Russia’s Yandex to launch e-grocery delivery in Paris then London
-
Bloomberg
Bitcoin Plunges in Biggest Intraday Drop Since February
(Bloomberg) — Bitcoin plunged the most in more than seven weeks, just days after reaching a record.The biggest crypto coin fell 8.5% to $55,810.32 as of 2:52 p.m. in Singapore on Sunday, after declining as much as 15.1% to $51,707.51. Ether, the second-largest token, dropped almost 18% before paring losses.Several online reports attributed the plunge to speculation the U.S. Treasury may crack down on money laundering that’s carried out through digital assets.Bitcoin hit a record high of $64,869.78 last week ahead of the debut trade for the cryptocurrency exchange Coinbase Global Inc. on the Nasdaq Wednesday. The original crypto coin, Bitcoin is valued at more than $1 trillion after a more than 800% surge in the past year.Bitcoin Approaches $65,000 With Coinbase Listing Fueling DemandGrowing mainstream acceptance of cryptocurrencies has spurred Bitcoin’s rally, as well as lifted other tokens to record highs. Interest in crypto went on the rise again after companies from PayPal to Square started enabling transactions in Bitcoin on their systems, and Wall Street firms like Morgan Stanley began providing access to the tokens to some of the wealthiest clients.That’s despite lingering concerns over their volatility and usefulness as a method of payment. Dogecoin, a token created as a joke and which has been boosted by the likes of Elon Musk and Mark Cuban, rallied more than 110% Friday before dropping the next day. Demand was so brisk for the token that investors trying to trade it on Robinhood crashed the site, the online exchange said in a blog post Friday.Governments are inspecting risks around the sector more closely as the investor base widens.Federal Reserve Chairman Jerome Powell last week said Bitcoin “is a little bit like gold” in that it’s more a vehicle for speculation than making payments. European Central Bank President Christine Lagarde in January took aim at Bitcoin’s role in facilitating criminal activity, saying the cryptocurrency has been enabling “funny business.”Turkey’s central bank banned the use of cryptocurrencies as a form of payment from April 30, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses. India will propose a law that bans cryptocurrencies and fines anyone trading or holding such assets, Reuters reported in March, citing an unidentified senior government official with direct knowledge of the plan.Crypto firms are beefing up their top ranks to shape the emerging regulatory environment and tackle lingering skepticism about digital tokens. Bitcoin’s most ardent proponents see it as a modern-day store of value and inflation hedge, while others fear a speculative bubble is building.(Updates with regulators’ concerns from seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
-
Reuters
Exclusive: China’s Ant explores ways for Jack Ma to exit as Beijing piles pressure – sources
Ant Group is exploring options for founder Jack Ma to divest his stake in the financial technology giant and give up control, as meetings with Chinese regulators signaled to the company that the move could help draw a line under Beijing’s scrutiny of its business, according to a source familiar with regulators’ thinking and two people with close ties to the company. Reuters is for the first time reporting details of the latest round of meetings and the discussions about the future of Ma’s control of Ant, exercised through a complicated structure of investment vehicles. The Wall Street Journal previously reported that Ma had offered in a November meeting with regulators to hand over parts of Ant to the Chinese government.
-
Reuters
Wall Street Week Ahead: Tech retakes market lead as investors eye yields, earnings
U.S. technology and growth stocks have taken the market’s reins in recent weeks, pausing a rotation into value shares as investors assess the trajectory of bond yields and upcoming earnings reports. Technology has been the top-performing S&P 500 sector in April, rising 8% versus a 5% rise for the benchmark index. Big tech-related growth stocks in other S&P 500 sectors such as Amazon Inc, Tesla Inc and Google-parent Alphabet Inc have also charged higher.
-
-
Bloomberg
‘Roaring Kitty’ Boosts GameStop Bet After Exercising Options
(Bloomberg) — The Reddit user who helped fuel the surge in GameStop Corp.’s stock price this year has doubled down on his bet by exercising his call options and buying even more shares.Keith Gill, who goes by monikers “Roaring Kitty” and “DeepF___gValue,” posted a screenshot of his portfolio showing that he has exercised 500 GameStop call options expiring Friday at a strike price of $12, giving him 50,000 more shares. The stock closed at $154.69 on Friday.On top of that, Gill bought another 50,000 shares of the video-game retailer, effectively doubling his holdings to 200,000 shares from 100,000 at the beginning of the month. His total investment in GameStop is now worth more than $30 million, giving him a profit of nearly $20 million.Gill’s mother, Elaine Gill, reached by phone at his childhood home in Massachusetts, confirmed the Reddit screenshots posted by her son.Gill rose to fame this year as one of the most influential voices on Reddit and YouTube amid an effort by retail traders to squeeze GameStop short-sellers. He testified at a congressional hearing in February, where he said he didn’t call for anyone to buy or sell the shares for his profit.The comments came as he was hit with a lawsuit that accused him of misrepresenting himself as an amateur investor. The suit alleges that he was actually a licensed securities professional who manipulated the market for profit, which he denied.GameStop Chief Executive Officer George Sherman, who is expected to leave, disposed of almost $12 million in shares, with the proceeds earmarked by the company to pay compensation-related taxes, according to a regulatory filing Friday. Earlier this week, he forfeited about 587,000 shares after failing to meet performance targets.The company is looking for a new CEO as part of a shake-up spurred by activist investor and Chewy.com co-founder Ryan Cohen, a person with knowledge of the matter has said.As part of a corporate overhaul spearheaded by Cohen, the company has brought in new executives, including chief officers for growth and technology as it seeks to move away from its brick-and-mortar business.GameStop, based in the Dallas suburb of Grapevine, Texas, has suffered with the video-game industry’s shift to online distribution. With gamers downloading or ordering software and gear online, there’s less reason to make a trip to a physical store.Shares of GameStop are up 721% so far this year, though they are less than half of the peak level in January. On Tuesday, the company announced plans to retire senior notes due in two years, leaving it virtually debt free.(Updates with background on company’s debt. A prior version corrected description of GameStop CEO’s stock transactions.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
-
Bloomberg
Historic Oil Glut Amassed During the Pandemic Has Almost Gone
(Bloomberg) — The unprecedented oil inventory glut that amassed during the coronavirus pandemic is almost gone, underpinning a price recovery that’s rescuing producers but vexing consumers.Barely a fifth of the surplus that flooded into the storage tanks of developed economies when oil demand crashed last year remained as of February, according to the International Energy Agency. Since then, the lingering remnants have been whittled away as supplies hoarded at sea plunge and a key depot in South Africa is depleted.The re-balancing comes as OPEC and its allies keep vast swathes of production off-line and a tentative economic recovery rekindles global fuel demand. It’s propping international crude prices near $67 a barrel, a boon for producers yet an increasing concern for motorists and governments wary of inflation.“Commercial oil inventories across the OECD are already back down to their five-year average,” said Ed Morse, head of commodities research at Citigroup Inc. “What’s left of the surplus is almost entirely concentrated in China, which has been building a permanent petroleum reserve.”The process isn’t quite complete. A considerable overhang appears to remain off the coast of China’s Shandong province, though this may have accumulated to feed new refineries, according to consultants IHS Markit Ltd.Working off the remainder of the global excess may take some more time, as OPEC+ is reviving some halted supplies and new virus outbreaks in India and Brazil threaten demand.Still, the end of the glut at least appears to be in sight.Oil inventories in developed economies stood just 57 million barrels above their 2015-2019 average as of February, down from a peak of 249 million in July, the IEA estimates.It’s a stark turnaround from a year ago, when lockdowns crushed world fuel demand by 20% and trading giant Gunvor Group Ltd. fretted that storage space for oil would soon run out.Stockpile SlumpIn the U.S., the inventory pile-up has effectively cleared already.Total stockpiles of crude and products subsided in late February to 1.28 billion barrels — a level seen before coronavirus erupted — and continue to hover there, according to the Energy Information Administration. Last week, stockpiles in the East Coast fell to their lowest in at least 30 years.“We’re starting to see refinery runs pick up in the U.S., which will be good for potential crude stock draws,” said Mercedes McKay, a senior analyst at consultants FGE.There have also been declines inside the nation’s Strategic Petroleum Reserve, the warren of salt caverns used to store oil for emergency use. Traders and oil companies were allowed to temporarily park oversupply there by former President Trump, and in recent months have quietly removed about 21 million barrels from the location, according to people familiar with the matter.The oil surplus that gathered on the world’s seas is also diminishing. Ships were turned into makeshift floating depots when onshore facilities grew scarce last year, but the volumes have plunged, according to IHS Markit Ltd.They’ve tumbled about by 27% in the past two weeks to 50.7 million barrels, the lowest in a year, IHS analysts Yen Ling Song and Fotios Katsoulas estimate.A particularly vivid symbol is the draining of crude storage tanks at the logistically-critical Saldanha Bay hub on the west coast of South Africa. It’s a popular location for traders, allowing them the flexibility to quickly send cargoes to different geographical markets.Inventories at the terminal are set to fall to 24.5 million barrels, the lowest in a year, according to ship tracking data monitored by Bloomberg.For the 23-nation OPEC+ coalition led by Saudi Arabia and Russia, the decline is a vindication of the bold strategy they adopted a year ago. The alliance slashed output by 10 million barrels a day last April — roughly 10% of global supplies — and is now in the process of carefully restoring some of the halted barrels.The Organization of Petroleum Exporting Countries has consistently said its key objective is to normalize swollen inventories, though it’s unclear whether the cartel will open the taps once that’s achieved. In the past, the lure of high prices has prompted the group to keep production tight even after reaching its stockpile target.Mixed BlessingTo consuming nations the great de-stocking is less of a blessing. Drivers in California are already reckoning with paying almost $4 for a gallon of gasoline, data from the AAA auto club shows. India, a major importer, has complained about the financial pain of resurgent prices.For better or worse, the re-balancing should continue. As demand picks up further, global inventories will decline at a rate of 2.2 million barrels a day in the second half, propelling Brent crude to $74 a barrel or even higher, Citigroup predicts.“Gasoline sales are ripping in the U.S.,” said Morse. “Demand across all products will hit record levels in the third quarter, pushed up by demand for transport fuels and petrochemical feed-stocks.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
-
Bloomberg
Tech Stocks Are Mired in Unfamiliar Territory as Market Laggards
(Bloomberg) — Investors’ love affair with technology stocks has cooled off noticeably this year.And while the upcoming deluge of earnings from the group may offer an opportunity to rekindle the romance, tech faces an uphill battle in commanding the type of devotion it once enjoyed in the stock market.After trouncing all other sectors in 2020, tech stocks in the S&P 500 Index have drifted toward the back of the pack this year, out-performed by sectors like financials and industrials perceived to have better growth prospects. Bulls are betting that strong results and forecasts from companies like Apple Inc. will help catapult tech back to the forefront, yet lofty valuations pose a challenge.“If these companies want to return to share-price growth, they need to have a good story about where growth is going to come from and when,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.A rally in the past two weeks has returned the tech-heavy Nasdaq 100 Index to a record this month after rising interest rates and concerns the stocks were too expensive sent the benchmark down 11% in early March. While tech is once again leading the market for the month of April, an advance of 9.9% for the group in the S&P 500 this year still trails seven of the 11 other main industries.As is usually the case, the tech group is expected to post strong growth in sales and earnings. What’s different this time is that growth in much of the rest of the market will be even better this year, flattered by comparisons to the same period in 2020 when broad swathes of the economy were shut down.Technology companies are expected to lead the S&P 500 with 16% revenue growth in the first quarter, according to data compiled by Bloomberg Intelligence.Projections for the rest of the year, however, aren’t quite as bright. Growth is expected to be just 5.6% in the fourth quarter. In terms of profit expansion, tech looks even less appealing with estimates for 2021 at 22% — an impressive performance, to be sure, but one that would lag behind financials, industrials, consumer discretionary and materials.For the bears, even beating those growth projections isn’t enough to support valuations that are the highest in years. At 41 times trailing profits, the Nasdaq 100 is trading at the most-expensive valuation since 2004.Investors who are fretting about valuations are underestimating revenue growth potential for many technology companies like Microsoft Corp. and cybersecurity company Zscaler Inc. that are poised to capture even more spending from companies investing in digital services, according to Daniel Ives, an analyst with Wedbush Securities Inc.“What’s been lost in the noise is the massive underlying fundamental growth stories that are happening as part of the digital transformation,” said Ives. “Across the board, it’s going to be a domination quarter for the tech space.”Trailing the S&PAmazon.com Inc. is the only company among the top five projected to see its revenue growth shrink this year, according to data compiled by Bloomberg. That’s hardly a surprise considering how much its core businesses like e-commerce and web services surged in 2020 as a result of U.S. lockdowns.Alphabet Inc., Facebook Inc., Apple and Microsoft are all expected to see revenue growth accelerate in their current fiscal years.Amazon and Apple, the two best performing megacap stocks last year, have trailed the S&P 500 in 2021. Amazon has gained 4.4%, while Apple has advanced just 1.1%.Some of the most-expensive software companies, in particular, have taken a beating so far this year. Coupa Software Inc., a maker of expense management software that trades at nearly 30 times this year’s projected sales, has fallen more than 20%.For some investors, elevated valuations are not ignored so easily.“Tech stocks are extremely expensive historically,” said Michael O’Rourke, chief market strategist at Jonestrading. “Even if the optimistic earnings forecasts are met, the market would still be very expensive.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
-
Reuters
Biden White House’s secret weapon on infrastructure: small businesses
The Biden administration is seeking to leverage a secret weapon in its bid to get corporate America to pay for a sweeping jobs and infrastructure package: the nation’s some 30 million small businesses. The White House’s effort, previously unreported, seeks to harness the political popularity of small businesses and the current agitation among them over a tax structure many view as generous to larger, billion-dollar corporations like Walmart Inc and Amazon.com Inc over Main Street establishments. In doing so, the White House believes it has allies that will serve as an antidote to the large national trade groups – like the U.S. Chamber of Commerce and The Business Roundtable – who have come out in favor of infrastructure investment but strongly against President Joe Biden’s plan to raise the corporate tax rate from 21% to %28.
-
Bloomberg
Knighthead, Certares Boost Bid to Buy Hertz From Bankruptcy
(Bloomberg) — The fight to buy Hertz Global Holdings Inc. out of bankruptcy is escalating after a group of investors that were previously outbid sweetened their deal to give the reorganized company an enterprise value of around $6.2 billion.The amended proposal from Knighthead Capital Management and Certares Management would pay unsecured bondholders in full, and offer existing shareholders equity in the reorganized company, according to people with knowledge of the plan who asked not to be identified discussing a private matter.The new plan includes a private placement of $750 million in reorganized stock from ad hoc equity investors that would be available to eligible shareholders, the people said. Apollo Global Management agreed to provide $2.5 billion in preferred equity financing as part of the amended proposal, the people said. The deal assigns the reorganized Hertz an equity market value of around $5.5 billion.Hertz shares surged as much as 46% Friday morning in New York to trade at $1.79.Representatives for Knighthead, Certares and Apollo declined to comment. A representative for Hertz didn’t immediately respond to a request for comment. The Wall Street Journal earlier reported on the amended plan.Hertz filed for bankruptcy in May when the near-total shutdown of the global travel industry sent its rental revenues plunging. It became a popular stock among day traders, who sent shares of the bankrupt company soaring, even though common shareholders are typically wiped out in Chapter 11 proceedings. Hertz briefly raised funds for its bankruptcy by selling stock, but abandoned the program after the Securities and Exchange Commission questioned the plan.Earlier this month, Hertz chose a rival offer from Centerbridge Partners, Warburg Pincus and Dundon Capital Partners to help it exit bankruptcy. Under that plan, supporting noteholders agreed to support the exchange of unsecured funded debt claims against Hertz for about 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of shares.The sweetened offer from Knighthead gives the company a new option to consider as it works to leave court protection. Hertz aims to complete the process in June, and has put tentative restructuring terms in place for review and approval by a bankruptcy judge in Wilmington, Delaware.Hertz is rushing to exit court protection to take advantage of the hot stock market and an expected surge in summer travel as more consumers are vaccinated against Covid-19. The industry is raising prices as business and leisure travel surges and household-name rental companies don’t have enough cars for customers to drive off the lot. Firms are adding cars back to their fleets, but can only do so slowly since a semiconductor shortage has hampered production of new cars. Hertz, like rivals that didn’t file bankruptcy, sold large portions of its inventory and cut costs severely to shore up finances when U.S. travel ground to a halt last year. The amended Knighthead and Certares plan also includes $550 million of cash in a recovery pool that would pay general unsecured creditors in full, the people said. It also includes a 250 million euro ($300 million) interim financing plan to help meet the liquidity needs of Hertz’s international businesses, they added.(Updates with bankruptcy exit background in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
-
Reuters
U.S. stops short of branding Vietnam, Switzerland, Taiwan currency manipulators
WASHINGTON (Reuters) -The U.S. Treasury Department on Friday said Vietnam, Switzerland and Taiwan tripped its thresholds for possible currency manipulation under a 2015 U.S. trade law, but refrained from formally branding them as manipulators. In the first semi-annual foreign exchange report issued by Treasury Secretary Janet Yellen, the Treasury said it will commence “enhanced engagement” with Taiwan and continue such talks with Vietnam and Switzerland after the Trump administration labeled the latter two as currency manipulators in December.