts owed to the MTA and other transit franchise partners as total transit and other revenues incrementally improve in the future. Results for the three and six months ended June 30, 2022, are not indicative of the results that may be expected for the fiscal year ending December 31, 2022. Conference CallWe will host a conference call to discuss the results on August 3, 2022 at 4:30 p.m. Eastern Time. The conference call numbers are 800-263-0877 (U.S. callers) and 646-828-8143 (International callers) and the passcode for both is 8001508. Live and replay versions of the conference call will be webcast in the Investor Relations section of our website, www.OUTFRONTmedia.com. Supplemental MaterialsIn addition to this press release, we have provided a supplemental investor presentation which can be viewed on our website, www.OUTFRONTmedia.com. About OUTFRONT Media Inc. OUTFRONT leverages the power of technology, location and creativity to connect brands with consumers outside of their homes through one of the largest and most diverse sets of billboard, transit, and mobile assets in North America. Through its technology platform, OUTFRONT will fundamentally change the ways advertisers engage audiences on-the-go. Contacts: Investors Media Stephan Bisson Courtney Richards Investor Relations PR & Events Specialist (212) 297-6573 (646) 876-9404 stephan.bisson@outfront.com courtney.richards@outfront.com Non-GAAP Financial MeasuresIn addition to the results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") provided throughout this document, this document and the accompanying tables include non-GAAP financial measures as described below. We calculate organic revenues as reported revenues excluding revenues associated with a significant acquisition and the impact of foreign currency exchange rates ("non-organic revenues"). We provide organic revenues to understand the underlying growth rate of revenue excluding the impact of non-organic revenue items. Our management believes organic revenues are useful to users of our financial data because it enables them to better understand the level of growth of our business period to period.  We calculate and define "Adjusted OIBDA" as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation and restructuring charges. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues. Adjusted OIBDA and Adjusted OIBDA margin are among the primary measures we use for managing our business, evaluating our operating performance and planning and forecasting future periods, as each is an important indicator of our operational strength and business performance. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.  It is management's opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates. When used herein, references to "FFO" and "AFFO" mean "FFO attributable to OUTFRONT Media Inc." and "AFFO attributable to OUTFRONT Media Inc.," respectively. We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and non-controlling interests, as well as the related income tax effect of adjustments, as applicable. We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes restructuring charges and losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, a gain on disposition of non-real estate assets, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other real estate investment trusts ("REITs"). Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management's opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs. Since organic revenues, Adjusted OIBDA, Adjusted OIBDA margin, FFO and AFFO are not measures calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, revenues, operating income (loss) and net income (loss) attributable to OUTFRONT Media Inc., the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs. Please see Exhibits 4-6 of this release for a reconciliation of the above non-GAAP financial measures to the most directly comparable GAAP financial measures. Cautionary Statement Regarding Forward-Looking StatementsWe have made statements in this document that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "could," "would," "may," "might," "will," "should," "seeks," "likely," "intends," "plans," "projects," "predicts," "estimates," "forecast" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations, including but not limited to the impact of the COVID-19 pandemic on our capital resources, portfolio performance and results of operations. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: declines in advertising and general economic conditions, including declines caused by the COVID-19 pandemic and the current heightened levels of inflation; the severity and duration of the COVID-19 pandemic and any other pandemics, and the impact on our business, financial condition and results of operations; competition; government regulation; our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners, including interruptions and reductions in demand caused by the impact of the COVID-19 pandemic; losses and costs resulting from recalls and product liability, warranty and intellectual property claims; our ability to obtain and renew key municipal contracts on favorable terms; taxes, fees and registration requirements; decreased government compensation for the removal of lawful billboards; content-based restrictions on outdoor advertising; seasonal variations; acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations; dependence on our management team and other key employees; diverse risks in our Canadian business; experiencing a cybersecurity incident; changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies; asset impairment charges for our long-lived assets and goodwill; environmental, health and safety laws and regulations; our substantial indebtedness; restrictions in the agreements governing our indebtedness; incurrence of additional debt; interest rate risk exposure from our variable-rate indebtedness; our ability to generate cash to service our indebtedness; cash available for distributions; hedging transactions; the ability of our board of directors to cause us to issue additional shares of stock without common stockholder approval; certain provisions of Maryland law may limit the ability of a third party to acquire control of us; our rights and the rights of our stockholders to take action against our directors and officers are limited; our failure to remain qualified to be taxed as a REIT; REIT distribution requirements; availability of external sources of capital; we may face other tax liabilities even if we remain qualified to be taxed as a REIT; complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive opportunities; our ability to contribute certain contracts to a taxable REIT subsidiary ("TRS"); our planned use of TRSs may cause us to fail to remain qualified to be taxed as a REIT; REIT ownership limits; complying with REIT requirements may limit our ability to hedge effectively; failure to meet the REIT income tests as a result of receiving non-qualifying income; the Internal Revenue Service may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax; establishing operating partnerships as part of our REIT structure; and other factors described in our filings with the Securities and Exchange Commission (the "SEC"), including but not limited to the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022. All forward-looking statements in this document apply as of the date of this document or as of the date they were made and, except as required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. EXHIBITS Exhibit 1:  CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) See Notes on Page 14 Three Months Ended Six Months Ended June 30, June 30, (in millions, except per share amounts) 2022 2021 2022 2021 Revenues: Billboard $              354.0 $              287.3 $              652.2 $              510.9 Transit and other 96.2 53.7 171.5 89.3 Total revenues 450.2 341.0 823.7 600.2 Expenses: Operating 226.5 189.6 439.3 367.2 Selling, general and administrative 106.9 88.9 205.3 165.4 Net (gain) loss on dispositions 0.2 (2.9) (0.1) (3.2) Depreciation 19.4 20.0 38.7 40.0 Amortization 17.3 16.3 32.1 32.7 Total expenses 370.3 311.9 715.3 602.1 Operating income (loss) 79.9 29.1 108.4 (1.9) Interest expense, net (31.6) (32.1) (62.3) (66.7) Loss on extinguishment of debt — — — (6.3) Other income, net 0.1 — — — Income (loss) before benefit (provision) for income taxes and    equity in earnings of investee companies 48.4 (3.0) 46.1 (74.9) Benefit (provision) for income taxes (1.2) 2.4 0.9 7.1 Equity in earnings of investee companies, net of tax 1.2 (0.1) 1.5 (0.5) Net income (loss) before allocation to non-controlling    interests 48.4 (0.7) 48.5 (68.3) Net income attributable to non-controlling interests 0.4 0.2 0.6 0.3 Net income (loss) attributable to OUTFRONT Media Inc. $                48.0 $                 (0.9) $                47.9 $               (68.6) Net income (loss) per common share: Basic $                0.28 $               (0.05) $                0.25 $               (0.57) Diluted $                0.28 $               (0.05) $                0.25 $               (0.57) Weighted average shares outstanding: Basic 164.0 145.6 158.0 145.2 Diluted 164.6 145.6 158.8 145.2   Exhibit 2:  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION.....»»

Category: earningsSource: benzingaAug 3rd, 2022

One Abandoned NYC Block Is "Frozen" In Peak-Pandemic Time

One Abandoned NYC Block Is "Frozen" In Peak-Pandemic Time Life in most places is making an attempt to move forward from the pandemic lockdowns. But for one city block in New York, that isn't the case. Outside of the 59th Street subway stop, across Lexington Avenue, Bloomberg writes you can still find an entire block "frozen" in peak-pandemic time.  The area, which used to be prime New York real estate, was formerly the home of Banana Republic, the Gap and Victoria's Secret. Now, all people see are signs trying to find tenants for the empty buildings.  Steve Soutendijk, an executive managing director at Cushman & Wakefield, told Bloomberg: “It’s probably the slowest market to return to pre-Covid levels out of any in New York City. It’s a little bit of a mystery.” This block is a microcosm of how slow the city has been to recover, post-lockdowns, the report says. It was also suffering heading into Covid, with ridership exiting at 59th Street "declining for years" and businesses starting to select other parts of the city in favor of occupying the block.  Now, ridership at the "Bloomingdale's Area", as brokers call it, and the 59th Street stop is down 50% since 2014. The department store used to be the big draw in the neighborhood, which would then act as a feeder for smaller retail shops in the area. But as online shopping has gained in prominence and since the pandemic severed off a large portion of the local businesses, the department store is "no longer the anchor it once was", the report says.  Michael Hirschfeld, a vice chairman at real estate firm Jones Lang LaSalle, said: “It’s a model of shopping that’s not entirely in favor at the moment.” Help from tourists has also waned, with international visitors only expected to reach 60% of pre-Covid levels this year, the report says.  But walking traffic is on the rise, the report says. More people are walking down that block than they did when the retail space was occupies in 2019, the report says, citing cell phone tracking data. Foot traffic in the area is outpacing other surrounding areas. Maybe that's why Soutendijk can't help but shed a little optimism. He concluded: “I don’t think these spaces are staying vacant forever.” Tyler Durden Fri, 07/29/2022 - 20:00.....»»

Category: dealsSource: nytJul 29th, 2022

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI US equity futures and global markets started the second week of the 3rd quarter on the back foot, with spoos sliding on Monday morning as traders were spooked by fears that Covid may be making a return to China leading to more virus restrictions sending Chinese stocks tumbling the most in a month, amid growing concern about an ugly second-quarter earnings season which begins this week. A closely watched CPI print on Wednesday which is expected to rise again, will also keep markets on edge. Contracts on the S&P 500 and Nasdaq 100 traded 0.7% lower, suggesting last week’s rally in US stocks my stall as concerns about China’s Covid resurgence weigh on risk appetite. The dollar jumped, reversing two weeks of losses and trading around the highest level since 2020 while Treasuries gained. Bitcoin dropped, oil declined and iron ore extended losses on concern about the demand outlook in China. Adding to the risk-off mood were the latest covid news out of China, whose stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door.  Both the Hang Seng and Shanghai traded negative after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. There was more bad news out China including a rejection by China Evergrande Group’s bondholders on a proposal to extend debt payment, as well as a warning by a prominent investor’s wife that a key lithium maker’s stock is overvalued. The Chinese selloff is a reminder that the nation’s Covid Zero policy and lingering uncertainty toward tech crackdowns remain key risks for investors betting on a sustained rebound in Chinese shares. The Hang Seng China gauge has recorded just one positive session in the last eight after rallying nearly 30% from a March low.  Anyway, back to the US where in premarket trading, Twitter shares slumped in premarket trading after Elon Musk terminated his $44 billion takeover approach for the social media company. Some other social media stocks were lower too, while Digital World Acquisition (DWAC US), the SPAC tied to Donald Trump, jumps as much as 30%. Bank stocks are also lower in premarket trading Monday amid a broader decline in risk assets as investors await the release of key inflation data later this week. S&P 500 futures are also lower, falling as much as 1%, while the US 10-year Treasury yield holds above the 3% level. In corporate news, UBS is considering a plan to promote Iqbal Khan to sole head of the bank’s global wealth management business. Meanwhile, Klarna is shelling out loans for milk and gas with cash-strapped customers looking for ways to cover basic necessities. Here are some other notable premarket movers: US-listed Macau casino operators and Chinese tourism stocks fall after local authorities in the gambling hub shut almost all business premises as a Covid-19 outbreak in the area worsened. Las Vegas Sands (LVS US) down 3.5%, MGM Resorts (MGM US) -3.5%, Wynn Resorts (WYNN US) -3.1%. Cryptocurrency-exposed stocks were lower after the latest MLIV Pulse survey suggested that the token is more likely to tumble to $10,000, cutting its value roughly in half, than it is to rally back to $30,000. Crypto stocks that are down include: Marathon Digital (MARA US) -6%, Riot Blockchain (RIOT US) -4.5%, Coinbase (COIN US) -3.8%. Lululemon (LULU US) cut to underperform and Under Armour (UAA US) downgraded to hold by Jefferies in a note on athletic apparel firms, with buy-rated Nike (NKE US) “still best-in-class.” Lululemon drops 1.8% in US premarket trading, Under Armour -3.1% Morgan Stanley cut its recommendation on Fastly (FSLY US) to underweight from equal-weight, citing a less favorable risk/reward scenario heading into the second half of the year. Shares down 5.2% in premarket. Price pressures, a wave of monetary tightening and a slowing global economy continue to shadow markets. the June CPI print reading on Wedensday is expected to get closer to 9%, a fresh four-decade high, buttressing the Federal Reserve’s case for a jumbo July interest-rate hike. Company earnings will shed light on recession fears that contributed to an $18 trillion first-half wipe-out in global equities. “The real earnings hit will come in the second half as we’re hearing from companies, especially retailers, saying they’re already seeing weakness from consumers,” Ellen Lee, portfolio manager at Causeway Capital Management LLC, said on Bloomberg Television. The Stoxx Europe 600 index pared a decline of more than 1% as an advance for utilities offset losses for carmakers and miners. The Euro Stoxx 50 was down 0.8% as of 10:30 a.m. London time, having dropped as much as 1.9% shortly after the cash open. DAX and CAC underperform at the margin. Autos, miners and consumer products are the worst-performing sectors.  Copper stocks sank as fear of global recession continues to suppress metals prices; miners suffered: Anglo American -5.1%, Antofagasta -5.3%, Aurubis -3.7%, Salzgitter -5.1%. Copper was hit hard, with futures down 1.9% today. Here are the top European movers: Dufry shares rise as much as 11%, while Autogrill falls as much as 9.4% after the Swiss duty-free store operator agreed to buy the Italian company from the billionaire Benetton family, with the offer price being below Autogrill’s closing price on Friday. Danske Bank declines as much as 6.4% after the lender cut its outlook for the year. Fincantieri advances as much as 7% after the Italian shipbuilder said it secured an ultra-luxury cruise ship order that will be built by the end of 2025. Joules drops as much as 25% after the British retailer said it hired KPMG to advise on how to shore up its cash position. MJ Gleeson jumps as much as 7.4% after the homebuilder published a trading update stating that it sees full-year earnings being “significantly ahead of expectations.” Peel Hunt says it was a “strong finish to the year.” Uniper falls as much as 12%, adding to its declines in recent weeks, after the German utility last week asked the government for a bailout. Wizz Air declines as much as 5.3% after the low-cost carrier provided a 1Q update, with ticket fares down 12% versus FY20. Nordex rises as much as 7.8%, reversing early losses after the wind-turbine maker said it plans to raise EU212m via a fully-underwritten rights issue. Mining stocks sink as fear of global recession continues to suppress metals prices. Anglo American and Antofagasta are among the decliners. “Earnings expectations will come down this year and probably next year as well, which is somewhat priced,” Barclays Private Bank Chief Market Strategist Julien Lafargue said on Bloomberg Television. “The question is how big are the cuts we are going to see,” he added. The declines in Europe came as Chinese stocks had their worst day in about a month as the Covid resurgence combined with fresh fines for tech giants hit markets Earlier in the session, Asian stocks tumbled as resurging Covid-19 cases in China dented investor sentiment and raised fears of lockdowns that could hurt growth and corporate earnings. The MSCI Asia Pacific Index dropped as much as 1.1%, erasing an earlier gain of as much as 0.5%. Chinese stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door. Japan was a bright spot, buoyed by the prospect of administrative stability after the ruling coalition expanded its majority in an upper house election. Alibaba and Tencent dragged the gauge the most after China’s watchdog fined the internet firms. All but two sectors declined, with materials and consumer discretionary sectors leading the retreat. Chinese stocks were the region’s notable losers, with benchmarks in Hong Kong slumping about 3% and those in mainland China down more than 1%. A bevy of bad news from the world’s second-largest economy ahead of major economic data releases later this week dampened the mood. The first BA.5 sub-variant case was reported in Shanghai in another challenge to authorities struggling to counter a Covid-19 flare-up in the financial hub. Macau shuttered almost all casinos for a week from Monday as virus cases remain unabated.  “Sentiment got weakened again as Covid-19 cases spread again in China,” said Cui Xuehua, a China equity analyst at Meritz Securities in Seoul. “There are also worries about lockdowns as companies will start reporting their earnings.”   Meanwhile, benchmarks in Japan outperformed the region, gaining more than 1% following the ruling bloc’s big election victory.   Traders in Asia are awaiting for a set of data from the world’s second-largest economy this week, including its growth and money supply figures. Also on the watch are corporate earnings, which would give investors more clues about the impact of lockdowns in China and rising costs of goods and services. Japanese equities climbed after the ruling coalition expanded its majority in an upper house election held Sunday, two days after the assassination of former Prime Minister Shinzo Abe.  The Topix index rose 1.4% to 1,914.66 as of the market close in Tokyo, while the Nikkei 225 advanced 1.1% to 26,812.30. Toyota Motor Corp. contributed the most to the Topix’s gain, increasing 1.9%. Out of 2,170 shares in the index, 1,862 rose and 256 fell, while 52 were unchanged. “In the next two years or so, the government will be able to make some drastic policy changes and if they don’t go off in the wrong direction, the stability of the administration will be a major factor in attracting funds to the Japanese market,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Australia's S&P/ASX 200 index fell 1.1% to close at 6,602.20, with miners and banks contributing the most to its drop. All sectors declined, except for health. EML Payments was the worst performer after its CEO resigned. Costa slumped after Credit Suisse downgraded the stock. The produce company also said it’s faced quality issues from weather. In New Zealand, the S&P/NZX 50 index fell 0.6% to 11,106.14 India’s benchmark stock index declined following the start of the first quarter earnings season, with bellwether Tata Consultancy Services Ltd. disappointing amid worsening cost pressures faced by Indian companies.  The S&P BSE Sensex Index fell 0.2% to 54,395.23 in Mumbai, after posting its biggest weekly advance since April on Friday, helped by a recent correction in key commodity prices. The NSE Nifty 50 Index ended little changed on Monday.  Tata Consultancy contributed the most to the Sensex’s drop, falling 4.6%, its sharpest decline in seven weeks. Bharti Airtel slipped as Adani Group’s surprise announcement of participating in a 5G airwaves auction potentially challenges its telecom business. Still, 15 of the 19 sub-sector gauges compiled by BSE Ltd. gained, led by power producers. Software exporter HCL Technologies Ltd. slumped more than 4% before its results on Tuesday. In FX, the pound fell as the race to replace Boris Johnson as UK premier heats up. Over in Europe, the main conduit for Russian gas goes down for 10-day maintenance on Monday. Germany and its allies are bracing for President Vladimir Putin to use the opportunity to cut off flows for good in retaliation for the West’s support of Ukraine following Russia’s invasion. The Bloomberg Dollar Spot Index snapped a two-day decline as the greenback rose against all of its Group-of-10 peers. The Norwegian krone and the Australian dollar were the worst performers. The Aussie declined amid the greenback’s strength, and poor sentiment triggered by Covid news and political strife with China. Australian Prime Minister Anthony Albanese has ruled out complying with a list of demands from the Chinese government to improve relations between the two countries. Shanghai reported its first case of the BA.5 sub-variant on Sunday, warning of “very high” risks as the city’s rising Covid outbreak sparks fears of a return to its earlier lockdown. The yen dropped to a 24-year low above 137 per dollar. Japanese Prime Minister Fumio Kishida’s strong election victory presents him with a three-year time frame to pursue his own agenda of making capitalism fairer and greener, with no need to quickly change course on economic policy including central bank stimulus In rates, Treasuries are slightly richer across the curve with gains led by the front end, following a wider rally seen across bunds and, to a lesser extent, gilts as stocks drop. Sentiment shifts to second-quarter earnings season, while focus in the US will be on Tuesday’s inflation print. Bunds lead gilts and Treasuries higher amid haven buying. Treasury yields richer by up to 3.5bp across front end of the curve, steepening 2s10s and 5s30s spreads by almost 2bp; 10-year yields around 3.06%, with bunds and gilts trading 3bp and 1bp richer in the sector.  Auctions are front loaded, with 3-year note sale today, followed by 10- and 30-year Tuesday and Wednesday. Auctions resume with $43b 3-year note sale at 1pm ET, followed by $33b 10-year and $19b 30-year Tuesday and Wednesday. WI 3-year around 3.095% is above auction stops since 2007 and ~17bp cheaper than June’s stop-out. Bitcoin caught a downdraft from the cautious start to the week in global markets, falling as much as 2.6% but holding above $20,000. In commodities, crude futures decline. WTI trades within Friday’s range, falling 1.3% to trade near $103.48. Base metals are mixed; LME copper falls 1.4% while LME lead gains 1.4%. Spot gold maintains the narrow range seen since Thursday, falling roughly $4 to trade near $1,739/oz. It is a quiet start tot he week otherwise, with nothing scheduled on the US calendar today. Market Snapshot S&P 500 futures down 0.6% to 3,877.75 STOXX Europe 600 down 0.8% to 413.75 MXAP down 0.9% to 157.30 MXAPJ down 1.6% to 516.87 Nikkei up 1.1% to 26,812.30 Topix up 1.4% to 1,914.66 Hang Seng Index down 2.8% to 21,124.20 Shanghai Composite down 1.3% to 3,313.58 Sensex down 0.2% to 54,349.37 Australia S&P/ASX 200 down 1.1% to 6,602.16 Kospi down 0.4% to 2,340.27 German 10Y yield little changed at 1.28% Euro down 0.6% to $1.0122 Brent Futures down 2.2% to $104.66/bbl Gold spot down 0.3% to $1,738.11 U.S. Dollar Index up 0.47% to 107.51 Top Overnight News from Bloomberg Foreign Secretary Liz Truss entered the race to replace Boris Johnson as UK premier, the latest cabinet minister to make her move in an already fractious contest Price action in the spot market Friday for the euro was all about short-term positioning, options show The Riksbank needs to prevent high inflation becoming entrenched in price- and wage-setting, and to ensure that inflation returns to the target, it says in minutes from latest monetary policy meeting The probability of a euro-area economic contraction has increased to 45% from 30% in the previous survey of economists polled by Bloomberg, and 20% before Russia invaded Ukraine. Germany, one of the most- vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink ECB Governing Council member Yannis Stournaras said a new tool to keep debt-market turmoil at bay as interest rates rise may not need to be used if it’s powerful enough to persuade investors not to test it The number of UK households facing acute financial strain has risen by almost 60% since October and is now higher than at any point during the pandemic A more detailed look at global markets courtesy of Newqsuawk Asia-Pac stocks traded mostly lower as the region digested last Friday’s stronger than expected NFP data in the US, with sentiment also mired by COVID-19 woes in China. ASX 200 was led lower by underperformance in tech and the mining-related sectors, while hopes were dashed regarding an immediate improvement in China-Australia ties following the meeting of their foreign ministers. Nikkei 225 bucked the trend amid a weaker currency and the ruling coalition’s strong performance at the Upper House elections, but with gains capped after Machinery Orders contracted for the first time in 3 months. Hang Seng and Shanghai Comp. traded negative amid COVID concerns after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. Top Asian News Shanghai’s COVID-19 cases continued to increase which prompted authorities to declare more high-risk areas and is fuelling fears that China’s financial hub may tighten movement restrictions again, according to Bloomberg. In relevant news, Shanghai reported its first case of the BA.5 omicron subvariant and authorities ordered two more rounds of mass testing in at least 9 districts. An official from China's Shanghai says authorities have classified additional areas as high risk areas. Macau will shut all non-essential businesses including casinos this week due to the COVID-19 outbreak, according to Reuters. It was separately reported that Hong Kong is considering a health code system similar to mainland China to fight COVID. China’s Foreign Minister Wang said he had a candid and comprehensive exchange with US Secretary of State Blinken, while he called for the US to cancel additional tariffs on China as soon as possible and said the US must not send any wrong signals to Taiwan independence forces, according to Reuters. US Secretary of State Blinken stated that the US expects US President Biden and Chinese President Xi will have the opportunity to speak in the weeks ahead, according to Reuters. US Commerce Secretary Raimondo said cutting China tariffs will not tame inflation and that many factors are pushing prices higher, according to FT. China’s antitrust watchdog fined companies including Alibaba (9988 HK) and Tencent (700 HK) regarding reporting of past deals, according to Bloomberg. Japan's ruling coalition is poised to win the majority of seats contested in Sunday's upper house election and is projected to win more than half of the 125 Upper House seats contested with a combined 76 seats and the LDP alone are projected to win 63 seats, according to an NHK exit poll cited by Reuters. Japanese PM Kishida said that they must work toward reviving Japan’s economy and they will take steps to address the pain from rising prices, while he added they will focus on putting a new bill that can be discussed in parliament when asked about constitutional revision and noted that they are not considering new COVID-19 restrictions now, according to Reuters. European bourses are pressured, Euro Stoxx 50 -0.5%, but will off post-open lows amid a gradual pick-up in sentiment. Pressure seeped in from APAC trade amid further China-COVID concerns amid a relatively limited docket to start the week. Stateside, futures are directionally in-fitting but with magnitudes less pronounced with earnings season underway from Tuesday; ES -0.4%. Toyota (7203 JP) announces additional adjustments to its domestic production for July; volume affected by the adjustment will be around 4000 units, global production plan to remain unchanged, via Reuters. Top European News Fitch affirmed European Stability Mechanism at AAA; Outlook Stable and affirmed Greece at BB; Outlook Stable, while it cut Turkey from BB- to B+; Outlook Negative. UK Companies are bracing for a recession this year with multiple companies said to have begun “war gaming” for a recession, according to FT. In other news, local leaders warned that England’s bus networks could shrink by as much as a third as the government’s COVID-19 subsidies end and commercial operators withdraw from unprofitable routes, according to FT. Senior Tory party figures are reportedly seeking to narrow the leadership field quickly, according to FT. It was separately reported that only four Tory party leadership candidates are expected to remain by the end of the week under an accelerated timetable being drawn up by the 1922 Committee of backbenchers, according to The Times. UK Chancellor Zahawi, Transport Minister Shapps, Foreign Secretary Truss, junior Trade Minister Mordaunt, Tory MPs Jeremy Hunt and Sajid Javid have announced their intentions to run for party leader to replace UK PM Johnson, while Defence Secretary Wallace decided to not run for PM and several have declared the intention to cut taxes as PM, according to The Telegraph, Evening Standard and Reuters. FX Buck firmly bid after strong US jobs report and pre-CPI on Wednesday that could set seal on another 75bp Fed hike this month, DXY towards top of 107.670-070 range vs last Friday's 107.790 high. Aussie undermined by rising Covid case count in China’s Shanghai, AUD/USD loses grip of 0.6800 handle Yen drops to fresh lows against Greenback after BoJ Governor Kuroda reiterates dovish policy stance amidst signs of slowing Japanese growth, USD/JPY reaches 137.28 before waning. Euro weak due to heightened concerns that Russia may cut all gas and oil supplies, EUR/USD eyes bids ahead of 1.0100. Pound down awaiting Conservative Party leadership contest and comments from BoE Governor Bailey, Cable under 1.2000 and losing traction around 1.1950. Hawkish Riksbank minutes help Swedish Crown avoid risk aversion, but Norwegian Krona declines irrespective of stronger than forecast headline inflation; EUR/SEK sub-10.7000, EUR/NOK over 10.3200. Yuan soft as Shanghai raises more areas to high-risk level; USD/CNH and USD/CNY nearer 6.7140 peaks than troughs below 6.6900 and 6.7000 respectively. Fixed Income Debt regains poise after post-NFP slide, with Bunds leading the way between 151.00-149.75 parameters Gilts lag within 114.94-33 range awaiting Conservative leadership contest and comments from BoE Governor Bailey 10 year T-note firm inside 118-00+/117-18+ bounds ahead of USD 43bln 3 year auction Commodities Crude benchmarks are curtailed amid the COVID situation with broader developments limited and heavily focused on Nord Stream. French Economy and Finance Minister Le Maire warned there is a strong chance that Moscow will totally halt gas supplies to Europe, according to Politico. Canada will grant a sanctions waiver to return the repaired Russian turbine to Germany needed for maintenance on the Nord Stream 1 gas pipeline but will expand sanctions against Russia’s energy sector to include industrial manufacturing. The US does not expect any specific announcements on oil production at this week’s US-Saudi summit, according to FT sources. JPMorgan (JPM) sees crude prices in the low USD 100s in H2 2022, falling to high USD 90s in 2023. Spot gold remains relatively resilient, torn between the downbeat risk tone and the USD's modest advances; attention on the metal's reaction if DXY surpasses Friday's best. Copper pulls back as Los Bambas returns to full output and on the China readacross. US Event Calendar Nothing major scheduled Central Banks 14:00: Fed’s Williams Takes Part in Discussion on Libor Transition DB's Jim Reid concludes the overnight wrap If you're in Europe over the next week good luck coping with the heatwave. In the UK I read last night that there's a 30% chance that we will see the hottest day ever over that period. The warning signs are always there when at 5am you're sweating and not just because of the immense effort put in on the EMR. Talking of red hot, it's that time of the month again where all roads point to US CPI which will be released exactly half way through the European week. This will be followed by the US PPI release (Thursday) and the University of Michigan survey for July on Friday where inflation expectations will be absolutely key. With US Q2 GDP currently tracking negative Friday's retail sales and industrial production could still help swing it both ways. Staying with the US it's time for Q2 earnings with a few high profile financials reporting. This is a very important season (aren't they all) as the collapse in equities so far in 2022 is largely due to margin compression and not really earnings weakness. Elsewhere China’s Q2 GDP on Friday alongside their main monthly big data dump is a highlight as we see how data is rebounding after the spike in Covid. In Europe, it will be a data-packed week for the UK. Going through some of this in more detail now and US CPI is the only place to start. Our economists note that while gas prices fell in the second half of June, the first half strength will still be enough to help the headline CPI print (+1.33% forecast vs. +0.97% previously) be strong on the month but with core (+0.64% vs. +0.63%) also strong. They have the headline YoY rate at 9.0% (from 8.6%) while core should tick down from 6.0% to 5.8%. Aside from an array of Fed speakers, investors will be paying attention to speeches from the BoE Governor Bailey (today and tomorrow). Markets will be also anticipating the Bank of Canada's decision on Wednesday, and another +50bps hike is expected based on Bloomberg's median estimate. Finally, G20 central bankers and finance ministers will gather in Bali on July 15-16. In Europe, it will be a busy week for the UK, with monthly May GDP, industrial production and trade data due on Wednesday, among other indicators. Germany's ZEW Survey for July (tomorrow) will also be in focus as European gas prices continue to be on a tear amid risks of Russian supply cut-offs. Speaking of which, Nord Stream 1 will be closed from today to July 21st for maintenance with much anticipation as to what happens at the end of this period. Elsewhere, Eurozone's May industrial production (Wednesday) and trade balance (Friday) will also be due. Finally, as Q2 earnings releases near for key US and European companies, key US banks will provide an early insights on the economic backdrop and consumer spending patterns. Results will be due from JPMorgan, Morgan Stanley (Thursday), Citi and BlackRock (Friday). In tech, TSMC's report on Thursday may provide more insight into the state of supply-demand imbalance in semiconductors. In consumer-driven companies, PepsiCo (tomorrow) and Delta (Wednesday) will also release their results. The rest of the day by day week ahead is it the end as usual. Asian equity markets are starting the week mostly lower on rising concerns around a fresh Covid flare-up in China as Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant on Sunday. Across the region, the Hang Seng (-2.89%) is the largest underperformer amid a broad sell-off in Chinese tech shares after China imposed fines on several companies including Tencent and Alibaba for not adhering to anti-monopoly rules on disclosures of transactions. In mainland China, the Shanghai Composite (-1.50%) and CSI (-2.05%) both are trading sharply lower whilst the Kospi (-0.30%) is also weaker after see-sawing in early trade. Bucking the trend is the Nikkei (+1.02%) after Japan’s ruling party, the Liberal Democratic Party (LDP) and its coalition partner, Komeito, expanded its majority in the upper house in the country’s parliamentary vote held on Sunday and following the assassination of former Prime Minister Shinzo Abe last week. Outside of Asia, US stock futures are pointing to a weaker start with contracts on the S&P 500 (-0.60%) and NASDAQ 100 (-0.85%) moving lower. Early morning data showed that Japan’s core machine orders dropped -5.6% m/m in May (v/s -5.5% expected) and against an increase of +10.8% in the previous month. Over the weekend, China’s factory gate inflation (+6.1% y/y) cooled to a 15-month low in June (v/s +6.0% expected) compared to a +6.4% rise in May. Additionally, consumer prices rose +2.5% y/y in June (v/s +2.4% expected), widening from a +2.1% gain in May and to the highest in 23 months. Elsewhere, oil prices are lower with Brent futures down -0.36% at $106.63/bbl and WTI futures (-0.77%) at $103.98/bbl as I type. Treasury yields are less than a basis point higher at the moment. Recapping last week now and a return to slightly more optimistic data boosted yields and equities, as central bank pricing got a bit more hawkish after a dovish run. More pessimistically, natural gas and electricity prices in Europe skyrocketed, as another bout of supply fears gripped the market. Elsewhere, the resignation of Prime Minister Johnson left a lot of questions about the medium-term policy path for the UK. After global growth fears intensified at the beginning of the month, a combination of stronger production and labour market data allayed short-term aggressive slow down fears. This sent 10yr Treasury and bund yields +20.6bps (+9.1bps Friday) and +11.3bps (+2.7bps Friday) higher last week. In the US, the better data coincided with expectations that the Fed would be able to tighten policy even more, which drove 2yr yields +27.2bps higher (+9.1bps Friday), and drove the 2s10s yield curve into inversion territory, closing the week at -2.5bps. The market is still anticipating that the FOMC will reach its terminal rate this cycle around the end of the first quarter next year, but that rate was +24.4bps (+12.2bps Friday) higher over the week. A large part of the jump in yields came on Friday following the much stronger than expected nonfarm payrolls figures, which climbed +372k in June, versus expectations of +265k. It’s hard to have a recession with that much job growth, so hiking will continue. Elsewhere in the print, average hourly earnings were in line at 0.3%, with the prior month revised higher to 0.4%, while the unemployment rate stayed at an historically tight 3.6% as consensus expected. Contrary to the US, yield curves were steeper in Europe, with 2yr bund yields managing just a +1.1bp climb (-3.1bps Friday). The continent had more immediate concerns in the form of a potential energy crisis. Fears that Russia would use the planned Nord Stream maintenance period beginning this week as a chance to squeeze supplies, alongside a now averted strike in Norway, sent European natural gas prices +14.44% higher (-4.24% Friday), ending the week at €175 per megawatt-hour, levels last rivaled during the initial invasion of Ukraine. German electricity prices also took off, increasing +20.26% (-7.54% Friday), setting off fears of a genuine energy crisis on the continent. That, combined with more expected Fed tightening priced in versus the ECB over the week, drove the euro -2.23% (+0.21% Friday) lower versus the US dollar, to $1.018, the closest to parity the single currency has come in over two decades. The fears were somewhat tempered by the end of the week, when it was reported that Canada would send a necessary turbine to Russia via Germany, enabling Russia to in theory remit gas supply back to Germany post the shutdown. Through all the macro noise the S&P 500 posted its 12th weekly gain of the year, climbing +1.94% (-0.08% Friday), driven by a particularly strong performance among tech and mega-cap stocks, with the NASDAQ (+4.56%, +0.12% Friday) and FANG+ (+5.82%, -0.22% Friday) both outperforming. European equities also managed to climb despite the energy fears, with the STOXX 600 gaining +2.35% (+0.51% Friday), the DAX gaining +1.58% (+1.34% Friday), and the CAC +1.72% higher (+0.44% Friday). UK equities underperformed, with the FTSE 100 gaining just +0.38% (+0.10% Friday). The pound was in the middle of the pack in terms of G10 currency performance versus the US dollar, however losing -0.53% (+0.05% Friday). Tyler Durden Mon, 07/11/2022 - 08:03.....»»

Category: personnelSource: nytJul 11th, 2022

Going on Vacation This Summer? Welcome to the ‘Revenge Travel’ Economy

Demand is soaring for vacations that are more frequent, more indulgent, and far from home. The clock had not yet struck noon on a recent sunny day in Copenhagen, but the hour didn’t stop Hannah Jackson and her friends from ordering a bottle of Champagne. After the waiter at one of the outdoor restaurants that line the Danish capital’s colorful harbor popped the cork, the four women from Texas gleefully toasted to their European adventure. “This is my first trip in more than two years,” said Jackson, 32. “We are celebrating every moment we can.” Because no phenomenon can be real until it can be hashtagged, the travel industry has been quick to brand the impulse driving Jackson and countless others this summer as “revenge travel.” Like revenge spending and even revenge bubble-tea drinking, the phrase refers to consumers’ increased willingness to cough up cash after 28 long months of lockdowns and restrictions. In travel’s case, that means a newly unbridled demand for vacations that are more frequent, more indulgent, and—more than anything—far from home. That demand got a boost on June 13 when the U.S. stopped requiring a negative COVID-19 test for entry. But as it rises to and even surpasses pre-pandemic levels, a host of challenges, from inflation to war to, yes, the lingering threat of COVID-19, casts a shadow on the rosy predictions of a rebound. Will this be the summer in which the travel industry does indeed get revenge on the pandemic? Or will its hopes be dashed once again? [time-brightcove not-tgx=”true”] Read More: Can Barcelona Fix Its Love-Hate Relationship With Tourists After the Pandemic? “The truth is that tourism is rebounding very, very quickly,” says Luís Araújo, president of the European Travel Commission (ETC), which represents the continent’s national tourism organizations. “It’s quite impressive.” At this juncture, revenge travel looks to be off to a good start. Among Europeans, 70% are planning vacation trips between now and November, according to an ETC survey. The numbers are almost as strong among Americans, with 65% planning leisure trips within the next six months according to MMGY Travel Intelligence, a global marketing and research company based in Kansas City. According to Mastercard, bookings on short and medium-haul flights have surpassed pre-pandemic levels. And travel searches for the first quarter of 2022 were above their 2019 levels, according to Google, while searches for passport appointments jumped 300% in the first three months of this year. Carl Court—Getty ImagesTravelers wait in a long queue to pass through the security check at Heathrow in London, on June 1, 2022. “Pent up demand is already delivering rapid growth,” says David Goodger, Europe director for Tourism Economics, a U.K.-based company that provides forecasting and analysis to the travel industry. It’s driven, he adds, “by excess savings accumulated during the period when people couldn’t spend or travel as usual.” Those extra savings are affecting not only the amount of travel people are undertaking but the kind of travel as well. After decades of appealing to budget travelers with low-cost flights and party buses, many European destinations are emerging from the pandemic with a new emphasis on upscale travel. “A lot of enterprises, big and small, have spent the past two years renovating their facilities, upgrading, investing in their hospitality—adapting to the new needs of the customer,” says Araújo of the ETC. “We also see a lot of countries adjusting their communication to high-end travel.” Certainly companies that specialize in high-end travel are experiencing a boom. At Black Tomato, a luxury tour company with headquarters in London, the interest in itineraries that have guests island hopping in Greece or bottling their own perfumes in Provence is at record levels. “Demand for Europe is insane right now,” says Brendan Drewniany, director of communications. “We’re advising our clients that if they want to go to specific destinations in Europe at this point they’re going to have to be pretty open-minded about alternatives.” Nick Paleologos—Bloomberg/Getty ImagesVisitors take photos of the sunset in Chora, Mykonos, Greece, on June 11, 2022. Drewniany says that travelers started planning for this summer early: the company had its best quarter ever at the end of 2021, and in the first quarter of 2022, its clients are spending on average 31% more per booking. “We’re seeing a lot more multi-destination trips, and a lot more multi-generational ones,” he says. “People are traveling to celebrate milestones, and they want to bring the grandparents now.” And after all that time stuck at home with nothing to do except stream Netflix and tend their sourdough starters, travelers are eager for experiences. “I prefer to call it ‘liberation travel,’ rather than revenge travel,” Araújo says with a chuckle. “But there’s an increase in people wanting to stay in independent hotels, partly because they care about sustainability. And they’re looking for more authentic experiences as well.” Katie Parla can testify to that. The author of several books on Italian food, she leads culinary tours in Rome, and has seen her bookings surge 200% in the last several months compared to the same period in 2019. “People are just so grateful to be having these experiences,” Parla says. “Often they’re doing trips that they had planned to do in 2020, so even then something is closed or things don’t go as planned, they’re tolerant and understanding. They’re just so happy to be there.” Alessandra Tarantino—APTourists visiting the interior of Rome’s Pantheon stand in the light circle projected on the marble floor, on June 17, 2022. But we have been here before. In fact, the notion of revenge travel first emerged ahead of the summer of 2021, when everyone thought the worst was over and the world would soon open up again. In many ways, it did. Domestic travel in many places surged to nearly 90% of its 2019 rates that summer, and, as MMGY senior analyst Leanne Hill points out, tourists spent unusually high amounts that were, she says, “largely revenge-travel oriented.” But slow vaccine rollouts and adoption rates, coupled with the slew of ever-changing travel restrictions and newly emerging virus variants ultimately stymied expectations. International tourism was down 67% in July 2021 over its rates that same month in 2019. This time around, the obstacles to the fulfillment of travel fantasies, vengeful and otherwise, are less about the virus (all of the experts TIME consulted agreed that there was little tolerance for more lockdowns and restrictions) than other ills that have sprung up in its wake. “Inflation and staff shortages is the twin-headed monster threatening the travel recovery this summer,” says Tourism Economics’ Goodger. Staffing shortages are cutting into service across Europe. Many hotels have responded by automating some aspects like check in, and trimming once routine benefits like daily room cleaning. Restaurants from Copenhagen to Madrid have cut their operating hours and, in some cases, shut down altogether. But perhaps nowhere is the impact of the shortage on travelers clearer than in the scenes of chaos emerging from airports across Europe and the United States: flight cancellations, long waits for baggage that frequently fails to appear altogether, excruciating lines through security. “Demand is ramping up much more quickly than businesses, having shed workers during the pandemic, have been able to recruit for,” says Goodger. Horacio Villalobos—Corbis/Getty ImagesA couple sunbathes as tourists are seen in the background in Cais das Colunas in Lisbon, Portugal on May 19, 2022. And although American travelers are, according to MMGY estimates, planning on spending an average of $600 more per trip than they did a year ago, it’s unclear, analyst Hill says, “whether that’s because of increased costs or overall willingness to spend more.” There are clear signs, she adds, inflation is definitely starting to bite. “We’re beginning to see travel intentions start to erode slightly, particularly among travelers making less than $100,000.” Those concerns are echoed among Europeans travelers, according to the ETC, which found that while only 7% of travelers expressed concern about inflation and costs affecting their vacations in 2021, 13% do so now. At the high end too, pricing is “definitely a real challenge,” says Black Tomato’s Drewniany. “Hotel properties are all still recouping and it’s not that they’re trying to be extortionist, but prices are definitely worse. So it’s a challenge to explain and translate that to clients.” The war in Ukraine is also having an impact, at least in countries close to the border that, although they may not be major destinations, had experienced tourism growth prior to the pandemic. “These countries are running as smoothly as in any other country, but we’ve seen that they’ve had a hard time getting that message across to travelers,” says Araújo, especially when compared to the rapidly rebounding Mediterranean area. Inside Europe, he adds, the recovery has “two velocities.” Sarah Meyssonnier—ReutersA tourist stands in front of the glass pyramid of the Louvre museum in Paris, France, June 15, 2022. All that, and the uncertainty of COVID-19 to boot. When the U.S. lifted the requirement of a negative test to enter the country on June 12, it spurred an immediate boomlet within the larger boom of American travel plans. One global tour operator Explore, saw a 12% increase in website traffic immediately following the news, according to MMGY. Within Europe, though, some countries still have some restrictions in place, and the lack of clarity has translated, according to the ETC, into a weaker resurgence of long-haul flights to Europe, including from the US; those numbers are not expected to return to 2019 levels until 2024. Even so, most industry insiders are feeling optimistic about the summer ahead of them. And even more than revenge, that may be due to another pandemic-generated emotion: resilience. “You hear things like, oh, people are valuing experiences over Rolexes, and I think that is the reality right now: people are putting their money into experiences,” says Drewniany. But, he adds, there’s something else in play. “After everything everyone’s been through, there’s not a ton of fear about the unknown anymore. People know that if they’re scheduled to go to London in October and for some reason, London locks down or something, they know that we’ll figure it out. What you’re seeing renewed right now is this sort of inherent mindset of flexibility.”.....»»

Category: topSource: timeJun 21st, 2022

Metra to offer new $100 monthly pass, the latest change to draw back riders

With ridership still less than half of pre-pandemic levels and gas prices skyrocketing, Metra will test a new, cheaper monthly pass.With ridership still less than half of pre-pandemic levels and gas prices skyrocketing, Metra will test a new, cheaper monthly pass......»»

Category: topSource: chicagotribuneJun 1st, 2022

Sister of Goldman Sachs banker shot dead on New York subway says he didn"t take the train during the pandemic for fear of his health

Daniel Enriquez was on his way to brunch on Sunday when he was shot in the chest, his sister told The New York Times. Daniel Enriquez, 48, was shot in the chest while riding the Manhattan-bound Q train, the New York City Police Department said.Theodore Parisienne/New York Daily News/Tribune News Service via Getty Images A banker who was killed on a subway avoided trains amid pandemic over health fears, his sister told the NYT. Daniel Enriquez, a Goldman Sachs banker, was shot in the chest on Sunday on a train, police said. Griselda Vile, Enriquez's sister, told the NYT that he was on his way to brunch. The sister of Daniel Enriquez, a bank worker who was shot dead on the New York City subway, said her brother had avoided taking the train during most of the pandemic out of fear of getting ill, The New York Times reported.Enriquez, who worked for Goldman Sachs for nine years, was shot in the chest on Sunday morning while traveling on the Q train bound for Manhattan, the New York City Police Department said in a news conference at Canal Street station.Griselda Vile, one of Enriquez's three siblings, told The Times that he was making his way to brunch via the subway — something which he hadn't used in the pandemic because he was worried about his health, she added. New York City subway ridership sank 60% in March 2020 from usual ridership levels because of the pandemic, The Metropolitan Transportation Agency said, reported by Insider's Graham Rapier.A survey by NYU published in October 2020 found that 24% of New York City's bus and subway workers were infected with COVID-19, while 70% said they were scared about their safety at work. Around one hour before Enriquez was shot, he asked his family via text about his parent's health and then text the relatives individually, Vile told The Times."It's horrific, this is a horror movie," Vile told The Times, adding that she feels scared about being in New York.She told The Times that Enriquez, 48, was a "special, jovial guy."The New York police said Enriquez and the gunman didn't have any interaction prior to the attack. So far, there have been no arrests after the suspect fled from the subway at Canal Street station, the police said.Goldman Sachs CEO David Solomon said in a statement sent to Insider that Enriquez was a "beloved" employee who "epitomized our culture of collaboration and excellence." Solomon described it as a "senseless tragedy" and sent the bank's sympathies to Enriquez's family.Read the original article on Business Insider.....»»

Category: personnelSource: nytMay 23rd, 2022

Futures Jump As Crypto Turmoil Fades, Dip Buyers Make Cautious Appearance

Futures Jump As Crypto Turmoil Fades, Dip Buyers Make Cautious Appearance After dropping to the edge of a bear market, with Eminis sliding to precisely 3,855 or exactly 20% lower than the all time high, US index futures rebounded sharply from the brink (the same way they did on Dec 24, 2018 when the S&P spent a few minutes in a bear market) as the stabilization of much of the cryptosphere (where no new stablecoins suddenly cratered to 0) and an overnight easing in Treasury yields provided some relief after a two-day slide. Nasdaq 100 futures climbed 1.7% as of 730 a.m. in New York. S&P 500 futures were also higher, rising 1.1%, as high as 3976 after dropping to 2,855 yesterday. Twitter shares plunged as much as 26% in New York premarket trading after Elon Musk tweeted that his deal for the social media company was "temporarily on hold." Yields on 10-year US Treasury yields fell for a fourth consecutive day on Thursday, reaching 2.85%, before edging higher again on Friday. The dollar index dipped but remains on course for its longest streak of weekly gains since 2018, while bitcoin and ether reversed several days of harrowing losses to rise back over 30,000 and 2,000, respectively. Abating panic in the cryptocurrency market was among the highlights of a risk-on environment on the last day of the week. Bitcoin added about $1,800 to top $30,000. US cryptocurrency-exposed stocks including Riot Blockchain Inc. and Marathon Digital Holdings Inc. also rallied premarket. In notable premarket moves, Twitter slumped 21% after bidder Elon Musk tweeted deal was “temporarily on hold” pending details about fake accounts. On the other end, Robinhood surged 20% after cryptocurrency billionaire Sam Bankman-Fried snapped up a 7.6% stake, while Affirm jumped 30% after earnings. Cryptocurrency-exposed stocks climbed as digital assets started to rebound after the recent rout linked to the implosion of the TerraUSD stablecoin. Coinbase rose 11% despite being sued over its role in the promotion and trading of a stablecoin that purportedly had its value pegged to the price of the Japanese yen.  Bank stocks rose in premarket trading Friday, putting them on track to snap a six-day losing streak. Here are all the notable premarket movers: Twitter (TWTR US) shares slump as much as 19% premarket after Musk says deal is “temporarily on hold pending details”. Tesla (TSLA US) shares hit a session high, rising nearly 5% on the news Megacap tech stocks and semiconductor makers rally in US premarket trading amid a broad rebound across growth sectors, while Korean chip peer Samsung was said to be in talks to hike chipmaking prices. Apple (AAPL US) +2.1%, Meta Platforms (FB US) +2.4%, Microsoft (MSFT US) +1.8% Robinhood (HOOD US) shares surge as much as 27% in U.S. premarket trading after cryptocurrency billionaire Sam Bankman-Fried disclosed a new 7.6% stake in the online brokerage Cryptocurrency-exposed stocks climb in US premarket trading as digital assets started to rebound after the recent rout linked to the implosion of the TerraUSD stablecoin. Riot Blockchain (RIOT US) +7.9%, Marathon Digital (MARA US) +7.2% US-listed Chinese stocks rise in premarket trading, with sentiment boosted by the Fed’s pushback on speculation of steeper interest-rate hikes and Shanghai’s new timeline to end a grueling lockdown. Alibaba (BABA US) +3.3%, JD.com (JD US) +4%, Pinduoduo (PDD US) +4.3%. New Relic (NEWR US) declined 9% in postmarket. It delivered a mixed fourth quarter, according to analysts, with revenue growth coming in ahead of consensus, albeit with a lower beat compared to the last period Figs (FIGS US) sinks as much as 27% in US premarket trading, with Cowen saying that the scrubs maker’s cut to its full-year 2022 sales growth and Ebitda margin guidance is “well below” previous guidance Compass (COMP US) jumpped 7% in extended trading after the real-estate software company reported larger-than-expected revenues in the first quarter, despite guiding toward lower- than-expected second-quarter revenue First Solar Inc. (FSLR US) shares gained 2.8% in extended trading on Thursday, as Piper Sandler upgrades the stock to overweight from neutral Stocks have plunged this year as traders fretted over the impact tighter monetary will have on growth, with the S&P 500 dropping to precisely 20% from its recent peak before bouncing. On Thursday, Fed Chair Jerome Powell on Thursday reaffirmed that the central bank is likely to raise interest rates by a half percentage point at each of its next two meetings, while leaving open the possibility it could do more. The Fed chair also said that whether a soft landing can be executed or not may depend on factors that they cannot control but added they have tools to get inflation under control and that it will ultimately be more painful if high inflation is not dealt with and becomes entrenched. Furthermore, he noted that with perfect hindsight, it would have been better to have hiked rates sooner, according to Reuters. As the Federal Reserve embarks on interest-rate hikes to tame surging inflation, expensive growth shares, including the tech sector, have suffered as higher rates mean a bigger discount for the present value of future profits. This marks a shift in investor outlook after tech stocks had been some of the market’s best performers for years.  “While we continue to see positives for the market, investor sentiment isn’t likely to turn until we get greater clarity on the 3Rs -- rates, recession and risk,” said Mark Haefele, chief investment officer, UBS Global Wealth Management. “Until then, we favor parts of the market that should outperform in an environment of rising policy rates, slowing growth, and geopolitical uncertainty.” At $1.1 billion, tech stocks suffered their biggest outflows so far this year in the week to May 11, second only to financials, which lost $2.6 billion, Bank of America CIO Michael Hartnett wrote in a note, citing EPFR Global data. By contrast, US stocks overall noted their first inflow in five weeks at $93 million. It’s a “very tough time,” Kathy Entwistle, managing director at Morgan Stanley Private Wealth Management, said on Bloomberg Television. “We’re holding just still and quiet and patient and waiting for some more insights as to where we’re going. We still see a lot of volatility on the horizon." In Europe, the Stoxx 600 Index rose 1.2% as the lowest valuations since the start of the pandemic drew buyers. Banks and technology stocks led gains, while autos and telecommunication shares underperformed.  Here are Europe's biggest movers: Evotec shares rise as much as 9.5% after Deutsche Bank analyst Falko Friedrichs raised the recommendation to buy from hold, citing a unique opportunity to invest in a firm with an entire partnered drug pipeline “for free.” Deutsche Telekom shares advance 1.8% after raising full-year outlook for adjusted Ebitda after leases, reflecting higher forecasts for T-Mobile US. Freenet shares gain as much as 4.8% 1Q results show a good start to the year, and there may be scope for a guidance upgrade in 1H22, Citi (buy) writes in note Fortum shares advance as much as 11% on Friday -- the biggest intraday gain since 2009 -- after SEB and Danske Bank raised their recommendation on the stock citing the Finnish utility’s Russia exit and de-risking related to Uniper gas contracts. UCB shares fall as much as 17% after the company said the US FDA said it can’t approve UCB’s psoriasis treatment bimekizumab in its current form, forcing the company and analysts to reasses 2022 expectations. Drax falls as much as 7.6% and is among weakest performers in the Stoxx 600 on Friday after Credit Suisse gives the stock its only negative rating, moving to underperform on elevated power prices. SalMar drops as much as 4%, falling alongside peers in the Norwegian salmon and seafood sector, after a slew of several companies in the sector reported 1Q earnings that came in below expectations. Unipol and UnipolSai drop in Milan trading after releasing first-quarter results and the 2022-2024 strategic plan; analysts note lower-than-expected cumulative dividends in plan for UnipolSai. European Union nations said it may be time to consider delaying a push to ban Russian oil if the bloc can’t persuade Hungary to back the embargo. Wheat production in Ukraine, one of the biggest growers, will fall by one-third compared to last year, according to a US forecast. Earlier in the session, Asian stocks rallied as battered technology shares bounced back, with the regional benchmark still on track for its worst weekly losing streak since 2015 on worries about higher interest rates and lockdowns in China. The MSCI Asia Pacific Index rose as much as 1.8%, advancing with US futures as comments from Federal Reserve Chair Jerome Powell signaled rate hikes of more than 50 basis points may be unlikely. SoftBank was among the biggest boosts after its results, along with Tencent and TSMC. Traders said Friday’s rebound was largely driven by the unwinding of short positions following the recent selloff, with many still nervous about how China’s virus measures can complicate the already murky global economic outlook. The Asian equity measure was on track for its sixth-straight weekly decline, down 2.5% in the past five sessions. “We have to be watchful on the impact of China’s lockdowns, that’s going to have an effect on inflation as well as on growth,” said Jumpei Tanaka, a strategist at Pictet. “Up until now, the earnings outlook hasn’t been lowered that much. The market has been adjusting valuations because of the Fed’s rate hikes. The next key point is how corporate earnings will be affected.” Japan’s Nikkei rose 2.6%, boosted by gains in Tokyo Electron after strong profits as well as SoftBank. In Hong Kong, the Hang Seng Tech Index jumped 4.5%. India’s key equity indexes fell for a 6th straight session and posted their longest stretch of weekly losses in two years as investors’ appetite faded on the back of the local currency’s plunge to a record low and disappointing earnings.  The S&P BSE Sensex declined 0.3% to 52,793.62 in Mumbai after erasing advance of as much as 1.6% during the session. The NSE Nifty 50 Index retreated 0.2% to its lowest level since July 30. Both gauges have retreated 3.7% and 3.8% for the week respectively and fallen for a fifth straight week, their longest run of losses since April 2020. “The fear of rising inflation and expectations of more rate hikes in the near term are weighing on investors’ minds,” according to Kotak Securities analyst Amol Athawale.“Traders are selling at every opportunity given that there seems to be no respite from the negative news flows.” The Sensex and Nifty are now about 14.5% off their peak levels in Oct.  Ten of the 19 sector sub-indexes compiled by BSE Ltd. dropped on Friday, led by metal companies. For the week, utilities stock gauge was the worst performer, dropping about 11%.  ICICI Bank contributed the most to the Sensex’s decline, easing 2.7%. Out of 30 shares in the Sensex index, 15 rose while rest fell. In rates, Treasuries were pressured lower as stock futures pushed through Thursday’s session highs, following gains across European equities. 10-year TSY yields rose to around 2.90%, cheaper by 5bp on the day and sitting close to session highs into early session -- both bunds and gilts underperform slightly across the sector. Risk sentiment was boosted by a rebound in cryptocurrencies, leaving Treasury yields cheaper by up to 6bp across long-end of the curve where 20-year sector underperforms. Long-end led losses steepening 5s30s by 2bp on the day and 2s10s by 2.8bp. The Dollar issuance slate is empty so far; six deals were priced for $11.5b Thursday, taking weekly total to $21.7b vs. $30b projected -- two names decided to stand down. Bund, gilt and UST curves bear-steepen. Peripheral spreads widen, short-dated BTPs lag, widening 5bps to core. Yields on Japan’s debt fell even as those on Treasuries rise across the curve in Asia amid higher equities. In FX, the Bloomberg Dollar Spot Index slumped and the greenback weakened against all of it Group-of-10 peers apart from the yen as investor demand for haven assets ebbed after Federal Reserve Chair Jerome Powell pushed back against speculation of more aggressive interest-rate hikes. Risk sensitive Scandinavian currencies as well ask the Australian dollar led gains. The main theme in the FX options space Friday is gamma selloff following the large swings this week. Still, demand for low-delta exposure on a haven basis remains better bid, with greenback topside in good demand versus the euro and the pound. European government bonds followed US Treasuries lower, snapping a recent rally. Treasury yields rose by 3-7 bps as the curve bear- steepened. The yen pared early weakness after BOJ’s Kuroda stressed FX stability. China’s yuan strengthens against the dollar following warnings from the CBIRC with gains fading following soft loan data. In commodities, Crude futures advance, WTI gains stall near $108. Base metals trade poorly with much of the LME complex down over 1%. Spot gold trades in a narrow range near $1,823/oz. In crypto, Bitcoin rose back above $30,000.  Binance said that withdrawals for Lunar and UST will open when the market becomes more stable, will suspend spot trading for LUNA/BUSD and UST/BUSD at 09:30BST, May 13th. To the day ahead now, and data releases include Euro Area industrial production for March, along with the University of Michigan’s preliminary consumer sentiment index for May. Otherwise, central bank speakers include the Fed’s Kashkari and Mester, as well as the ECB’s Centeno, Nagel and Schnabel. Market Snapshot S&P 500 futures up 1.1% to 3,970.75 STOXX Europe 600 up 1.2% to 429.53 MXAP up 1.7% to 160.25 MXAPJ up 1.9% to 522.21 Nikkei up 2.6% to 26,427.65 Topix up 1.9% to 1,864.20 Hang Seng Index up 2.7% to 19,898.77 Shanghai Composite up 1.0% to 3,084.28 Sensex up 1.2% to 53,564.26 Australia S&P/ASX 200 up 1.9% to 7,075.11 Kospi up 2.1% to 2,604.24 German 10Y yield little changed at 0.91% Euro up 0.2% to $1.0403 Brent Futures up 0.8% to $108.30/bbl Gold spot up 0.0% to $1,822.04 U.S. Dollar Index down 0.25% to 104.59 Top Overnight News from Bloomberg Calls are growing for China’s government to sell more bonds to pay for extra stimulus to boost an economy facing its greatest challenges since the initial few months of the pandemic in 2020 For global investors trying to gauge the fallout from surging interest rates and slowing economic growth, Hong Kong is quickly emerging as a must-watch market. While Hong Kong’s $466 billion foreign-reserves stockpile and plentiful interbank liquidity suggest little chance of an imminent crisis, signs of financial stress are building UK Chancellor of the Exchequer Rishi Sunak said the Brexit settlement in Northern Ireland is causing economic and political harm and called on the European Union to be flexible, comments likely to be seen as an attempt to publicly align himself with Boris Johnson after reports of a rift With the U.K. wilting under the fastest inflation in three decades, supermarkets are raising prices at an even quicker rate, according to a new analysis prepared for Bloomberg. That’s turning the screws on shoppers who are already grappling with higher gas and heating bills and falling real incomes Some EU nations are saying it may be time to consider delaying a push to ban Russian oil so they can proceed with the rest of a proposed sanctions package if the bloc can’t persuade Hungary to back the embargo Beijing reported a slight increase in new Covid-19 cases after officials late Wednesday denied the city will be locked down amid growing concern the Chinese capital’s response to a persistent outbreak is about to be intensified Investors are deep in risk-off mood with outflows from stocks, bonds, cash and gold, Bank of America strategists said, citing EPFR Global data A more detailed look at global markets courtesy of Newsquawk APAC stocks were firmer as risk momentum picked up following on from the volatile session on Wall St where the major indices finished mixed but almost wiped out all losses after a late ramp up heading into the close. ASX 200 traded with respectable gains and back above the 7,000 level with tech frontrunning the advances. Nikkei 225 outperformed as focus remained on earnings, while SoftBank surged amid buyback hopes and despite a record loss. Hang Seng and Shanghai Comp joined in on the elated mood with Hong Kong led by strength in tech, although the advances in the mainland were moderated by the mixed COVID headlines with Beijing to conduct the next round of mass COVID testing, while Shanghai aims to achieve zero community spread by the middle of this month and is considering expanding the scale of output resumption. Top Asian News Shanghai Vice Mayor said they aim to have no community spread of coronavirus by mid-May and are considering expanding the scale of production resumption, while they will aim to open up, ease traffic restrictions and open shops in an orderly manner, according to Reuters. Shanghai is to prioritise resuming classes for grades 9, 11 and 12, while supermarkets, convenience and department stores will resume offline operations in an orderly manner and other services such as hairdressing will open gradually, according to Global Times. China Banking and Insurance Regulatory Commission says the Yuan's weakening is not sustainable, adding do not bet on the unilateral devaluation and appreciation or you could face unnecessary losses; retreat in the Yuan was normal market reaction.. BoJ Governor Kuroda said Japan still hasn't achieved a situation where inflation is stably and sustainably at 2%, while the expected rise in inflation is driven mostly by energy costs and is lacking sustainability. Kuroda reiterated the BoJ must continue monetary easing to reach its price target and it is premature to debate an exit from ultra-easy policy, while he also said it is appropriate to maintain the current dovish forward guidance on interest rates, according to Reuters. North Korea said around 350k have shown fever symptoms of an 'unknown cause' and 187.8k are being treated in isolation, while it reported 18k COVID-19 cases and 6 died from a fever in which one was confirmed as a COVID death, according to KCNA and Yonhap. European bourses are firmer as the rebound from Thursday's selloff continues, Euro Stoxx 50 +1.3%. US futures are similarly bolstered across the board, NQ outpacing peers modestly as Tech recoups, ES +0.9%. Samsung (005930 KS) is reportedly in talks to hike chipmaking prices by up to 20%, according to Bloomberg sources. Elon Musk says the Twitter (TWTR) deal is temporarily on hold, pending details supporting the calculation that spam/fake accounts represent less than 5% of users. Pressure in TWTR subsequent extended to -13% in the pre-market; extending to -19% after five-minutes. Top European News UK PM Johnson is considering as many as 90k job cuts in civil service, according to ITV. GVS Shares Rise After Agreeing to Buy Haemotronic for EU212m EU Starts to Consider Oil Sanctions Delay as Hungary Digs In UCB Plunges After FDA Says It Can’t Approve Psoriasis Drug Now Black Bankers Fight to Hold Finance Accountable for Its Promises FX Dollar and Yen shed some safe haven gains as risk sentiment recovers ahead of the weekend; DXY slips from fresh 2022 peak at 104.920, though still positive, and USD/JPY up near 129.00 vs new retracement low circa 127.50. Aussie takes advantage of pickup in risk appetite and Yuan bounce amidst verbal intervention; AUD/USD hovering under 0.6900 from sub-0.6850 yesterday, USD/CNH and USD/CNY around 6.8000 vs 6.8370 and 6.8110. Euro, Pound and Franc regroup, but remain vulnerable around psychological levels; 1.0400, 1.2200 and parity in EUR/USD, Cable and USD/CHF respectively. Loonie off recent lows post hawkish BoC comments and pre Q1 Loans Survey, USD/CAD close to 1.3000 and 1.1bln option expiry interest between 1.2990 and the round number. Peso underpinned after 50 bp Banxico hike as 1 of the 5 voters dissented for 75 bp. Czech Koruna caught between CNB minutes underlining dovish leaning of new head and Holub opining that May’s hike may not be the final one. Fixed Income Bonds bounce after conceding ground to recovering risk assets. Bunds find support just ahead of 154.00, Gilts in the low 120.00 zone and 10 year T-note at 119-07. Curves re-steepen after decent US 30 year sale completes the Quarterly Refunding remit and attention turns to 20 year and 10 year TIPS auctions next week. Commodities WTI and Brent are firmer moving with the broad rebound in risk-assets, however, upside is capped amid the EU considering omitting the proposed Russia oil embargo from the 6th sanctions round. WTI resides around USD 107/bbl (106.29-108.13 intraday range) and Brent trades just under USD 109/bbl (107.79-109.79 intraday range). Spot gold is contained around USD 1820/oz, though it is coming under modest pressure as the DXY picks up most recently. US Event Calendar 08:30: April Import Price Index MoM, est. 0.6%, prior 2.6%; YoY, est. 12.2%, prior 12.5% 08:30: April Export Price Index MoM, est. 0.7%, prior 4.5%; YoY, est. 19.2%, prior 18.8% 10:00: May U. of Mich. Sentiment, est. 64.0, prior 65.2; Current Conditions, est. 69.3, prior 69.4; Expectations, est. 61.5, prior 62.5 10:00: May U. of Mich. 1 Yr Inflation, est. 5.5%, prior 5.4%; 5-10 Yr Inflation, prior 3.0% DB's Jim Reid concludes the overnight wrap As those working in this industry know, spreadsheet errors can have consequences – often costly ones. My fiancée doesn’t spend as much time on Excel as I do, but with our wedding coming up in July, she’s been using a spreadsheet to keep track of the number of guests. I privately regard this sheet to be an abomination, so in the interests of our future marriage I’ve tried to avoid the subject. But a couple of weeks ago I was told that we needed more guests and had to extend further invites, since we were up against the reception venue’s minimum. This I duly did, although having already invited my friends, I mostly resorted to being a lot more generous on my plus-one policy. At the weekend however, she showed me the spreadsheet. It turned out she hadn’t extended the range on the guest list sum function, and we were already comfortably above what we needed. I won’t tell you how much these extra invites have cost us. Thankfully as a primary school teacher she doesn’t teach Excel to her 5- and 6-year-olds, although I then discovered with even more alarm that she’s considered the spreadsheet expert at her school… It’s been a costly few weeks in markets too as investors have priced in growing recession risks, and over the last 24 hours we’ve seen some incredible intraday volatility across a range of asset classes. At one point in the New York afternoon, the S&P 500 had been down -1.94% at the lows, which left it just shy of a -20% decline since its all-time closing peak that would mark the formal start of a bear market. But then in the final hour there was a major recovery that meant the index only saw a modest -0.13% fall on the day, even if that still marked a fresh one-year low. Futures markets are implying we’re going to see that rally extended today, with those for the S&P up +0.92% this morning. But even if we do see a recovery of that sort of magnitude, then the major losses we’ve already seen this week mean it would still be the first time in over a decade that the index has posted 6 consecutive weekly declines. That pattern of deep losses followed by a late recovery was echoed more broadly yesterday, with the NASDAQ paring back losses of more than -2% on the day to eke out a marginal +0.06% advance. For the FANG+ index (-0.30%), the late recovery wasn’t enough to bring it back into positive territory, and there was a significant milestone reached since its latest slump means it’s now more than -40% beneath its all-time high, which surpasses its losses during the Covid selloff of 2020 when it was “only” down by -34% from peak to trough. European equities lost ground too, and the STOXX 600 (-0.75%) similarly saw a second-half recovery, having been as low as -2.41% earlier in the day. Unlike in April, when the equity declines were triggered by the prospect of a more aggressive Fed tightening cycle and went hand-in-hand with sovereign bond losses, this week’s declines have much more obviously surrounded global growth risks, which you can see in the way that Fed Funds futures are now beginning to take out some of the tightening they’d been pricing in over the year ahead. Only yesterday, the futures-implied rate by the FOMC’s December meeting came down by -5.3bps to still be beneath its level from 3 weeks earlier, which marks a change from the almost relentless march higher we’ve seen over the last 8 months. In fact the only major interruption to that trend so far has come from Russia’s invasion of Ukraine in late-February, before the inflationary consequences of the conflict reasserted themselves on market pricing. With investors expecting less monetary tightening and seeking out safe havens, yesterday witnessed a major sovereign bond rally across countries and maturities. The 10yr Treasury yield came down -7.3bps to 2.85%, and at the front-end of the curve, 2yr yields were down -7.8bps to 2.56%. This came on a day with another round of Fed speakers sounding the same tune of late, including Chair Powell who said that +50bp hikes at the next two meetings were probably appropriate. Meanwhile, he sounded an even more pessimistic tone on the path of the economy given the impending tightening, noting that getting inflation back to target would “include some pain” and that whether a soft landing can be arranged is up to matters beyond the Fed’s control. Over in Europe the declines were even larger, with yields on 10yr bunds (-14.6bps) undergoing their biggest daily move since the start of March, as yields on 10yr OATs (-13.8bps), BTPs (18.4bps) and gilts (-16.5bps) saw similar declines. A noticeable feature of the recent sovereign bond rally is how investors’ expectations of future inflation have come down significantly over recent days, with the 10yr German breakeven falling from a peak of 2.98% on May 2 to just 2.29% yesterday, which is an even faster decline than the one seen during the initial phase of the Covid pandemic in March 2020. That flight to havens was evident in foreign exchange markets too, where the dollar index strengthened a further +0.97% to levels not seen since 2002. Conversely, that saw the euro close beneath the $1.04 mark for the first time since late-2016, although the traditional safe haven of the Japanese Yen was the top-performing G10 currency yesterday, strengthening +1.27% against the US Dollar and +2.61% against the Euro. When it came to cryptocurrencies, Bitcoin hit an intraday low of $25,425 shortly after the European open, which is the first time it’s traded that low since late 2020, before recovering its losses to end the session higher at $28,546, and this morning it’s rebounded another +6.34% to hit $30,356. Overnight in Asia we’ve seen a significant rebound in equity markets too, with the Nikkei (+2.52%), the Hang Seng (+2.00%) and the KOSPI (+1.72%) all seeing sizeable advances, and the Shanghai Comp (+0.56%) also posting a solid gain. Those earlier comments from Chair Powell after the US close have supported risk appetite, particularly since he echoed his previous comments about the Fed being on course for further 50bp hikes at the next couple of meetings, rather than moving towards 75bps in the aftermath of the stronger-than-expected CPI reading. A number of yesterday’s other moves have also begun to unwind, with the Japanese Yen down -0.50% against the US Dollar this morning, whilst yields on 10yr Treasuries have risen +3.6bps overnight. Separately in Shanghai, officials said that they planned to stop community spread of Covid-19 and start reopening by May 20, which is the first time that a timeline has been put forward as to when the lockdown might end. Elsewhere yesterday, there was a significant +13.50% rise in European natural gas futures after Gazprom said that gas flows wouldn’t be able to go through the Yamal pipeline because of Russian-imposed sanctions on European companies. But on the other hand, Bloomberg reported that some EU nations were considering a delay in sanctioning Russian oil in light of Hungarian opposition, and instead pushing ahead with the rest of the sanctions package. There were also further signs of the geopolitical shifts as a result of Russia’s invasion, after Finland’s President and Prime Minister endorsed NATO membership, saying the country should apply “without delay”. Staying on the political sphere, tensions have continued to fester between the UK and the EU over the Northern Ireland Protocol, and yesterday’s statements from the two sides indicated there was a difficult phone call between UK Foreign Secretary Truss and EU Commission Vice President Šefčovič. The UK Foreign Office’s readout of the call said that “if the EU would not show the requisite flexibility … we would have no choice but to act.” Then Šefčovič said in his own statement that it was “of serious concern that the UK government intends to embark on the path of unilateral action.” So one to watch into next week given press reports we could hear more from the UK side then. Looking at yesterday’s data, the US PPI reading added to the picture of elevated inflationary pressures. The headline monthly gain for April came in at +0.5% as expected, but the March reading was revised up two-tenths to +1.6%, meaning that the year-on-year figure only came down to +11.0% (vs. +10.7% expected). We also had the weekly initial jobless claims for the week through May 7, which came in at 203k (vs. 193k expected). And in the UK, the Q1 GDP reading was a bit below consensus at +0.8% (vs. +1.0% expected), and looking at the monthly reading for March specifically there was actually a -0.1% contraction (vs unchanged expected). To the day ahead now, and data releases include Euro Area industrial production for March, along with the University of Michigan’s preliminary consumer sentiment index for May. Otherwise, central bank speakers include the Fed’s Kashkari and Mester, as well as the ECB’s Centeno, Nagel and Schnabel. Tyler Durden Fri, 05/13/2022 - 07:56.....»»

Category: smallbizSource: nytMay 13th, 2022

Will Rising Interest Rates Chill CRE Sales?

After New York City’s investment sales plummeted in 2020 into the first half of 2021, we witnessed amassive uptick in sales activity in 4Q21 and 1Q22 which reached above 2019 pre-pandemic levels. Therewas no doubt pent up demand, as sellers were finally met by eager buyers looking to put capital... The post Will Rising Interest Rates Chill CRE Sales? appeared first on Real Estate Weekly. After New York City’s investment sales plummeted in 2020 into the first half of 2021, we witnessed amassive uptick in sales activity in 4Q21 and 1Q22 which reached above 2019 pre-pandemic levels. Therewas no doubt pent up demand, as sellers were finally met by eager buyers looking to put capital back towork. Debt was (and still is) plentiful and accretive driving average cap rates in Manhattan to 4.32% formulti, 5.20% for retail, and 4.45% for office.  That being said, no doubt the biggest driver to the uptick in sales volume was the recovery of the City.Although Manhattan office use is still only around 50%, companies are making long terms bets includingGoogle’s purchase of St John’s Terminal and Facebook’s soon to be opening of 700k SF in the Farley PostOffice.  It is clear that the talent is here.  The streets, especially in residential neighborhoods, have comeback to life. The Wall Street Journal reported that Times Square foot traffic is almost back to pre-pandemic levels. Metro-North ridership is now only off 11% pre-pandemic levels, although subwayridership is still off 40%. Even traffic being up 5% is bittersweet. Along with all this activity, has come a rent recovery. According to Jonathan Miller’s report, NYCresidential rents gained 33% over the last year and have now surpassed pre-Covid levels. Meanwhile,the retail market has tightened with vacancy rates dropping in almost every corridor in Manhattan.Lastly, Manhattan office net effective rents are +14.4% since April 2020. But with a 50 bp increase by the Fed and the 10-year treasury surpassing 3% for the first time since2018, the question now is will this chill the CRE sales market? Will there be significant cap rateexpansion?  To determine, we need to look at current deals in the marketplace as opposed to closedsales. Remember that closed sales are rearview indicator (as they typically take 60-90 days to close,another few weeks to hit the transfers, and then wait to be included in the next quarter’s statistics). I recently had lunch with one of the most active institutional multifamily buyers in the marketplace. Histeam tracks new listings to the marketplace meticulously. He advised that there were 20 new $50m+NYC deals with bids due in 4Q. 18 went under contact which was the highest conversion rate that theyhad ever tracked. Traditionally, it is closer to a 50% success rate as oftentimes sellers opt to hold and refiinstead especially when rates are so favorable. In stark contrast, my friend advised that only 2 out of 20 1Q deals were signed, meaning that most arestill on the market or being removed. This would no doubt suggest hesitation by buyers and sellerspostponing decisions. I was frankly surprised with how dramatic this decline was in activity. Anecdotally, our Tri-StateInvestment Sales group has been incredibly busy. We just held a bid deadline for a $10m asset andreceived over 20 offers. It would seem that the mid-market demand is still as strong as ever for the rightproduct. That being said, there is no doubt some of our clients who have had to show more flexibility to get dealsdone especially for core type deals with long term cash flows. This would also certainly apply to fullyregulated apartment buildings where increases are based on the mercy of the RGB which will at least bebetween 2-4% this year for one-year leases. Our group’s activity has paralleled the overall market. In the last 2 quarters (Q4 + Q1), our number ofsales has increased four-fold from the pandemic era in the second half of 2020 and first three quartersof 2021. In times like these, there will no doubt be opportunities. Sellers may look to transact for fear that theexpected future rate hikes will only lead to more downward pressure on pricing, while buyers look tolock in debt that is still historically low. We are also now looking at our client’s existing debt and seeing ifit is accretive to a sale. Assuming a seller’s debt from last year, could certainly be advantageous if theleverage is right. This will be a market to closely watch as there are many opposing factors that will leadto anything like a predictable market. The post Will Rising Interest Rates Chill CRE Sales? appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyMay 12th, 2022

Array Technologies Stock Giving Another Ground Floor Entry

Solar tracking systems provider Array Technologies (NASDAQ:ARRY) stock has fallen below its pandemic lows despite improving business. The Company manufactures and supplies single-axis solar tracking systems that enable the optimal positioning of a solar array to increase clean and renewable energy production. Its systems help lower lifetime costs by over 7% and over 31% lower […] Solar tracking systems provider Array Technologies (NASDAQ:ARRY) stock has fallen below its pandemic lows despite improving business. The Company manufactures and supplies single-axis solar tracking systems that enable the optimal positioning of a solar array to increase clean and renewable energy production. Its systems help lower lifetime costs by over 7% and over 31% lower lifetime O&M. The Company plays right into the ESG theme by making solar energy systems more efficient. However, a glance at the horrifying share price collapse would make you think the Company was going out of business. Shares peaked at $54.78 in January 2021 and stumbled to a low of $8.28 on Feb. 24, 2022, before staging a rally that is fizzling out again. Inflationary pressures hit hard with extensive spikes in commodities and materials pricing along with increased logistics costs. Historically, these costs tend to fall, not rise. These headwinds cut right into margins causing a miss which was accentuated by the shifting of deliveries to the next quarter. Management believes this is transitory and with a newly appointed CEO, investors may be seeing a light at the end of the tunnel. The Company continues to grow top-line beats and is guiding towards profitability next year as it surpasses the $1 billion revenue mark. Prudent and patient investors can watch for opportunistic pullbacks to scale into a position. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Q4 Fiscal 2021 Earnings Release On April 5, 2022, Array released Q4 fiscal 2021 results for the quarter ending in December 2021. The Company reported earnings per share (EPS) of (-$0.06) excluding non-recurring items, missing consensus analyst estimates of (-$0.03), by $0.03. Revenues rose 21.8% year-over-year (YoY) to $219.88 million, beating analyst estimates for $213.19 million. Supply chain disruptions resulted in higher material costs. Executed contracts and awards hit a new record of $1.8 billion on Dec. 31, 2021. Full-Year 2022 In-Line Guidance Array raised its full-year fiscal 2022 earnings guidance with EPS ranging between $0.55 to $0.74 versus consensus analyst estimates for $0.71. Full-year fiscal 2022 revenues are estimated between $1.45 billion to $1.75 billion beating consensus analyst estimates of $1.46 billion. The Company appointed a new CEO Kevin Hostetler from Rotork. Array CEO Jim Fusaro commented We delivered revenue in line with expectations for the fourth quarter and the full year of 2021. That said, our full-year 2021 revenue and adjusted EBITDA were adversely impacted by approximately $7 million from the shifting of revenue into future periods due to the restatement of the first three quarters of 2021, as discussed in our Form 8-K filed on March 29, 2022.  It is, however, important to reiterate that the total overall contractual revenue and cash flow for these projects remains unchanged and that this shifting is merely a timing issue.” Conference Call Takeaways CEO Fusaro highlighted the three key risks in the industry and how the Company is mitigating them. The first was rising commodity and logistics costs. Array is providing fixed tracker pricing and confidence in material availability to fend off the pricing volatility for customers. The global tightening of supply chains and available logistics has been driving longer lead-times making it tougher to get the right parts to the right destinations in a timely manner. Array added 20 new suppliers with its STI acquisition to help mitigate the pressures stemming for supply chain disruption. Lastly, the U.S. regulatory environment fosters uncertainty with a potential headwind from the AD/CVD inquiry. Array isn’t affected directly since they don’t procure modules, but their availability impacts their clients with their build schedules. This in turn impacts Array. They have been actively providing outreach initiatives in Washington, D.C. to educate Congress, while engaging clients to ascertain the certainty of module supplies. Array is working with customers on-site for redesign efforts of module swap-outs as needed. The STI acquisition has also enabled Array to diversify its business internationally which offsets some of the exposure in the U.S. He concluded, “Over the last few years, we've transformed into a global renewable energy leader with an incredible platform to grow even bigger. The pieces are in place, and I look forward to seeing the great things this company will do in the future. So, I would like to not only thank my management team but the entire organization for their support over the last several years. It has been quite a ride” ARRY Opportunistic Pullback Levels Using the rifle charts on weekly and daily time frames provides a precise view of the landscape for ARRY stock. The weekly rifle chart downtrend made an initial bottom off the $18.02 Fibonacci (fib) level. The weekly market structure low (MSL) buy triggered a breakout through $11.84 as shares peaked out at $13.96 before sinking again on earnings. The weekly rifle chart is in a make-or-break setup that will resolve in either an inverse pup breakdown or a stochastic mini pup breakout. The weekly 5-period moving average (MA) is stalled at $11.41 with a 15-period MA at $11.17. The weekly lower Bollinger Bands (BBs) sit at $3.35 and 50-period MA at $16.07. The weekly stochastic had a mini pup that coiled through the 20-band but is stalling just under the 40-band as shares plummet. The daily rifle chart has a downtrend with a falling 5-period MA overlapping the 50-period MA resistance at $10.65 with 15-period MA falling at $11.82. The daily lower BBs sits at $8.62. On the upside, the daily upper BB sits at $15.02 and the daily 200-period MA sits at $15.69. The daily stochastic is completing a full oscillation down through the 20-band on a mini inverse pup. Prudent investors can watch for opportunistic pullback levels at the $8.70, $8.02 fib, $7.46, $6.64 fib, $5.59, and the $4.44 fib levels. Upside trajectories range from the $13.09 fib level up to the $19.78 fib level. Should you invest $1,000 in Array Technologies right now? Before you consider Array Technologies, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Array Technologies wasn't on the list. While Array Technologies currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. Article by Jea Yu, MarketBeat Updated on Apr 15, 2022, 10:06 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkApr 15th, 2022

Futures Flat On Last Day Of Dismal Quarter, Oil Tumbles As Biden Preps Massive SPR Release

Futures Flat On Last Day Of Dismal Quarter, Oil Tumbles As Biden Preps Massive SPR Release US equity futures were muted and flat on the last trading day of the month and quarter, fading a modest overnight gain as the underlying index headed for its first quarterly decline in two years on worries about surging inflation, hawkish monetary policy and an economic slowdown. Contracts on the S&P 500 were down 0.1% at 730 a.m. ET while Dow futures were little changed and Nasdaq 100 futures rose 0.2%, while European stocks fell, heading for the first quarterly decline since 2020. Asian equities retreated on lackluster Chinese PMI data and regulatory concerns. Treasuries held gains with the 10Y yield dropping to 2.31% (from 2.50% earlier this week when the 2s10s inverted) and the dollar ticked up against almost all G-10 peers. Fed watchers will be focused on the PCE deflator, which may have sped up in February. The big overnight action was in oil, which plunged following the news late on Wednesday that the White House was (again) mulling a plan to release roughly a million barrels a day from reserves to combat crashing Democrat approval rating ahead of the midterms as a result of soaring gasoline prices coupled with supply shortages in response to US sanctions of Russia. The proposal, which includes 180 million barrels being freed over several months, may help the market rebalance this year but won't solve a structural deficit, Goldman said. The reserve release news came just hours ahead of an OPEC+ supply meeting, where the cartel is expected to stick with its strategy of a modest output boost in May. Equities globally are poised for their worst quarter since the early days of the pandemic on concerns about tightening monetary policy, red-hot inflation and a looming recession. While stocks remained resilient to the historic rout in bond markets this month, some strategists see little room for them to rally this year, partly as high costs threaten corporate profits. French inflation accelerated more than expected to reach another record, following unexpectedly high readings on Wednesday from Germany and Spain. “Our base case now is for only modest upside for stocks,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, adding that he expects the S&P 500 to end the year at 4,700, about 2% higher than current levels. He also trimmed his estimate for global earnings growth to 8% from 10% for 2022. “Aside from quarter-end considerations, oil is very much the center of attention,” Simon Ballard, chief economist at First Abu Dhabi Bank, wrote in a note to investors. Still, “all the usual suspects are still in play, keeping the market in check, including the specter of the Fed pursuing an aggressive path of monetary policy normalization over the coming months.” Elsewhere, officials from Ukraine and Russia are set to resume talks via video conference on Friday, according to a Ukrainian negotiator, though there was no immediate confirmation from Moscow. Friday’s video discussions between Ukraine and Russia would follow in-person talks this week in Turkey that didn’t produce a short-term cease-fire or major progress toward a broader peace deal. Ukraine’s negotiator said the hope was to have enough agreed on paper in another week to be able to move toward a meeting between President Vladimir Putin and President Volodymyr Zelenskiy. Going back to the US market, shares in big U.S. energy companies slumped in premarket trading along with crude prices drop (Exxon Mobil -1.9% and Chevron -1.5% premarket, Occidental Petroleum -2.6%, Gran Tierra Energy -3.1%, Imperial Petroleum -3.8%, Camber Energy -4.3%). Bank stocks are also lower putting them on track to fall for a second straight day as the U.S. 10-year yield falls to 2.31%. Goldman Sachs warned that stagflation could make bank stocks less profitable. U.S.-listed Chinese stocks slipped in premarket trading as Securities and Exchange Commission Chair Gary Gensler dialed down prospects of an imminent deal to allow Chinese firms to keep trading on American exchanges. Russian equities advanced as the nation partly lifted the short-selling ban on local stocks on Thursday, removing one of the measures that helped limit the declines in the market after a record long shutdown. Other notable premarket movers include: Vipshop ADRs (VIPS US) rise 8.4% in premarket trading after the Chinese online retailer announces a $1b share buyback plan. Robinhood Markets (HOOD US) shares rise 1.4% in U.S. premarket trading, set to extend the previous day’s 24% gains after the online brokerage announced plans to expand the trading day by four hours, while Morgan Stanley begins coverage of the stock with an equal-weight rating. Energy companies decline in premarket trading as crude prices drop. The U.S. is considering tapping its reserves again in a potentially massive release aimed at managing inflation and supply shortages. Exxon Mobil (XOM US) -1.9%, Chevron -1.5% (CVX US). U.S.-listed Chinese stocks are heading for a lower open after Securities and Exchange Commission Chair Gary Gensler dialed down prospects of an imminent deal to allow Chinese firms to keep trading on American exchanges. Alibaba (BABA US) fell 1.7% in premarket, while its e-commerce rival JD.com (JD US) lost 2.8%. Advanced Micro Devices (AMD US) shares fall 1.3% in U.S. premarket trading, after the semiconductor maker is downgraded to equal- weight from overweight at Barclays, which says that the growth story “needs a pause.”. IZEA Worldwide (IZEA US) shares surge 27% in U.S. premarket trading after the influencer marketing company reported fourth-quarter earnings and saw total revenue increase 62% to a record of $10.3m. In Europe, the Stoxx 600 reversed initial gains and dropped 0.3%, the Euro Stoxx 50 fell 0.2%, and other major indexes trade flat to slightly lower with retailers, telecoms and energy the worst performing sectors. Retail and telecom stocks led declines while utilities and insurance sectors outperformed. Some notable premarket movers: Brewin Dolphin shares rise as much as 62% and trade slightly below the agreed bid for the firm from RBC Wealth Management. The transaction, being carried out at a high premium, highlights the attractiveness of the U.K. wealth sector, analysts say. Orpea shares climb to their highest level in almost 2 months after Societe Generale says that allegations of mistreatment at its facilities are likely to have “limited” financial impact. Fresenius SE shares rise as much as 3.3% on news that the company’s Kabi intravenous drug unit has bought a majority stake in mAbxience SL and acquired Ivenix. Pernod Ricard shares rise as much as 2.6% as Citi says 3Q sales are likely to beat expectations, also lifting its which lifts EPS estimates and PT, as well as opening a positive catalyst watch. Tate & Lyle shares gain as much as 3.7% after saying it would buy Quantum Hi-Tech, a prebiotic dietary fiber business in China. The deal enhances Tate & Lyle’s portfolio, Goodbody says. Pearson shares rise as much as 3.5%, rebounding from Wednesday’s losses after private equity firm Apollo Global Management said it won’t make an offer for the education publisher. Earlier in the session, Chinese data and regulatory concerns weighed on Asia stocks. China's NBS manufacturing PMI declined to 49.5 in March from 50.2 in February, missing estimates, likely due to Covid-related restrictions and geopolitical tensions. The output sub-index in the NBS manufacturing PMI survey fell by 0.9 points in March, and the new orders sub-index fell by 1.9 points. The NBS non-manufacturing PMI fell to 48.4 in March from 51.6 in February, also missing expectations, and entirely driven by the decline of services sector due to recent Covid outbreaks in multiple provinces. Separately, Bloomberg reported that Chinese authorities are considering a plan to raise several hundred billion yuan for a new fund to backstop troubled financial firms. Asian stocks retreated after a two-day advance, as the U.S. securities regulator’s tough stance on a potential delisting of Chinese firms and weak China manufacturing data worried investors.  The MSCI Asia Pacific Index declined as much as 0.8%, and was poised to finish its worst quarterly performance in two years, with Taiwan Semiconductor Manufacturing and Tencent among the biggest drags. Benchmarks in Hong Kong and China underperformed regional peers. Japanese equities headed for a second day of declines while Australia stocks retreated after seven straight day of gains in response to a stimulatory federal budget.  The U.S. Securities and Exchange Commission’s chief said Chinese firms need to fully comply with audit requirements in order to stay on American exchanges. Meantime, China’s manufacturing contracted in March, underscoring the growing toll of lockdowns. Investors are also watching how a tumble in oil prices can alleviate inflation risks and affect corporate earnings.  “If you look at the PMIs there’s an obvious explanation for why PMIs are weak, which is China pursuing zero-Covid strategy,” Kieran Calder, head of Asia Equity Research at Union Bancaire Privee, said in an interview with Bloomberg Television. “The reality of Covid-19 versus the response in China, the mismatch is too strong right now and I think that’s the biggest worry for us.”  For the quarter, Asian stocks were poised for nearly a 7% loss, the worst performance since early 2020 when the emergence of the pandemic shocked investors. Investors had to grapple with a U.S. rate hike, a war in Ukraine and continued regulatory risks out of China, which caused huge volatility Japanese equities fell for a second day following a rally in the yen. Electronics makers and banks were the biggest drags on the Topix, which fell 1.1%. Recruit and SoftBank were the largest contributors to a 0.7% loss in the Nikkei 225. The yen was little changed after gaining 1.6% against the dollar over the previous two sessions. Both key gauges still capped their first monthly gains of the year. The Nikkei 225 rose 4.9% in March, the most since November 2020, while the Topix climbed 3.2% on the month. India’s benchmark equity index clocked its best monthly advance since August, as buying by local funds amid war-induced volatility supported sentiment. The S&P BSE Sensex fell 0.2% to 58,568.51 in Mumbai, trimming its gain for March to 4.1%. The NSE Nifty 50 Index also slipped 0.2% on Thursday. Stocks swung between gains and losses several times during the day ahead of the expiry of monthly derivative contracts Thursday. Institutional investors in India have bought $5 billion worth of shares this month, while foreign investors are set to extend their selling to a sixth consecutive month. Reliance Industries Ltd. was the biggest drag on the 30-share Sensex, which saw an equal number of shares closing up and down. Twelve of the 19 sectoral indexes compiled by BSE Ltd. gained, led by a gauge of telecom stocks. S&P BSE Healthcare Index was the worst performing sub-index.   “Markets took a breather on a monthly expiry day and ended the last day of the financial year on a flat note,” said Ajit Mishra, vice president of research at Religare Broking Ltd. “We reiterate our positive yet cautious stance citing lingering geopolitical tension between Russia-Ukraine and its impact on the global markets.” In rates, Treasuries extended this week’s rally with yields richer by up to 5bp across belly of the curve, which continues to outperform vs wings. Wider bull-steepening move grips bunds and gilts, as central-bank rate-hike premium is pared. Oil futures are sharply lower, weighing on energy stocks, following reports that Biden is considering a massive release of crude from U.S. reserves to fight inflation. The 10-year yield was around 2.31%, richer by ~4bp vs Wednesday’s close, underperforming bunds in the sector by ~4bp while keeping pace with gilts. Long-end swap spreads are sharply tighter, with 30- year dropping as low as -19.5bp. Euro-area, bonds extended their advance as money markets pare central bank tightening wagers. French bonds underperformed bunds as EU-harmonized CPI rose 5.1% from a year ago in March -- the most since the data series began in 1997 -- and above the 4.9% median estimate in a Bloomberg survey of economists.  The belly of the German curve richened 6-7bps, leading gains. Peripheral spreads are mixed: Italy tightens, Portugal and Spain widen to core. Money markets trim rate hike pricing. Japanese government bonds extended their advance as the central bank’s aggressive bond purchases this week reassured players that an excessive rise in yields won’t be tolerated. Yen was little changed in choppy trade. Bank of Japan’s offer to buy an unlimited amount of 10-year government bonds at fixed yields recorded no takeup, the central bank said. In FX, Bloomberg dollar spot index snapped two days of losses after rebounding in early European session; the dollar advanced versus all of its Group-of-10 peers and commodity currencies were the worst performers. The euro gave up earlier gains after earlier touching a four-week high versus the greenback. Norway’s krone slumped by as much as 1.6% versus the greenback after the central bank announced a ramp-up of FX purchases on behalf of the government. The pound declined for a third day against the euro, touching its weakest level versus the common currency since Dec. 23. A report from the British Retail Consortium gave another glimpse into the cost-of-living crisis, showing prices in U.K. shops rose in March at the fastest annual pace since September 2011. Japan’s factory output eked out its first gain in three months in February, offering only a tepid sign of resilience amid fears the economy has slipped back into reverse. Production inched up 0.1% from the previous month. The Australian dollar declined against most of its Group-of-10 peers as oil prices tumbled on news that the Biden administration is weighing a massive release of crude from U.S. reserves. Sales of Aussie back into euro have seen option-related Australian dollar bids attached to large option strikes get filled, according to Asia-based currency traders In commodities, crude futures hold Asia’s losses triggered by reports that the White House may make an announcement on the U.S. oil reserve release as soon as Thursday. WTI drops over $6.50 near $101.10. European natural gas faded an initial drop after Germany signaled Russia is softening its demand for ruble payments. Precious metals and much of the base metals complex traded heavy. Looking to the day ahead now, data releases include German retail sales for February and unemployment for March, French and Italian CPI for March, and the Euro Area unemployment rate for February. From the US, there’s also February’s personal income and personal spending, the weekly initial jobless claims, and the MNI Chicago PMI for March. Otherwise, central bank speakers include ECB Vice President de Guindos, Chief Economist Lane, and New York Fed President Williams. Market Snapshot S&P 500 futures up 0.1% to 4,601.75 STOXX Europe 600 down 0.2% to 459.49 MXAP down 0.7% to 180.37 MXAPJ down 0.6% to 591.98 Nikkei down 0.7% to 27,821.43 Topix down 1.1% to 1,946.40 Hang Seng Index down 1.1% to 21,996.85 Shanghai Composite down 0.4% to 3,252.20 Sensex down 0.2% to 58,590.32 Australia S&P/ASX 200 down 0.2% to 7,499.59 Kospi up 0.4% to 2,757.65 German 10Y yield little changed at 0.62% Euro down 0.3% to $1.1130 Brent Futures down 3.6% to $109.40/bbl Gold spot down 0.4% to $1,924.94 U.S. Dollar Index up 0.24% to 98.03 Top Overnight News from Bloomberg The Biden administration is weighing a plan to release roughly a million barrels of oil a day from U.S. reserves, for several months, to combat rising gasoline prices and supply shortages following Russia’s invasion of Ukraine, according to people familiar with the matter Bank of Japan Governor Haruhiko Kuroda is determined to stick with targeting long-term bond yields near zero, even as it leaves him increasingly at variance with global peers and propels a depreciating exchange rate The yen has taken a beating in recent weeks but technicals suggest that it may be on the road to a recovery. Japan’s currency may rebound to 116 per dollar in the coming months after sliding as low as 125.09 on Monday, the weakest in almost seven years, an analysis by Bloomberg shows Russian President Vladimir Putin said that European buyers could continue making gas payments in euros, according to a German readout of a call he had with Chancellor Olaf Scholz Russian government bondholders would be left with no viable path to recover their money if the country defaults, according to one of the top global lawyers in sovereign debt litigation Hungary kept its key interest rate unchanged after the forint staged the second-biggest emerging-market currency rally this week, relieving pressure on policy makers to deliver more monetary tightening China’s cabinet vowed to stabilize the economy and called on officials to avoid measures that harm market expectations as the government struggles to control Covid outbreaks across the country including in the financial center of Shanghai For the first time in more than a decade, China’s yield advantage over Treasuries may be erased. The yield spread between the benchmark bonds of the world’s two biggest debt markets has narrowed to around 40 basis points from 150 a year ago, well below the People’s Bank of China’s “comfortable” range Australia will invest more to find new buyers for its exports in an effort to ease trade dependence on China, its treasurer said, in the face of “economic coercion” from Beijing that shows little sign of abating A more detailed look at global markets courtesy of Newsquawk Asia=Pac stocks traded cautiously at month-end following the weak lead from the US due to increased Russia-Ukraine scepticism and as the region digested disappointing Chinese PMI data. ASX 200 was kept afloat by outperformance in the mining and materials industries although upside was capped as the tech sector suffered from profit-taking and with energy hit by a drop in oil prices. Nikkei 225 traded indecisively amid a choppy currency and after Industrial Production data missed forecasts. Hang Seng and were subdued following the weak Chinese PMI data and with the mood inShanghai Comp. stocks not helped by the US SEC chief casting doubt regarding an imminent deal to avert a delisting of Chinese stocks. Top Asian News Thirteen-Hour Power Cuts Get Sri Lanka to Shorten Stock Trading Effissimo Would Tender Toshiba Shares in Event of Bain Bid BOJ Looks Ready for a Victory Lap With Yields on the Retreat BOJ Boosts Bond Buying in April-to-June Quarter European equities (Eurostoxx 50 -0.3%) kicked the final trading session of the month off on the front foot before drifting towards the unchanged mark. Sectors in Europe exhibit a mostly positive tilt with airline names cheering the declines in the energy space as the Energy sector suffers. The biggest laggard in the region is the retail section following a disappointing Q1 update from H&M (-8%). Futures in the US are modestly firmer as the NQ (+0.5%) marginally outpaces the ES (+0.1%) with inflation set to continue to remain in focus today, with the release of US PCE metrics for March; core PCE is seen rising to 5.5% Y/Y Top European News Iron Ore Futures Advance as Outlook for Demand Brightens Sorrell’s S4 Capital Audit Delay No Longer Down to Covid EU Commission Confirms Raids in Germany’s Natural Gas Sector Pearson Shares Rebound; Barclays Sees a ‘Resilient Business’ In FX, Dollar finds its feet as month, quarter and fiscal year end approach, albeit with a helping hand from others - DXY back on the 98.000 handle, narrowly. Commodity currencies reverse course alongside underlying prices, with crude crushed on reports of US SPR and IEA opening reserve taps - Usd-Cad rebounds through 1.2500 after sliding to new y-t-d low sub-1.2450 only yesterday. Yen choppy amidst residual repatriation flows and more BoJ action to cap JGB yields - Usd/Jpy circa 122.00 within a 122.45-121.35 range. Euro fades into 1.1200 vs Buck again as option expiries and tech resistance impinge, but Aussie  may derive traction from expiry interest at 0.7500 - EURUSD now eyeing support at 1.1100 after tripping stops. In commodities, WTI and Brent remain firmly on the backfoot in the wake of reports suggesting that the Biden administration is considering a 'massive' SPR release. The news has sent May’22 WTI and Jun’22 Brent to respective lows of USD 100.53/bbl and USD 107.39/bbl to leave them a few dollars above their weekly lows of USD 98.44/bbl and USD 102.19/bbl respectively. US President Biden's administration is considering a 'massive' release of oil to combat inflation and may release up to 1mln bpd for months from the strategic reserve in which the total release could be 180mln , according to Bloomberg.bbls Goldman Sachs says a potentially large SPR release would ease the situation but wouldn't resolve the structural deficit in the oil market. Says adjustments for SPR release, Iran supply delays would lower H2 22 Brent forecast by USD 15, to USD 120/bbl - still above market forwards. US President Biden will deliver remarks today at 13:30EDT/18:30BST regarding the administration's actions to reduce gas prices in the US, according to the White House. It was also reported that the US mulls permitting, according to Reuters sources.summertime sales of higher ethanol blends of gasoline to ease pump prices IEA called an emergency ministerial meeting for Friday, according to the Australian Energy Minister's office. It was later reported that , according to New Zealand'sIEA countries are to decide on a collective oil release Energy Minister's office OPEC+ JTC replaced IEA reports with Wood Mackenzie and Rystad Energy as secondary sources to assess crude oil output and conformity, according to sources cited by Reuters. In fixed income, bonds on track to see out extremely bearish month, quarter and end to FY on a firmer note. Curves more even after wild swings between flattening, inversion and steepening.BoJ ramps efforts to maintain YCC via a mostly larger JGB buying remit for Q2. US Event Calendar 08:30: March Initial Jobless Claims, est. 196,000, prior 187,000 08:30: Feb. Personal Income, est. 0.5%, prior 0% 08:30: Feb. Personal Spending, est. 0.5%, prior 2.1%; Real Personal Spending, est. -0.2%, prior 1.5% 08:30: Feb. PCE Deflator MoM, est. 0.6%, prior 0.6%; PCE Deflator YoY, est. 6.4%, prior 6.1% 08:30: Feb. PCE Core Deflator MoM, est. 0.4%, prior 0.5%; YoY, est. 5.5%, prior 5.2% 09:45: March MNI Chicago PMI, est. 57.0, prior 56.3 DB's Jim Reid concludes the overnight wrap After a great deal of optimism in markets on Tuesday following the Russia-Ukraine negotiations in Turkey, the last 24 hours have proven to be much more negative as investor hopes for a de-escalation in Ukraine were dampened by more gloomy comments on the war from both sides. From Russia, the Kremlin spokesman Dmitry Peskov said that they hadn’t seen a breakthrough in the talks, whilst Ukrainian President Zelensky said that “Russia is deploying new forces on our terrain to try to continue destroying us”, and NATO leaders continued to strike a sceptical tone. Indeed, it was reported by Dow Jones that the European Commission was considering new sanctions against additional Russian banks, and UK Prime Minister Johnson said that the UK was “looking at going up a gear” in its support to Ukraine. President Biden expressed similar sentiments, pledging $500 million of additional aid to Ukraine in a call with President Zelensky. Against this backdrop, oil prices rose again for the first time this week, with Brent Crude up +2.92% to $113.45/bbl, but there’s been a sharp turnaround overnight on the back of news that the US are planning a major release from their reserves, with Bloomberg reporting it would be a million barrels a day over several months. Biden is due to speak about efforts to lower prices at 1:30pm Eastern, so all eyes will be on that, and overnight we’ve seen Brent Crude prices come down by -4.54% to $108.30/bbl, more than reversing their gains from the previous session. However, European natural gas (+9.77%) rose for a third consecutive session to €118.97/MWh, which is its highest closing level in nearly 3 weeks. That occurred amidst a continued dispute about Russian gas payments, which President Putin wants paid for in rubles, but which multiple European countries have rejected as a breach of contract. In response, Germany’s economy minister Robert Habeck activated the “early warning phase” of an emergency law, which could eventually lead to gas rationing if supplies fall short. With Russia’s invasion having lasted for over 5 weeks now, we’re increasingly seeing the impact reflected in the official inflation numbers, and yesterday’s releases out of Europe gave fresh life to the bond selloff. In terms of the numbers, German inflation rose to +7.6% in March on the EU-harmonised measure, which was up from +5.5% back in February and some way above the +6.8% reading expected by the consensus. It was the same story in Spain, where inflation rose to +9.8% (up from +7.6% in February), which will heighten interest in tomorrow’s flash release for the entire Euro Area. In turn, that’s led to growing expectations of ECB rate hikes this year, with a total of 63bps being priced in by the December meeting, which is the most we’ve seen to date. On top of that, more than 30bps are even being priced in by the September meeting, which surpasses their pre-invasion peak. Given the strong inflation numbers and the prospect of a more aggressive ECB, European bonds sold off across most of the continent, with yields on 10yr bunds (+1.3bps), OATs (+2.3bps) and BTPs (+1.3bps) all hitting fresh multi-year highs. Furthermore, the 2yr German yield (+5.6bps) closed in positive territory for the first time since 2014, having briefly got there on an intraday basis during the previous session. Unsurprisingly, the latest rise in yields was driven by higher inflation breakevens rather than real rates, and the 10yr German breakeven surged another +6.0bps to 2.71%, its highest level in data available back to 2009, whilst the Italian breakeven rose +4.0bps to 2.53%, its highest level since 2008. Even as European bonds were selling off once again, it was the reverse story in the United States, where Treasuries recovered somewhat yesterday as we come to the end of one of their worst quarterly performances in decades. Yields on 10yr Treasuries fell -4.6bps to 2.35%, whilst yield curves remained incredibly flat; the 2s10s curve steepened marginally by +1.3bps to 3.6bps, avoiding another inversion, and this morning is up another +0.3bps to 3.9bps. In terms of other developments this morning, Asian equity markets have followed Wall Street’s lead overnight with the Nikkei (-0.18%), Hang Seng (-0.59%), Shanghai Composite (-0.14%), CSI (-0.26%) all losing ground, though the Kospi (+0.54%) is the exception to this pattern. The weakness in Asian gauges has come amidst declines in the PMI data, with China’s manufacturing PMI down to 49.5, and the non-manufacturing PMI down to 48.4. For reference, that’s the first time that both readings have been below the 50-mark that separates expansion from contraction since February 2020, and comes as multiple cities are undergoing further lockdowns in response to the current Covid outbreak. Additionally, a slide in Chinese tech stocks is weighing on sentiment after the US Securities and Exchange Commission added Hong Kong listed Baidu Inc. to its long list of companies potentially facing delisting from US exchanges. Outside of Asia, stock futures in the US and Europe are pointing to a more positive start, with contracts on the S&P 500 (+0.28%), Nasdaq (+0.56%) and DAX (+0.59%) all trading higher. Those equity declines overnight in Asia follow a broader decline in risk appetite yesterday given the more negative geopolitical developments, and both the S&P 500 (-0.63%) and Europe’s STOXX 600 (-0.41%) unwound some of their gains from the previous day. More cyclical industries underperformed in general, whilst the German DAX (-1.45%) also put in a weaker performance relative to the other main European indices. The VIX Index of volatility (+0.43pts) also ticked up to 19.33pts, after closing at to its lowest level since Russia’s invasion of Ukraine on Tuesday. In France, we’re now just 10 days away from the first round of the presidential election, and there are continued signs of a narrowing in the polls, albeit with President Macron still in the lead. In terms of yesterday’s polls (from Opinionway, Harris, Ipsos, Ifop and Elabe), all of them pointed to a repeat of the second-round contest from 2017, with the first-round polling putting President Macron in first place followed by Marine Le Pen in second. That said, they’re also implying a noticeably tighter result in the second round than Macron’s 66%-34% victory against Le Pen in 2017. Looking through the numbers, the second round estimates ranged from a 55%-45% Macron victory (from Opinionway and Ipsos), to a 52.5%-47.5% Macron victory (from Elabe). Finally on yesterday’s other data, the ADP’s report of private payrolls from the US showed growth of +455k in March (vs. +450k expected). That comes ahead of tomorrow’s jobs report, where our US economists are expecting nonfarm payrolls to have grown by +400k, with the unemployment rate ticking down to a post-pandemic low of 3.7%. To the day ahead now, and data releases include German retail sales for February and unemployment for March, French and Italian CPI for March, and the Euro Area unemployment rate for February. From the US, there’s also February’s personal income and personal spending, the weekly initial jobless claims, and the MNI Chicago PMI for March. Otherwise, central bank speakers include ECB Vice President de Guindos, Chief Economist Lane, and New York Fed President Williams. Tyler Durden Thu, 03/31/2022 - 07:56.....»»

Category: blogSource: zerohedgeMar 31st, 2022

"It"s Been Bad Since Christmas" - Subway Service Slows Dramatically As Worker Shortages Cause Mass Delays

"It's Been Bad Since Christmas" - Subway Service Slows Dramatically As Worker Shortages Cause Mass Delays One day after New York's Gov. Kathy Hochul delivered her state of the state address - her first major address since taking over from her former boss Gov. Andrew Cuomo this past summer - the NYT and the rest of the media gallery praised her performance. But despite her alluring promises about ending "unproductive" rivalries between the elected leaders of NYC and the Empire State. Unfortunately, she still has one major, economy-wrecking problem to solve, and it's this: on any day this week, some 1,300 people out of a work force of 6.3K (roughly 1/5th) have been absent from work from the MTA due the ongoing crush of omicron case. The soaring jump in absenteeism, which the transportation authority attributes to the virus, has meant a lack of workers to keep up with the regular train schedules, leading officials to suspend service this week on three of the system’s 22 subway lines and reduce schedules on many others, leading to longer wait times. NYC's shortage of workers has made it the most critically underserved public transit system in the country, the NYT reports. "I feel like it’s been bad since Christmas," Jennifer Hall, 41, said Wednesday morning as she waited with her son for a D train in the Bronx. The news comes as New York State confirmed 85K new cases on Thursday, a new daily record for the Empire State. Source: NYT The surge in worker absences comes as the transportation authority has already been contending with a smaller work force after a rush of retirements and a pandemic-related hiring freeze was lifted last February. Unlike other public workers, MTA employees are not restricted by the vaccine mandate (although if they aren't vaccinated they must submit to a test every week). The MTA's troubles are hardly unique; they're part of a wider issue of staffing shortages that has lead to thousands of flights being cancelled, along with train delays across the country. In particular, sick calls have soared in recent weeks: "We have seen increased sick calls, more than we have seen in the past," said Craig Cipriano, the interim president of the division of the transportation authority. The number swelled through the end of the year, with unplanned absences currently more than three times higher than their typical levels before the pandemic. The number of subway riders in NYC has fluctuated dramatically, often following the COVID case numbers in an inverse pattern. Unsurprisingly, this has forced the MTA to make some exceptions to its virus-related worker absences. Subway ridership this week stood at about 40 percent of prepandemic numbers, transit officials said. That is a drop from levels that climbed above 50 percent in November, but still represents millions of passengers. For now, at least, the MTA's leaders expect the worker shortages to get better, not worse. Still, Mr. Cipriano said there was reason to believe that the suspensions and delays caused by virus-related worker absences would soon ease, though he would not specify when. Already this week, he said, the absentee numbers showed signs they may be reversing. Transit employees who test positive for the virus get up to two weeks of sick leave beyond their standard sick time, which is 12 days per year. In the transit authority’s guidance to employees, which mirrors recent guidance from the federal Centers for Disease Control and Prevention, it suggests that vaccinated workers who test positive for Covid-19 must isolate for at least five days and can return to work only if they have been without a fever for three days, have no runny nose and a “minimal cough." Unvaccinated workers who have tested positive or been exposed to the virus must isolate for 10 days before returning to work. Transit officials have said that about 80 percent of its roughly 67,000 employees were vaccinated, and that they were unlikely to impose a stricter vaccine requirement out of concern that it might further disrupt service at a time when the system can scarcely afford it. Fortunately, Cipriano and the rest of the MTA leadership don't expect to halt round-the-clock service any time soon. At the very least, they feel they would be able to run fewer trains per hour before they're stuck with having to dial back service, forcing passengers who keep odd hours to pay for cab fare after leaving work late at night or early in the morning. Tyler Durden Thu, 01/06/2022 - 18:40.....»»

Category: smallbizSource: nytJan 6th, 2022

Metra hopes ridership will increase in 2022

Metra, CTA and Pace have reported increased ridership since the start of the pandemic, but even as residents got vaccinated and much of the city reopened, none of the three transit agencies has seen ridership numbers return to pre-pandemic levels.Metra, CTA and Pace have reported increased ridership since the start of the pandemic, but even as residents got vaccinated and much of the city reopened, none of the three transit agencies has seen ridership numbers return to pre-pandemic levels......»»

Category: topSource: chicagotribuneDec 19th, 2021

lululemon (LULU) Beats Q3 Earnings & Sales Estimates, Ups View

lululemon (LULU) gains from robust responses to its products, improved store productivity and continued e-commerce momentum in Q3. Management raises the fiscal 2021 view. lululemon athletica inc. LULU reported robust third-quarter fiscal 2021 results, with the top and bottom lines surpassing the Zacks Consensus Estimate as well as improving year over year. Despite industry-wide supply-chain issues, including higher air freight expenses, results were driven by the robust response to the company’s products, particularly the athletic and leisurewear brands as well productivity above the pre-pandemic levels. Also, a solid start to the holiday season contributed to the performance. That said, management remains on track with its Power of Three growth plan.However, headwinds related to its recently acquired Mirror remain concerning. As a result, it slashed the Mirror revenue guidance to $125 million from the previously mentioned $130 million for fiscal 2021. The company also expects uncertainty from the new COVID-19 variant to affect its performance.Despite the headwinds related to COVID-19, including supply-chain disruptions, management raised its top and bottom-line guidance for fiscal 2021. We note that shares of this Zacks Rank #3 (Hold) company have gained 19.8% year to date compared with the industry’s 18.1% growth. Image Source: Zacks Investment Research Q3 Numberslululemon’s adjusted earnings of $1.62 per share in the fiscal third quarter beat the Zacks Consensus Estimate of $1.39 and increased 39.6% year over year from $1.16 reported in the year-ago quarter. It also came ahead of 96 cents reported in third-quarter fiscal 2019.The Vancouver, Canada-based company’s quarterly revenues advanced 30% year over year to $1,450 million and surpassed the Zacks Consensus Estimate of $1,431 million. On a constant-dollar basis, revenues increased 28%. Compared with the third quarter of fiscal 2019, net revenues improved 58% on a reported basis. On a two-year compounded annual growth rate basis, revenues rose 26%. The top line gained from strength across the majority of regions, with each region posting double-digit sales growth on a two-year CAGR basis.Comparable sales grew 27% year over year and 26% on a cc basis. Comparable store sales also advanced 32% on a reported and 31% on a cc basis.Direct-to-consumer sales rose 23% to $586.5 million and were up 21% in constant currency. Direct-to-consumer revenues represented 40.4% of the company’s total revenues compared with 42.8% in third-quarter fiscal 2020. The company’s revenues improved 28% in North America and 40% in international markets on a year-over-year basis. On a two-year CAGR basis, North America and international revenues increased 23% and 42%, respectively.In the digital channel, revenues increased 21% year over year and 54% on a two-year CAGR basis, driven by its expanded omnichannel capabilities as well as strength in websites and apps. Digital comps were up 21% in the fiscal third quarter. Meanwhile, store revenues rose 38% year over year and 10% on a two-year CAGR basis. This can be attributable to robust year-over-year traffic growth of more than 50%.MarginsGross profit advanced 32% year over year to $829.4 million in third-quarter fiscal 2021. The gross margin expanded 110 basis points (bps) year over year to 57.2%.  On a two-year basis, the gross margin increased 210 bps, driven by a 230-bps leverage in occupancy, product team costs and depreciation, and 30 bps of favorable foreign exchange, offset by a 50-bps decline in product margin.SG&A expenses of $545.1 million increased 32.4% year over year and 66% on a two-year basis. SG&A expenses, as a percentage of sales, expanded 80 bps year over year and 170 bps on a two-year basis to 37.6% due to increased investments.Adjusted income from operations rose 32% year over year to $282.1 million in the fiscal third quarter. Adjusted operating margin of 19.4% expanded 30 bps year over year and 20 bps on a two-year basis.Store UpdatesIn the fiscal third quarter, the company opened 18 stores. As of Oct 31, 2021, it operated 552 stores. In fiscal 2021, the company expects to open 50-55 company-operated stores, including 40-45 stores in the international markets.Financialslululemon exited the fiscal third quarter with total liquidity of $1.4 billion, which indicates a strong financial position. This included $993.6 million of cash and cash equivalents, and $396.9 million available under its revolving credit facility. Its stockholders’ equity was $2,658.5 million as of Oct 31, 2021.Inventories were up 22% year over year to $943.9 million at the end of the fiscal third quarter. It repurchased 0.6 million shares for $236.4 million in the quarter, with $509 million remaining under its current share repurchase authorization.In the first three quarters of fiscal 2021, the company generated an operating cash flow of $658.1 million. It incurred a capital expenditure of $122 million in the fiscal third quarter compared with $66 million in third-quarter fiscal 2020. The capital spending is mainly related to store capital for new locations, relocation and renovations, supply-chain investment, and technology spend to support business growth.At the end of fourth-quarter fiscal 2021, the company expects inventory levels to increase 20-25% from that reported in fourth-quarter fiscal 2020. For fiscal 2021, it anticipates incurring a capital expenditure of $375-$385 million.lululemon athletica inc. Price, Consensus and EPS Surprise   lululemon athletica inc. price-consensus-eps-surprise-chart | lululemon athletica inc. QuoteOutlookManagement expects fourth-quarter fiscal 2021 revenues between $2.125 billion and $2.165 billion, with revenue growth of 23-24% on a two-year CAGR basis. Adjusted earnings are projected to be $3.25-$3.32, with a flat gross margin on a two-year basis. The view includes negative impacts of 450 basis points from airfreight costs due to congestion and capacity constraints. SG&A expenses for the fourth quarter are envisioned to deleverage 200-250 bps on a two-year basis.For fiscal 2021, the company anticipates revenues of $6.25-$629 billion, up from the earlier mentioned $6.19-$6.26 billion. The current view suggests witnessing a two-year CAGR of 25-26%. The e-commerce business is forecast to see mid-teen growth. The gross margin is likely to expand 100-150 bps, down from the earlier mentioned 150-200 bps due to higher airfreight expenses. However, the gross margin view surpasses the modest annual gross margin expansion target under the Power of Three growth plan. SG&A for fiscal 2021 is expected to leverage 50-100 bps. Adjusted earnings are predicted to be $7.69-$7.76, up from the prior mentioned $7.38-$7.48.Here’s How Other Stocks FaredWe have highlighted some better-ranked stocks from the broader Consumer Discretionary space, namely Steven Madden SHOO, Gildan Activewear GIL and PVH Corp PVH.Gildan Activewear currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 85%, on average. Shares of GIL have gained 48.3% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Gildan’s current financial-year sales and earnings per share suggests growth of 4.5% and 24.4%, respectively, from the year-ago period’s reported numbers. The Zacks Consensus Estimate for GIL’s 2021 earnings is pegged at $2.38 per share, which has increased 12.3% in the past 30 days.Steven Madden presently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 41.9%, on average. Shares of SHOO have rallied 37.4% year to date.The Zacks Consensus Estimate for Steven Madden’s current financial-year sales and earnings suggests growth of 50% and 170.4% from the year-ago period’s reported numbers, respectively. The Zacks Consensus Estimate for SHOO’s 2021 earnings is pegged at $2.35 per share, which has increased 11.9% in the past 30 days.PVH Corp, a Zacks Rank #2 stock at present, has a trailing four-quarter earnings surprise of 72.3%, on average. The PVH stock has gained 9.3% year to date.The Zacks Consensus Estimate for PVH Corp’s current financial-year sales and earnings per share suggests growth of 27.6% and 571.6%, from the year-ago period’s reported figure. However, the Zacks Consensus Estimate for PVH’s 2021 earnings is pegged at $9.29 per share, which has increased 7.3% in the past 30 days. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report lululemon athletica inc. (LULU): Free Stock Analysis Report PVH Corp. (PVH): Free Stock Analysis Report Gildan Activewear, Inc. (GIL): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 10th, 2021

Only A Banking Crisis Or Higher Rates Can Stop Inflation Now: Trader

Only A Banking Crisis Or Higher Rates Can Stop Inflation Now: Trader Submitted by QTR's Fringe Finance This is Part 2 of an exclusive interview with Rosemont Seneca, a U.S. based professional trader focused on event-driven and distressed situations. Rosemont spent their career on the buy-side working as a financials analyst and their investing/trading style is inspired in equal parts by Icahn and Druckenmiller. Like me, Rosemont is not an RIA and does not hold licenses. Market commentary and opinion expressed in this interview are personal views, not investment advice or solicitation for business. QTR’s Note: The point of this blog is to bring to the reader information and perspectives they, or the mainstream media, may not otherwise find on their own. The cool thing about FinTwit is that you get to meet people based on their ideas and investing acumen and not their identities. I have been following Rosemont on Twitter for years and love their perspective and takes on the market - their takes often stand at odds with my own and they have helped me broaden my horizon and be less bearish on markets, while still maintaining my skepticism about monetary policy. They have chosen to remain completely anonymous with me, which I respect, and I have never personally met or otherwise know anything about the identity of Rosemont. That doesn’t matter, however, because I like their ideas and their commentary. You can follow Rosemont on Twitter here. Part 1 of this interview can be read here. Bernard Baruch, 1919 / Photo used for @rosemontseneca's Twitter profileQ: What's your take on how we're handling Covid? You've mentioned what happened to our economy over the last 18 months was "economic terrorism". Will we learn - either through people revolting or negative consequences - or will we continue down this Orwellian path? It’s very disappointing to see how politicized the pandemic became in the United States. It obviously didn’t help that COVID struck in an Election year, but there will be plenty of blame to go around the table when a proper post-mortem analysis is conducted years from now. We hope that Bethany McLean (Enron: The Smartest Guys in the Room) will eventually write a thoroughly unbiased expose on the timeline of policy decisions in 2020. We’re of the firm belief that our Leaders in Washington D.C. did more harm than good in the early months of this pandemic. We can safely conclude the 2020 COVID shutdowns are the direct cause for the supply chain dislocations and hyperinflation that Americans are about to suffer. The shutdowns that we witnessed in the United States were a flawed policy decision akin to willful pilot error or ‘economic terrorism;’ Federal and State Governments suffocated millions of livelihoods and permanently destroyed hundreds of thousands of perfectly viable small & medium family-owned businesses. The larger, better capitalized multinational corporations capable of accessing capital markets and Government Stimulus Programs not only survived, they eventually thrived. What happened can only be described as a crime. Does the Fed and the Biden administration have a handle on the inflation problem? Why or why not? If you study the history of inflation in the U.S., whenever CPI surpasses 5.0% outside of wartime, the only thing that prevents inflation from marching higher is a banking crisis (’92, ’08) or significantly higher interest rates, which occur with a considerable lag. Capital market participants today are of the consensual view that the Fed is hamstrung from raising their Target Rate significantly higher due to Treasury’s debt service and interest burden. We don’t buy that premise; if CPI inflation trends 10% or higher they will have to act with Volckerian resolution. Our supply chains have been diligently outsourced overseas during the last three decades. The physical goods we import ($3.0 trillion/year) and consume will probably continue to see tremendous inflation in 2022-2023, the worst since the Carter years. There is absolutely nothing Biden can do (not even SPR releases) to change this paradigm as tremendous damage was done in 2020; a patient who suffers a debilitating stroke may take many months or years to learn to walk again. The same goes for our global economy. In the meantime, inflation will gallop away. When China exits the crypto market, could it be because they are worried about a crash - or do you think it's just so it doesn't compete with the digital yuan? We’ve been in regular touch with China-based crypto traders in Shenzhen and Hong Kong since 2015. What we gather (and this was widely commented) is the CCP didn’t want energy resources and coal being wasted on crypto mining during a time of energy supply shortages post-COVID. North Korea, Iran and Venezuela proactively hack and mine crypto currencies today. The cynical conclusion is that China wanted to save this nefarious business for the State. The CCP is already in the business of industrial espionage and stealing U.S. intellectual property; operating within a $2.5 trillion crypto market with a large addressable market with far fewer diplomatic consequences seems like a better business. What stocks/sectors would you avoid at all costs right now? There are many sectors that are in a clear and present mania: -       Most electric vehicle companies (Tesla included) -       crypto currency and NFT-related equities -       majority of Meme Stocks     -       90% of SPAC-linked structures    -       Emerging Market equities (why send precious U.S. Dollars to die abroad?) -       80% of stocks in the ARKK fund (ARK Invest analysts are glorified journalists) Is it "different" this time? Will we normalize at these PE ratios and this balance of growth vs. value? Or will PEs eventually crash back under 10 and will value be a virtue again? It’s never different this time. Cycles get longer or shorter, the catalysts change, but the progression of boom-bust cycles never changes. Warren Buffett likes to gauge total U.S. market capitalization / GDP levels, Pierre Lassonde tracks the Dow / Gold ratio. At extremes these metrics provide interesting signals to be cautious or greedy. By those measures the U.S. equity market seems extremely overstretched at present. The Shiller PE Ratio (38x) is also back at 1999-2000 levels. We would probably need a very acute banking crisis similar to 2008 or a Fed Fund Target Rate in the 8-10% range for the market multiple to de-rate down to 10x. Given the schizophrenic high-frequency nature of our equity market, it’s very hard to predict growth/value factor rotations, timing and duration. We’ll defer to competent equity market Strategists like Mike Wilson or Tom Lee to go in-depth with you on this question. -- You can read Part 1 of this interview here. Zerohedge readers always get 10% off a subscription to my blog for life by using this link. -- DISCLAIMER:  It should be assumed I or Rosemont Seneca has positions in any security or commodity mentioned in this article. None of this is a solicitation to buy or sell securities. Neiher I nor RS hold licenses or are investing professional. None of this is financial advice. Positions can always change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.  Tyler Durden Wed, 12/01/2021 - 12:37.....»»

Category: dealsSource: nytDec 1st, 2021

Transcript: Edwin Conway

   The transcript from this week’s, MiB: Edwin Conway, BlackRock Alternative Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS:… Read More The post Transcript: Edwin Conway appeared first on The Big Picture.    The transcript from this week’s, MiB: Edwin Conway, BlackRock Alternative Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, man, I have an extra special guest. Edwin Conway runs all of alternatives for BlackRocks. His title is Global Head of Alternative Investors and he covers everything from structured credit to real estate hedge funds to you name it. The group runs over $300 billion and he has been a driving force into making this a substantial portion of Blackrock’s $9 trillion in total assets. The opportunity set that exists for alternatives even for a firm like Blackrock that specializes in public markets is potentially huge and Blackrock wants a big piece of it. I found this conversation to be absolutely fascinating and I think you will also. So with no further ado, my conversation with Blackrock’s Head of Alternatives, Edwin Conway. MALE VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is Edwin Conway. He is the Global Head of Blackrock’s Alternative Investors which runs about $300 billion in assets. He is a team of over 1,100 professionals to help him manage those assets. Blackrock’s Global alternatives include businesses that cover real estate infrastructure, hedge funds private equity, and credit. He is a senior managing director for BlackRock. Edwin Conway, welcome to Bloomberg. EDWIN CONWAY, GLOBAL HEAD OF ALTERNATIVE INVESTORS, BLACKROCK: Barry, thank you for having me. RITHOLTZ: So, you’ve been in the financial services industry for a long time. You were at Credit Suisse and Blackstone and now you’re at BlackRock. Tell us what the process was like breaking into the industry? CONWAY: It’s an interesting on, Barry. I grew up in a very small town in the middle of Ireland. And the breakthrough to the industry was one of more coincident as opposed to purpose. I enjoyed the game of rugby for many years and through an introduction while at the University, in University College Dublin in Ireland, had a chance to play rugby at a quite a – quite a decent level and get to know people that were across the industry. It was really through and internship and the suggestion, I’ve given my focus on business and financing things that the financial services sector may be a great place to traverse and get to know. And literally through rugby connections, been part of a good school, I had an opportunity to really understand what the service sector, in many respects, could provide to clients and became absolutely intrigued with it. And what – was it my primary ambition in life to be in the financial services sector? I can definitively say no, but through the circumstance of a game that I love to play and be part of, I was introduced to, through an internship, and actually fell in love with it. RITHOLTZ: Quite interesting. And alternative investments at Blackrock almost seems like a contradiction in terms. Most of us tend to think of Blackrock as the giant $9 trillion public markets firm best known for ETFs and indices. Alternatives seems to be one of the fastest-growing groups within the firm. This was $50 billion just a few years ago, it’s now over 300 billion. How has this become such a fast-growing part of BlackRock? CONWAY: When you look at the various facets which you introduced at the start, Barry, we’ve actually been an alternatives – will be of 30 years now. Now, the scale, as you know, which you can operate on the beta side of business, far surpasses that on the alpha side. For us, throughout the years, this was very much about how can we deliver investment excellence to our clients and performance? Therefore, going an opportunity somewhere else to explore an alpha opportunity in alternatives. And I think being so connected to our clients understanding, that this pivots was absolutely taking place at only 30 years ago but in a very pronounced way today, you know, we continue to invest in this business to support those ambitions. They’re clearly seeing this as the world of going through a tremendous amount of transformation and with some of the challenges, quite frankly, in the traditional asset classes, being able to leverage at BlackRock, the Blackrock muscle to really explore these alpha opportunities across the various alternative asset classes that in our mind wasn’t imperative. And the imperative, really, is from the firm’s perspective and if you look at our purpose, it’s to serve the client. So the need was coming from them. The necessity to have alternatives and their whole portfolio was very – was very much growing in prominence. And it’s taken us 30 years to build this journey and I think, Barry, quite frankly, we’re far from being done. As you look at the industry, the demand is going to continue to grow. So, I think you could expect to see from us a continued investment in the space because we don’t believe you can live without alternatives in today’s world. RITHOLTZ: That’s really – that’s really interesting. So let’s dive a little deeper into the product strategy for alternatives which you are responsible for at BlackRock. Our audiences is filled with potential investors. Tell them a little bit about what that strategy is. CONWAY: So we’re – I think as you mentioned, we’re in excess of 300 billion today and when we started this business, it was less about building a moat around private equity or real estate. I think Larry Fink’s and Rob Kapito’s vision was how do we build a platform to allow us to be relevant to our clients across the various alternative asset classes but also within the – within the confines of what they are permitted to do on a year-by-year basis. So, to always be relevant irrespective of where they are in their journey from respect of liabilities, demand for liquidity, demand for returns, so we took a different approach. I think, Barry, to most, it was around how do we scale into the business across, like you said, real estate equity and debt, infrastructure equity and debt. I mean, we think of that as the real assets platform of our business. Then you take our private equity capabilities both in primary investing, secondary et cetera, and then you have private credits and a very significant hedge fund platforms. So we think all of these have a real role and depending on clients liquidities and risk appetite, our goal was, to over the years, really build in to this to allow ourselves for this challenging needs that our clients have. I think as an industry, right, and over the many years alternatives have been in existence, this is been about return enhancement initially. I think, fundamentally, the changes around the receptivity to the role of alternatives in a client’s portfolio has really changed. So, we’ve watched it, Barry, from this is we’re in the pursuit of a very total return or absolute return type of an objective to now resilience in our portfolio, yield an income. And so things that probably weren’t perceived as valuable in the past because the traditional asset classes were playing a more profound role, alternatives have stepped up in – in many respects in the need to provide more than just total return. So, we’re taking the approach of how do you have a more holistic approach to this? How do we really build a global multi-alternatives capability and try to partner and I think that’s the important work for us. Try to partner with our clients in a way that we can deliver that outperformance but delivered in a way that probably our clients haven’t been used to in this industry before. Because unfortunately, as we know, it has had its challenges with regard to secrecy, transparency, and so many other aspects. We need to help the industry mature. And really that was our ambition. Put our client’s needs first, build around that and really be relevant in all aspects of what we’re doing or trying to accomplish on behalf of the people that they support and represent. RITHOLTZ: So, we’ll talk a little bit about transparency and secrecy and those sorts of things later. But right now, I have to ask what I guess is kind of an obvious question. This growth that you’ve achieved within Blackrock for nonpublic asset allocation within a portfolio, what is this coming at expense of? Are these dollars that are being moved from public assets into private assets or you just competing with other private investors? CONWAY: It’s really both. What – what you are seeing from our clients – if I take a step back, today, the institutional client community and you think about the – the retirement conundrum we’re all facing around the world. It’s such an awful challenge when you think how ill-prepared people are for that eventual stepping back from the workplace and then you know longevity is your friend, but can also be a very, very difficult thing to obviously live with if you’re not prepared for retirement. The typical pension plan today are allocating about 25 percent to 28 percent in alternatives. Predominantly private market. What they’re telling us is that’s increasing quite substantially going forward. But you know, the funding for that alpha pursue for that diversification and that yield is coming from fixed-income assets. It’s coming from equity assets. So there’s a real rebalancing that’s been taking place over the past number of years. And quite frankly, the evolution, and I think the innovation that’s taken place particularly in the past 10 years, alternatives has been really profound. So the days where you just invest in any global funds still exist. But now you can concentrate your efforts on sector exposure, industry exposures, geographic exposures, and I think the – the menu of things our clients can now have access to has just been so greatly enhanced at and the benefit is that but I think in some – in some respects, Barry, the next question is with all of those choices, how do you build the right portfolio for our client’s needs knowing that each one of our client’s needs are different? So, I would say it absolutely coming from the public side. We’re very thankful. Those that had a multiyear journey with us in the public side are now allocating capital to is now the private side to because I do think the – the industry given that change, given that it evolution and given the complexity of these private assets, our clients are looking to, quite frankly, do more with fewer managers because of the complexion of the industry and complexity that comes with it. RITHOLTZ: Quite – quite interesting. (UNKNOWN): And attention RIA’s. Are your clients asking for crypto? At interactive brokers, advisers can now offer crypto to their clients and you could trade stocks, options, futures currencies, bonds and more from the same platform. Commissions on crypto are just 12-18 basis points with no hidden spreads or markups and there are no ticket charges, custody fees, minimums platform or reporting fees. Learn more at IBKR.com/RIA crypto. RITHOLTZ: And I – it’s pretty easy to see why large institutions might be rotating away from things like treasuries or tips because there’s just no yield there. Are you seeing inflows coming in from the public equity side also? The markets put together a pretty good string of years. CONWAY: Yes. It absolutely has. And many respects, I think, we’ve had a multiyear where there was big questions around the alpha that can be generated, for example, from active equities? The question was active or passive? I think what we’ve all realized is that at times when volatility introduces itself which is frequent even independent of what’s been done from a fiscal and monetary standpoint, that these Alpha speaking strategies on the traditional side still make a lot of sense. And so, as we think about what – what’s happening here, the transition of assets from both passive and active strategies to alternative, it – it’s really to create better balance. It’s not that there’s – there’s a lack of relevance anymore in the public side. It’s just quite frankly the growth of the private asset base has grown so substantially. I moved, Barry, to the U.S. in 1998. And it’s interesting, when you look back at 1998 to today, you start to recognize the equity markets and what was available to invest in. The number of investable opportunities has shrunk by 40 plus percent which that compression is extraordinarily high. But yet you’ve seen, obviously, the equity markets grow in stature and significance and prominence but you’re having more concentration risk with some of the big public entities. The converse is true, though on the – on the private side. There’s this explosion of enterprise and innovation, employment creation, and then I believe opportunities has been real. So, I look at the public side, the investable universe is measured in the thousands and the private side is measured in the millions. RITHOLTZ: Wow. CONWAY: And I think part of the – part of the part of the thing our clients are not struggling with but what we’re really recognizing with – with enterprises staying private for longer, if not forever, and with his growth of the opportunities that open debt and equity in the private market side, you really can’t forgo this opportunity. It has to be part of your going forward concerns and asset allocation. And I think this is why we’re seeing that transformation. And it’s not because equities on fixed income just aren’t relevant anymore. They’re very relevant but they’re relevant now in a total portfolio or a whole portfolio context beside alternatives. RITHOLTZ: So, let’s discuss this opportunity set of alternatives where you guys at Blackrock scene demand what sectors and from what sorts of clients? Is this demand increasing? CONWAY: We’re very fortunate, Barry. Today, there isn’t a single piece of our business within – within Blackrock alternatives that isn’t growing. And quite frankly too, it’s really up to us to deliver on the investment objectives that are set forth for those clients. I think in the back of strong absolute and relative performance, thankfully, our clients look to us to – to help them as – as they think about what they’re doing and as they’re exploring more in the alternatives areas. So, as you know, certainly, the private equity and real estate allocations are quite mature in many of our client’s portfolios but they’ve been around for many decades. I think that the areas where we’re seeing – that’s called an outside demand and opportunity set, just but virtue of the small allocations on a relative basis that exist today is really around infrastructure, Barry, and its around private credits. So, to caveat that, I think all of the areas are certainly growing, and thankfully, for us that’s true. We’re looking at clients who we believe are underinvested, we believe they’re underinvested in those asset classes infrastructure both debt and equity and in private credit. And as you think about why that is, the attributes that they bring to our client is really important and in a world where your correlation and understanding those correlations is important that these are definitely diversifying assets. In a world where you’re seeing trillions of dollars, quite frankly, you’re providing little to no or even there’s negative yield. Those short falls are real and people need yield than need income. These assets tend to provide that. So the diversification, it comes from these assets. The yield can come from these assets and because of the immaturity of the asset classes, independence of the capital is flowing in, we still consider them relatively white space. You’re not crowded out. There’s much room for development in the market and with our client’s portfolios. And to us, that’s exciting because it presents opportunities. So, at the highest level, they’re the areas where I believe are most underdeveloped in our clients. RITHOLTZ: So let’s talk about both of those areas. We’ll talk about structured credit in a few minutes. I think everybody kind of understands what – what that is. What – when you see infrastructure as a sector, how does that show up as an investment are – and obviously, I have infrastructure on the brink because we’re recording this not too long after the giant infrastructure bill has been passed, tell us a little bit about what alternative investments in infrastructure looks like? CONWAY: Yes. It’s really in its infancy and what the underlying investments look like. I think traditionally, you would consider it as – and part of the bill that has just been announced, roads, bridges, airports. Some of these hard assets, some of the core infrastructure investments that have been around for actually some time. The interesting thing is the industry has evolved so much and put the need for infrastructure. It’s so great across both developed and emerging economies. It’s become something that if done the right way, the attributes we just spoke of can really have a very strong effect on our client’s portfolios. So, beyond the core that we just mentioned, well, we’ve seen a tremendous demand as a result of this energy transition. You’re really seeing a spike in activity and the necessity transition industry to cleaner technologies, a movement, not away completely from fossil fuel but integrating new types of clean energy. And as a result, you’ve seen a lot of demand on a global basis for wind and solar. And quite frankly, that’s why even us at BlackRock, albeit, 10-12 years ago, we really established a capability there to help with that transition to think about how do we use these technologies, solar panels, wind farms, to generate clean forms of energy for utilities where in some cases they’re mandated to procure this type of this type of – this type of power. And when you think about pre-contracting with utilities for long duration, that to me spells, Barry, good risk mitigation and management and ability to get access to clean forms of energy that throw off yield that can be very complementary to your traditional asset classes but for very long periods of time. And so, the benefits for us of these – these assets is that they are long in duration, they are yield enhancing, they’re definitely diversifying. And so, for us, where – we’ve got about, let’s call this 280 assets around the world that we’re managing that literally generate this – this clean electricity. I think to give the relevance of how much, I believe today, it’s enough to power the country of Spain. RITHOLTZ: Wow. CONWAY: And that’s really that’s really changing. So you’re seeing governments – so from a policy standpoint, you’re seeing governments really embracing new forms of energy, transitioning out of bunker fuels, for example, you know, burning diesels which really spew omissions into the – into the into the environment. But it’s really around modernizing for the future. So, developed and emerging economies alike, want to retain capital. They want to attract new capital and by having the proper infrastructure to support industry, it’s a really, really important thing. Now, on the back of that too, one things we’ve learned from COVID is that the necessity to really bring e-commerce into how you conduct your business is so important and I think from the theme of digitalization within infrastructure to is a huge part. So, it’s not just the energy transition that you’re seeing, it’s not just roads and bridges, but by allowing businesses to connect to a global consumer, allowing children be educated from home, allowing experiences that expand geographies and boundaries in a digital form is so important not just for commerce but in so many other aspects. And so, you think about cable, fiber optics, if you think about all the other things even outside of power, that enable us to conduct commerce to educate, there are many examples where, Barry, you can build resilience into your portfolio because that need is not measured in years. Actually, the shortfall of capital is measured in the trillions so which means this is – this is a multi-decade opportunity set from our vantage point and one of which our clients should really avail of. RITHOLTZ: Quite interesting. And I mentioned in passing, structured credit, tell us a little bit about what that opportunity looks like. I think of this as a space that is too big for local banks but too small for Wall Street to finance. Is that an oversimplification? What is going on in that space. CONWAY: I probably couldn’t have set it better, Barry. It’s – if we go back to just the even the investable universe, in the tens of thousands of companies, just if we take North America that are private, that have great leadership that really have strategic vision under – at the – in some cases, at the start of their growth lifecycles are even if they maintain, they have a very credible and viable business for the future they still need capital. And you’re absolutely right. With the retreat of the banks from the space to various regulations that have come after the global financial crisis, you’re seeing the asset managers in many respects working behalf of our clients both wealth and institutional becoming the new lenders of choice. And – and when we – when we think about that opportunity set, that is really understanding the client’s desire for risk or something maybe in a lower risk side from middle-market lending or midmarket enterprises where you can support that organization through its growth cycle all the way to some higher-yielding, obviously, with more risk assets on the opportunistic or even the special situations side. But it – it expands many things. And going back of the commentary around the evolution of the space, private credit today and what you can do has changed so profoundly, it expands the liquidity spectrum, it expands the risk spectrum. And the great news is, with the number of companies both here and abroad, the opportunities that is – it’s being enriched every single day. And were certainly seeing, particularly going back to the question are some of these assets coming from the traditional side, the public side. When we think of private credit, you are seeing private credit now been incorporated in fixed-income allocations. This is a – it’s a yelling asset. This is – these are debt instruments, these are structures that we’re creating. We’re trying to flexible and dynamic with these clients. But it really is an area where we think – it really is still at its – at its infancy relevant to where it can potentially be. RITHOLTZ: That’s really quite – quite interesting. (UNKNOWN): It’s Rob Riggle. I’m hosting Season 2 of the iHeart radio podcast, Veterans You Should Know. You may know me as the comedic actor from my work in the Hangover, Stepbrothers or 21 Jump Street. But before Hollywood, I was a United States Marine Corps officer for 23 years. For this Veterans Day, I’ll be sitting down with those who proudly served in the Armed Forces to hear about the lessons they’ve learned, the obstacles they’ve overcome, and the life-changing impact of their service. Through this four-part series, we’ll hear the inspiring journeys of these veterans and how they took those values during their time of service and apply them to transition out of the military and into civilian life. Listen to Veterans You Should Know on the iHeart radio app, Apple Podcast or wherever you get your podcast. RITHOLTZ: Let’s stick with that concept of money rotating away from fixed income. I have to imagine clients are starved for yields. So what are the popular substitutes for this? Is it primarily structured credit? Is it real estate? How do you respond to an institution that says, hey, I’m not getting any sort of realistic coupon on my bonds, I need a substitute? CONWAY: Yes. It’s all of those in many respects. And I think to the role, even around now a time where people have questions around inflation, how do substitute this yield efficiency or certainly make up for that shortfall, how do you think about a world where increasingly seeing inflation, not of the transitory thing it feels certainly quasi-permanent. These are a lot of questions we’re getting. And certainly, real estate is an is important part of how they think about inflation protection, how client think about yield, but quite frankly too, we’ve – we’ve gone through something none of us really had thought about a global pandemic. And as I think about real estate, just how you allocate to the sector, what was very heavily influenced with retail assets, high street, our shopping behaviors and habits have changed. We all occupied offices for obviously many, many years pre the pandemic. The shape of how we operate and how we do that has changed. So, I think some of the underlying investment – investments have changed where you’ve seen heavily weighted towards office space to leisure, travel in the past. Actually, now using a rotation in some respects out of those, just given some of the uncertainties around what the future holds as we come – come through a really difficult time. But the great thing about this sector is between senior living, between student housing, between logistics and so many other parts, there are ways in real estate to capture where there’s – where there’s demand. So still a robust opportunity set and it – and we do think it can absolutely be yield enhancing. We mentioned infrastructure. Even if you think about – and we mention OECD and non-OECD, emerging and developed, when I think about Asia, in particular, just as a subset of the world in which we’re living in, that is a $2.6 trillion alternative market today growing at a 15 percent CAGR. And quite frankly, the old-growth is driven by the large economic growth in the region. So, even from a regional perspective, if we pivot, it houses 57 percent of the world’s population and yet delivers 47 percent of the world’s economic growth. So, think of that and then with regard to infrastructure and goes back to that, this is truly a global phenomenon. So if we just even take that sector, Barry, you’ll realize that the way to maintain that type of growth, to attract capital, to keep capital, it really requires an investment of significant amount of money to be able to sustain that. And when you have 42 million people in a APAC migrating to cities in the year going back to digitalization, that’s an important thing. So, when I say we’re so much at the infancy in infrastructure, I really mean it. It can be water, it can be sewer systems, it can be digital, it can be roads, there’s so much to this. And then even down to the regional perspective, it’s a – it’s a need that doesn’t just exist in the U.S. So, for these assets, this tend to be long in duration. There’s both equity and debt. And on the debt side, quite frankly, very few outside of our insurance clients and their general account are taking advantage of the debt opportunity. And – and as we both know, to finance these projects that are becoming more plentiful every single day, across the world, including like, I said, in APAC in scale, there’s an opportunity in both sides. And I think that’s where the acid mix change happen. It’s recognizing that the attributes of these assets can have a role, the attributes of these assets can potentially replace some of these traditional assets and I think you’re going to see it grow. So, infrastructure to us, it’s really equity and debt. And then on the credit side, like I mentioned, again, too, it’s a very, very big and growing market. And certainly, the biggest area today from our vantage point is middle-market lending from a scale opportunity standpoint. So, we think much more to come in all of those spaces. RITHOLTZ: Really interesting. And let’s just stay with the concept of public versus private. That line is kind of getting blurred and the secondary markets is liquidity coming to, for lack of a better phrase, pre-public equities, tells little bit about that space. Is that an area that is ripe for growth for BlackRock? CONWAY: Yes. We absolutely think it is and you’re absolutely correct. The secondary market is – has grown quite substantial. If you even look at just the private equity secondary market and what will transact this year, I think it will be potentially in excess of 100 billion. And that’s what were clear, not to mention what will be visible and what will be analyzed. And that speaks to me what’s really happening and the innovation that we mentioned earlier. It’s no longer about just primary exposure. It’s secondary exposure. When we see all sort of interest and co-investment opportunities as well, I think the available sources of alpha and the flexibility you can now have, albeit if directed and advised, I believe the right way, Barry, can be very helpful and in the portfolio. So, your pre-IPO, it is a big part of actually what we do and we think about growth equity. There is – it’s a significant amount of capital following that space. Now, from our vantage point, as one of the largest investors in the public equity market and now obviously one of the largest investors and they in the private side, the bridge between – between private to public – there’s a real need. IPOs are not going away. And I think smart, informed capital to help with this journey, this journey is really – is really a necessity and a need. RITHOLTZ: So let’s talk a little bit about this recent restructuring. You are first named Global Head of Blackrock Alternative Investors in April 2019, the entire alternatives business was restructured, tell us a little bit about how that restructuring is going? CONWAY: Continues to go really well, Barry. When you look at the flow of acid from our clients, I think, hopefully, that’s speaks to the performance we’ve been generating. I joined the firm, as you know, albeit, 11 years ago and being very close to the alternative franchise as a critical thing for me and running the institutional platform. To me, when you watched this migration of asset towards alternatives, it was obviously very evident for decades now that this is a critical leg of the stool as our clients are thinking about their portfolios. We’re continuing to innovate. We’re continuing to invest, and thankfully, we’re continuing to deliver strong performance. We’re growing at about high double digits on an annual basis but we’re trying to purposeful too around where that growth is coming from. I think the reality is when you look at the competitive universe, I think the last number I saw, it was about 38,000 alternative asset managers out there today, obviously, coming from hedge funds all the way to private credits and private equity. So, competition is real and I do think the outcomes for our clients are starting to really grow. Unfortunately, some – in some cases, obviously, very good, and in some cases, actually not great. So our focus, Barry, is really much on how can we deliver performance, how can we be a partner? And I think we been rewarded with a trust and the faith our clients have in us because they’re seeing something different, I think, from us. Now, the scale of the business that you mentioned earlier really gives us tentacles into the market that I believe allows us to access what I think is the new alpha which is in many respects, given the heft of competition sourcing and originating new investments is certainly harder but for us, sitting in or having alternative team, sitting in 50 offices around the world, really investing in the markets because that – the market they grew up with and have relationships within, I think this network value that we have is something that’s quite special. And I think in the world that’s becoming increasingly competitive, we’re going to continue to use and harness that network value to pursue opportunities. And thankfully, as a result of the partnership we’ve been pursuing with her clients, like, we’ve – we’re certainly looking for opportunities and investments in our funds. But because of the brand, I think because of the successes, opportunities seeks us as much as we seek opportunity and that has been something that we look at an ongoing basis and feel very privileged to actually have that inbound flow as well. RITHOLTZ: Really quite interesting. There was a quote of yours I found while doing some prep for this conversation that I have to have you expand on. Quote, “The relationship between Blackrock’s alternative capabilities and wealth firms marked a large opportunity for growth in the coming years.” This was back in 2019. So, the first part of the question is, was your expectations correct? Did you – did you see the sort of growth you were hoping for? And more broadly, how large of an opportunity is alternatives, not just for BlackRock but for the entire investment industry? CONWAY: Yes. It’s been very much an institutional opportunity set up until now. And there’s so much to be done, still, to really democratize alternatives and we certainly joke around making alternatives less alternative. Actually, even the nomenclature we use and how we describe it doesn’t kind of make sense anymore. It’s such a core – an important allocation to our clients, Barry, that just calling it alternative seems wrong. Just about the institutional clients. It ranges, I think, as I mentioned on our – some of our more conservative clients which would be pension plans which really have liquidity needs on a monthly basis because of the liabilities they have to think about. At about 25 plus percent in private markets, to endowments, foundations, family offices, going to 50 percent plus. So, it’s a really important part and has been for now many years the institutional client ph communities outcomes. I think the thing that we, as an industry, have to change is alternatives has to be for the many, not for the few. And quite frankly, it’s been for the few. And as we talked about some of the attributes and the important attributes of these asset classes to think that those who have been less fortunate in their careers can’t access, things they can enrich their future retirement outcomes, to me, is a failing. And we have to address that. That comes from regulation changes, it comes from structuring of new products, it comes from education and it comes from this knowledge transmission where clients in the wealth segment can understand the role of alternatives and the context of what can do as they invest in equities and fixed income too. And we think that’s a big shortfall. So, the journey today, just to give you a sense, as we look at her clients in Europe on the wealth side, on average, as you look from what we would call the credited investors all the way through to more ultra-high-net worth individuals, their allocation to alternatives, we believe, stands at around two to three percent of their total portfolio. In the U.S., we believe it stands at three to five. So, most of those intermediaries, we speak to our partners who were more supporting and serving the wealth channel. They have certainly an ambition to help their clients grow that to 20 percent and potentially beyond that. So, when I look at that gap of let’s call it two to three to 20 percent in a market that just given the explosion in wealth around the world, I think the last numbers I saw, this is a $65 trillion market. RITHOLTZ: Wow. CONWAY: That speaks to the shortfall relative to the ambition. And how’s it been going? We have a number of things and capabilities we’ve set up to allow for this market to experience, hopefully, private equity, hedge funds, credit, and an infrastructure in ways they haven’t in the past. We’ve done this in the U.S., we’re doing it now in Europe, but I will say, Barry, this is still very much at the start of the journey. Wealth is a really important part of our future given our business, quite, frankly is 90 plus percent institutional today, but we’re looking to change that by, hopefully, democratizing these asset classes and making it so much more accessible in that of the past. RITHOLTZ: So, we hinted at this before but I’m going to ask the question outright, how significant is interest rates to client’s risk appetites, how much of the current low rate environment are driving people to move chunks of their assets from fixed income to alternatives? CONWAY: It’s really significant, Barry. I think the transition of these portfolios is quite profound, So you – and I think the unfortunate thing in some respects as this transition happens that you’re introducing new variables and new risks. The reason I say it’s unfortunate and that I think as an industry, this goes back to the education around the assets you own, understanding the role, understanding the various outcomes. I think it’s so incredibly important and that this the time where complete transparency is needed. And quite frankly, we’re investing capital that’s not ours. As an industry, we’re investing our client’s assets and they need to know exactly the underlying investments. And in good and bad times, how would those assets behave? So certainly, interest rates are driving a flow of capital away from these traditional assets, fixed-income, and absolutely in towards real estate, infrastructure, private creditors, et cetera, in the pursuit of this – this yield. But I do – I do think one of the things that’s critically important for the institutional channel, not just the wealth which are newer entrants is this transmission of education, of data because that’s how I think you build a better balanced portfolio and that’s a – that’s a real conundrum, I think, that the industry is facing and certainly your clients too. RITHOLTZ: Quite interesting. So let’s talk a little bit about the differences between investing in the private side versus the public markets, the most obvious one has to be the illiquidity. When you buy stocks or bonds, you get a print every microsecond, every tick, but most of these investments are only marked quarterly or annually, what does this illiquidity do when you’re interacting with clients? How do you – how do you discuss this with them in and how do perceive some of the challenges of illiquid investments? CONWAY: Over the – over the past number of decades, I think our clients have largely held too much liquidity in their portfolios. Like, so what we are finding is the ability to take on illiquidity risk. And obviously, in pursuit of that premium above, the traditional markets, I mean, I think the sentiment they are is it an absolute right one. That transition towards private market exposure, we think is an important one just given the return objectives, the majority of our clients’ need but then also again, most importantly now, with geo policy, with uncertainty, with interest rate uncertainty, inflation uncertainty, I mean, the – going back to the resilience point, the characteristics now by introducing these assets into the mix is important. And I think that’s – that point is maybe what I’ll expand on. As were talking to clients, using the Aladdin systems, and as you know, we bought eFront technologies, albeit a couple of years ago, by allowing, I think, great data and technology to help our clients understand these assets and the context of how they should own them relative to other liquidity needs, their risk tolerances, and the return expectations are really trying to use tech and data to provide a better understanding and comprehension of the outcomes. And as we continue to introduce these concepts and these approaches, by the way, that there is, as you know, so used to in the traditional side, it – it gives them more comfort around what they should and can expect. And that, to me, is a really important part of what we’re doing. So, we’ve released recently new technology to the wealth sector because, quite frankly, we mentioned it before, the 60-40 portfolio is a thing of the past. And that introduction of about 20 percent into alternatives, we applaud our partners who are – who are suggesting that to their clients. We think it’s something they have to do. What we’re doing to support that is really bringing thought leadership, education, but also portfolio construction techniques and data to bear in that conversation. And this goes back to – it’s no longer an alternative, right? This is a core allocation so the comprehension of what it is you own, the behavior of the asset in good and bad times is so necessary. And that’s become a very big thing with regard to our activities, Barry, because your clients are looking to understand better when you’re talking about assets that are very complex in their nature. RITHOLTZ: So, 60-40 is now 50-30-20, something along those lines? CONWAY: Yes. RITHOLTZ: Really, really intriguing. So, what are clients really looking for these days? We talked about yield. Are they also looking for downside protection on the equity side or inflation hedges you hinted at? How broad are the demands of clients in the alternative space? CONWAY: Yes. It ranges the gamut. And even – we didn’t speak to even hedge funds, we’ve had differing levels of interest in the hedge fund world for years and I, quite frankly, think some degree of disappointment too, Barry, with regard to the alpha, the returns that were produced relevant to the cost. RITHOLTZ: It’s a tough space to say the very least exactly. CONWAY: Exactly right. But when you start to see volatility introducing itself, you can really see where skill plays a critical factor. So, we are absolutely seeing, in the hedge fund, a resurgence of interest and demand by virtue of those who really have honed in on their scale, who have demonstrated an up-and-down markets and ability to protect and preserve capital, but importantly, in a low uncorrelated way build attractive risk-adjusted returns. We’re starting to see more activity there again too. I think with an alternatives, you’ve really seen a predominant demand coming from privates. These private markets, like a set of growths so extraordinarily fast and the opportunities that is rich, the reality too on the public side which is where our hedge funds operate, they continue to, in large part, do a really good job. The issue with our industry now with these 38,000 managers is how do you distill all the information? How do you think about your needs as a client and pick a manager who can deliver the outcomes? And just to give you a sense, the difference now between a top-performing private equity manager, a top quartile versus the bottom quartile, the difference can be measured in tens of percent. RITHOLTZ: Wow. CONWAY: Whereas if you look at the public equity side, for example, a large cap manager, top quartile versus bottom quartile is measured in hundreds of basis points. So, there is definitely a world that has started where the outcomes our clients will experience can be great as they pursue yield, as they pursue diversification, inflation protection, et cetera. I think the caveat that I would say is outcomes can vary greatly. So manager underwriting and the importance of it now, I think, really is this something to pay attention to because if you do have that bottom performing at the bottom quartile manager, it will affect your outcomes, obviously. And that’s what we collectively have to face. RITHOLTZ: So, let’s talk a little bit about real estate. There are a couple of different areas of investment on the private side. Rent to own was a very large one and we’ve seen some lesser by the flip algo-driven approaches. Tell us what Blackrock is doing in the real estate space and how many different approaches are you bringing to bear on this? CONWAY: Yes, we think it’s both equity and debt. Again, no different to the infrastructure side, these projects need to be financed. But on the – as you think about the sectors in which you can avail of the opportunity, you’ve no doubt heard a lot and I mentioned earlier this demand for logistics facilities. The explosion of shopping online and having, until we obviously have the supply chain disruption, an ability to have nearly immediate satisfaction because the delivery of the good to your home has become so readily available. It’s a very different consumer experience. So the explosion and the need for logistics facilities to support this type of behavior of the consumer is really an area that will continue to be of great interest too. And then you think about the transformation of business and you think about the aging world. Unfortunately, you can look at various economies where our populations are decreasing. And quite frankly, we’re getting older. And so, were you’re thinking of the context of that senior living facilities, it becomes a really important part, not just as part of the healthcare solution that come with it, but also from living as well. So, single-family, multifamily, opportunities continue to be something that the world looks at because there is really the shortfall of available properties for people to live in. And as the communities evolve to support the growing age of the population, tremendous opportunity there too. But we won’t give up on office space. It really isn’t going away. Now, if you even think about our younger generation here in BlackRock, they love being in New York, they love being in London, they love being in Hong Kong. So, the shape and the footprint may change slightly. But the necessity to be in the major financial centers, it still exists. But how we weighed the risks has definitely changed, certainly, for the – for the short-term and medium-term future. But real estate continues to be, Barry, a critical part of how we express our thought around the investment opportunity set. But clients largely do this themselves too. The direct investing from the clients is quite significant because they too see this as still as a rich investment ground, albeit, one that has changed quite a bit as a result of COVID. RITHOLTZ: Well, I’m fascinated by the real estate issue especially having seen some massive construction take place in cities pre-pandemic, look over in Manhattan at Hudson Yards and look at what’s taking place in London, not just the center of London but all – but all around it and I’m forced to admit the future is going to look somewhat different than the past with some hybrid combination of collaborative work in the office and remote work from home when it’s convenient, that sort of suggests that we now have an excess of capacity in office space. Do you see it that way or is this just something that we’re going to grow into and just the nature of working in offices is changing but offices are not going away? CONWAY: Yes. I do think there’s – it’s a very valid point and that in certain cities, you will see access, in others we just don’t, Barry. And quite frankly, as a firm, too, as you know, we have adopted flexibility with our teams that were very fortunate. The technologies in which we created at BlackRock has just become such an amazing enabler, not just to help us as we mention manage the portfolios, help us a better portfolio construction, understand risks, but also to communicate with our clients. I think we’ve all witnessed and experienced a way to have connectivity that allows them to believe that commerce can exist beyond the boundaries of one building. However, I do look at our property portfolios and even the things that we’re doing. Rent collections still being extraordinarily high, occupancy now getting back up to pre-pandemic levels, not in all cities, but in many of the major ones that have reopened. And certainly, the demand for people to just socialize, that the demand for human connectivity is really high. It’s palpable, right? We see it here too. The smiles on people’s faces, they’re back in the office, conversing together, innovating together. When people were feeling unsafe, unquestionably, I think the question marks around the role of office space was really brought to bear. But as were coming through this, as you’ve seen vaccine rates change, as you’ve seen the infection rates fall, as you’ve seen confidence grow, the return to work is really happening and return to work to office work is really happening, albeit, now with degrees of flexibility. So, going back to the – I do believe in certain areas. You’re seeing a surplus. But in many areas you’re absolutely seeing a deficit and the reason I say that, Barry, is we are seeing occupancy in certain building at such a high level. And frankly, the demand for more space being so high, it’s uneven and this goes back to then where do you invest our client’s capital, making sense of those trends, predicting where you will see resilience versus stress and building that into the portfolio of consequences as you – as you better risk manage and mitigate. RITHOLTZ: Very interesting. And so, we are seeing this transition across a lot of different segments of investing, are you seeing any products that were or – or investing styles that was once thought of as primarily institutional that are sort of working their way towards the retail side of things? Meaning going from institutional to accredited to mom-and-pop investors? CONWAY: Well, certainly, in the past, private equity was really an asset class for institutional investors. And I think that’s – that has changed in a very profound way. I mentioned earlier are the regulation has become a more adaptive, but we also have heard, in many respects, in providing this access. And I think the perception of owning and be part of this illiquid investment opportunity set was hard to stomach because many didn’t understand the attributes and what it could bring and I think we’ve been trying to solve for that and what you’re seeing now with – with regulators, understanding that the difference between if we take it quite simply as DD versus DC, the differences between the options you as a participant in a retirement plan are so vastly different that – and I think there’s a broad recognition now that there needs to be more equity with regard to what happens there. And private equity been a really established part of the alternatives marketplace was once, I think, really believed to be an institutional asset class, but albeit now has become much more accessible to wealth. We’ve seen it by structuring activities in Europe working with the regulators. Now, we’re able to provide private equity exposure to clients across the continent and really getting access to what was historically very much an institutional asset class. And I do think the receptivity is extraordinarily high just throughout people’s careers, they have seen wealth been created as a result of engineering a great outcome with great management teams integrate business. And I do believe the receptivity towards private equity is high as an example. In the U.S., too, working with the various intermediaries and being able to wrap now private equity in a ’40 Act fund, for example, is possible. And by being able to deliver that to the many as opposed to the few, we think has been a very good success story. And I think, obviously, appreciated by our clients as well. So, I would look at that were seeing across private equity as well as private credit and quite frankly infrastructure accuracy. You’re seeing now regulation that’s becoming more appreciative of these asset classes, you’re seeing a more – a greater level of openness and willingness to allow for these assets to be part of many people’s experiences across their investment portfolio. And now, with innovation around structures, as an industry, were able to wrap these investments in a way that our clients can really access them. So, think across the board, it probably speaks the innovation that’s happening but I do think that accessibility has changed in a very significant way. But you’ve really seen it happen in private equity first and now that’s expanding across these various other asset classes. RITHOLTZ: Quite intriguing. I know I only have you for a relatively limited period of time, so let’s jump to our favorite questions that we ask all of our guests. Starting with tell us what you’ve been streaming these days. Give us your favorite Netflix or Amazon Prime shows. CONWAY: That is an interesting question, Barry. I don’t a hell of a lot of TV, I got to tell you. I am – I keep busy with three wonderful children and a beautiful wife and between the sports activities. When I do watch TV, I have to tell you I’m addicted to sports and having – I may have mentioned earlier, growing up playing rugby which is not the most common sport in the U.S., I stream nonstop the Six Nations that happens in Europe where Ireland is one of those six nations that compete against each other on an annual basis. Right now, they’re playing a lot of sites that are touring for the southern hemisphere. And to me, the free times I have is either enjoying golf or really enjoying rugby because I think it’s an extraordinary sport. Obviously, very physical, but very enjoyable to watch. And that, that truly is my passion outside of family. RITHOLTZ: Interesting stuff. Tell us a bit about your mentors, who helped to shape your early career? CONWAY: Well, it even goes back to some of the aspects of sports. Playing on a team and being on a field where you’re working together, there’s a strategy involved with that. Now, I used to really appreciate how we approach playing in the All-Ireland League. How we thought about our opponents, how we thought about the structure, how we thought about each individual with on the rugby field and the team having a role. They’re all different but your role. And actually, even starting from an early age, Barry, thinking about, I don’t know, it’s sports but how to build a great team with those various skills, perspective, that can be a really, really powerful combination when done well. And certainly, from an early age, that allowed me to appreciate that – actually, in the work environment, it’s not too different. You surround yourself with just really great people that have high integrity that are empathetic and have a degree of humility that when working together, good things can happen. And I will say, it really started at sports. But I think of today and even in BlackRock, how Larry Fink thinks about the world and I think Larry, truly, is a visionary. And then Rob Kapito who really helps lead the charge across our various businesses. Speaking and conversing with them on a daily basis, getting their perspectives, trying to get inside your head and thinking about the world from their vantage point. To me, it’s a huge thing about my ongoing personal career and development and I really enjoy those moments because I think what you recognize is independent of how much you think you know, there’s so much more to know. And this journey is an ever evolving one where you have to appreciate that you’ll never know everything and you need to be a student every single day. So, I’d probably cite those, Barry, as certainly the two most important mentors in my life today, professionally and personally quite frankly. RITHOLTZ: Really. Very interesting. Let’s talk about what you’re reading these days. Tell us about some of your favorite books and what you’re reading currently? CONWAY: Barry, what I love to read, I love to read history, believe it or not. From a very small country that seems to have exported many, many people, love to understand the history of Ireland. So, there’s so many books. And having three children that have been born in the U.S. and my wife is a New Yorker, trying to help them understand some of their history and what made them what they are. I love delving into Irish history and how the country had moments of greatness and moments of tremendous struggle. Outside of that, I really don’t enjoy science fiction or any of these books. I love reading, you name any paper and any magazine on a daily basis. Unfortunately, I wake at about 4:30, 5 o’clock every day. I spent my first two hours of the day just consuming as much information as possible. I enjoy it. But it’s all – it’s really investment-related magazines, not books. It’s every paper that you could possibly imagine, Barry, and I just – I have a great appreciation for certainly trying to be a student of the world because that’s what we’re operating in an I find it just a very interesting avenue to get an appreciation to for the, not just the opportunities, but the challenges we’re collectively facing as a society but also as a business. RITHOLTZ: I’m with you on that mass consumption of investing-related news. It sounds like you and I have the same a morning routine. Let’s talk about of what sort of advice you would give to a recent college graduate who was interested in a career of alternative investments? CONWAY: Well, the industry has – it’s just gone through such extraordinary growth and the difference, when I’ve started versus today, the career opportunity set has changed so much. And I think I try to remind anyone of our analysts who come into each one of our annual classes, right, as we bring in the new recruits. I think about how talented they are for us, Barry, and how privileged we all are to be in this industry and work for the clients that we do. It’s just such an honor to do that. But I kind of – I try to remind them of that. At the end of the day, whether you’re supporting an institution, that institution is the face of many people in the background and alternatives has really now become such an important part of their experience and we talked about earlier just this challenge of retirement, if we do a good job, these institutions that support the many, they can have, hopefully, a retirement that involves dignity and they can have an ability to do things they so wanted to do as they work so hard over their lives. Getting that that personal connection and allowing for those newbies to understand that that’s the effect that you can have, an alternatives whether it’s private equity, real estate, infrastructure, private credit, hedge funds, all of these now, with the scale at which they’re operating at can allow for a great career. But my advice to them is always don’t forget your career is supporting other people. And that comes directly to how we intersect with wealth channel, it comes indirectly as a result of the institutions. And it’s such a privilege to do that. I didn’t envision when I grew up, as I mentioned, my first job, milking cows and back in a small town in the middle of Ireland that I would be one day leading an alternatives business within BlackRock. I see that as a great privilege. So, for those who are joining afresh, hopefully, try to remind them that it is for all of us and show up with empathy, dignity, compassion, and do the best you can, and hopefully, these people be sure will serve them well. RITHOLTZ: And our final question, what you know about the world of alternative investing today you wish you knew 25 years or so ago when you were first getting started? CONWAY: I think if we had invested much more heavily as an industry in technology, we would not be in the position we are today. And I say that, Barry, from a number of aspects. I mentioned in this shortfall of information our clients are dealing with today. They’re making choices to divest from one asset class to invest in another. To do that and do that effectively, they need great transparency, they needed real-time in many respects, it can’t be just a quarterly line basis. And if we had been better prepared as an industry to provide the technology and the data to help our clients really appreciate what it is they own, how we’re managing the assets on their behalf, I think they would be so much better served. I think we’re very fortunate at this firm to have built a business on the back of technology for albeit 30 plus years and were investing over $1 billion a year in technology as I’m sure you know. But we need to see more of that in the industry. So, the client experience is so important, stop, let’s demystify alternatives. It’s not that alternative. Let’s provide education and data and it’s become so large relative to other asset classes, the need to support, to educate, and transmit information, not data, information, so our client understand it, is at a paramount now. And I think it certainly as an industry, things have to change there. If I knew how big the growth would have been and how prominent these asset classes were becoming, I would oppose so much harder on that front 30 years ago. RITHOLTZ: Thank you, Edwin, for being so generous with your time. We’ve been speaking with Edwin Conway. He is the head of Blackrock Investor Alternatives Group. If you enjoy this conversation, please check out all of our prior discussions. You can find those at iTunes, Spotify, wherever you get your podcast at. We love your comments, feedback and suggestions. Write to us at MIB podcast@Bloomberg.net. You can sign up for my daily reads at ritholtz.com. Check out my weekly column at Bloomberg.com/opinion. Follow me on Twitter, @ritholtz. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Mohammed ph is my audio engineer. Paris Wald is my producer, Michael Batnick is my head of research, Atika Valbrun is our project manager. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Edwin Conway appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureNov 22nd, 2021