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This Is What Whales Are Betting On United Airlines Holdings

A whale with a lot of money to spend has taken a noticeably bullish stance on United Airlines Holdings. Looking at options history for United Airlines Holdings (NASDAQ:UAL) we detected 30 strange trades. read more.....»»

Category: blogSource: benzingaJan 14th, 2022

See inside a VIP Boeing 757 private jet that has a full bedroom and dining room

The aircraft has a large 10-tonne payload, which is good for large parties needing extra cargo space, like orchestras, sports teams, or tour groups. VIP Boeing 757-200.ACC Aviation Private charter company Freedom II is the latest operator of a VIP Boeing 757-200 jet. The aircraft has a large payload and several living spaces, including a bedroom and dining room. Managing company ACC Aviation hopes the jet will lure large tour groups and sports teams. Private aviation has been booming since the pandemic.Flying on Volato's $5 million HondaJet.Taylor Rains/InsiderI flew on Honda's $5 million private jet that seats 4 — see inside Volato's HondaJetHealth concerns — coupled with the ongoing summer chaos that has seen thousands of flight cancelations and hundreds of bags lost — has prompted people to switch to private aviation.John Ruiz's Boeing 767 refurbished plane.VIP CompletionsA passenger bought an airline ticket just to look for his lost luggage at Dublin AirportNetJets and VistaJet, which are two of the world's biggest private charter companies, have both seen increased demand for private flights.A VistaJet Bombardier Global 7500 at the Dubai Airshow 2021.Thomas Pallini/InsiderI flew on a $50 million Bombardier Global 5000 private jet from Montreal to New Jersey and saw why those who can afford it are flocking to private aviationVistaJet told Insider that it has reported a 29% increase in passengers over the last year — 71% of that are people who switched from commercial flying.A VistaJet Bombardier Global 7500 at the Dubai Airshow 2021.Thomas Pallini/InsiderBombardier just delivered its 100th Global 7500 business jet built for the ultra-wealthy that features a private bedroom — see inside the 'Ferrari of the Skies'Meanwhile, NetJets told Insider it has recorded a 72% increase in business since the pandemic.A NetJets' Embraer Phenom 300E.Embraer Executive JetsNetJets is betting $1.2 billion on one of Embraer's most-advanced personal private jets as unprecedented demand rocks the industry: Meet the Phenom 300EWith private charters on the rise, companies are eager to get more VIP options available for deep-pocket customers, like a converted VIP Boeing 767…John H. Ruiz's refurbished Boeing 767 private jet.VIP CompletionsA Boeing 767 has been transformed into a VIP private jet complete with a bedroom and home cinema — see inside…and a converted VIP Boeing 747-8i, which is the world's largest private jet.Qatar Amiri Flight Boeing 747-8 BBJ.Jetlinerimages/Getty ImagesSee inside the world's largest private jet: a Boeing 747 with an interior so large it took 4 years to design and buildAnother luxury jet available is an all-VIP Boeing 757-200 operated by private charter company Freedom II — take a look.VIP Boeing 757-200.ACC AviationSource: ACC AviationHaving first entered service in 1999 with bankrupt low-cost charter carrier ATA Airlines (American Trans Air), the converted Boeing 757 served Russia's defunct Air Bashkortostan before becoming a VIP private jet in 2008 with Greek operator GainJet Aviation.The Boeing 757 when it was with GainJet Aviation.ACC AviationSource: PlanespottersThe 62-seater plane was registered to Freedom II in December 2021.VIP Boeing 757-200.Timo JägerThe jet "bridges the gap between private charter and scheduled services," according to ACC Aviation, which manages and markets the jet in partnership with charter broker Perigean Aviation.VIP Boing 757-200.GainJet AviationSource: ACC AviationThe aircraft has a large 10-tonne payload, which is good for large parties needing extra cargo space, like orchestras, sports teams, or tour groups.Freedom II VIP Boeing 757-200.ACC AviationSource: ACC AviationWith a range of 4,500 nautical miles, the plane can fly up to 9.5 hours. Onboard, passengers will find several living spaces and amenities, including a bedroom…VIP Boeing 757-200.ACC AviationSource: ACC Aviation...an ensuite bathroom...VIP Boeing 757-200.ACC AviationSource: ACC Aviation…several dining tables…VIP Boeing 757-200.ACC AviationSource: ACC Aviation…and large leather seats with a 140-degree recline, a legrest, and 52 inches of pitch.VIP Boeing 757-200.ACC AviationSource: ACC AviationThe front of the plane has four sets of loungers facing each other in a 2x2 configuration. These convert into the dining spaces.VIP Boeing 757-200.GainJet AviationSource: GainJet AviationThe bedroom and ensuite bathroom sit in the middle of the plane...VIP Boeing 757-200.ACC AviationSource: GainJet Aviation...while several rows of regular seats fill up the back. There are three lavatories in this section as well.VIP Boeing 757-200.GainJet AviationSource: GainJet AviationThe cabin also features mood lighting.VIP Boeing 757-200.ACC AviationSource: ACC Aviation"The Freedom II 757 represents an ideal platform for our customers including safety, comfort and service with the benefit of international range," Perigean Aviation president Richard Page said. "This, coupled with ACC's experienced worldwide team brings a most unique and efficient pairing of benefits for our customers."VIP Boeing 757-200.ACC AviationSource: ACC AviationBefore joining the Freedom II fleet, the aircraft already flew class A celebrities and sports teams, like Lady Gaga, England's Liverpool Football Club, and the US Women's National Soccer team.VIP Boeing 757-200.GainJet AviationSource: ACC AviationAccording to ACC Aviation, the 2022 FIFA World Cup in Doha, Qatar, is drawing a lot of sports and support teams to the city, and the aircraft will "provide much-needed capacity."VIP Boeing 757-200.GainJet AviationSource: ACC AviationQatar Airways CEO Akbar Al Baker, whose airline is sponsoring the World Cup, told Insider in an interview at the Farnborough International Airshow that the event is drawing a lot of demand to the city.Qatar Airways CEO Akbar Al Baker poses near an Airbus A350-900 aircraft.ERIC CABANIS/AFP via Getty Images)Qatar Airways CEO said he received 20,000 applications for 700 pilot jobs despite airlines battling an industry-wide shortage of flight crewsHe explained that Qatar is unable to handle all the demand and has called on partner airlines to help out. ACC Aviation hopes to fill that gap with the VIP Boeing 757.Qatar Airways' Boeing 777 special FIFA livery.Qatar AirwaysThe juiciest match-ups in the opening round of the 2022 FIFA World Cup in Qatar"We see immediate opportunities for the upcoming autumn season, including touring programs, substantial MICE (Meetings, Incentives, Conferences and Exhibitions) travel, and the World Cup in Qatar," ACC Aviation's director charter, Richard Smith, said.VIP Boeing 757-200.ACC AviationAccording to ACC Aviation, the plane is available for "ad hoc and program charter flying" and can operate "seamlessly" between Europe, the Middle East, Africa, Asia, and the Americas.VIP Boeing 757-200.ACC AviationFreedom II's Boeing 757 is not the only luxury aircraft of its kind. Also flying is a converted Boeing 757-200 operated by Spanish private charter airline Privileged Style that features 88 business-class seats...Privilege Style Boeing 757-200.Karolis Kavolelis/Shutterstock...the Mexican Air Force's VIP transport Boeing 757-200...Mexican Air Force Boeing 757-200.viper-zero/Shutterstock...and the US Air Force's Boeing Boeing C-32 VIP transport aircraft that is known as "Air Force 2" and carries US vice presidents such as current Vice President Kamala Harris. The C-32 is a special model of the Boeing 757-200 that features a stateroom and conference rooms.The United States Air Force Boeing C-32 VIP transport aircraft.US Air ForceSource: United States Air Force, The AviationistRead the original article on Business Insider.....»»

Category: personnelSource: nytAug 7th, 2022

The crypto winter has investors gearing up for court dates to recoup their losses, while the layoffs continue

Today's big story on Wall Street digs into crypto. With Coinbase and Block on deck to report their latest earnings, the Street has lowered expectations for the fintechs. Investors, meanwhile, are trying to win back some of their losses. Hi. I'm Aaron Weinman. Winter is well and truly here for the crypto space. Fintechs like Coinbase and Block have got nervous earnings coming and Wall Street is bracing for the downturn.Before we get into that, just a kind reminder that it's the last call for nominations for Insider's 2022 class of Wall Street rising stars. Nominate here.Also, there is breaking news from London this morning after the Bank of England hiked interest rates by 50 basis points for the first time since 1995.If this was forwarded to you, sign up here. Download Insider's app here.Jeremy Woodhouse/Getty Images; IStock;1. August might be hot in New York City, but it's been a winter storm for crypto. The month is barely four days old, but already, the US Securities and Exchange Commission is clamping down on questionable crypto schemes and Wall Street has lowered expectations for fintechs like Coinbase and Block.Coinbase, which reports second-quarter earnings on Aug. 9, has lost more than three quarters of its market cap (around $18 billion on Wednesday) this year, while Block has shed in excess of half its value (Approximately $50 billion on Wednesday). Block reports earnings today.To rub salt in crypto wounds, the startup Nomad on Tuesday lost almost $200 million after hackers exploited a flaw in the blockchain-transfer platform's security defenses. The hackers were able to let users enter any value into the system and siphon off the funds, even if Nomad lacked the necessary assets in its deposit base.At the heart of the matter, however, is that popular cryptocurrencies have spiraled this year. Bitcoin, for example, has nearly halved in value.Companies — from Coinbase to Celsius — flew too close to the sun by hiring, and then firing, thousands. Robinhood, the pandemic darling that got everyone from the Bodega attendant to seasoned Wall Streeters playing the stock market, partially blamed the crypto freefall for its latest round of job cuts.Investors, burned by big losses, are now gearing up for court battles. Over 200 cases have been filed, some settled in the million-dollar range, some investors lost, and others are still going. Insider's Jack Newsham spoke to lawyers and investigators about what investors are doing to try to get their money back.In other news:Downtown ChicagoSteve Geer/Getty Images2. Angelo Gordon investors just learned of a rape claim against a former executive. The chief executive of a California pension fund said the litigation "raises concerns" and that the fund is "monitoring the situation closely."3. Disgruntled lenders are fuming at the marketing process of a loan marketed by Goldman Sachs and JPMorgan, Bloomberg reported. The first-lien lenders to a loan for Avaya have hired law firm Akin Gump to examine legal options over what they viewed as inadequate disclosures about the transaction.4. Carlyle has amassed a portfolio of 130 Brooklyn apartments. Carlyle's investment is the latest example of how cashed-up investment firms are becoming corporate landlords and replacing traditional mom-and-pop property owners.5. Staying on real estate, mortgage rates will fall back to Earth after an unprecedented climb. The dip in rates should make homes more affordable, Bank of America analysts said.6. Healthcare startup Calibrate's chief executive used a Zoom call to cull staff. Minutes later, the employees' company laptops were automatically wiped and rebooted.7. Adtech firm Criteo completed the acquisition of rival Iponweb at a revised price. The deal had been jeopardized because much of Iponweb's team is based in Russia. The revised deal valued the target at $250 million, plus a $100 million earn-out.8. New York City's comptroller has chided BlackRock over its fossil fuel holdings, according to this report from Gothamist. Brad Lander and national climate activists are calling on the asset manager to stop investing in the expansion of fossil-fuel infrastructure.9. Here are five little-known stocks that one of Germany's foremost portfolio managers is betting on now. Andreas Strobl is a senior PM at Berenberg Bank and his job is to unearth successful, little-known firms to invest in. He shared his insights, and stocks to avoid, with Insider.10. Goldman Sachs and Thoma Bravo just helped an artificial-intelligence startup raise $90 million. Here's a look at the pitch deck that Aisera used to raise the cash. Thoma Bravo, meanwhile, just agreed to buy ID company Ping Identity for about $2.8 billion.Done deals:Alternative asset manager Balbec Capital has raised over $1.5 billion for its fifth, and largest, flagship fund to date. The fundraise also includes a $100 million expandable co-investment vehicle.Brightwood Capital has provided a term loan to the Yardbird Group, a Miami-based restaurant company. Proceeds will come from Brightwood's third fund and Yardbird will use the money to enhance its existing operations.Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 4th, 2022

5 Top-Ranked ETFs That Outperformed in July

July was a banner month for the U.S. stock market as all the three major indices logged in the best month since 2020. July was a banner month for the U.S. stock market as all the three major indices logged in the best month since 2020. Better-than-expected corporate earnings reports and falling bond yields brought back the lure for riskier assets. The Nasdaq Composite Index was the outperformer, climbing 12.4%, while the Dow Jones and the S&P 500 gained 6.7% and 9.1%, respectively.While there have been winners in many corners of the space, we highlight five ETFs from different industries that gained last month and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). The funds are, namely, S&P Kensho Cleantech ETF CTEX, SPDR S&P Semiconductor ETF XSD, Consumer Discretionary Select Sector SPDR Fund XLY, SPDR S&P Transportation ETF XTN and Vanguard Mega Cap Growth ETF MGK. These are likely to continue outperforming should the trends prevail.Through Jul 29, Q2 results from 279 S&P 500 members or 55.8% of the index’s total membership are up 4.7% on 14.1% higher revenues, with 75.6% beating EPS estimates and 65.6% beating revenue estimates, per the latest Earnings Trends. This is faring better than expected and almost in line with the Q1 earnings and revenue growth of 5% and 14.1%, respectively (read: Stocks' Best Month Since 2020: Top ETF Areas of July).Meanwhile, the 10-year yield dropped to 2.6% from 3% over the past month in the face of deteriorating economic conditions and recession fears. The world's largest economy is poised for a technical recession as GDP shrank by 0.9% in the second quarter, followed by a 1.6% decline in the first quarter. This might prompt the Fed to scale back its interest rate hiking cycle in the fall, resulting in risk-on trade.The central bank raised interest rates by 75 bps to the range of 2.25% and 2.5% in its last meeting to fight inflation and said it is “strongly committed to returning inflation to its 2% objective.” It also hinted that it could slow the pace of its rate hike campaign at some point.Further, commodity prices have also fallen on recessionary fears, thereby providing a boost to investor sentiment.We have profiled the above-mentioned ETFs in detail below:S&P Kensho Cleantech ETF (CTEX) – Up 21.4%S&P Kensho Cleantech ETF invests in companies involved in developing and building the green technologies that could power the future in areas like hydro, solar, wind, and geothermal by tracking the S&P Kensho Cleantech Index. It holds 30 stocks in its basket, with each making up for no more than 5% share. S&P Kensho Cleantech ETF has the largest allocations in industrials and information technology sectors.S&P Kensho Cleantech ETF has accumulated $3.1 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 1,000 shares and has a Zacks ETF Rank #2.SPDR S&P Semiconductor ETF (XSD) – Up 19.9%SPDR S&P Semiconductor ETF offers exposure to the semiconductor segment of the broad technology sector and tracks the S&P Semiconductor Select Industry Index. It holds 40 stocks in its portfolio, with each making up for not more than 4% share. SPDR S&P Semiconductor ETF has AUM of $1.3 billion and an average daily volume of about 74,000 shares.SPDR S&P Semiconductor ETF charges 35 bps in fees per year and has a Zacks ETF Rank #1 (read: Time for Semiconductor ETFs on Senate's CHIPS-Plus Bill Passage?).Consumer Discretionary Select Sector SPDR Fund (XLY) – Up 19%Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space and tracks the Consumer Discretionary Select Sector Index. It holds 58 securities in its basket with key holdings in Internet & direct marketing retail, automobiles, specialty retail, and hotels, restaurants and leisure round off the next three spots with a double-digit allocation each.Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $15.1 billion and an average daily volume of around 6 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #1.SPDR S&P Transportation ETF (XTN) – Up 14.1%SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 49 stocks in its basket with none of the firms accounting for less than 3%. About 38% of the portfolio is dominated by trucking, while airlines, and air freight & logistics take 28% and 20% share, respectively.With AUM of $506.2 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and trades in a volume of around 53,000 shares a day.Vanguard Mega Cap Growth ETF (MGK) – Up 13.2%With AUM of $11.4 billion, Vanguard Mega Cap Growth ETF offers diversified exposure to the largest growth stocks in the U.S. market by tracking the CRSP US Mega Cap Growth Index. It holds 99 securities in its basket, with none accounting for more than 15.2% of total assets. Information technology takes the largest share at 52.6%, while consumer discretionary takes 24.5% of assets (read: Tech ETFs Make A Solid Comeback in July).Vanguard Mega Cap Growth ETF charges 7 bps in annual fees and trades in a good volume of around 351,000 shares a day on average. It has a Zacks ETF Rank #2. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports SPDR S&P Transportation ETF (XTN): ETF Research Reports SPDR S&P Semiconductor ETF (XSD): ETF Research Reports Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports ProShares S&P Kensho Cleantech ETF (CTEX): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 2nd, 2022

See inside the 4-seat electric flying taxi that could be shuttling passengers between airports and city centers by 2026

Airlines are betting big on eVTOLs, with Embraer's Eve winning 1,900 orders. Here's what the flying taxis could look like. Eve expects the aircraft to operate in cities like London.Eve Air Mobility eVTOLs, or "flying taxis", are being hailed as the future of short-haul inner city travel.  Embraer's Eve has received 1,900 orders from US airlines such as Republic and Skywest. Here's what the 4-passenger aircraft, which may start flying in 2026, could look like.  The Farnborough International Airshow 2022 was arguably about all the flying taxi. Multiple firms unveiled their plans for eVTOLs – electrically powered Vertical Takeoff and Landing Vehicles – that are being seen as the next stage of urban air travel.Vertical Aerospace (pictured), Boeing-backed Wisk, Supernal and Joby Aviation were among the firms to show-off eVTOL concepts at the show.Vertical AerospaceeVTOLs are a key part of Advanced Air Mobility (AAM) — a transport system using new types of aircraft and drones to move people and cargo around and between cities.Airlines like American and JetBlue plan to use eVTOLs to ferry premium passengers between city centers and transport hubs. Major aircraft manufacturers Airbus and Boeing are among a number of firms developing their own versions of the craft.Major aircraft manufacturers Airbus and Boeing are also developing their own flying taxi aircraft.NYC Russ/ShutterstockAmerican Airlines has ordered 250 electric flying taxis to ferry passengers around cities at speeds of up to 200mph. Take a look at the VX4. However, the craft with the most potential, at least in terms of orders, is Brazilian plane maker Embraer's Eve, which it launched through New York-listed subsidiary Eve Air Mobility (EAM).Embraer E195-E2 at the Farnborough International Airshow.Taylor Rains/InsiderThe craft has won 1,900 orders from regional airlines including Republic and Skywest, helicopter firms and Europe's largest defence company BAE Systems.EAM expects Eve to operate in cities like London.Eve Air MobilityEAM unveiled a mockup of the cockpit at the airshow, and hopes Eve will be in operation in cities from 2026. Here's what it could like look like.Only a cockpit mockup was on display.Eve Air MobilitySource: EVE, EVE"Our targeted flight range will address 99% of intra-metro travel," EAM's David Rottblatt told the publication eVTOL in February.The small electric-powered craft will be used for inner-city travel.Stephen Jones / InsiderSource: eVTOL InsiderThe cabin has four seats, arranged in two rows facing each other. The pilot will control the aircraft from a separate cockpit.Inside the passenger cabin of the Embraer-backed eVTOL called Eve.Eve Air MobilityThe cockpit mockup contained limited controls, but the final design is likely to change after flight testing.The final design may change.Stephen Jones / InsiderThe cockpit contained a small gear stick.It's similar to the joy stick seen on conventional helicopters.Stephen Jones / InsiderAnd a display screen to show the aircraft's flight systems.The screen inside the cockpit of the Eve eVTOL.Stephen Jones / InsiderThe final design could well change, however.The cockpit mockup ha limited flight controls.Stephen Jones / InsiderLike many other eVTOL manufacturers, EAM is seeking regulatory approval for its craft. So how likely is this to happen?Eve will have eight rotors allowing for vertical take off and landing.Eve Air MobilitySource: SimpleFlyingIf Advanced Air Mobility is to reach the potential investors believe it can, it will require a radical upgrade to localized air traffic management, as well as its own infrastructure.Operators imagine eVTOLs will travel between a network of "vertiports" located in city centers and transport hubs.SkyportsIntegrating vehicles into already complex existing airspace is one of the biggest barriers facing operators, said Simon Whalley of Skyports, a UK startup working to develop a network of vertiports. That could be even more of a challenge if aircraft are operating in densely populated city centers as proposed.Skyports is developing a network of vertiports, including a proposed hub at Cergy-Pontoise, outside Paris.Skyports"You're operating at lower levels. You're close to people, you're close to buildings. So you're dealing with things like visual and sound blight, for example," Whalley said. "All those things are going to have to be taken into consideration by the industry."New York City from above on City Climb.Courtesy companyRegulators have been broadly supportive. In the UK Eve led a consortium of AAM firms, helicopter operators and airports in partnership with the Civil Aviation Authority to develop a scheme for how the system could operate in London.Heathrow airport.EQRoy/ShutterstockSource: EAMIn June the European flight regulator EASA published first draft proposals setting rules on how air taxis including eVTOLs but also unmanned craft could operate. A consultation is open until September.EASA's proposals focus on crew licensing, flight rules, airworthiness and operations.SOPA Images / ContributorSource: EASAIn the US, the FAA recently put eVTOL firms on edge when it shifted the rules on how the craft will be certified. Rather than being classed in a similar way to small aircraft, eVTOLs will now be classified as "power-lift" aircraft because they take off and land vertically in a similar way to a helicopter.eVTOLs will now be classified as "power-lift" aircraft, because they take off and land vertically, in a similar way to a helicopter.Royal NavySource: The Air Current, ReutersThe FAA said this shouldn't delay the process for certifying aircraft. Joby Aviation, another eVTOL manufacturer that's backed by JetBlue, is working towards full FAA certification by 2024.The Joby eVTOL.Joby AviationSource: Joby AviationRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 29th, 2022

Tales From The Crypto: Trapped Celsius Customers Share Financial Horrors

Tales From The Crypto: Trapped Celsius Customers Share Financial Horrors Liquidity-challenged crypto lender Celsius Network filed for Chapter 11 bankruptcy protection earlier this month in the Southern District of New York - over a month after it halted customer withdrawals, citing "extreme market conditions." Celsius CEO Alex Mashinsky The filing came just nine days after crypto broker Voyager Digital filed for Chapter 11 in the same court, following a similar pause in customer withdrawals triggered by the collapse of crypto hedge fund Three Arrows Capital. According to court filings, Celsius had at least a $1.2 billion shortfall on its balance sheet - with $5.5 billion in liabilities ($4.7bn of which were customer holdings), and $4.3 billion in mostly-illiquid assets, according to CoinDesk, which notes that "Though the company has already begun to make good on its debt to institutional creditors, retail investors have been left in the dark and will likely bear the brunt of Celsius’ failing." To that end, letters from trapped Celsius holders have been published on the bankruptcy case website, which journalist Molly White (@molly0xFFF) has posted to Twitter. 50: "Like many investors, I have lost a large chunk of my life savings and struggle to live daily with devastation and extreme stress of watching on the sideline feeling powerless over my money, which I entrusted with Celsius to manage." — Molly White (@molly0xFFF) July 21, 2022 More (emphasis ours): "I am a Celsius customer with a little over $15k worth of deposits that are locked up in Celsius. $15k may not mean a lot to some people, but it is about 65% or my life savings.... Losing all of my savings will have irreparable consequences on the well-being of myself..." "... and my family. I am ashamed, humiliated, and quite frankly, disgusted, that I put all my trust into a company that has clearly participated in near fraudulent activity. I will be spending years trying to make back the money I lost." "My life savings were in Celsius. I trusted Alex. I pray and hope everyday you are doing everything in your power to rightfully return deposits back to customers. I can’t tell my wife and kids our retirement and dreams have been stolen from us." "I left my all of my ETH (about 60 ETH [~$90,000]) on Celsius in hopes for a modest return (not enough to beat current inflation) and now, like others, my ETH is locked and I have no way to access it." "As a disabled Combat Veteran who served in the Afghanistan Campaign, it hasn’t been easy for me to maintain employment and save money to build a future retirement for my family. So, I have been saving for years to amass the sum that I had in Celsius...." "... To Celsius I am but a minnow in a sea of whales. My 36k loan to Celsius that took me nearly a decade to save for with dedication and hard work for feels completely insignificant." "I moved the bulk of these funds into Celsius in February of 2022 because I would Watch Alex Mashinsky on his weekly AMAs published on YouTube. He reiterated time and time again on Twitter and on these AMAs that the company was over collateralized..." "on numerous youtube 'AMAs (ask mashinsky anything)' and interviews that the yield paid on our cryptocurrency deposits was generated with overcollateralized lending." "Everything now seems to be a blatant lie. Mr. Mashinsky and the company where deceiving a lot of people, including myself for years. This has an immense impact on my life." *  *  * My God pic.twitter.com/vqyUygy4ZR — Frank Chaparro (@fintechfrank) July 23, 2022 Caveat emptor... Tyler Durden Sat, 07/23/2022 - 13:00.....»»

Category: dealsSource: nytJul 23rd, 2022

Goldman: Some Noteworthy Clients Are Starting To Buy Throughout The Day

Goldman: Some Noteworthy Clients Are Starting To Buy Throughout The Day Earlier today, we wrote that according to the Goldman flow desk, "most clients were hating this rally", sentiment which Nomura's Charlie McElligott picked up on later in the day when he wrote that the risk over the near term is a "further pile-on to the crowd who has expected another surge lower in stocks, instead squeezing their shorts and accelerating the enormous Systematic buying already going through as CTAs cover and flip long." Well, it appears that the most steadfast bears - who are recently capitulated bulls, and who according to the latest BofA Fund Manager Survey, are now the most pessimistic on record - are starting to capitulate yet again, this time calling a bottom to stocks, and are starting to buy. Indeed, as Goldman flow trader John Flood writes in his end of day wrap, "some noteworthy long-only clients have now started to passively buy on our desk throughout the day (velocity picked up this afternoon as mkt moved higher)" adding that "executed flow across US equities franchise had +338bp buy skew vs 30d avg of -30bp sell skew. L/Os buy skew +9.8% was highest here since since 6/30." Translation: it is possible that this bear market rally is about to transform into something more sustainable, and as more whales join the buying parade, the train may soon leave the station. That said, as Flood writes it will be interesting to see if this "long-only" momentum will sustain into Friday post "a slew of relatively disappointing earnings" post close, from companies such as SNAP, COF, CRSR, SAM, SIVB, STX. We excerpt from his note below; the full pdf available to pro subscribers in the usual place. Our desk was a 6 on 1 – 10 scale today. 3 More intraday blocks + CCL primary raise as institutions take advantage of surprise move higher in tape this week. Client demand for these blocks remains strong on our desk. Leading thematics today were China Exposure (GSCBCHSE) +196bps, Secular Growth (GSXUSGRO) +194bps, High Retail Sentiment (GSCBHRSB) +186bps. Some noteworthy L/O clients have now started to passively buy on our desk throughout the day (velocity picked up this afternoon as mkt moved higher). Executed flow across US equities franchise had +338bp buy skew vs 30d avg of -30bp sell skew. L/Os buy skew +9.8% was highest here since since 6/30. Demand concentrated in cons disc and materials. Will be interesting to see if this L/O demand back tomorrow post a slew of relatively disappointing earnings post close: SNAP, COF, CRSR, SAM, SIVB, STX, etc. SNAP (first take) -20% ... Guiding Q3 revenue growth "thus far" this quarter to Flat YoY (Cons for full qtr Q3 growth was +18% y/y). Not giving full Q3 financial guidance. Gas prices in the US have moved down to $4.44/gallon (national average), 58 cents below their all-time high in mid-June. SLG (NYC's largest commercial real estate landlord): "Tenant demand is shifting as some of the big technology tenants which expanded rapidly have pulled back as they adapt to new workforce patterns." The ECB went big for its first rate hike in over a decade. It defied consensus with a 50 bp increase that ended the era of negative rates to tackle inflation Christine Lagarde said will remain "undesirably high for some time." It also unveiled a crisis tool called the Transmission Protection Instrument. All countries are eligible and the plan received unanimous backing, though Lagarde said nations need sound macro policies and to comply with EU debt rules. Traders are now betting on 60 bps of increases in September. The euro erased earlier gains as she spoke, and yields came off some earlier highs, with some traders criticizing Lagarde for a lack of details during the presser. Finally, some humor from the Goldman trading desk: Joe Biden contracted Covid-19, has mild symptoms, and will isolate in the White House while continuing to work. The 79-year-old president has a runny nose, fatigue and an occasional dry cough, and has begun taking Paxlovid to treat the disease, according to a letter from his physician. Biden's illness comes after a five-day trip to the Middle East during which he made few efforts to avoid infection. Tyler Durden Thu, 07/21/2022 - 22:55.....»»

Category: personnelSource: nytJul 21st, 2022

Qatar just confirmed an order for 25 Boeing 737 MAX jets amid its dispute with Airbus over paint issues

Qatar and Airbus have been in a bitter legal dispute over surface paint issues on the carrier's A350 jets, which Airbus says is "cosmetic." Boeing Qatar Airways just finalized an order for 25 Boeing 737 MAX 10 jets — the largest of the MAX family. The move comes after a Memorandum of Understanding for MAX 10 jets, which was signed in January, had expired. Qatar's investment comes during an ongoing dispute with Airbus over paint issues on the carrier's A350 planes. Qatar Airways is betting big on Boeing as its dispute with Airbus continues. On Thursday, at the Farnborough International Airshow 2022 in England, Qatar finalized an order for 25 Boeing 737 MAX 10 jets — the largest of the MAX family. According to a Boeing press release, the aircraft will support the airline's short and medium-haul routes and provide improved fuel efficiency and economics. "We are honored that Qatar Airways has decided to add Boeing's single-aisle family to its fleet, deepening our relationship with this world-class airline," Stan Deal, Boeing Commercial Airplanes president and CEO, said. "The 737-10 is ideally suited for Qatar Airways' regional network and will provide the carrier with the most capable, most fuel-efficient airplane in its class."Qatar's announcement comes just weeks after the carrier indicated a provisional agreement to buy 25 MAX jets, with an option for 25 more, had "expired," Reuters reported. The Memorandum of Understanding (MOU) was signed in January. Turning and spurningThe news of the expired MOU was revealed by Boeing's rival Airbus, which requested documentation of the Boeing deal as part of the ongoing legal battle between the European planemaker and Qatar. Qatar CEO Akbar Al Baker confirmed to reporters at a roundtable in Farnborough on Monday, which Insider attended, that the MOU had indeed lapsed.He emphasized that he did not understand Airbus' interest in the MAX agreement in the London court "when the MAX has no relation to the A321 order that [Airbus] erroneously, illegally canceled."Airbus and Qatar have been in a year's-long dispute over surface paint issues on the carrier's A350 aircraft, which has led to a bitter battle in the court system, and Airbus canceled some of Qatar's A321 and A350 orders.Since August 2021, Qatar has grounded 23 of its A350 jets at the direction of the country's air safety regulator, as well as the airline's internal concerns about safety. Airbus has maintained that the issue is "cosmetic," which the European Aviation Safety Agency backed in June, Aviacionline reported.Other airlines have also committed to the 737 MAX 10, including Delta Air Lines, which announced an order for 100 of the MAX 10 variant on Monday.Deal said on Tuesday that the jet has been "rebooted," per Reuters, and that the planemaker has gotten over 1,000 orders for the MAX since its global grounding after two fatal MAX crashes in 2018 and 2019. Not yet set to jetDespite the orders, Boeing's 737 MAX 10 is still not certified to fly, but the manufacturer hopes to get regulatory approval by the end of 2022. A company spokesperson told Insider on Wednesday that the timeline "is completely in the hands of the regulator" but the company is still intending to certify the plane.If the planemaker doesn't meet the end-of-year deadline, it may be forced to redesign the cockpit, which is required of all aircraft certified after December 31, 2022, due to new laws governing pilot warning systems. Boeing said it may ask for an extension from the FAA on the issue for the MAX 10, according to the Seattle Times. However, Boeing CEO Dave Calhoun told Aviation Week in early July that he is willing to cancel the program if the company is not granted an extension, But, he added that he does not expect to shelve the plane, and "it's just a risk."The current cockpit design is similar to the MAX 7 and MAX 8 planes, so if the MAX 10 jet's flight deck was upgraded it would require additional pilot training, costing airlines time and money. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 21st, 2022

American Airlines has ordered 250 electric flying taxis to ferry passengers around cities at speeds of up to 200 mph. Take a look at the VX4.

Major airlines are investing in eVTOLs, often referred to as flying taxis, as a way to transfer passengers between transport hubs and city centers. The VX4 is being developed by the UK firm Vertical Aerospace.Stephen Jones / Business Insider American Airlines pre-ordered 250 VX4 flying taxis from UK aerospace firm Vertical Aerospace.  Insider recently saw a prototype of the VX4 unveiled at the Farnborough International Airshow 2022.  It can carry four passengers up to 100 miles and reach speeds of more than 150 miles per hour.  American Airlines is betting big on flying taxis.American Airlines aircraft.AP Photo/Steven SenneThe airline conditionally pre-ordered 250 of Vertical Aerospace's VX4 eVTOLs in June 2021, with an option for 100 more. On July 15, 2022, American agreed delivery slots on the first 50 of those.Vertical AerospaceVertical AerospaceSource: Vertical Aerospace and American Airlines eVTOLs, short for Electric Vertical Takeoff and Landing aircraft, are seen by some as the future of short-distance air travel and as a contribution towards the air industry's target of net-zero carbon emissions by 2050.Major planemakers like Boeing (which backs Wisk), Airbus, and Embraer are all developing prototypes of their own.JUSTIN TALLIS / Contributor Getty ImagesThe 'flying car' market could be worth $150 billion by 2035. Meet 9 power players helping the brand new industry take off. UK firm Vertical Aerospace is one of several startups seeking approval from aviation regulators for eVTOLs.Lilium, Supernal, and Joby Aviation are other companies designing eVTOLs.Vertical AersopaceDesigners often describe eVTOLs as a form of flying taxi. The aircraft will be more environmentally friendly, quieter, and faster than helicopters, which are used for similar intercity air travel, designers say.eVTOLs could improve inner-city and inter-city travel.Gary Hershorn/Getty ImagesInsider recently saw a prototype of Vertical Aerospace's VX4 on display at the Farnborough Airshow 2022. Here's what the vehicle could look like.The VX4 is being developed by the UK firm Vertical Aerospace.Stephen Jones / Business InsiderVertical Aerospace's fully electric VX4 will be capable of transporting five people — one pilot and four passengers — distances up to 100 miles, the company says. It could reach speeds of up to 200 miles per hour.Vertical Aerospace's VX4 from the front.Stephen JonesIt has a wing span of 15 meters and a fuselage length of 13 meters.Source: Vertical AerospaceThe craft doesn't have engines but instead has eight EPUs (Electrical Power Units) developed by Rolls-Royce.The Vx4 doesn't have engines but has EPUs instead.Stephen Jones Business InsiderThe four row of rotors take off in a vertical position, but tilt to flat once the craft is at cruising altitude, a spokesperson told Insider.The four EPUs at the back stay in a static position.Honeywell, the US aerospace manufacturer, is developing the flight controls and avionics.Stephen Jones / Business InsiderThe prototype cabin has room for four passengers and baggage compartments under the seat.The VX4 cabin sits four passengers, with luggage storage under the seats.Stephen Jones / Business InsiderThere are holds for bigger bags that are accessible on the exterior of the fuselage.Luggage storage on the VX4 behind the cockpit.Stephen Jones / Business InsiderVertical Aerospace is preparing to begin test flights in the summer, starting with a prototype of the aircraft identical to the mockup.The spokesperson said that the final design could change depending on the results.Stephen Jones / Business InsiderVertical Aerospace hopes the craft will be certified by aviation regulators from 2025. American Airlines' preorder is on the condition that the vehicle is approved.VX4Stephen Jones / Business InsiderSource: Vertical Aerospace"We believe these aircraft are a step forward in the future of air mobility, particularly in urban city centers," an American Airlines spokesperson told Insider.The ability of eVTOLs to ferry initially premium paying passengers between transport hubs and city centers is a major appeal for airlines.Andrew Aitchison / Contributor / GettyAmerican is not the only major carrier interested in the craft. Vertical Aerospace said it has around 1,400 conditional preorders, from airlines including Virgin Atlantic, AirAsia and Japan Airlines.Virgin Atlantic has also placed preorders for the Vertical Aerospace's Ax4.Vertical Aerospace / MockupSource: Vertical AerospaceRead the original article on Business Insider.....»»

Category: dealsSource: nytJul 21st, 2022

Here are 32 startup founders using their business chops to help other founders prosper

Today's biggest story on Wall Street delves into the budding startup world that's suffering from a pullback in capital. But here' are 32 founders who are using their experience to invest in fellow startups. Hi, Aaron Weinman here. Today I want to highlight startup founders who are using their entrepreneurial expertise to invest in fellow startups.It's not the easiest environment for a young business right now, but here are 32 founders betting on their peers.Let's get into it.If this was forwarded to you, sign up here. Download Insider's app here.The Grand World; Bubble; Conceive; Bandwagon; Rachel Mendelson/Insider1. Many startup founders are also active investors in fellow startups. They leverage their connections and know-how in getting a business off the ground to help — and pick up a stake in — other budding entrepreneurs with potentially game-changing businesses.In recent years, more early-stage startups have moved away from large amounts of VC cash, and opted for smaller checks from individual investors. And those individuals often run their own company as a side hustle.That's not to say it isn't a tough slog for startups right now. Venture-capitalist funds have tightened their purse strings when it comes to investing in early-stage companies, and any prospective startup darling that harbored hopes of going public have likely had to put those ambitions on ice as investors navigate choppy public markets.But even in a funding crunch, these founders are writing checks for their peers.In this list, Insider's Melia Russell tapped into a network of founders and investors to identify who runs companies while investing in others.They all still work at the startup they founded, and to qualify, their startup had to have raised more than $3 million in funding. And finally, to make the list, they needed to have written at least two checks for startups, either as an angel investor or fund manager since January.Here's a look at 32 active startup founders betting on their fellow entrepreneurs.In other news:Shannon Stapleton/Reuters; Andrew Burton/Getty Images; Julian Restrepo/Citigroup via AP; Misha Friedman/Getty Images; Samantha Lee/Insider2. Banks plowed billions of dollars into these 19 crypto startups since last year. Here's their favorite upstarts, from Blockdaemon to TRM Labs.3. Twitter won the first round in its legal battle against Elon Musk. The Delaware Chancery Court has granted the social-media platform's request to advance the case on an "expedited" schedule.4. Financial publisher Euromoney has agreed to a private-equity sale that values the company at about $1.9 billion. Euromoney, known for industry publications like Institutional Investor and Metal Bulletin, will be sold to a consortium of investors led by the French firm Astorg.5. Jefferies is shedding its last big holdings from conglomerate Leucadia National, the Wall Street Journal reported. An asset sale and a spin off will enable Jefferies to focus on investment banking.6. Pimco bought a little over $1 billion of Apollo buyout loans from banks, according to the Financial Times. The investment-management firm bought the loans from the banks that underwrote Apollo's takeover of Worldline's payments terminal business.7. Anthony Scaramucci's SkyBridge has halted withdrawals from one of its funds as the stock market deteriorates. The Legion Strategy fund also holds 10% in crypto, which has taken a beating lately.8. A Nike-backed hands-free shoe company picked up $20 million in venture-capital commitments. HandsFree Labs has now raised about $34 million since 2019 as slip-on sneakers become increasingly popular.9. Healthie, a healthcare startup that's focused on improving virtual care, just nabbed $16 million in Series A funding. Here's the 18-slide pitch deck it used to nab a commitment from Velvet Sea Ventures.10. Citadel's Ken Griffin is riling up his new Floridian neighbors, according to the Daily Beast. The hedge fund chief executive — whose firm announced in June that it's relocating headquarters from Chicago to Miami — has amassed a swath of land in Palm Beach and his neighbors are having a moan about its "inordinate size."Done deals:The American Forest Foundation's affiliate, the Family Forest Impact Foundation, raised a $10 million taxable bond to fund the Family Forest Carbon Program. It's the first green bond structured to support nature-based carbon credits. Morgan Stanley underwrote the deal.Trilon Group, an Alpine Investors infrastructure portfolio company, acquired engineering firm The Mannik & Smith Group, Inc.Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 20th, 2022

Crypto lender Celsius is betting on its mining operation to help it reorganize as creditors and customers look to recoup $5 billion from the firm

"In a world where the crypto market rebounds, the mining business has the potential to be quite valuable," a lawyer for Celsius said. Celsius founder and CEO Alex Mashinsky speaks at the Web Summit conference in 2021.Bruno de Carvalho/SOPA Images/LightRocket via Getty Images Celsius received approval to expand its mining operations as it looks to reorganize and pay back creditors. Prospects still look grim for Celsius' customers, as the lender only holds $170 million in cash. Some officials have expressed skepticism around the plan to boost income from mining.  Celsius Holdings unveiled a plan to reorganizes its finances and hack away at $5.5 billion in obligations, by mining more bitcoin through its subsidiary, Celsius Mining, with the firm receiving approval for an expansion in a bankruptcy court hearing on Monday.The crypto lender's troubles became public in June, when it paused customer withdrawals shortly before filing for Chapter 11 bankruptcy in early July. Currently, Celsius has around $5.5 billion in liabilities – $4.7 billion of which is customer holdings – and only $170 million in cash on hand, CoinDesk reported. That debts owed to its users have spurred hate mail and death threats as customers lose faith in getting their deposits back, according to the Wall Street Journal. Now, the lender has proposed trying to pay down debt by significantly ramping up mining operations. After presenting a 61-page plan yesterday, the crypto lender got a green light to spend $5 million more dollars to triple its mining rigs in operation, with 43,000 units currently working and plans to have 112,000 in operation by mid-2023. Some officials have expressed skepticism about the plan. A US Trustee Program attorney suggested the Celsius should pursue liquidation, noting that the company still needed to pay duties for 37,500 mining rigs, which are currently inoperable and held by customs authorities.Celsius' legal team defended the expansion and asserted its potential for profitability. "In a world where the crypto market rebounds, the mining business has the potential to be quite valuable," the company's lawyer said. The prospects don't look promising for Celsius' customers, who run a major risk of losing their funds held with the firm. Celsius lost billions in assets since the crash of the stablecoin Terra and its related crypto Luna.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 19th, 2022

Alluvial Fund 2Q22 Commentary: Copper Property CTL Pass Through Trust

Alluvial Fund commentary for the second quarter ended June 30, 2021, discussing their new investment in Copper Property CTL Pass Through Trust (OTCMKTS:CPPTL). Dear Partners, Alluvial Fund declined 9.9% in the second quarter and is down 16.5% year-to-date. By contrast, the Russell Microcap Index lost 19.0% this quarter and has fallen 25.1% in 2022. It’s […] Alluvial Fund commentary for the second quarter ended June 30, 2021, discussing their new investment in Copper Property CTL Pass Through Trust (OTCMKTS:CPPTL). Dear Partners, Alluvial Fund declined 9.9% in the second quarter and is down 16.5% year-to-date. By contrast, the Russell Microcap Index lost 19.0% this quarter and has fallen 25.1% in 2022. It’s ugly out there. At the halfway point of the year, global stock markets have recorded one of their worst performances in modern market history. Fortunately for us and in keeping with the historical pattern, Alluvial Fund has managed to avoid a portion of the decline. Our holdings, with their robust balance sheets and durable cash flows, have fared far better than the hyper-growth (and hypo-profit) story stocks that investors bid to dizzying heights last year. Nevertheless, our holdings are public. They rise and fall on the whims of investors. And investors sure are a capricious bunch. When mounting stress and fear cause the stock market to tumble, our holdings are not wholly unaffected. 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 Series in PDF Get the entire 10-part series on Charlie Munger 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); Q2 2022 hedge fund letters, conferences and more I don’t worry about falling stock prices. I don’t enjoy them by any means, but they don’t keep me up at night. What I do worry about is permanent loss of capital. There are a variety of ways to achieve a permanent loss, but at the heart of each is the same error: over-paying. There’s a school of thought, a very popular one at present, that says investors should spend all their time identifying the market’s highest quality companies and ignore all the rest. And that once these paragons of virtue are found, nearly any price can be paid for their shares and a good outcome assured. I am not a subscriber. I am willing to invest in average or even sub-par businesses, provided they are priced so modestly that a large margin of safety exists. A company does not have to dominate its industry, invent the next iPhone, or become a global household name for shareholders to earn an outstanding return. Indeed, a company can do all these things and still deliver only middling returns if the achievements were priced in from the beginning. I would rather spend time finding situations where the market’s expectations of a company are so low (or barely exist at all) that even modest success means a much higher stock price. It’s much tougher to over-pay for a company where the market expects little than to over-pay for one from which the market expects continuous and unbounded success. Now, investing in low expectations companies and securities is not for the impatient. But neither is Alluvial Fund. The Rundown Our portfolio’s holdings are relatively unchanged from last quarter, but multiple companies reported meaningful positive developments. The market doesn’t care, but that is the normal state of affairs during bear markets. When the fear subsides, fundamentals will matter once again. P10 Inc. In June, I attended the P10 Inc (NYSE:PX) shareholder meeting in Dallas. Co-CEO Robert Alpert presided and did a fine job providing an overview of the company’s initiatives and fielding questions from the handful of investors in attendance. I asked if P10 were considering how to add permanent capital vehicles to its assets under management, and the answer was an enthusiastic “Yes.” So I was pleased to see the company announce a large indirect investment in Crossroads Impact Corp. Crossroads will serve as a growing source of permanent capital for P10’s impact investing platform, Enhanced Capital. The upshot is additional high-margin, recurring revenue for P10. P10 has traded down this year in sympathy with other alternative asset managers. However, the firm continues to grow its base of contractually guaranteed fee revenue. A murkier economic outlook makes fund-raising more challenging, but it will not permanently dampen P10’s prospects. Shares are worth at least $18 (50% upside from here) and more if the company can execute on acquisition opportunities. Unidata S.p.A. If there is a bull market to be found, it may be in grim headlines from Europe. Energy woes. A looming recession. Resigning premieres. It comes as no surprise that investors have done an about face on several of our European holdings despite dirt cheap valuations and long-term industry tailwinds. But a continental recession, even a deep one, will not bring the expansion of broadband internet in Italy to a halt. Unidata SpA (BIT:UD) keeps on hustling to build out its network, and the customer list keeps growing. Most recently, Unidata announced a joint venture with an infrastructure fund to codevelop and manage one of Italy’s first energy efficient data centers. Creative moves like this will enable Unidata to roughly double its cash flow by 2025. I expect shares to reach €100 well before then. Garrett Motion Preferreds Garrett Motion Inc (NASDAQ:GTXAP) is an exercise in patience. Just as it seemed the global automotive market was about to recover to pre-COVID production, along came Russia, inflation, and the threat of recession. Still, the company is making great strides in improving and simplifying its balance sheet. In June, the company redeemed the rest of the Series B preferred shares it issued to Honeywell when it exited bankruptcy in 2021. With the Series Bs out of the way, Garrett Motion is free to dedicate its cash flow to continued deleveraging or share buybacks. At some point in the next year or two, the conditions will be met for Garrett Motion to convert these preferreds and simplify their capital structure. If the market stubbornly refuses to value Garrett Motion shares at a reasonable price, I believe the company will pursue a sale or merger. Until then, our preferred shares will continue to accrue dividends at an attractive yield. The preferreds are worth at least $15 today, and possibly $20 or more if the company can reduce leverage and/or buy back shares and the automotive market recovers. Pegroco Invest AB Preferreds As expected, Pegroco Invest AB (STO:PEGRO-PREF) has resumed paying quarterly dividends on its preferred shares. However, the company has yet to pay out the arrearage that built up while COVID ravaged the economy. This arrearage continues to build and now exceeds SEK 24 per share. At SEK 110, Pegroco preferreds offer a distribution yield of 8.6%, with investors to receive an additional dividend of 22% of the trading price at some point in the future. Pegroco’s asset value covers the preferred and dividends in arrears several times over, and Pegroco has recently taken steps to monetize a few investments and build liquidity. Pegroco is an example of a special situation that has worked very well for Alluvial Fund, but we’re not quite done here. TIM S.A. Poor TIM SA (WSE:TIM). Despite continued excellent results, shares have been trashed as the Polish construction market slows. The market now values TIM at just 4x my estimate of operating income as of June 30. Citing poor market conditions, the company announced it would delay the planned IPO of its e-commerce logistics company 3PL. TIM has gone from “very cheap” to “wildly cheap” this year. The market is too focused on near-term headwinds in TIM’s electronic components distribution business and is missing the continued growth and huge market opportunity at 3PL. Management apparently agrees and has announced a repurchase plan covering 14% of TIM’s shares outstanding. With Polish investors as morose as they have been in years, it could take time for TIM shares to rebound. But the market cannot ignore TIM’s profitability and growth forever. Introducing Copper Property CTL Pass Through Trust We have a new holding in Copper Property CTL Pass Through Trust (OTCMKTS:CPPTL). That’s a bit of a mouthful, so we’ll call it “CPT.” CPT is a highly attractive liquidation opportunity. CPT was created out of the JC Penney bankruptcy to own a variety of JC Penney’s store properties and distribution centers. CPT is a liquidating trust tasked with selling off all 146 remaining properties within three years and distributing monthly net rents received until then. These properties are on an 18-year triple net master lease to New JC Penney. The reorganized JC Penney is well-financed and profitable. CPT’s market capitalization is $956 million. The trust has a small cash balance and zero debt. Gross annual rents from JC Penney are $111 million. After the cost of management fees and sales effortrelated expenses, the trust distributes nearly $100 million to holders annually. This 10%+ yield is simply too high for a geographically diversified collection of commercial properties on long-term triple net lease to a good quality tenant. Today trust units are changing hands at around $12.75. Ultimately, I expect us to receive liquidation proceeds of $18 or more within three years, plus $1.30 per share in annualized distributions for an internal rate of return of at least 20%. The faster that CPT winds up, the better the outcome. Know anyone who wants to buy some real estate? Expert Market Fireworks Since last year’s SEC rule change that effectively eliminated public quotation of non-SEC reporting securities, we have continued to hold a select few of the affected stocks, viewing them as quasipermanent holdings. These are high-quality companies with competent, well-aligned management teams. The kind of holdings you can tuck away in a portfolio for a decade or longer with full confidence that the value of your investment is growing at an attractive rate. I know we won’t often hear from these companies, but they will occasionally surprise us with positive developments. It’s an exciting day when an annual report from one of them shows up in my mailbox. This month’s entertainment came in the form of an annual report from Boston Sand & Gravel. The company had an excellent year, earning $80 per share in operating profit. The balance sheet couldn’t be stronger with $250 per share in net cash and at least $100 per share in non-core real estate it is preparing for sale. Shares most recently changed hands at $610. Boston Sand & Gravel will have ups and downs, but its strategic location within the city limits of Boston ensures it will enjoy steady demand for its products for decades to come. If sold, Boston Sand & Gravel would fetch at least $1,800 per share. It won’t be sold any time soon. But even families adamantly against selling sometimes change course when a generational transition happens or a seller simply makes a generous offer. That’s what happened with Ash Grove Cement a few years back. Until then, we will enjoy a growing stream of dividends and a more and more profitable and valuable Boston Sand & Gravel under the experienced leadership of the Boylan family. Another Alluvial Fund expert market holding making waves is Cuisine Solutions, an innovator in food technology. Unlike a lot of “innovators,” Cuisine Solutions manages to be highly profitable while dedicating millions to research and development. The company has spent the last few years constructing new state of the art facilities to produce its sous vide items for sale at Costco and Starbucks, and for use by several airlines and restaurant chains. Turns out it wasn’t just a few eccentric investors who noticed. In June, Bain Capital stepped up to invest $250 million in convertible preferred stock, valuing Cuisine Solutions at over $1 billion. Bain’s investment provides ample capital for expansion and sets the company on a path to an IPO and exchange listing in a few years. To my amazement, we have been able to acquire quite a few additional Cuisine Solutions shares since the announcement at prices 60% below the conversion price of Bain’s investment. I expect to Cuisine Solutions to reward us richly in the coming years. Until then, if you see their products somewhere, give them a try! You won’t be disappointed. Concluding Thoughts and Updates As I stated at the beginning of this letter, it’s ugly out there. Given the prevailing uncertainty, investors are reluctant to commit new funds to any companies facing short-term headwinds. But that’s not all bad. The market is offering us a chance to invest in many different companies at shockingly low multiples of profits a few years out. That doesn’t mean these same shares won’t experience further declines, or that they will regain all their lost ground quickly once economic sentiment and conditions improve. Investor confidence, once it is gone, takes time to return. But I have little doubt that buying shares of high-quality enterprises at mid-single digit multiples of 2025 earnings or free cash flows will prove as rewarding as ever over a reasonable time frame. I have been very willing to “provide liquidity” to some panicky sellers in stocks I know well, and I expect these purchases will work out very well once some of the fear subsides. I thank you for your confidence in Alluvial Fund. This month we welcomed our largest investment by a new partner in multiple years, and several other new and existing partners stepped up with additional capital for investment in the quarter. I continue to hold my entire investable assets within Alluvial Fund. I welcome questions from partners about our portfolio and strategy. Please do not hesitate to reach out by phone or e-mail. Expect to receive details about an upcoming webinar in the next few weeks. Best Regards, Dave Waters, CFA Alluvial Capital Management, LLC Updated on Jul 18, 2022, 2:15 pm (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: valuewalkJul 18th, 2022

Transcript: Me on Bogleheads Live

Hear the entire interview at BogleHeads Live   My name is John Luskin. I’m your host. Our guest today is Barry Ritholtz. Today. I’ll rotate between asking very questions that I got beforehand from the Forum at Bogleheads.org. And taking live audience question from the folks here today. Let’s start by talking about the Bogleheads,… Read More The post Transcript: Me on Bogleheads Live appeared first on The Big Picture. Hear the entire interview at BogleHeads Live   My name is John Luskin. I’m your host. Our guest today is Barry Ritholtz. Today. I’ll rotate between asking very questions that I got beforehand from the Forum at Bogleheads.org. And taking live audience question from the folks here today. Let’s start by talking about the Bogleheads, a community of investors who believe in keeping it simple, following a small number of tried and true investing principles. You can learn more at the John C Bogle Center for Financial Literacy at Boglecenter.net. On today’s show with Barry Ritholtz, an American author, blogger, newspaper columnist, market analyst, and chief investment officer at RWM, and the host of Bloomberg’s Masters in Business podcast. Hey, John. Thanks so much for having me. I’ve been looking forward to this. What should Bogle heads know about the cognitive and behavioral side of investing? What should Bogle heads know? Well, well, let’s go back to first principles and talk about some of the things that John Bogle recognized so early. He very much realized how much of investing is just completely out of your control. What the Fed does, who the president is, what Congress does, what’s going on in the economy, whether the market decides to go down 20% for the first half of the year, you can’t control any of those things. But what you can control is your own behavior. How do you respond to inputs? How do you respond to stimulus? Which could be thrilling, exciting, terrifying, or nauseating you? Are you greedy when the market’s going higher? Do you panic when the market’s going low, lower? Does your limbic system control you or do you control it? Those are going to have a much bigger impact on your long-term success as an investor then whether or not you’re picking this stock or that, or even this index fund or that. You could have the best set of holdings in the world, but if at the first sign of trouble, you get panicked out of the markets, it’s not going to do you any good. And I feel sort of silly saying this to the Bogleheads because if any group of investors has understood this and internalize that and walked the walk its you guys. We have all the data from Vanguard and how their investors behaved in 2020 and in 08-09. People who follow the teachings of Jack Bogle very clearly have their behavioral side under control. And David, you are live to ask your question. Thank you very much. I truly admire your podcast. I’ve listened to for, for years. It’s spectacular. So thank you so much for doing that. And, you know, given your expertise and your experience in the network you’ve developed over the years in terms of interviewing you asset managers. You know, people like JackBogle. I’m wondering where you think this industry is going to go over the next 10 years. And I’ll tell you, what kind of got me thinking about this more deeply was a book called The Bogle Effect, where it kind of paints a picture that the mutual ownership structure that Vanguard uses it’s just very, very difficult to replicate. Thank you. Sure. Very fair question. Although a lot of it is speculation on my part, the book, The Bogle Effect is by a friend of mine, Eric Balchunas, who I have him coming on the podcast. I think next month. The book was really a lot of fun. So the industry has been going through all these really fascinating changes. And a lot of these changes have been a long time coming there, just overwhelming trends that have been developing momentum for forever. And, sometimes, it’s the old joke from Hemingway: “How did you go bankrupt? Gradually at first, and then all at once.” Indexing is one of those things that it just gradually, gradually, gradually was slowly gaining ground and then boom, after oh 08-09 it just exploded. My pet theory is that given all the scandals in the early two thousands, the analyst scandal, the IPO scandal, the accounting scandals. People just finally said, “Why are we playing this game? Let’s just, you know, take our ball and go home.” And, and by ball, I mean money and home, I mean, Vanguard. That’s how indexing one from this sort of interesting academically supported niche to now half of the mutual funds and half of the ETFs more than half are managed via passive indexes. Which by the way is a very misleading, misleading datapoint, because when you look at mutual funds and ETFs, they’re actually a fraction of all the assets that are managed out there. The vast majority of assets, and let’s just hold aside commodities and real estate. But the vast majority of stocks and bonds are still managed actively.  It’s just the mutual funds and ETFs where we see the passive approach really winning. You’re starting to see more and more institutions move at least a portion of their portfolio in that direction. I think that’s going to continue the thing that’s really fascinating is some of the pushback to low-cost, passive indexing as an approach. I did a couple of columns with Bloomberg, where I got to mock the people who called Indexing Socialist Marxist UnAmerican, a threat to the economy, a threat to the stability of the stock market, just every nonsensical thing you could come up with. My favorite bit of nonsense was the white paper by a bunch of law professors who used the airline industry to prove that” Look, it’s an antitrust violation having all this indexing go going on!” Talk about cherry-picking data. Why use airlines a notoriously small, frequently bankrupt, often consolidated industry? To show indexing as a problem. How about the giant technology space? Why don’t you use that? That’s because prices have been coming down. It’s more competitive. How about finance? Same thing. How about industry? Same thing. And so you, you go through all these hired guns retained or motivated by a higher cost active managers to take a swing at indexing. My concern is that you start to see the relentless parade of slings and arrows eventually start to have an effect. Hey, Barry. Great to speak to you. I’ve been a huge fan, I listen to all the podcasts. My question to you is, at what point does passive indexing become counter-productive ?   It is such a great value add for the average mom and pop investor. At what point do you say everybody passively investing is not a good idea. Or do you reach that point? Great, great question. I’ll give you a two-part answer. The first is over at MIT. Andrew Lo actually looked at this question to find out at what point does the lack of analysts community, research, stock picking effort, stock selection affect price discovery. And his conclusion was “Well over 90%. Once passive indexing gets over 90%, we can see a decrease in price discovery and market efficiency.” So that’s his guess — and his guess is much better than my guess. The second part is something I would borrow from George Soros, the idea of reflexivity. One of the fascinating things about markets and one of the reasons it’s so impossible to do any sort of long-term forecasting is that every print, every price, every day we get market numbers and that affects subsequent reactions of other participants in the market. So, so here we are, it’s half of mutual funds and ETFs or something like 12% or 15% of all equities, but whatever it is, think about how the dynamic around stock selection is going to change once 50, 60, 70% of the stock buyers are just blind index purchasers. One would think that of stock pickers or maybe even market timers had an edge that they could gain over the broad index. When there are fewer and fewer people competing in the stock picking world and more and more people just throwing money at the index, one would imagine that that would create an environment where stock pickers do better. That concept of there’s less competition as more and more people are buying passive. The theory is that there’ll be more opportunities, there’ll be more inefficiencies, and they’ll be easier to identify. And then what happens, all of a sudden for a couple of years, active managers are outperforming net of fees. Hey, maybe some money slides back from passive towards active and maybe that’s what stops the March upwards of ownership by passive indexing. But that’s just a guess, it’s impossible to project anything in a straight line because each day, each month, each year, the changes that take place within the market structure affect what subsequent market actors do. So I’m trying to guess two and three steps away. Okay, so is it at 70%, maybe it’s easier to pick stocks? Hey, maybe these active guys put together a run of a couple of years. Maybe they outperform enough that it attracts money back to active from passive, but really that’s just me spit-balling. Hey, maybe Andrew Lo of MIT is right. That it’s 90%. I suspect that that change in the dynamic of stock selection. It’s not like we are going to 100%; No one is going to do that again. I think human nature is such that there’s still going to be a bunch of people who think: “How hard could it be to beat the market? I think I could do this!” On your podcast you always have new interesting investment ideas each week. Assuming you agree with buying & holding, how do you consume investment information without causing damage to your portfolio? I call Masters in Business the most fun I have each week. And I’m fortunate to draw from an amazing pool of people. But its less about the specific investing idea, and more about the thought process. The how this person developed their philosophy and methodology than whether they’re buying this stock or that mutual fund or this option. When you have someone like professor Scott Galloway of NYU Stern, who’s built a number of companies successfully. The way he looks at data, the way he looks at opportunity and entrepreneurship. That’s what I want to pull out from him. Not should I be long Facebook or not? Or Richard Thaler and Danny Kahneman. These are people who can teach you about your own thinking process? Two Nobel laureates, Behavioral psychologists, and Thaler is an economist also. And so it’s less about “Give me a fish” and more about “Teach me how to think about the process of fishing.” I find the guests much less intriguing for their stock recommendation. In fact, part of the idea for how the podcast came about, I’m flying back to New York from Vancouver. I have to change planes in I think it was Chicago. And while I’m waiting for my plane, I’m in the lounge one of the financial channels is on TV and a well-known Hedge fund manager is on and the interviewer’s just asking him the worst questions: What’s your favorite stock? Where’s the Dow going to be in a year? When’s the fed going to raise rates and every question. The answer would have been stale by the time the guy walked out of the studio. And as I’m watching and I’m thinking, No! Don’t ask for a fish! Find out how he fishes. You know, who were his mentors? How did he develop his philosophy, his methodology? What books does this person read? What mistakes did they made? What advice would they give somebody going into the field today? What do they know today they wish they knew 30 years ago. And that was the approach that ultimately led to the podcast. Just frustration with how bad a lot of television interviews were. So to me, it’s never about, here’s my best idea, and here’s why you should buy it. It’s always, let me tell you how I go about thinking about. Managing risk in my portfolio. How do I allocate assets? How do I look at the world? That’s what matters? It’s the process, not the outcome. How would you suggest your children or grandchildren invest money for long-term investments? Another great question. Um, so. I I’m going to say something that I know a lot of people are going to disagree with, but you asked me to be honest, si I’m going to give you the honest truth. When you’re 20 years old, probably till the time you’re 40, you should be a hundred percent equity. 0% bonds. When you’re 36 years old, you don’t really need bonds. I would also say the bulk of that should be a portfolio of low-cost, passive global indexes. Just look at the past 20 years – Globally. EM outperform the U.S, so don’t suffer from home country bias. So you want a global portfolio and you want to rebalance it every year. And if you want to take some percentage 10, 20, 30% and make an active bet with it, Hey, this technology thing seems to be working out. Let’s put 10% of our index into the NASDAQ QQQS, or I think India is a growth nation, let’s put 5% into that and I like small cap value and there’s another 10%. I’m just making up these things off the top of my head. But you know, if you go 80, 20 Passive/Active or something like that. I think you’re fine up Until the time you’re 40, by the time you hit 40 and maybe for the decade after that I would be very comfortable adding some venture capital funds to that. Assuming you have access to the top quartile of VCs, if you are overladen with technology on the equity side, well, then you probably don’t need that. But if you’re at a point where you’re making enough money and you could throw a percentage into some venture, I think the potential upside is worth the illiquidity and the cost. I don’t really think you need to add bonds, uh, until you’re 50 years old, if you want to add some REITs and real estate trust or farmlands, or maybe even some private equity at 50. And I’m talking again, a couple of percent around the edge. It should never be the bulk of your portfolio, it should always be no more than 5, 10, 15% at most. Again, if you’re in the top decile, private equity funds. They’re fantastic. You know? All of the things that Jack Bogle hated, he was talking broadly.  Private equity’s expensive, venture capital is expensive. Hedge funds are expensive and underperforming. However, if you can get some access to the top decile of these I know a bunch of Bogleheads eyes are spinning in their heads, but if at 50 years old you have a nice nest egg put, put aside and you want to pull a little bit of your investing into some of these alternatives. Again, it’s scratching that itch. I’m okay with that. But the caveat is you have to watch your fees. I know Vanguard is talking about private equity for a 401k’s — think about how the world has changed over the past 40 years. That is actually a project that’s being worked on. I’m okay with a 50-year-old, who has a substantial money put away. Peeling a little bit off and, and if it scratches that itch and it gives them some potential upside fine, but the core investment for the bulk of your life is going to be long-term globally, diversified, passive. You know, you really don’t need bonds in your twenties and thirties, arguably not even in your forties, But if it helps you sleep at night. Okay.  Bonds, especially with current prices, are not a screaming buy and it hasn’t been for some time. That’s how I would advise, anyone who was in their teens or twenties or even thirties. To be looking out over the course of the next, you know, 75 years. Keep in mind if you’re 15 to 25 years now. The odds of you making into your nineties or beyond are much, much higher than they were 50 years ago.   Hear the rest of the interview at BogleHeads Live The post Transcript: Me on Bogleheads Live appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureJul 15th, 2022

Tchir: A Few Quick Long Weekend Thoughts

Tchir: A Few Quick Long Weekend Thoughts Authored by Peter Tchir via Academy Securities, On the bright side, it seems difficult to believe that the second half of 2022 can be as difficult as the first half was (difficult, but not impossible). “Seasonal” Flows There had been a lot of chatter that there was going to be large month-end and quarter-end rebalancing. That did not seem to materialize, and I’m not sure how many people are stuck long betting on that? I suspect the number is high, as many like to bet on start of month flows (often positive) and bet ahead of long weekends (often positive). I was surprised that both TQQQ and ARKK had outflows yesterday. Both of these funds had seen reasonable inflows and yesterday seemed like an “ideal” “buy the dip” sort of day. If investors start to capitulate from these more volatile trades, we could see more pressure on markets (I am fixated, for better of worse, on these, when looking for capitulation. I started hearing the 401k chatter yesterday. I am not sure how many people only look at their investments on a monthly or quarterly basis, especially in this type of market, where the moves are daily headlines, but if there is anyone who only looks at periodic statements, they could be in for a rude awakening. Long Duration Assets While I’m constructive on bonds (because I think the economy is decelerating faster than is being picked up in the current data, and far faster than “straight line extrapolation” models can register). Having said that, I think buyers of “long duration” assets will be much more circumspect this time around. Cash flows, barriers to entry, etc., will impact what assets catch the long duration bid. Which brings us to bitcoin. I have 3 Rules of Bitcoin. Rule #1, that “Bitcoin is smarter than me” is something I’m questioning as we see firm after firm being exposed, by, what seems to me,  to be incredibly poor risk management.  But I’m really focused on Rule #2, “There are No Rules”. Yes, one of my 3 rules is that there are no rules, but I think that is particularly important right now. Yesterday felt a bit like some sort of institution(s) who didn’t want to report bitcoin holdings on their quarterly report, got out. The overnight trading looks exactly what I’d expect if someone was trying to manipulate a market higher. Find a period of less liquidity (overnight, on quarter end), push hard to reclaim “support” levels (no purchase since late 2020, that was held, is in the money) and try and create some “buzz” around the bounce. That overnight trade is already fading, and I do not see where new adopters come into this market, at least not until it becomes clear that the risk of one firm locking access, does not spread any further. That some of the questions about stable coins get more definitive answers. When I think of “long duration” assets, I currently do not think of bitcoin, and I think it is extremely fragile here and the risk of another rapid drop from here is extremely high! Long Weekends Enjoy your long weekend and if you missed Academy’s latest Around the World, I highly recommend it for a quick catch up an a variety of important geopolitical topics! Tyler Durden Fri, 07/01/2022 - 08:30.....»»

Category: blogSource: zerohedgeJul 1st, 2022

DEFCON 2... Or Cutting Off The Nose To Spite The Face

DEFCON 2... Or Cutting Off The Nose To Spite The Face By Peter Tchir of Academy Securities I had difficulty choosing a title for today. DEFCON 2 made a lot of sense as I’m increasingly worried about the economy and the market – for this summer. On the one hand I’m so perplexed by the messaging that the Fed is prepared to trigger a recession in its fight with inflation that I can’t help but think about cutting off your nose to spite the face. I could almost see Powell starting the press conference with “this is going to hurt me more than it is going to hurt you,” which based on my experience, is rarely true. Inflation - Food To expect monetary policy to reduce food prices seems like a stretch. We all must consume some basic level of food regardless of our income level. Sure, maybe the rich eat more Kraft dinners with fancy ketchup [apologies to the Barenaked Ladies], but food consumption seems relatively inelastic. Maybe lowering the cost of fuel will help reduce the cost of food [shipping, the farmer's use of diesel, etc.], but I'm not sure that will happen quickly enough [or be impactful enough] to help the average consumer in the meantime. Many of those consumers are now facing higher costs of funding - anything from credit cards to ARMs, or any new loan that they are looking at. The supply chain disruption in primarily wheat [and other basic groins due to the Russian invasion of Ukraine] is real and is likely to lost into next year. The longer that lasts, the more stockpiles will be eroded. That is a problem not impacted much one way or the other by interest rates. The shortage of fertilizer [a topic of conversation] will admittedly be helped by reduced energy prices [if the Fed achieves that], but again, I'm not sure this provides much near-term relief, Food, which may or may not be accurately reflected in official inflation measures [when I write may or may not I mean definitely not, but don't want to sound too aggressive] is unlikely to see price declines to the point where the consumer is helped materially. While the official data may or may not be accurate, the consumers know the "real world'' costs and that is affecting their behavior, their sentiment, their outlook, and ultimately their spending, I remain extremely worried about food inflation. Inflation - Energy I'm not sure that even the "after school" specials that used to air on broadcast TV [that always had a morality message] could come up with a plot where the "hero" beats up on the "villain" for most of the show, only to realize that the "villain" has something they need, Then the "hero" reaches out to the "villain" to strike a "mutually" beneficial deal and the "villain," which is so overjoyed to become part of the "good team," immediately acquiesces to that and ignores all the previous messaging, Weirdly, it is a plot too unbelievable for a children's special, but one that "we" (collectively] seem to think will work with Iron, Venezuela, and the Saudis. I won't even touch on the "side plot" of the long-overlooked friend, eagerly waiting for o word of encouragement from the "hero" and ready to step up and deliver, finding itself being treated worse than the "villain" at a time of need. If you missed the Academv Podcast that was "dropped" (I think that's the cool term for it] on Friday, I highly recommend listening to it, General Kearney [ret,] leads the conversation, along with Rachel Washburn, Michael Rodriguez [from an ESG perspective], and me, on nuclear proliferation, the nuclear geopolitical landscape, and also, crucially important, thoughts on the future of nuclear energy, But I've digressed, as those energy issues are really more issues related to D.C. and policy rather than anything controlled by interest rates and Fed policy, But maybe after all I didn't digress that much because I don't see how Fed policy helps reduce energy prices, other than if they are "successful” in derailing the economy. Again, much like food, individuals can only tinker with their need for energy. All of this has a limited impact on overall consumption: keeping the house warmer in the summer, colder in the carpooling a winter, carpooling a bit more, being more organized on errands, convincing the bosses that WFH is good for the environment, etc. Higher energy costs are already causing the demand shrinkage from consumers and I don't see any direct way that higher rates will help reduce gas demand or prices, unless, again, the Fed is "successful" in making the economy worse by a significant margin. On the other side of the coin, higher interest rates seem likely to increase the cost of new production and storage. Any company tying up working capital or expanding production is now experiencing higher interest costs and logic dictates that they will try and pass some of those costs on or not embark on some projects due to the higher cost of funds, So, the rate hikes’ direct impact on energy prices is to probably push them higher as the production and distribution systems face higher costs. Reducing Energy Prices, aka, Hitting the Economy Hard If interest rates are going to reduce energy prices it is going to come from cratering demand for anything and everything that uses energy that can be affected by interest rates! Housing/Real Estate/Construction. I have no idea how much energy goes into building a new home, but I assume a non-trivial amount, The materials that go into constructing a building can be energy intensive [copper piping, etc,], The transportation of these materials to the building site is also expensive, We are already seeing negative data in the housing sector [new home permits are down, expectations for new home sales are declining, the Fannie Mae Home Purchase Sentiment Index is at its lowest level in a decade [except very briefly in March 2020 during the Covid lockdowns], I'm sure I could find more dato pointing to housing slowing, but maybe highlighting that the Bankrate.com 5/1 ARM national average is at 4.1% versus 2.75% at the start of the year, is sufficient, We could look at 30-year mortgages and really shock you, but I think that the 5/1 is as interesting as the rate environment because it demonstrates that there is little relief anywhere along the curve for those needing new mortgages. Autos. Annualized total U.S, auto sales [published by WARD'S automotive] have fallen recently. This measure has been "choppy" to say the least as auto sales have clearly been hit by supply issues. For many makes and models, I'm hearing the wait time is 6 months for a car where you pick the features and it is built to your specifications [which had become the "normal" way of buying cars]. So, maybe, just maybe, the sales here are still being impacted by that, but I’d have to guess that rising auto loan costs are playing a role as well. The Manheim used vehicle value index is still very high, but has stabilized of late. If that stabilization is related to higher loan costs, then it is bad for the auto industry. If it is related to new cars and trucks being more readily available, it isn't a great sign, since that means the new auto sales indications cannot be entirely explained away by supply constraints. My understanding, given the steel and other components, is a lot of energy goes into producing a new automobile. So, I guess it is "good" news that slowing auto sales [and presumably production] will curb energy demand? Consumer Purchases and Delivery, Everywhere you turn there are stories and anecdotes about consumer purchasing slowing down, CONsumer CONfidence [as discussed last weekend] is atrocious! Not only does energy go into the production of the goods that the consumer was purchasing, but with home delivery being such a feature of today's purchasing behavior, energy consumption should go down as delivery services slow down [and as they continue to become more efficient - a process spurred on by higher gas prices]. I’m not sure whether to laugh or cry. Higher interest rates will "help" reduce demand for autos, housing, and general consumer consumption, Apparently, that is good, because it reduces demand for energy and energy inflation [as well as inflation for those products]. I can see that, but I cannot help but think that we need to Be Careful What You Wish For! A Special Place in Hell for Inventories I fear that inventories were a big part of the rise in inflation and would contribute to stabilizing prices [all else being equal] and that recent rate hikes are going to turn a "normal" normalization into something far more dangerous, Manufacturing and Trade Inventories grew from 2014 until COVID at a steady pace, This seemed to correlate nicely with the growing U.S. and global economy. They dropped with supply chain issues, but were back to pre-COVID levels by last summer. Then, from late last summer until the end of April [most recent data point for this series], these inventories grew rapidly! Companies worried about supply chain issues overstocked. This could lead to much lower future orders. Companies shifting to "just in case" from "just in time" need higher inventories, so that part would be stable, but costs of carrying inventory have increased, Maybe companies used straight line extrapolation to accumulate inventory to meet expected consumer demand. That is bad for inventories if the demand isn't materializing! It is extra bad if consumers pulled forward demand in response to their supply chain concerns, meaning that any simplistic estimate of future demand [always problematic, though easy] is even further off the mark as the extrapolation was based on a faulty premise [which is not thinking consumers responded to supply chain issues]. We may have an inventory overhang in the economy. While inventories are significantly higher than pre-COVID levels, the number of people working has still not returned to pre-COVID levels, Yeah, I get that it is far easier to "spend now, pay later" than it used to be through a variety of fintech solutions [ignoring rising interest costs] and that the "wealth effect" and "gambling" culture allows for more spending per job [or maybe it did a few months ago, but not now?] Maybe I'm just a stick in the mud, but... When I look at this chart, I see the correlation between total number of people working and inventory has been completely dislocated! [It also makes me question some of the supply chain issues we allegedly have]. Again, this potential inventory overhang is "amazing" if you want to slow orders and "fix" inflation by having to work off excess inventory rather than adding more. Apologies, if you're tired of reading my snarky comments about things being "good" for inflation fighting. I'm tired of writing them, but cannot think of what else to do. But the Economy is So Resilient? More on this later,,. The "Disruptive Portfolio" Wealth Destruction We have examined the concept of Disruptive Portfolio Construction and continue to think that this is playing a major role in how markets are trading, but increasingly this creates a potential shock to the economy, Let's start with crypto, Bitcoin briefly dropped below $19,000 Saturday morning. I have no idea where it will be by the time you are reading this, but I am targeting $10,000 or less for bitcoin within a month or so. First the "altcoins" [some of which are derisively referred to as "sh*t-coins"] are a complete mess. Solana is down 88% from its November 2021 highs and is roughly back to where it "debuted" in June 2012. Dogecoin, which I think was originally created as a joke, but rose to 70 cents [I think the weekend of Elon Musk's Saturday Night Live appearance] is back to 5 cents, which I guess is still good for something that was originally created as a joke. Ethereum, a "smart contract" that has some use cases very different than bitcoin and was often talked about as a superior product, is down 80% from its November 2021 highs. Under the Bloomberg CRYP page there are 25 things listed as "Crypto Assets". Maybe if I looked at each one I'd find some with a different story, but somehow, I doubt it. Okay, I lied, I couldn't resist, I had never heard of Polkadot, but it looks like it was launched in April 2021 at $40, declined to $11, rallied to $54 in November 2021, and is now down to $7 [at least the name is still cute]. But bitcoin is the story I’m looking at because it is the biggest and the one that seems to have the most direct ties to the broader market. Crypto, to me, is often about adoption. It was why I got bullish a couple of years ago and caught at least part of the wave. Back then, every day some new, easier, better way to own crypto was being announced. Companies and famous billionaires were putting it on their corporate balance sheets. FOMO was everywhere with people racing to put ever higher targets on its future price and those who didn't have anyone to jump on to the bandwagon with were hiring people who could put on an ever-higher price target with a straight face. That ended a while ago and we are in the "disadoption" phase [spellcheck says disadoption isn't a word, but I'm sticking with it]. Or as I wrote the other day, which the FT picked up on, we have moved from FOMO [Fear Of Missing Out] to FOHO [Fear of Holding On]. Even more concerning is a world where HODLING [originally either a mistype of HOLDING that gained traction or short for Holding On for Dear Life] is more prevalent and many people are now unable to exit their positions even if they wanted to. There are some serious "plumbing" issues right now in the crypto space. Maybe the decentralized nature of crypto will work and be extremely resilient [I cannot fully discount that possibility] but maybe, just maybe, there is a reason banks and exchanges have regulators who enforce rules to protect everyone [yes, I can already see the flame mail accusing me of FUD and not understanding how self-regulating is better, etc, but then all I do is spend about 10 minutes looking at some of the shills out there and fall back to thinking "adult supervision" might be wise]. Stablecoins. Stablecoins are what I would call a "thunk" layer in programming language, It is an intermediate layer between two things, in this case, cryptocurrencies and fiat, Terra/LUNA got wiped out, but it was an "algo" based stablecoin which many, in hindsight, say was a flawed design [clearly it was], but that didn't stop it from growing to $20 billion with some big-name investors engaged. Tether is the one garnering a lot of attention now. It is still the largest stablecoin and it did survive on "attack" of sorts after the Terra/LUNA fiasco. The issue with Tether is that it purports to be fully backed by "safe" assets, yet will not produce audited financials. The disarray in stablecoins should at the very least slow adoption. Freezing Accounts. Celsius blocked withdrawals 5 days ago and as of the time I'm typing this, it was still frozen. Babel Finance announced Friday that it would stop withdrawals. I found this one particularly interesting, as in May, according to news reports, it raised $80 million in a Series B financing, valuing it at $2 billion. Maybe needing to suspend withdrawals isn't a big issue, or maybe it is a sign of how rapidly things can change in the space? Right now, I’d be more worried about extracting value from the system rather than adding to the system. Yes, these are isolated cases [so far] and there are some big players in the space which presumably are not at risk of such an event, but having lived through WorldCom and Enron, and then the mortgage fiasco of 2008, I'm heavily skewed to believing that the piping issues will spread and get worse before they get better. Industry Layoffs. In a rapidly evolving industry, one with so much potential, it makes me nervous how quickly we are seeing layoffs announced publicly or finding out about them privately. Maybe I'm cynical, but to me that signals that the insiders aren't seeing adoption increase, which for anything as momentum dependent as crypto has been, seems like a signal for more pain. The big question is how many of the "whales" and big "hodlers" will buy here to stabilize their existing holdings or whether some level of risk management is deemed prudent. You cannot go more than two minutes talking to a true believer without "generational wealth" being mentioned [trust me, I've tried]. At what point does wanting to stay really rich become the goal rather than trying for generational wealth, even if it means converting back ("cringe") to something as miserable as fiat? I expect more wealth destruction in crypto and that will hurt the economy! The wealth itself is gone, curbing spending [I'm already noticing how much I miss the Lambo photos all over social media]. The jobs are now disappearing, curbing spending. The advertising will likely slow down [though not having to watch Matt Damon or LeBron wax on about crypto might be a good thing for our sanity]. But seriously, ad dollars from this lucrative source [I'm assuming it's lucrative given how often ads appear in my social stream, during major sporting events, and even in an arena [or two] could be drying up just as retailers are also struggling. It seems that every week there is a conference somewhere dedicated to crypto [with Miami and Austin seemingly becoming a non-stop crypto conference/party]. This could turn out to hurt many companies and even some cities, Semiconductor purchases could decline. Mining rigs have been a big user of semiconductors, All you have to do is pull up a chart of bitcoin versus some select semi-conductor manufacturers and the correlation is obvious, Energy usage could decline. If mining slows [as a function of lower prices and less activity] then we might see less energy used by the crypto mining industry [the public miners are in some cases down almost 90% from their November 2021 highs, presumably because the industry is less profitable]. Ultimately this could reduce energy prices and semiconductor prices/backlogs, which would generally be good for the broader economy and would help the Fed on their inflation fight, but could hurt some individual firms that rely on this industry. My outlook for crypto is that we have more downside in sight and that will hurt broader markets and might do far more damage to the economy than many of the crypto haters realize. It is fine to dislike crypto, but it is naïve not to realize how much wealth was there helping spending and how impactful a slowdown on this industry could be! Which brings me briefly to "disruptive" stocks. The wealth created by these companies was simply astounding, Whether remaining in the hands of private equity or coming public through IPOs or via a SPAC, there was incredible wealth generated, Investors were rewarded, but so were the founders, sponsors, and employees! There was great wealth created as these innovators and disruptors [along with a mix of more traditional companies] were rewarded. I am extremely concerned about the employee wealth lost. I cannot imagine the personal wealth destruction that has occurred for many, especially mid-level to mildly senior employees. Just enough of a taste of the equity exposure to do well.  Many have restrictions so have not exited and many had options, not all of which were struck at zero, so they may be back to zero, That wealth lost has to translate into lower economic activity, especially as the losses seem more persistent than they might have been a few months ago! But investors have also been hit hard, and possibly harder than most people factor in. I will use ARKK here to illustrate an important point and why a subset of investors is in far more financial difficulty than might be apparent [assuming "traditional" portfolio construction]. ARKK, not accounting for dividends, is back to where it traded in the aftermath of the COVID shutdowns in March 2020. The number of shares outstanding have almost tripled since then. Yes, the number of shares traded daily is large and they frequently change hands, but on average, this shows that some large number of shares were issued as the fund price rallied. Many of those investors [on average] were originally reworded, but now, on average, those shares are somewhere between small losses and serious carnage. ARKK is down to $7.7 billion in AUM as of Friday from a peak of $28 billion in March 2021. The bulk of that change in market cap can be attributed to performance as shares outstanding are still near their peak. I highlight ARKK because I don't feel like talking about individual companies, the portfolio has changed so much, the performance is more generic than company specific, and ETFs are often just the observable "tip of the iceberg" of major trends that are more difficult to observe, but are still happening, TQQQ, the triple leveraged QQQ, exhibits a similar pattern and all the gambling stocks are doing poorly, which I attribute to incredible wealth destruction for a subset of investors, The three groups that I believe were most hurt are: Relatively young people, who took a very aggressive approach to trading/gambling [with relatively small amounts of money] that they can make back via their job earnings over time [or they might now need a job if they were living off of the trading/gambling money]. I don't see a material economic impact from this group, It may even encourage workforce participation, Aggressive disruptive investors. Many people went all-in on some version of a disruptive portfolio [I didn't even bring up those who treated mega-tech stocks as a bank account with dividends and upside], There could be some serious wealth lost here that will affect the economy [and is likely already affecting the economy], Employees, some of whom also adopted disruptive portfolios. As the likelihood of a near-term rebound recedes, there will be wealth preservation as a focus. The number of IPOs and SPACs that are not just below their all-time highs, but below their launch prices, is scary, and that really hurts the employees, or at least those who couldn't sell, didn't sell, or sold, but diversified into a disruptive portfolio. This is all deflationary (which I’m told is a good thing] but I cannot see how this is a good thing for the economy or broader markets! But the Economy is So Resilient? I challenge this. If we have an inventory overhang, the economy may grind to a halt far quicker than many are expecting. If banks start tightening lending practices [clear evidence this is occurring and will likely get worse than better] we will see credit contraction and that will feed into the economy, rapidly. We have NEVER gone from low rates and QE to higher rates and QT successfully [we haven't had many attempts, but I remain convinced that QE is very different than rate cuts and that it affects asset prices quite directly - see Stop Trying to Translate Balance Sheet to BPS. The wealth effect must be bad overall and devastating to some segments. My view is that: Things definitely hit faster than people realized. Often the inflection point has already occurred while many are still applying straight line extrapolation to what they perceive to be the still “existing" trend. "Gumming" up the piping often leads to more problems, rather than a quick solution [and I completely believe the current high levels of volatility in markets and lack of depth in liquidity is a form of gumming up the pipes]. If the problem hits the financial sector it is too late (unless immediate/strong support from central banks is provided). So far, the banking sector is looking good, though Europe is lagging the U.S, in that respect. The ECB came up with half-hearted efforts to reduce Italian bond yields relative to others. The JGB stuck to their yield curve targeting, but markets will soon just expect that to get reversed at their next meeting. Finally, the Fed, unlike in March 2020, will have difficulty reversing course and helping. The good news is so far this isn’t hitting the banking system, but I am watching this sector closely, especially in Europe. Risk happens fast! It's a phrase often said, but often ignored. I'm not ignoring it right now. Commodity Wars? This is a bigger question, and one that is coming up more frequently, but have we entered into a global "war" to secure natural resources? I think that, increasingly, this is the reality we live in and that will be inflationary, just like reshoring, onshoring, securing supply chains, and “transforming“ energy production/ distribution, etc., will all be inflationary longer-term as well, But I've taken up too much space already today and that isn’t a question that needs to be answered to drive my current thinking, Bottom Line I am including what I wrote last week because it largely worked and my views haven't materially changed, I added some color and exactness on the views while definitely shifting from DEFCON 3 to DEFC0N2. I want to own Treasuries here at the wide end of the range, but for the first time, I'm scared that we could break out of this range (big problem]. The 10-year finished almost unchanged on the week, going from 3.16% last Friday to close at 3.23% (it did gap to 3.48% on Tuesday]. The swings in the 2-year were even more "insane" given the level and maturity. So, as recession talk heats up, yields should go down, but I’d spend a bit of option premium protecting against a rapid gap to higher yields. Credit spreads should outperform equities here, though both may be weak, (Verbatim from last week]. Equities could be hit by the double whammy of earnings concerns and multiple reduction. I am told there is a lot of support, but I think that we see new lows this week unless central banks change their tune, which seems incredibly unlikely). I still find it mind boggling that we prefer recession to inflation. Crypto should remain under pressure. I think bitcoin will be sub $20k< before it reaches $35k. Now I think it will be $12,000 before $24,000. Have a great Father's Day and enjoy the Juneteenth long weekend! (Though, I have to admit, I kind of wish markets were open on Monday because this is the trading environment that deep down, I have to admit, I enjoy!] Tyler Durden Tue, 06/21/2022 - 07:20.....»»

Category: dealsSource: nytJun 21st, 2022

Shark Tank"s Kevin O"Leary explains why he"s buying the dip in bitcoin and ether &mdash; and says the collapse of risky tokens will help the crypto market in the long run

In an exclusive interview with Insider, O'Leary explained how he's investing in crypto amid the downturn, and what he expects to happen next. Kevin O'Leary.Kevin O'Leary In an exclusive interview with Insider, Kevin O'Leary broke down how he's approaching the crypto bear market.  The "Shark Tank" investor said the market correction hasn't yet seen a defining moment.  He also explained how he's betting on the "best intellectual capital in the world." "Shark Tank" investor Kevin O'Leary — otherwise known as Mr. Wonderful — isn't sweating the cryptocurrency bear market. If anything, he thinks it will end up propping up the whole crypto sector in the long run. The venture capitalist explained that he's been doubling down on tokens, including bitcoin and ether, as well as various Web3 projects even though he acknowledges that not every investment will be a winning bet. "I'm not selling anything," O'Leary told Insider. "Long term you just have to stomach it. You have to understand you'll get volatility, and that some projects aren't going to work."His portfolio reflects his bullishness for blockchain technologies more broadly. He currently holds 32 positions in the digital asset space, including solana and blockchain firm Polygon. Meanwhile, the O'Leary-backed WonderFi just became the first crypto-trading platform to be featured on the Toronto Stock Exchange. But as the crypto bear market has slammed valuations, digital assets now make up 16% of his holdings, down from 20% six months ago, he said.Still, his long-term view is that blockchain has economic value. During an interview with Insider in April, he said investing in cryptocurrencies is like investing in software.The future of the crypto sectorO'Leary noted that recent crypto collapses, such as that of stablecoin Terra and sister token Luna, are events that teach investors caution, and can actually help further the technology underpinning digital assets. "Luna raised 30-plus billion [dollars]," he said. "No one's going to use their idea again. [The collapse] educated everybody that this isn't the way to build a stablecoin. It's important for the education and the maturation of the market."In the context of global financial markets, he added, the collapse of a token won't change the status quo, even when tens of billions of dollars disappear from the market and some investors lose money. But the lessons are sound. "It's nothing, a rounding error in the context of a sovereign wealth. It's bad for investors, but they've educated the market on what not to do. It's a good thing," he said.The smaller projects that fail will help strengthen the market, and the projects that flounder may eventually be regulated out of existence, O'Leary said. Such collapses can also help indicate when the crypto sell-off hits bottom, as a "defining capitulation" will signal the start of a rebound, he said. Ultimately, the veteran investor isn't just betting on crypto or the blockchain, but the human resources that he sees piling into the sector. "Look at an MIT graduating class of engineers," O'Leary said. "The smartest people want to work on the [block]chain. So you've got the majority of the best intellectual capital in the world solving poor outcomes on the chain — why wouldn't you expect that to work?"Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 18th, 2022

Stocks Stage Feeble Attempt At Dead Cat Bounce After Losing $1.3 Trillion In One Day

Stocks Stage Feeble Attempt At Dead Cat Bounce After Losing $1.3 Trillion In One Day US index futures staged a feeble, fading attempt to bounce on Tuesday, following Monday's crash that wiped out $1.3 trillion in market cap and topped a furious 4-day selloff that was the worst since March 2020 and culminated in a bear market amid expectations - even from permabull Goldman - that the Fed's now accepted 75bps rate hike on Wednesday will hurl the economy into a recession. Futures on the S&P 500 rebounded more than 1% in early trading before fading the gain to just 0.24%, while Nasdaq 100 futures climbed 0.5%. US stocks plunged on Monday to the lowest level since January 2021 and closed more than 20% below its January record high, triggering Joe Biden first official bear market. Global equities sold off after an unexpectedly strong reading Friday on US inflation sparked concern that the Fed will go too far in raising interest rates to tame soaring prices. Bond yields dipped after soaring to a peak last seen in 2011. The yield curve remained flat, however, underscoring worries about an economic downturn sparked by tighter monetary policy, with the 2s10s curve just 1bps away from inverting again.  Cryptocurrencies, meanwhile, plunged with bitcoin puking more than 10% to below $21,000 before paring much of the slide as dip buyers emerged. UBS said most long-term owners are now in the red and warned of more losses if coin miners buckle under the pressure and start selling. The dollar was steady near a two-year high. In Japan, the central bank boosted bond-purchase operations to keep yields in check. The yen hovered near a 24-year low against the greenback. “We remain bearish on equity outlook,” said Marija Veitmane, a senior strategist at State Street Global Markets. “Inflation is still a huge problem and central banks need to be very aggressive to fight it. This is a very negative outlook for stocks, so we would be sellers of any rally.” Among notable premarket movers, shares of megacap tech companies like Apple, Microsoft, Alphabet, Tesla and Meta Platforms were slightly higher and poised to recoup some of the losses from Monday: Apple (AAPL US) +1.4%, Amazon (AMZN US) +1.7%, Alphabet (GOOGL US) +1.5%, Meta Platforms (META US) +1.9% and Nvidia (NVDA US) +1.8% in premarket trading. Oracle shares rose 13% in premarket trading after the software company reported higher-than-expected fourth-quarter results. Here are the most notable premarket movers: AMC Entertainment (AMC US) shares rise as much as 3.7% in US premarket trading, in line with a broader rebound in risk assets, and after the movie theater operator said that last weekend’s admission revenues beat that of the same weekend of 2019. Adobe (ADBE US) slides 4.2% in premarket trading as Citi cut its price target on the company to $425, the lowest on Wall Street, citing weaker consumer spending and potentially rising competition. US-listed Chinese stocks post broad-based gains in premarket trading, on track to rebound from a three-day drop, as sentiment toward tech stabilizes: Alibaba (BABA US) shares rise 3.8%, Baidu (BIDU US) +4%, Pinduoduo (PDD US) +4.2%, JD.com (JD US) +3.2% and Li Auto (LI US) +6.1% Braze (BRZE US) shares jump 8% in premarket trading after the company’s first-quarter revenue beat estimates, and full-year guidance also topped expectations. Arista (ANET US) shares decline 4.1% in US premarket trading as Morgan Stanley says in a note that the company, as well as Wiwynn and memory stocks such as SK Hynix and Micron (MU US) are among those most at risk in the semiconductor and networking equipment space when tech firms cut spending on data centers. Kaival Brands (KAVL US) shares surge as much as 57% in US premarket trading, after the vaping products distributor reached deal with Philip Morris to distribute electronic nicotine delivery systems products outside of the US. Outset Medical (OM US) shares fall 4.6% in premarket trading as their price target was cut to a Street-low at Cowen, after the medical technology firm halted shipments on its Tablo Hemodialysis System for home use. The company also suspended guidance for the year. US Silica (SLCA US) shares may be in focus after they were upgraded to outperform from inline at Evercore ISI following the conclusion of the industrial minerals firm’s review of its Industrial & Specialty Products (ISP) segment. With just two weeks left until the end of Q2, a dismal picture emerges: this quarter is set to deliver the biggest combined loss for global bonds and stocks on record, according to Bloomberg. The highest inflation in a generation, stoked by supply-chain and commodity-market disruptions amid China’s Covid struggles and the war in Ukraine, is roiling the outlook. According to Bloomberg,  the big question is whether the Fed and other major central banks will tip their economies into recession as they tighten financial conditions. We disagree: a recession is now assured; the real big question is how sparking a recession in the US will force Putin to pump more gas. European gains were shorter-lived: Euro Stoxx 50 reverses a 1.1% bounce to trade down 0.2%, extending its decline to a sixth day, on track for the longest losing streak since the start of the pandemic and the lowest closing level in 15 months. Retail, media and travel are the weakest Stoxx 600 sectors with broad-based sectoral gains fading as the session progresses. Bonds in most of Europe edged lower, but gilts bucked the trend after data showed spending power of UK households plunged as inflation eroded wage increases. Here are the biggest European movers: Fortum shares rose as much as 9.5%, while Uniper gained 6.1% as Finland is prepared to give Fortum time to sell its Russian power plants and follow other western energy companies out of Russia. Rates-sensitive banking stocks in Europe outperform Tuesday as Treasury yields drop following four consecutive days of increases that lifted the 10-year to the highest level since 2011. HSBC shares gain as much as 3.2%, Standard Chartered +3.2%, Nordea Bank +2.7%, ING +2.8% Wizz Air shares rise as much as 6.2% after Berenberg upgraded the airline to buy from hold, citing the long-term potential of its business, despite numerous recent challenges. Go-Ahead rises as much as 15% amid a potential bidding war. The company accepted a £648m takeover bid from an investor group backed by Australian rival Kinetic, while Kelsian is assessing whether to make offer. Saipem gains as much as 8.5% after five sessions of declines; the company and Trevi signed memorandum of understanding for foundation drilling solutions and services for offshore wind farm projects. Atos shares plunge as much as 27% after the company announced the departure of newly arrived CEO Rodolphe Belmer and a separation into two publicly listed companies. Akzo Nobel shares decline as much as 6.1% after the company reduced 2Q forecasts due to China lockdowns and slower start to EMEA DIY season. Air France-KLM shares fall as much as 13% after the company raised EU2.3b in a deeply discounted rights offering to help repay state aid received during the pandemic. Earlier in the session, Asian stock market indexes hit bleak milestones in quick succession on Tuesday as investor concerns worsened that aggressive interest rate increases in the US could erode corporate earnings. The MSCI Asia Pacific Index dropped as much as 2% to its lowest level in a month after the world equities gauge entered a bear market overnight before paring losses. New Zealand’s stock index extended its decline to 20% from a peak reached last year, entering a bear market, while Singapore’s measure wiped out its gains for 2022. Traders are betting that the Fed will deliver a 75-basis-point rate increase in this week’s meeting -- the biggest since 1994 -- after US inflation hit a four-decade high in May. This is further muddying the economic outlook at a time supply chains are snarled, weighing on the valuation and profit estimates for the MSCI Asia index, which has lost 17% this year. “Bets are off for all asset classes as investors brace themselves for tough action from the Fed to counter higher-than-expected inflation,” said Justin Tang, head of Asian research at United First Partners in Singapore. “The renewed lockdowns in China are also not going to be helpful.” Central banks from South Korea and Australia to India have been raising rates in response to accelerating inflation, with the latter two announcing 50-basis-point increases in their latest decisions. China’s persistent zero-Covid strategy is another factor disproportionately affecting companies in Asia. Singapore’s Straits Times Index is near a correction, down 9.7% from an April high, while Australia’s S&P/ASX 200 Index has dropped 12% over a similar period. Elsewhere, the MSCI Asean Index is inching closer to a 20% drop from a peak reached in January 2021, while South Korea’s Kospi remains mired in a bear market.  Still, investors have identified some potential areas of outperformance, as Asia’s stock measure has held up better than global peers as it continues to trade at a lower forward price-to-earnings ratio. And while China has walked back on loosening some Covid-19 restrictions in Beijing and Shanghai, traders see the country’s fiscal and monetary easing stance giving its beleaguered stocks a further boost.  “China might outperform global equities, as it did in May and early June,” if consumption resumes in the coming months after a relaxation in lockdowns, said Herald van der Linde, head of APAC equity strategy at HSBC Holdings Plc. Meanwhile, commodity-exporting Southeast Asian countries such as Indonesia, which are also benefiting from border reopenings, are expected to continue to shine. The Jakarta Composite Index rose on Tuesday, taking its advance to 7.1% this year. India was no exception to the global rout, and stock gauges fell to their lowest levels in 11-months as inflation and interest-rate concerns continued to fuel selloffs across global equity markets.  The S&P BSE Sensex fell 0.3% to 52,693.57 in Mumbai after rising as much as 0.5% during the session. The NSE Nifty 50 Index dropped by an similar measure to its lowest since July 28. Both benchmarks have dropped more than 14% from October peaks. Foreign institutional investors have taken out $24.2 billion from local stocks this year through June 10, and the selloff is headed for its ninth consecutive month. However, the key indexes have still outperformed Asia Pacific and emerging-market peers this year, helped by net $26.4 billion of stock purchases by domestic investors, which include mutual funds and insurance companies. Consumer-price inflation in India has stayed above the central bank’s target in May while wholesale prices accelerated for a third-straight month as input costs continue to rise for manufacturers. “High inflationary environment, fresh curbs in China and rising crude oil prices are likely to keep the markets under pressure for a while,” Motilal Oswal analyst Siddhartha Khemka wrote in a note.  Reliance Industries contributed the most to the Sensex’s decline, decreasing 1.3%. Among the 30 shares in the Sensex Index, 15 rose, 14 fell and one was unchanged. In FX, the Bloomberg Dollar Spot Index fell as the greenback weakened against most of its Group-of-10 peers.  The euro rose from a one-month low against the dollar but still failed to retrace the recent plunge in a meaningful way. German June ZEW expectations came in at -28.0 versus estimate -26.8. Norway’s krone slumped to a fresh 4-week low against the euro after Norges Bank’s regional network report showed businesses were expecting growth to slow. Sweden’s krona got a temporary boost after inflation figures for May came in higher than the median estimate in a Bloomberg survey. A Riksbank survey showed businesses, which are seeing sharp cost increases, are concerned that the coming wage bargaining rounds will lead to higher salary costs than in previous collective agreements. The Swiss franc led G-10 gains as it pared most of yesterday’s drop against the dollar. The pound edged up from a two-year low against the dollar. Sterling remained on the back foot after UK labour market data showed limited further tightening in the jobs market, suggesting that the BOE may raise interest rates by 25bps this week, rather than 50bps. Australian sovereign bonds plunged in catch-up to a two-day rout in Treasuries as the specter of a 75bps Fed hike on Wednesday loomed large. Aussie steadied following a bounce in US stock futures. USD/JPY consolidated. The Bank of Japan ramped up the defense of its policy framework after yields came under renewed upward pressure, unveiling a further set of unscheduled buying operations, including purchases of much longer maturities In rates, treasuries bull steepened with front-end yields richer by 8.5bp on the day into US morning session. S&P futures slightly higher, although remain near Monday session lows as investors continue to position ahead of Wednesday’s Fed decision. Swaps market prices in just under 200bp of rate hikes over the next three meetings with 70bp priced into Wednesday’s decision. Three-month Libor fix jumps over 17bp. US yields richer by 8.5bp to 5bp across the curve with front-end led gains steepening 2s10s, 5s30s spreads by 2.1bp and 1.5bp; 10-year yields around 3.30% and outperforming bunds by 7bp on the day. IG dollar issuance slate; projections for the session remain murky amid markets turmoil and after a number of deals were put on ice Monday. Gilts put in a ~6bps parallel richening move across the curve. Bunds buck the trend, bear-steepening ahead of scheduled comments from ECB’s Schnabel on euro-area bond market fragmentation due later. In commodities, oil held above $120 a barrel as investors evaluated a tight supply outlook and the impact of China’s eventual return from virus curbs. WTI adds 0.7% to trade near $121.71, Brent holds above $123. Spot gold trades a narrow range, fading after hitting $1,830/oz. Base metals are mixed; LME tin falls 5.1% while LME zinc gains 0.3%. To the day ahead now. The ECB’s Schnabel speaks, while in data we get UK jobless claims, ILO unemployment rate, ZEW surveys for the Eurozone and Germany, US NFIB small business optimism and PPI, and Canadian manufacturing sales. Hold on to your hats. Market Snapshot S&P 500 futures up 1.1% to 3,790.50 STOXX Europe 600 up 0.1% to 413.07 MXAP down 0.9% to 159.98 MXAPJ down 0.6% to 529.25 Nikkei down 1.3% to 26,629.86 Topix down 1.2% to 1,878.45 Hang Seng Index little changed at 21,067.99 Shanghai Composite up 1.0% to 3,288.91 Sensex down 0.2% to 52,743.72 Australia S&P/ASX 200 down 3.5% to 6,686.03 Kospi down 0.5% to 2,492.97 Brent Futures up 0.7% to $123.15/bbl Gold spot up 0.6% to $1,829.72 U.S. Dollar Index down 0.34% to 104.72 German 10Y yield little changed at 1.62% Euro up 0.6% to $1.0473 Brent Futures up 0.7% to $123.17/bbl Top Overnight News from Bloomberg The latest jumps in consumer prices and inflation expectations will probably spur Federal Reserve officials to consider the biggest interest-rate increase since 1994 when they meet this week, after Chair Jerome Powell previously signaled a smaller move was the likely outcome JPMorgan Chase & Co. and Goldman Sachs Group Inc. are withdrawing from handling trades of Russian debt after the Biden administration’s surprise announcement last week it’s banning US investors from scooping up such assets As the BOJ escalates attempts to keep a lid on bond yields, BlueBay is betting the central bank will be forced to abandon a policy that’s increasingly out of sync with global peers. The BOJ’s so- called yield curve control is “untenable,” according to Mark Dowding, BlueBay’s London-based chief investment officer Investor fears of stagflation are at the highest since the 2008 financial crisis, while global growth optimism has sunk to a record low, according to Bank of America Corp.’s monthly fund manager survey A more detailed look at global markets courtesy of Newsquawk Asia-Pacific stocks were pressured following the global stock and bond slump as the aftershock from recent hot US inflation reverberated across risk assets and spurred further expectations for a 75bps Fed rate hike this week. ASX 200 was the worst performer as the losses caught up to the index on return from the extended weekend and with the declines led by underperformance in tech and metals. Nikkei 225 extended its declines despite the BoJ’s efforts to cap yields and with the recent rapid currency moves adding to the uncertainty. Hang Seng and Shanghai Comp. were negative as lockdown concerns lingered with China’s Vice Premier Sun suggesting it is necessary to strengthen COVID-19 prevention and control of key places, while Shanghai's Minhang district plans to conduct mass testing on Saturday. Top Asian News Shanghai's Minhang district is planning mass COVID-19 testing on Saturday, according to Bloomberg. BoJ announced additional bond purchases for Wednesday in which it will increase purchases of JGBs across several maturities, while it will continue to conduct additional buying as needed, according to Reuters. European bourses began on the front-foot but quickly slipped into negative territory, Euro Stoxx 50 -0.8%; since the post-open dip, price action has steadily deteriorated further. However, while US futures are directionally in-fitting they remain in positive territory, ES +0.3%; albeit, well of highs and the ES resides around 3760 currently awaiting Fed clarity amid increasing speculation for 75bp. Oracle Corp (ORCL) Q4 2022 (USD): Adj. EPS 1.54 (exp. 1.37), Revenue 11.8bln (exp. 11.66bln). Cloud License And On-Premise License: 2.54bln (exp. 2.19bln). Cloud Services And Licenses Support: 7.6bln (exp. 7.77bln). Total Hardware Revenues: 856mln (exp. 857.71mln). Total Services Revenues: 833mln (exp. 847.89mln). Added USD 15.8bln after Cerner acquisition and it expects cloud business to grow by over 30% in FY23; Co. expects Q1 rev. including Cerner to grow 17%-19%. (PR Newswire) +12% in the pre-market. German cartel office has commenced proceedings against Apple (AAPL) re. tracking regulations for 3rd party apps, via Reuters. Top European News The EU is set to launch three separate lawsuits against the British government after it published its plans to override the protocol, according to the Telegraph. One option would reportedly see the EU end financial equivalence for the City of London. US urged the UK and EU to return to talks to resolve differences over the Northern Ireland Protocol and said it remains a priority to protect gains of the Good Friday Agreement. White House said proposed changes to N. Ireland Protocol won't be an impediment to potential US-UK trade deal or trade dialogue talks in Boston, according to Reuters. UK PM Johnson is not looking to lower household taxes until inflation is brought under control, as such action is unlikely before next year, according to the Telegraph. FX Dollar consolidates after Monday’s melt up to new multi year peaks as clock ticks down to FOMC and US PPI data; DXY hovers around 105.00 and just shy of new 105.290 YTD high. Franc outperforms following suspension of trade in Russia against Rouble and Greenback; Usd/Chf probes 0.9000 to downside after pulling up only pips short of parity yesterday. Euro rebounds amidst more hawkish commentary from ECB’s Knot and irrespective of German ZEW survey misses; EUR/USD back above 1.0400 and decent option expiries between 1.0420-15. Aussie undermined by waning risk appetite and ongoing covid outbreaks in China, but underpinned by RBA Governor Lowe underlining determination to get inflation back to target, AUD/USD towards lower end of 0.6970-18 range. Pound fades after brief upturn in bigger than expected rise in UK employment as other labour market metrics fall short of expectations and EU rift over NI protocol persists; Cable on the cusp of 1.2100 after fleeting breach of round above, EUR/GBP crosses 0.8600 to set fresh 2 month apex. Fixed Income Recovery in EZ debt derailed by supply and hawkish remarks from ECB's Knot as Bunds retreat to 145.00 within a 145.58-144.51 range Gilts and 10 year T-note hold up better between 112.97-29 and 116-03/115-01+ parameters in consolidation after Monday's rout and ahead of US PPI data ** BTP/Bund** spread blows out beyond 250 bp in advance of ECB's Schnabel on fragmentation in bond markets Commodities WTI and Brent are firmer by circa. USD 1.0/bbl at present and reside towards the mid-point of a USD ~2.00/bbl range with specific newsflow thin and broader developments on familiar themes. Themes which include China COVID and travel demand, for instance; but, factors which are overshadowed by broader anticipation going into Wednesday's FOMC. US and Saudi Arabia will announce on Tuesday that US President Biden will visit Saudi Arabia on July 15th and 16th, according to NBC's Pegram citing sources. China's state planner is to increase retail prices of gasoline and diesel by CNY 390/tonne and CNY 375/tonne respectively as of June 15th, via NDRC. Spot gold is essentially unchanged on the session around USD 1820/oz after falling below the 10-, 21- & 200-DMAs yesterday; Copper softer amid broader risk. US Event Calendar 08:30: May PPI Final Demand MoM, est. 0.8%, prior 0.5%; YoY, est. 10.9%, prior 11.0% 08:30: May PPI Ex Food and Energy MoM, est. 0.6%, prior 0.4%; YoY, est. 8.6%, prior 8.8% 08:30: May PPI Final Demand DB's Jim Reid concludes the overnight wrap Where do we start this morning after as action packed a 24 hours as I can remember. The global equity and bond sell-off would have been bad anyway but the late US session headlines from a WSJ article (written by a journalist close to the Fed) that suggested the FOMC may need to surprise with a +75bp hike tomorrow was the last straw. Before we delve into the article and more detail on markets let’s take a one para overview of all the main market highlights. To start with, 2yr USTs capped their largest two-day move (+54.3bps, +29.1bps yesterday), since the week following Lehman’s collapse, while 10yr Treasuries have risen +31.8bps over the last two days (+20.4bps yesterday), the largest such move since December 2010, bringing the 10yr to 3.36%, the highest since 2011. Meanwhile, the 2s10s yield curve swung around violently before closing in inverted territory (-0.3bps) again for the first time since the first days of April and for only the 15th day out of the 3907 business days since May 2007. The historic moves didn’t end with the Treasury market, as Italian 10yr BTP yields (+26.2bps) crossed 4.0% for the first time since 2014, the crossover index widened +32.3bps to 534bps, its widest level since 2012 outside of peak initial Covid widening, Bitcoin fell -15.13% to its lowest since late 2020 and is down another -5.23% this morning, the S&P 500 (-3.88%) finally entered bear market territory (-21.8% from its YTD peaks), while the dollar index surged to its highest level since 2002. So quite a ride although as we'll see below risk is doing a bit better this morning with yields relatively flat. Going through things in more detail, the Treasury market has been at the epicentre of this sell-off after the shocking CPI from last Friday. Yields were drifting higher all day as some on the Street officially updated their call for +75bp on Wednesday and openly considered whether the Fed will need a +100bp hike. The WSJ report then later threw gasoline on the already raging fire, noting the Fed was indeed “considering surprising markets with a larger-than expected” +75bp hike as early as this week given Friday’s alarming CPI and inflation expectations data. All-in, Fed funds futures moved to price in a 94% chance of a +75bp hike on Wednesday. So a +75bp hike on Wednesday won’t come as a surprise anymore. At the end of the day, 2yr yields gained +29.1bps yesterday and +25.2bps Friday, bringing the rate to 3.35%. The 2s10s yield curve inverted, closing the day at -0.3bps, as 10yr yields climbed +11.4bps Friday and +20.4bps yesterday, bringing rates to 3.36%, their highest level since April 2011. As we go to press this morning, 2yr yields are up another 2bps with 10yr yields fractionally higher, thus inverting the curve a little more. US PPI today will be closely watched for the next inflation impulse. The policy rate at end 2022 implied by fed funds futures closed at 3.72%, its highest to date by some margin, and implies just shy of +300bps of tightening over 5 meetings. Markets also moved to price in a terminal rate above 4% in the middle of next year, closer to DB's call which has been the most aggressive on the street. It’s perhaps an understatement to say the market will be hyper focused on how the Fed communicates the near-term path of policy at this week’s FOMC, especially including what size rate hikes they’re considering as adequate for the rest of the year. The selloff was echoed in Europe, where 10yr bunds (+11.5bps), OATs (+15.4bps), and BTPs (+26.2bps) all soldoff, even before the blockbuster WSJ report. ECB speakers returned to the docket after last week’s meeting, where Governing Council member Kazmir noted there was a clear need for a +50bp hike in September, in line with our European economics team’s call. Kazmir went on to warn that the economy faces weak growth for several quarters, piling onto what the market had already deduced – the sharp global repricing in monetary policy would weigh on growth. One of the major fears following the ECB meeting was that absent a new tool designed to stem fragmentation, peripheral spreads would widen out, and yesterday brought a fresh round of peripheral widening, with 10yr Italian spreads widening +14.6bps to bunds, with Spanish bonds widening +9.9bps. Indeed, 10yr BTPs crossed 4.0% for the first time since 2014. Equity markets got the message, selling off across the Atlantic, with the S&P 500 falling -3.87% into bear market territory, down -21.82% from the all-time highs reached in early January, with the STOXX 600 down -2.41%. At one point, every single share in the S&P 500 was lower, though the index staged a heroic rally leaving 5 shares higher on the day. That’s the lowest amount since June 11, 2020 when only one share advanced. Unsurprisingly, every S&P 500 sector was lower, with all but two sectors declining by more than 3%. The NASDAQ fell -4.68% on the hit from higher discount rates, now -32.68% from its November high. Mega-cap shares bore the brunt of higher discount rates, with the FANG+ falling -6.50%, its worst day since September 2020, and -40.98% lower from its own all-time highs reached in November. Markets are trying to bounce this morning with S&P 500 futures +1% and Nasdaq futures +1.15% As we discussed yesterday, this sharp rates repricing is partly due to another attempt at forward guidance from the Fed. Having signalled 50bps at the next two meetings a few weeks ago they reduced volatility. However when it became clear that this guidance may be insufficient it has opened up a market attack. The last man standing continues to be the BoJ and to be honest the more the market attacks the Fed and the ECB the more likely it is that the BoJ own forward guidance (in the form of YCC) will end very messily with huge implications for global rates. If the BoJ throws in the towel in H2 then global bond markets lose a huge anchor. Certainly one to watch for every morning when you wake up! Indeed the BOJ ramped up its scheduled purchases of 5-to-10-year debt today from an expected ¥500 billion to ¥800 billion as the yield on the 10yr JGBs jumped to 0.255%, edging past the upper end of the central bank’s 0.25% target range. Talking of Asia, equity markets are lower this morning but markets are trying to fight back. The Nikkei (-2.00%) is the largest underperformer with the Hang Seng (-1.15%) and Kospi (-1.11%) also lagging. In mainland China, the Shanghai Composite (-1.60%) and CSI (-1.86%) are also lower. Elsewhere, the S&P/ASX 200 is -4.54% lower after returning to trade following a holiday yesterday. In such a broad-based selloff, many would have been interested in how crypto assets would hold up, supposedly uncorrelated with traditional assets. However, digital assets did not escape the wrath of plummeting risk sentiment, with bitcoin falling -15.13% and down another -5.28% this morning as we type. At one point this morning, Bitcoin fell about -10% to trade at $20,823 before recovering a little. There were reports that some exchanges were having trouble liquidating holdings of various crypto assets. This is a classic deleveraging and unwinding of a bubble trade. To the day ahead now. The ECB’s Schnabel speaks, while in data we get UK jobless claims, ILO unemployment rate, ZEW surveys for the Eurozone and Germany, US NFIB small business optimism and PPI, and Canadian manufacturing sales. Hold on to your hats. Tyler Durden Tue, 06/14/2022 - 07:49.....»»

Category: blogSource: zerohedgeJun 14th, 2022

Futures Rise Ahead Of Hawkish ECB Meeting

Futures Rise Ahead Of Hawkish ECB Meeting US index futures turned positive on Thursday, even as European stock slipped ahead of the ECB decision at 745am ET, with Nasdaq 100 contracts outperforming as oil prices and bond yields stabilized and strategists at Goldman and JPMorgan gave more bullish comments on equities. Sentiment was boosted after Bloomberg reported that China’s crackdown on internet companies may be easing with a revival of the Ant Group IPO, which boosted the country’s US-traded stocks (the news was since refuted by China, but moments later Reuters re-reported what Bloomberg said). S&P 500 futures traded 22 points or 0.5% higher, and Nasdaq 100 futs were 0.4% higher. The dollar slid, and 10Y rates were flat at 3.02%. Markets remain fixated on the risk that central banks intent on cooling inflation snuff out economic recoveries in the process. Money markets have priced in 36.5 basis points of tightening to the ECB’s rate by next month’s meeting, just short of a 50% chance of a half-a-percentage point increase, which would be the first since 2000. “To rein in surging prices the Fed has to increase rates, which can result in a recession,” Geir Lode, head of global equities at Federated Hermes, wrote in a note. “However, the pandemic-induced supply-chain shock and the Ukraine conflict are beyond the central bank’s control. In this environment we need to be lucky to avoid stagflation that could last for a long time.” While the ECB isn’t expected to raise official borrowing costs, President Christine Lagarde signaled in a blog post last month that the central bank will end bond purchases this month, and hike once in July and again in September, lifting the deposit rate from minus 0.5% to zero. Some investors see a new tone reaching beyond the official line as central bankers succumb to huge pressure to rein in record inflation at more than four times their target of 2%. Peers at the Federal Reserve, Bank of Canada and Reserve Bank of Australia have hiked in 50-basis point increments this year. “Chances are that the ECB will have a hawkish pivot today,” Carol Kong, a strategist at Commonwealth Bank of Australia, said on Bloomberg Television. In US premarket trading, Alibaba Group was among the best performers - at least initially - as it pumped, dumped and then rose again after several conflicting reports that Chinese regulators are considering a potential revival of the initial public offering by Jack Ma’s Ant Group. Tesla gained 3% after an upgrade to Buy from UBS and after the company said its deliveries of cars made in China doubled in May compared with April and as UBS recommended buying the stock. Bank stocks also traded higher in premarket trading as the US 10-year Treasury yield hovered just above 3%. In corporate news, Credit Suisse shares dropped after its CEO Thomas Gottstein said he wouldn’t comment on State Street’s reported interest in the Swiss bank. Here are all the notable premarket movers: Five Below (FIVE US) shares decline 7.3% in premarket trading after the company cut its full-year guidance, while analysts trimmed their targets for the stock, but were broadly positive on the firm’s longterm prospects. Spotify (SPOT US) shares could be in focus today as analysts were positive on the streaming giant’s forecast that its podcasting business will turn profitable as the company focuses on more non-music segments like audiobooks. Travel stocks could be active on Thursday following Expedia CEO Peter Kern’s bullish comments on summer travel. Keep an eye on Delta (DAL US), United (UAL US), Marriott (MAR US), Expedia (EXPE US), Airbnb (ABNB US) and Booking Holdings (BKNG US) among others Watch Oxford Industries (OXM US) shares after the company reported results, as Citi says that there is no sign of consumer weakness in any part of the branded apparel retailer’s business. Ollie’s Bargain (OLLI US) stock may be in focus as RBC Capital Markets upgraded the discount retailer to outperform, saying that despite another tough quarter, its fundamentals should improve in the back-half and beyond. In Europe, equities slipped ahead of a European Central Bank decision that will put the region’s monetary policy on a path of tightening and help close the gap with global peers. Real-estate companies and retailers led the Stoxx Europe 600 Index 0.5% lower. EDF jumped the most in three months, after a newspaper report that the new French government is studying two options for the electricity giant’s nationalization, including a buyout offer. Here are the most notable European movers: EDF shares rise as much as 8.3% after Les Echos newspaper reported that nationalization is among priorities for new government after this month’s legislative elections alongside combating inflation and pension reform. Prosus gains as much as 7.4% in Amsterdam and Naspers gains as much as 6.8% in Johannesburg following a report that Chinese financial regulators are considering reviving the IPO of Jack Ma’s Ant Group. Tate & Lyle advances as much as 4.4% after the company reported FY22 results that beat estimates. The FY23 outlook suggests upgrades to consensus estimates, according to Jefferies. Beiersdorf rises as much as 7.8% after the company said in a Capital Markets Day presentation on its website that it targets above-market organic sales growth at its consumer unit in the medium term. Credit Suisse drops as much as 4.9% after State Street declined to comment on a report that it was looking to acquire the Swiss bank. Separately, Bloomberg reported that Credit Suisse is tapping the brakes on its China expansion. CMC Markets falls as much as 19% after cutting its dividend and saying it was boosting spending on new hires, product development and marketing as the firm seeks to diversify amid a fading retail trading boom. Wizz Air drops as much as 8.3%, extending Wednesday’s 9.5% decline after the company gave guidance for an operating loss for the first quarter, while analysts also noted their concern about pricing trends. Asian stocks slipped as technology and financial firms declined and higher oil prices stoked concerns about inflation.  The MSCI Asia Pacific Index fell 0.3%, trimming its gain this week. Chip stocks declined after a warning on demand from Intel Corp., with the Hang Seng Tech Index sliding more than 1%, a breather after its recent rally. Australian banks were among the biggest contributors to the regional benchmark’s loss.  “We are seeing profit-taking moves after Chinese stocks rose a lot in recent sessions,” said Xue Hua Cui, a China equity analyst at Meritz Securities in Seoul. “There are also renewed concerns about the second-quarter corporate earnings.” Australia’s broad benchmark was among the biggest decliners in Asia Pacific as bank stocks slumped on concerns about valuations and macroeconomic risks. Shares in Singapore and Malaysia also fell. South Korean equities erased early-day losses to close nearly flat on options expiry, while Japanese peers also finished little changed amid the yen’s extended weakness.  Read: Australian Bank Stocks Take $32 Billion Hit on Rate Concerns Stocks in much of the region held losses after data showed Chinese exports jumped more than expected in May, while a mini-lockdown weighed on market sentiment. Even with Thursday’s dip, the MSCI Asia Pacific Index remained on track for its fourth straight weekly gain, which would be its longest winning streak since early 2021 Japanese stocks traded in a narrow range as investors continued to worry about inflation and growth while the yen extended losses to a fresh 20-year low.  The Topix Index was virtually unchanged at 1,969.05 as of the market close in Tokyo, while the Nikkei 225 was stable at 28,246.53. Out of 2,170 shares in the index, 937 rose and 1,105 fell, while 128 were unchanged. In Australia, the S&P/ASX 200 index fell 1.4% to close at 7,019.70, its lowest level since May 12. Banks contributed the most to the benchmark’s slump on growing concerns that faster monetary policy tightening might increase housing-market risks and pressure valuations.  Magellan was the top performer after saying co-founder Hamish Douglass will resume working with the business in a new consultancy role. In New Zealand, the S&P/NZX 50 index fell 0.5% to 11,211.31. In India, stock gauges advanced for the first session in five, helped by a surge in Reliance Industries and energy companies on the improving outlook for refining margin and software exporters extending recovery.  The S&P BSE Sensex rose 0.8% to 55,320.28 in Mumbai, while the NSE Nifty 50 Index gained 0.7%. Both indexes are still headed for weekly drops of about 0.8% and 0.6%, respectively, their first decline in four weeks. “With policy rate announcements now behind us, investors lapped up stocks that were in a downward spiral for quite some time,” Kotak Securities analyst Shrikant Chouhan said in a note. The market may witness select bouts, but volatility is expected to remain over the near-to-medium term, he added.  Reliance Industries provided the biggest boost to the key gauges, increasing 2.7%. Out of 30 shares in the Sensex index, 21 rose and 9 fell In FX, the Bloomberg Dollar Spot Index was little changed as the greenback traded mixed against its Group-of-10 peers. The euro fluctuated around $1.07. Bunds and Italian bonds swung between modest gains and losses. Options pricing in the euro and spot swings suggest not everyone is convinced that the euro will rally after the ECB meeting, which leaves ample room for an advance on a hawkish decision. The yen rebounded after touching a fresh two-decade low against the dollar and seven-year lows against the Australian dollar and the euro, as traders adjusted positions before the ECB. Speculators are gathering around the beleaguered yen and positioning is by no means extended, suggesting there’s still room for bears to pile in. The New Zealand dollar inched up and the nation’s 10-year yield hit a seven-year high after the RBNZ announced plans to offload QE bond holdings. One beneficiary of a hawkish pivot by the ECB would be the euro. The common currency has been bogged down by concerns over euro-area growth while a resurgent dollar and hawkish Fed pushed it to a five-year low against the US currency last month. The euro traded little changed against the dollar at $1.07. “If we do see Christine Lagarde leaning toward a 50 basis-points hike in July, that’s going to be very supportive of the euro-dollar,” Kong said. In rates, Treasuries are narrowly mixed with the yield flatter ahead of ECB rate decision at 7:45am ET and 30-year bond reopening, the last of this week’s coupon auctions. 2-year TSY yields rose to 2.80%, highest level since May 4 YTD high. 10-year little changed at 3.02%, underperforming bunds while gilts trail. US front-end cheapening flattens 2s10s by ~1bp on the day toward lowest level since May 25; as previewed before, the ECB is expected to announce imminent end to large-scale asset purchases, opening the door for interest-rate hikes at the July meeting; swaps price in around 30bp of rate- hike premium. Looking at today's auction we have a $19BN 30-year bond reopening which follows Wednesday’s mediocre 10-year, which tailed by 1.2bp. WI 30-year yield at ~3.16% is above auction stops since 2018 and ~16bp cheaper than May’s, which stopped 0.9bp through. German bonds and the euro are steady ahead of the ECB’s meeting later Thursday, where traders will look for clues on whether the bank will raise rates by 25bps or 50bps in July. Money markets don’t expect a hike today, and currently bet on 36bps next month, and about 132bps by the end of the year. Peripheral spreads tighten to Germany.  Both gilt and Treasury curves flatten.  In commodities, WTI trades within Wednesday’s range around the $122 level. Most base metals trade in the red; LME nickel falls 2.9%, underperforming peers. Spot gold falls roughly $3 to trade near $1,850/oz To the day ahead now, and the main highlight will be the aforementioned ECB decision and President Lagarde’s subsequent press conference. We’ll also hear from Bank of Canada Governor Macklem, and data releases today include the US weekly initial jobless claims. Market Snapshot S&P 500 futures up 0.4% to 4,130.75 STOXX Europe 600 down 0.7% to 437.16 MXAP down 0.4% to 168.75 MXAPJ down 0.6% to 557.70 Nikkei little changed at 28,246.53 Topix little changed at 1,969.05 Hang Seng Index down 0.7% to 21,869.05 Shanghai Composite down 0.8% to 3,238.95 Sensex up 0.2% to 54,988.33 Australia S&P/ASX 200 down 1.4% to 7,019.75 Kospi little changed at 2,625.44 Brent Futures down 0.4% to $123.07/bbl Gold spot down 0.3% to $1,848.12 U.S. Dollar Index little changed at 102.62 German 10Y yield little changed at 1.35% Euro down 0.1% to $1.0701 Top overnight News from Bloomberg The ECB is set to announce an imminent end to large-scale asset purchases, paving the way for the first increase in interest rates in more than a decade next month Traders are betting the BOE will deliver a historic half-point interest-rate hike by September to wrest control of inflation running at the fastest pace in four decades Judging by the latest comments, the yen’s exchange rate still has some way to go before Japan’s finance ministry would consider intervention to prop up the currency via actual purchase operations, something it has avoided for more than two decades. With the US more likely to be against any moves to weaken the dollar, Japan faces the problem that actual intervention may not be effective Japan’s Prime Minister Fumio Kishida appears to be counting on the Bank of Japan to keep borrowing costs near rock-bottom levels as his government paves the way for continued spending even after a record-breaking pandemic splurge and with the yen languishing at two-decade lows Riksbank Deputy Governor Anna Breman said all options are on the table for the June policy meeting as speculation grows over whether the Swedish central bank needs to speed up its interest rate increases China’s exports rebounded in May as Covid-related bottlenecks on production and logistics clear up, but a slowdown looms this year as global consumer demand for goods cools, weakening trade’s ability to act as a driver for economic growth A more detailed look at global markets courtesy of newsquawk Asia-Pac stocks were subdued following a weak handover from the US and with sentiment cautious. ASX 200 was pressured by underperformance in the top-weighted financials sector and weakness in property-related stocks also suffering amid expectations of aggressive RBA rate hikes which increases banks’ funding costs and could threaten the quality of their loan portfolios. Nikkei 225 kept afloat as participants contemplated the ramifications of further currency depreciation. Hang Seng and Shanghai Comp. were lacklustre despite the mostly better than expected Chinese trade data as some COVID concerns resurfaced in Shanghai with the city locking down the Minhang district on Saturday morning for mass COVID testing. Asia headlines Shanghai will lockdown the Minhang district on Saturday morning for mass COVID-19 testing, according to Bloomberg; additionally, Beijing's Chaoyang district is to close all entertainment venues from 14:00 local time (07:00BST) for COVID containment. US Treasury Secretary Yellen said China is guilty of unfair trade practices but some tariffs on Chinese goods do not serve US strategic interests and the Biden administration is looking to reconfigure tariffs in a way that would be more strategic, according to Bloomberg. Japan is planning to expand its prefectural travel subsidies across the entire country, according to Yomiuri. RBNZ outlined plans to sell New Zealand government bonds from July 2022 in which it intends to offload NZD 5bln per fiscal year in order of maturity date until its LSAP holdings are reduced to zero, according to Reuters. Equities are, overall, struggling for clear direction in relatively cautious trade going into ECB; Euro Stoxx 50 -0.5%. Bourses, and US futures, were lifted amid further constructive China tech developments, this time for Ant Group; albeit, we have drifted modestly off best since, ES +0.3%. China is said to be mulling reviving Jack Ma's Ant IPO, with reports framing it as an easing in crackdowns from China, according to Bloomberg sources. *Click here for analysis/reaction. China PCA Retail Passenger Vehicle Sales (May): -17.3% YY; Tesla (TSLA) 32.2k (prev. 33.5k YY). Walgreens Boots Alliance's (WBA) Boots has received a non-binding bid from Apollo Global Management and Reliance Industries, according to FT sources. European headlines Hawkish Lagarde Is Not Fully Priced In the Euro: ECB Cheat Sheet Traders Bet BOE Will Join Peers in Historic Half-Point Rate Hike European Gas Soars as Fire in US Compounds Russia Supply Concern Italy’s Eni to List Renewable Unit Plenitude in Milan FirstGroup Rejects £1.2 Billion Takeover Bid From I Squared FX Yen finally finds some friends amidst less hostile yield environment and supportive risk backdrop; USD/JPY retreats just over 100 pips around 134.00 and EUR/JPY almost 150 pips from 144.00+ peak. DXY remains anchored around 102.500 ahead of Friday’s US CPI data and as Euro pivots 1.0700 pre-ECB; EUR/USD flanked by decent option expiries as well from 1.0750-55 to 1.0605-00 on the downside. Kiwi underpinned after RBNZ outlines schedule for balance sheet rundown; NZD/USD hovers near 0.6450, AUD/NZD sub-1.1150 with AUD/USD capped into 0.7200. Rand continues bull run with extra incentive from wider than forecast SA current account surplus, USD/ZAR straddling 15.2500. Lira rout resumes following fleeting respite on prospect of capital controls raised by S&P, USD/TRY above 17.2200. Yuan retains bulk of Chinese trade data related gains even though parts of Beijing and Shanghai reimpose restrictive Covid measures; USD/CNH closer to 6.6700 than 6.7100, USD/CNY settles sub-6.7000 vs circa 6.7000 high. Fixed Income Bunds choppy and lagging Eurozone periphery within 149.17-148.52 range pre-ECB, as focus falls on fragmentation along with rate and QE guidance Gilts underperforming between 114.86-42 parameters as BoE tightening expectations rise and drag Sonia strip down US Treasuries flat-lining ahead of jobless claims and long bond supply, with 10 year T-note just above par inside tight 118-07/117-26+ band Commodities WTI and Brent are steady after giving up overnight gains with participants cautious and cognizant of China's fluid COVID situation. Currently, the benchmarks are sub-USD 122/bbl and USD 123.50/bbl respectively, vs highs of 122.72 and 124.34. Magnitude 5.6 earthquake hits the Antofagasta region in Chile, according to EMSC. Spot gold is sub-USD1850/oz, having slipped below its falling 10-DMA but holding above the overlapping 200- & 21-DMAs at USD 1842/oz. Central Banks Riksbank's Breman says she will support doing what is required to attain the inflation target, including more hikes than are currently in the path; adding, to control inflation back to target, need to act now. Does not exclude a 50bps hike at the next meeting.   Hungarian Finance Minister says the Hungary has issued FX bonds totalling USD 3bln and EUR 750mln; follows the NBH maintaining its one-week deposit rate at 6.75%. US Event Calendar 08:30: May Continuing Claims, est. 1.3m, prior 1.31m 08:30: June Initial Jobless Claims, est. 206,000, prior 200,000 12:00: 1Q US Household Change in Net Wor, prior $5.3t DB's Jim Reid concludes the overnight wrap I kicked off Day 1 of our annual European LevFin conference in London yesterday and we had a record attendance of over 1100 issuers and investors. It was the first in-person version since 2019 and if this conference is anything to go by, people still like the personal contacts that such an event brings. I also had a dinner at the event last night so I’m a bit shattered this morning so bear with me. This conference has been going now for 26 years at DB and the headline acts at the post conference entertainment have in the past included, The Killers, Duran Duran, Cheryl Crow, Dire Straits, The Corrs, The Sugababes, Stevie Wonder and Bon Jovi. Last night’s entertainment was a pub quiz. How times have changed. If you think the above means Zoom is dead then think again, as I’ll be doing a Zoom webinar next Wednesday (June 15th) at 2pm on my annual Default Study (“The End of the ultra-low default world?”), published earlier this week, that I presented at the conference. Please click here to register, and here to see the report itself. The day before this (June 14th), also at 2pm London time, a selection of our heads of trading and research desks will do a call on the near-term macro outlook across rates, FX, EM, equities and credit. Please click here to register. As I recover from the heckling of telling High Yield investors that defaults are coming, we arrive at the business end of the week with a big 36 hours ahead with the ECB meeting today, and US CPI tomorrow, looming large! And then don’t forget the FOMC, BoE and BoJ meetings next week. Markets approach this busy period on the nervous side with rates and equities selling off over the last 24 hours, and that’s still the case in much of Asia in this morning’s trading. Starting with Europe, sovereign bond yields hit fresh highs yesterday as investors have come to view a potential 50bp hike at some point this year as an increasingly likely possibility. In fact by the close of trade yesterday, overnight index swaps were pricing in 132bps worth of ECB hikes by the December meeting, which is the highest to date and more than double the 63bps of hikes expected after their last meeting in mid-April. So if they don’t hike until July as is widely expected, that implies at least one 50bp move is being fully priced in by year-end. In their preview last week (link here), our European economists agreed with this assessment that a 50bp hike is likely soon, and their view is that one of the two hikes in Q3 will be a 50bp hike, with September being more likely than July. After that, they then see the ECB reverting to continuous back-to-back 25bp hikes until they reach a terminal deposit rate of 2% in mid-summer 2023, although there’s a risk of a second 50bp hike before policy rates reach neutral. In terms of today’s decision however, they expect the ECB to confirm that APP net purchases will cease at the end of June, and that their new staff forecasts will show inflation at 2.0% in 2024, thus satisfying the liftoff criteria. When it comes to new guidance, their view is that the three conditions for policy rate liftoff are likely to be replaced by new guidance on the speed and extent of the hiking cycle. And finally on TLTRO, they expect the end of the TLTRO discount to be confirmed and the ECB to pledge a smooth transmission of monetary tightening through the banking system. With all that in mind, European yields moved higher through the day, with those on 10yr bunds (+6.2bps) and OATs (+7.0bps) both rising to their highest levels since 2014. The selloff was more pronounced among peripheral debt, with yields on 10yr Italian (+8.8bps) and Spanish (+8.2bps) debt seeing even larger rises, although the spread of both over bunds was still tighter than their recent peak last week. There are signs of growing nervousness elsewhere too, with EURUSD overnight implied volatility at its highest level right now since the US presidential election in November 2020. Meanwhile, those at the more hawkish end of the Governing Council received further support yesterday from data revisions, with Euro Area growth in Q1 revised up to show a +0.6% expansion (vs. +0.3% previously). This investor concern about rate hikes and persistent inflation was bad news for equities, first in Europe where the STOXX 600 (-0.57%) fell for a second day running and then extending to a late sell-off across the Atlantic, where the S&P 500 fell -1.08%, with only energy (+0.15%) managing to end the day in the green. This brings the index to +0.18% for the week, as it enters yet another late week showdown to see if it can manage to stay in positive territory. The decline came as 10yr Treasuries eclipsed the 3% mark again, closing up +4.8bps at 3.02%, and we’re up another +1.5 bps higher this morning at 3.036%. The impact of tighter monetary policy extended beyond risk assets and showed some signs of being felt in the real economy, too, with the number of mortgage applications in the US falling to a 22-year low in the week ending June 3. These inflationary worries for investors and central banks were aggravated further by a fresh rise in commodity prices. Oil prices saw further gains, and Brent Crude (+2.50%) moved back above $123/bbl again, inching ever closer to their post-invasion peak levels despite news of OPEC supply expansion and US reserve releases. That trend has continued this morning, with Brent crude up a further +0.33% at $123.98/bbl. WTI (+2.26%) moved above $122/bbl as well, so not far from its peak closing level following the invasion of $123.70/bbl. US natural gas prices displayed a lot of volatility, hitting a post-2008 high intraday before crashing into the close to finish down -6.39% following reports of a fire at a terminal used for exporting, keeping supplies stateside. European natural gas futures fell for a 6th consecutive session to hit another post-Ukraine invasion low of €78.41/MWh. Those losses on Wall Street have carried over into Asia overnight as that rally in oil prices has ramped up worries about inflation and the outlook for interest rates. The Hang Seng (-0.24%), the Shanghai Composite (-0.49%) and the CSI 300 (-0.64%) are all in negative territory, as is the Kospi (-0.31%), although the Nikkei (+0.26%) is up as the weaker Yen has raised hopes for an earnings improvement. Indeed yesterday, the Yen fell a further -1.22% against the US Dollar to close at a 20-year low of 134.25 Yen per dollar, having at one point traded at an intraday low of 134.47. Bear in mind that its intraday low so far in the 21st century was at 135.15 back in January 2002, so we’re not far off reaching levels unseen since the 1990s, although this morning it’s strengthened a touch to 134.06. Outside of Asia, stock futures in the US and Europe are pointing to additional losses today with contracts on the S&P 500 (-0.10%), NASDAQ 100 (-0.11%) and DAX (-0.44%) edging lower. Finally on the data front, China’s May exports advanced +16.9% y/y, beating analyst estimates for a +8.0% rise and faster than the +3.9% increase in April. At the same time, the nation’s trade surplus grew to $78.76 bn in May, (vs. $57.7 bn expected) and compared to a $51.12 bn surplus in April. Separately, German industrial production grew by a weaker-than-expected +0.7% in April (vs. +1.2% expected), which comes on the back of an unexpected contraction in factory orders the previous day. To the day ahead now, and the main highlight will be the aforementioned ECB decision and President Lagarde’s subsequent press conference. We’ll also hear from Bank of Canada Governor Macklem, and data releases today include the US weekly initial jobless claims. Tyler Durden Thu, 06/09/2022 - 07:45.....»»

Category: smallbizSource: nytJun 9th, 2022

UK PM Boris Johnson Survives "No Confidence" Vote

UK PM Boris Johnson Survives 'No Confidence' Vote Update (1600ET): UK prime Minister Boris Johnson has survived a vote of no confidence with a of 'secret' vote of 211 (confident) to 148 (not confident) leaving him remaining in office but significantly weakened. Sir Graham Brady says: "I can announce that the parliamentary party does have confidence in the prime minister." 211-148: UK Prime Minister Boris Johnson survives confidence vote that could have ousted him from power. pic.twitter.com/iAcYKtD4FP — The Recount (@therecount) June 6, 2022 This reportedly a worse result than former PM Theresa May suffered. Current rules prevent another vote from taking place within 12 months, although Tory party sources indicated that rule could be changed if there was sufficient demand.  One Conservative MP said: "It's the beginning of the end. It's actually far better for everyone if he goes voluntarily." Another predicted that Johnson would "be gone in six months… It is Theresa May 2.0 [and] she lasted seven months." A third said his win would leave the party "bitter" and divided. He said another vote of no confidence would be triggered as early as September, after the privileges committee report into whether Johnson misled Parliament, is published.  As The Telegraph's Camilla Tominey reports, as it stands, the only thing really keeping the Prime Minister in place right now is the lack of a viable alternative. The vultures, however, are circling. It is going to take a unique amount of doggedness to bring this disobedient party to heel. Some people seem happy... Meanwhile in the UK.....pic.twitter.com/Z7kW942uDX— FJ (@Natsecjeff) June 6, 2022 *  *  * Authored by Bill Blain via MorningPorridge.com, “I think he honestly believes that it is churlish of us not to regard him as an exception, one who should be free of the network of obligation which binds everyone else.” Big theme for the week in UK politics will be the last act in The Tragedy of Boris Johnson. His likely denouement coincides with rising economic stress, increasing corporate defaults and doubts on sterling. Time to Panic? Not at all! Bring it on..  We’ve suffered worse! Before getting stuck into Markets through the rest of the month, it’s worth a quick comment on the UK and politics. Change is coming… likely this week if the papers are to be believed. It’s not that I worry about UK Inc – we’ve been doing just fine for over a 1000 years with just a few hic-cups. Its just things are about to get, well, fraught and uncertain – and markets dislike uncertainty. Why do I not worry? History. Perhaps the very least well-known Shakespeare play is King John – yet it contains a singular line that sums up this Barmy Little United Kingdom best: “Come the three corners of the world in arms, and we shall shock them”. We may be a tiny, windswept Isle off the unfashionable west of Yoorp.. but we know ourselves. Change may be coming.  We thrive in adversity.. perhaps because we are so used to it. We’ve just spent a bonkers long weekend celebrating the Platinum Jubilee of Her Majesty and the absolute rightness of being British. It was all about being incredibly nice about monarchy – saying thanks to our Monarch. She is Queen Elizabeth the Second of England, and Queen Elizabeth of Scotland. A drone display over Buckingham Palace of a Corgi licking a bone got a massive cheer! At least we now know where The Queen keeps her Marmalade Sandwiches – that’s what handbags are for. Yet, perhaps it is now time to leave aside these childish things and face the uncertain future. However funny the Paddington having tea with Her Majesty skit was, in the real-world Priti Patel would be shipping him off to Rwanda next week. Britain’s great success has always been our multiculturism – blending successive waves of immigration into our cosmopolitan and inventive society. The degree of love for Her Majesty is reciprocated in the growing contempt for our Premier. Boris the Buffoon was booed whenever he had the temerity to appear. National Treasure Sir Stephen Fry caught the mood of the nation suggesting Her Majesty “tolerates” him. The monarchy will thrive as long as long as the alternative is “President Thatcher ” or “Chairman Blair”. (Like many disillusioned voters, I was quite looking forward to the high-point of our national celebration being the Queen appearing on the balcony to announce Boris has been sent on a one way trip to the Tower.) Patience…. After the party, sadly, its back to reality this morning as the global economy stumbles, the pound tumbles, stocks wobble, bond yields rise, recession looms, rail strikes and civil service failure abound, and a likely non-confidence vote in our Premier as the requisite number of Tory MPs realise they will otherwise be looking for new jobs. Last week my youngest got made redundant. Her firm was barely keeping its head above water through Covid. Inflation and the rising cost of living has mortally wounded it. She will not be the only one to lose out. Companies think the looming recession and cost of living crisis will do what Covid could not – decimate the corporate landscape. In a survey of over 500 CEOs, BDO cite rising energy costs, inflation, and supply chains as the main threats to UK commerce. Consumers with zero discretionary spending should be front and centre. Things are only going to get worse as earnings decline. Yet, the increasingly unstable UK financial base of the economy is not dominating the narrative. Instead, we’re focused on and distracted by politics – which, even if we get change, will ultimately solve little. It’s time to move on. While I am tolerated in Yacht Clubs as a token lefty, members tend to be Conservative in nature. Not any more; the main subject in the bars during our Jubilee Regatta was government failure and disgust with Boris in particular. When sensible business leaders and frothing-at-the-mouth Brexiteers are all demanding Boris goes… it’s finally going to happen. When Tory councillors tell you they despair at the what they hear on the doorsteps.. it’s time to listen. Sir Graham Brady, chairman of the 1922 Committee of backbench Conservative MPs, said on Monday morning, “The threshold of 15 percent of the parliamentary party seeking a vote of confidence in the leader of the Conservative Party has been exceeded.” Boris’ inevitable departure (this week or soon), will leave a massive political vacuum at the heart of the UK. [ZH: As The MailOnline details, the PM has sent a letter to MPs pleading for them to “draw a line” under the infighting, after backbench chief Graham Brady confirmed this morning that at least 54 MPs have asked for a full ballot. The vote will be held between 6pm and 8pm, with Mr Johnson addressing the parliamentary party before that and the results declared shortly afterwards. The development raises the possibility that Mr Johnson’s tenure could come to a crashing end less than three years after he won a stunning 80-strong Commons majority. However, if half of the 359 eligible MPs back him in the secret vote in theory he is safe for a year – with some insurgents fearing they have moved too early ahead of key by-elections later this month. ... Meanwhile, Mr Hunt – who lost the last leadership contest to Mr Johnson – tweeted saying that he will vote against the PM. “Anyone who believes our country is stronger, fairer and more prosperous when led by Conservatives should reflect that the consequence of not changing will be to hand the country to others who do not share those values. Today’s decision is change or lose. I will be voting for change,” he wrote] Excellent. His departure will remove the distraction… Buying boots on? Maybe… The Tories will be leaderless. Is there one among their number with the credibility with the public to replace him? The Labour party looks rudderless with its own leadership issues. There is talk of a new centre party or alliance. If I was a gambling man I’d be betting on a Liberal Democrat resurgence – at which point I either go off sailing round the world in despair or accept that anything is better than current broken UK politics…. Cometh the hour, cometh the woman… (or maybe man..)? The crisis of politics about to engulf the UK is about priorities: How to cope with, and how to pay for the coming global recession? How to reopen the doors to Europe? How to secure energy and food, and how to plan an energy transition policy? How to balance budgets, reform the NHS, improve Education, raise productivity and defend the nation? How to right size government while providing social support, benefits and ensuring equality and social justice? Standard political stuff – but wholly unanswered since 2019. (I blame myself. I voted for him – and now regret it.)  In a world where the answers are not obvious, then addressing these issues will be fraught. What’s the alternative? More weeks and months of Boris clinging on? Long-Term in Boris’ book is surviving through to the middle of this week, achieved by distracting the nation from the business of recovery? Time for change. As has been previously said in Westminster…. ‘You have sat there too long for all the good you have done, in the name of God, go!” A Number 10 spokeswoman said: “Tonight is a chance to end months of speculation and allow the government to draw a line and move on, delivering on the people’s priorities. “The PM welcomes the opportunity to make his case to MPs and will remind them that when they’re united and focused on the issues that matter to voters there is no more formidable political force.” Meanwhile.. outside the amusement park… Lots of market positivity out there as China reopens from lockdowns, folk hope that inflation is easing, and that central banks will hold off on further hikes…. Yeah.. sure..  Buckle up! Tyler Durden Mon, 06/06/2022 - 16:06.....»»

Category: personnelSource: nytJun 6th, 2022

UK Faces "Massive Political Vacuum" As Boris Johnson "No Confidence" Vote Looms

UK Faces "Massive Political Vacuum" As Boris Johnson 'No Confidence' Vote Looms Authored by Bill Blain via MorningPorridge.com, “I think he honestly believes that it is churlish of us not to regard him as an exception, one who should be free of the network of obligation which binds everyone else.” Big theme for the week in UK politics will be the last act in The Tragedy of Boris Johnson. His likely denouement coincides with rising economic stress, increasing corporate defaults and doubts on sterling. Time to Panic? Not at all! Bring it on..  We’ve suffered worse! Before getting stuck into Markets through the rest of the month, it’s worth a quick comment on the UK and politics. Change is coming… likely this week if the papers are to be believed. It’s not that I worry about UK Inc – we’ve been doing just fine for over a 1000 years with just a few hic-cups. Its just things are about to get, well, fraught and uncertain – and markets dislike uncertainty. Why do I not worry? History. Perhaps the very least well-known Shakespeare play is King John – yet it contains a singular line that sums up this Barmy Little United Kingdom best: “Come the three corners of the world in arms, and we shall shock them”. We may be a tiny, windswept Isle off the unfashionable west of Yoorp.. but we know ourselves. Change may be coming.  We thrive in adversity.. perhaps because we are so used to it. We’ve just spent a bonkers long weekend celebrating the Platinum Jubilee of Her Majesty and the absolute rightness of being British. It was all about being incredibly nice about monarchy – saying thanks to our Monarch. She is Queen Elizabeth the Second of England, and Queen Elizabeth of Scotland. A drone display over Buckingham Palace of a Corgi licking a bone got a massive cheer! At least we now know where The Queen keeps her Marmalade Sandwiches – that’s what handbags are for. Yet, perhaps it is now time to leave aside these childish things and face the uncertain future. However funny the Paddington having tea with Her Majesty skit was, in the real-world Priti Patel would be shipping him off to Rwanda next week. Britain’s great success has always been our multiculturism – blending successive waves of immigration into our cosmopolitan and inventive society. The degree of love for Her Majesty is reciprocated in the growing contempt for our Premier. Boris the Buffoon was booed whenever he had the temerity to appear. National Treasure Sir Stephen Fry caught the mood of the nation suggesting Her Majesty “tolerates” him. The monarchy will thrive as long as long as the alternative is “President Thatcher ” or “Chairman Blair”. (Like many disillusioned voters, I was quite looking forward to the high-point of our national celebration being the Queen appearing on the balcony to announce Boris has been sent on a one way trip to the Tower.) Patience…. After the party, sadly, its back to reality this morning as the global economy stumbles, the pound tumbles, stocks wobble, bond yields rise, recession looms, rail strikes and civil service failure abound, and a likely non-confidence vote in our Premier as the requisite number of Tory MPs realise they will otherwise be looking for new jobs. Last week my youngest got made redundant. Her firm was barely keeping its head above water through Covid. Inflation and the rising cost of living has mortally wounded it. She will not be the only one to lose out. Companies think the looming recession and cost of living crisis will do what Covid could not – decimate the corporate landscape. In a survey of over 500 CEOs, BDO cite rising energy costs, inflation, and supply chains as the main threats to UK commerce. Consumers with zero discretionary spending should be front and centre. Things are only going to get worse as earnings decline. Yet, the increasingly unstable UK financial base of the economy is not dominating the narrative. Instead, we’re focused on and distracted by politics – which, even if we get change, will ultimately solve little. It’s time to move on. While I am tolerated in Yacht Clubs as a token lefty, members tend to be Conservative in nature. Not any more; the main subject in the bars during our Jubilee Regatta was government failure and disgust with Boris in particular. When sensible business leaders and frothing-at-the-mouth Brexiteers are all demanding Boris goes… it’s finally going to happen. When Tory councillors tell you they despair at the what they hear on the doorsteps.. it’s time to listen. Sir Graham Brady, chairman of the 1922 Committee of backbench Conservative MPs, said on Monday morning, “The threshold of 15 percent of the parliamentary party seeking a vote of confidence in the leader of the Conservative Party has been exceeded.” Boris’ inevitable departure (this week or soon), will leave a massive political vacuum at the heart of the UK. [ZH: As The MailOnline details, the PM has sent a letter to MPs pleading for them to “draw a line” under the infighting, after backbench chief Graham Brady confirmed this morning that at least 54 MPs have asked for a full ballot. The vote will be held between 6pm and 8pm, with Mr Johnson addressing the parliamentary party before that and the results declared shortly afterwards. The development raises the possibility that Mr Johnson’s tenure could come to a crashing end less than three years after he won a stunning 80-strong Commons majority. However, if half of the 359 eligible MPs back him in the secret vote in theory he is safe for a year – with some insurgents fearing they have moved too early ahead of key by-elections later this month. ... Meanwhile, Mr Hunt – who lost the last leadership contest to Mr Johnson – tweeted saying that he will vote against the PM. “Anyone who believes our country is stronger, fairer and more prosperous when led by Conservatives should reflect that the consequence of not changing will be to hand the country to others who do not share those values. Today’s decision is change or lose. I will be voting for change,” he wrote] Excellent. His departure will remove the distraction… Buying boots on? Maybe… The Tories will be leaderless. Is there one among their number with the credibility with the public to replace him? The Labour party looks rudderless with its own leadership issues. There is talk of a new centre party or alliance. If I was a gambling man I’d be betting on a Liberal Democrat resurgence – at which point I either go off sailing round the world in despair or accept that anything is better than current broken UK politics…. Cometh the hour, cometh the woman… (or maybe man..)? The crisis of politics about to engulf the UK is about priorities: How to cope with, and how to pay for the coming global recession? How to reopen the doors to Europe? How to secure energy and food, and how to plan an energy transition policy? How to balance budgets, reform the NHS, improve Education, raise productivity and defend the nation? How to right size government while providing social support, benefits and ensuring equality and social justice? Standard political stuff – but wholly unanswered since 2019. (I blame myself. I voted for him – and now regret it.)  In a world where the answers are not obvious, then addressing these issues will be fraught. What’s the alternative? More weeks and months of Boris clinging on? Long-Term in Boris’ book is surviving through to the middle of this week, achieved by distracting the nation from the business of recovery? Time for change. As has been previously said in Westminster…. ‘You have sat there too long for all the good you have done, in the name of God, go!” A Number 10 spokeswoman said: “Tonight is a chance to end months of speculation and allow the government to draw a line and move on, delivering on the people’s priorities. “The PM welcomes the opportunity to make his case to MPs and will remind them that when they’re united and focused on the issues that matter to voters there is no more formidable political force.” Meanwhile.. outside the amusement park… Lots of market positivity out there as China reopens from lockdowns, folk hope that inflation is easing, and that central banks will hold off on further hikes…. Yeah.. sure..  Buckle up! Tyler Durden Mon, 06/06/2022 - 08:07.....»»

Category: blogSource: zerohedgeJun 6th, 2022

Millennials and Gen Z Invested When It Was Fun. Now They’re Riding Out a Crash

Young investors have been taking big swings on high-risk, high-return trades. What's next? “Being open to crypto astrology might literally change your life,” says Maren Altman. She’s a 23-year-old astrology influencer with over 1.2 million TikTok followers, and she believes the study of celestial bodies can be a valuable tool for making sense of cryptocurrency. “I’m tracking planetary cycles,” she says. “So I look at the positions of the planets at a given moment and then other times in history.” Altman emphasizes that you don’t have to be an expert trader to take advantage of this approach to investing. Just learn the signs that the market is about to get worse and “put some money aside to buy in if it dips.” [time-brightcove not-tgx=”true”] Crypto astrology is just one unusual example of how younger generations are doing away with traditional investing methods in favor of less time-tested approaches, from meme stocks to crypto to NFTs. Fueled by the economic volatility of the COVID-19 pandemic, millennial and Gen Z investors have been taking big swings on high-risk, high-return trades rather than letting investments simmer. They’re also weathering a punishing crash. On May 14, Altman posted a reassuring message for everyone who lost money in the recent debacle. The market, she said, would stabilize—especially since Luna was “eclipsed under a lunar eclipse.” She was talking about the near-total collapse of the crypto token Luna, which accompanied the fall of its sister stablecoin TerraUSD (UST) and plunged the broader crypto market into freefall last week. The crash wiped out more than $400 billion in crypto market capitalization in a matter of days and bankrupted many investors. It’s been a “cryptocurrency bloodbath,” says Glauber Contessoto, a 34-year-old crypto enthusiast better known as the “Dogecoin Millionaire.” Contessoto made a name for himself in the crypto world last year by exceeding $1 million in Dogecoin holdings just over two months after investing his life savings of around $180,000 in the meme coin in 2021. And while he says that creating a dollar-pegged stablecoin like UST that can’t stay stable “takes all of the trust out of what everyone’s trying to do with crypto,” he’s committed to staying the course. “Whether you’re looking at Bitcoin or Dogecoin or Cardano or Ethereum… all of them have seen fluctuations,” he says. “The issue with newer coins is it’s harder to gauge if they’re going to recover or not, because we haven’t seen the data to prove that.” Crypto’s decline is reflective of a wider retreat from risky assets like tech stocks that’s been triggered in recent months by inflation, rising interest rates, and economic uncertainty brought on by Russia’s invasion of Ukraine. But crypto’s downturn has been notably sharper than the drop in the stock market. While the S&P 500 has slumped by roughly 18% so far this year, Bitcoin’s price has plummeted by nearly 40% in the same timeframe. Even with Dogecoin falling by over 50% this year, Contessoto’s faith in crypto’s long-term viability hasn’t waned. “All of this is temporary,” he says. “If you look at the history of Bitcoin, it’s still the most incredible investment you could have made in the last decade. We’ve seen drops in Bitcoin of 80%, 90% over the years and it never gets easier. But you stand firm because you know that crypto is the future and you know that everything will pan out eventually and slowly rise.” Why young people got so into investing Before crypto and NFTs began spiking in popularity, meme stock mania set in amongst young people. It was January 2021, and users of Reddit’s WallStreetBets subreddit banded together to intentionally inflate GameStop’s stock in order to force a short squeeze. That made the market more volatile. It was a fateful moment in time for retail investors. More than 10 million Americans opened new brokerage accounts in 2020, according to a 2021 report by consulting firm Deloitte. Encouraged by pandemic-induced shocks that led to record highs and lows, this new class of individual investors was responsible for 20% of all stock trading less than a year after the pandemic’s onset and has continued to grow more empowered as time has gone on. Most of these new investors are from younger generations. Survey data from brokerage firm Charles Schwab suggests that roughly two-thirds are millennials and Gen Zers, meaning young people are enjoying an unprecedented level of market power. They’re also wielding it in unprecedented ways. Research conducted by global data intelligence company Morning Consult indicates that 13% of Gen Zers and 11% of millennials are willing to take substantial financial risks in expectation of earning substantial rewards as compared to 3% of Boomers. The possibility of getting rich quick is what appeals to many younger people about the crypto and NFT markets, says 33-year-old Shane Martz, a crypto influencer known on social media as the Jolly Green Investor. “The time to take risks on investments is when you’re young,” he says. “And right now, crypto and NFTs are that scene. They offer you the opportunity of getting back 10x or 100x on your investment within a few months or even weeks.” A November report published by Pew Research Center showed that roughly 31% of 18-29-year-old Americans have invested in, traded, or used a cryptocurrency, compared with smaller shares of adults in older age groups. Altman attributes this trend to the rise of easily accessible investing advice online. “The internet opens access to information that might have previously been gate-kept or intentionally just not advertised to the public,” she says. “When I was taking business school classes, I felt like there were certain words for things that were—I don’t want to say pretentious—but intended to keep people out. It doesn’t need to be that complicated. Online, people can cut through that easier.” That’s even how Contessoto got his start. He says he first began looking into crypto after the popular commission-free investing app Robinhood took steps to curb the trading of GameStop stock and other heavily shorted securities in early 2021—and ultimately learned about Dogecoin on a Reddit thread “I had some money invested in GameStop and then after Robinhood pulled what they did, it became apparent that style of investing was no longer working for me” he says. “I started looking at alternative ways of investing and that’s how I came across crypto.There were a lot of people in my shoes who lost a lot of money and started switching over.” What now? As the past week has shown, putting your faith in more volatile assets doesn’t always pan out. Newbie investors are often on the lookout for an investing opportunity that has the potential to change their fortune overnight because of success stories they’ve seen online, says Martz. But those types of gains aren’t the norm. “Social media is the reason everyone really wants to get involved in these newer trends because it makes them seem so easy and glamorous,” he says. “Everyone’s always chasing the next shiny thing. They’re seeing people driving around in Lambos on TikTok and Instagram saying, ‘I work two hours a day from anywhere in the world,’ or, ‘I just turned $1,000 into $500,000.’ But the reality is that successful investing takes a lot of work and dedication.” Even after his unprecedented success investing in Dogecoin, Contessoto says that he still cautions less-experienced investors against wild speculation. “People ask me questions all the time like, ‘How do I do what you did?’ But I consider Dogecoin this once-in-a-lifetime, perfect-storm scenario. I couldn’t even do it again.” Instead, he advises those just getting into the crypto space to stick to “blue-chip cryptocurrencies” like Bitcoin and Ethereum. “If you look at their track records, those two are the powerhouses. Obviously, it’ll be a slower grind with a slower growth rate. But it’s like, you can either play it safe or you can try your hand at a bunch of speculation plays and maybe lose all your money.” Still, Contessoto realizes it might seem disingenuous to give others advice that he didn’t take himself. “It’s hard to tell people to do something that you didn’t,” he says. “You know, I’m saying, ‘Hey, play it safe—buy Bitcoin and Ethereum.’ But I was over here YOLO-ing into Dogecoin and it happened to work out great for me.” Martz says that crypto’s current debacle illustrates how the crypto market can be manipulated just like the stock market. “We’ve seen over the past week that there’s large entities buying and selling to drive the price up and down. And unfortunately, it’s the whales that win the game every time. The retail investors always lose,” he says. “So the best thing you can do is educate yourself and try to take advantage of the trends.” But that doesn’t mean that a return to traditional investing is seen as the way forward for those who have made the switch. While some critics view crypto as a Ponzi scheme, Contessoto says they’re missing the big picture. “A lot of these old-school investing guys look at crypto as something that doesn’t create anything and is only worth more because more people are buying into it,” he says. “But we’re talking about a new form of money that didn’t exist a little over 10 years ago. It’s something more people should research and try to understand how it can be beneficial.” For those who are looking to the stars for an answer, Altman predicted on TikTok that prices will somewhat restabilize and improve over the summer. “Once eclipse season ends, I expect a lot of this insanity to end,” she said......»»

Category: topSource: timeMay 19th, 2022