Apr 15, 2021

India Proved to become a popular and Clever Investor in Poor Countries.

 economist.com

India has proved to be a popular—and clever—investor in poor countries

Apr 15th 2021

It cannot match China’s heft in foreign investment, but offers lessons for other investors


IN CENTRAL Lusaka a brand-new flyover flutters with the green, white and saffron of the Indian flag. Throughout the Zambian capital lorries produced by Tata Motors, part of the steel-to-tech Tata empire, are used for everything from construction to rubbish collection. Signs inside the vehicles instruct drivers in both English and Hindi. The lorries’ occupants phone each other over a mobile network run by Bharti Airtel, an Indian telecoms firm.

Many Zambians, like people in many other developing countries, complain loudly and often about the Chinese firms that are big local investors. India is also a big commercial presence but no one bats an eyelid. Tata Motors has huge assembly plants in many countries, including South Africa and Malaysia. Bharti Airtel is one of the biggest telecoms operators in Africa. The Aditya Birla Group is the world’s largest producer of carbon black, an ingredient in car tyres. It is one of Egypt’s biggest industrial investors and exporters.

The Political CEO

economist.com

The political CEO

Apr 15th 2021

Companies and democracy
The political CEO

Business and politics are growing closer in America, with worrying consequences


WHEN AMERICANS notice business and politics mingling in other countries they often see it as a sign of institutional decay, crony capitalism or authoritarianism. Today the mixing of government and corporations is happening in America. Sometimes that is in pursuit of honourable causes, as in the protest of CEOs over new laws restricting voting in Georgia and other states. Sometimes it is visible in the statesman-CEO: the latest manifesto from Jamie Dimon, boss of JPMorgan Chase, pronounces on military procurement and criminal justice among many other weighty concerns. Most broadly of all, it is reflected in how the Business Roundtable, a lobbying group, has extended the corporate remit to include serving all stakeholders, for the success of their firms, communities and country.

This newspaper strongly supports the protection of voting rights. We believe that companies operating in competitive markets advance social progress. Nonetheless, as classical liberals, we also believe that concentrations of power are dangerous. Businesspeople will always lobby for their own advantage, but the closer they get to the government, the more harm they threaten to both the economy and politics.

Metals | Spot Prices at Close on Thursday 15, April 2021.

 CMI

Spot Prices as of close of trading in New York
 
Thursday, April 15, 2021
 
 
 
GOLD
 
TODAY
 
$1,765.68
CHANGE
 
+$30.12
WEEK AGO
 
$1,756.38
MONTH AGO
 
$1,734.02
YEAR AGO
 
$1,732.86
SILVER
 
TODAY
 
$25.87
CHANGE
 
+$0.46
WEEK AGO
 
$25.51
MONTH AGO
 
$26.28
YEAR AGO
 
$15.57
PLATINUM
 
TODAY
 
$1,200.50
CHANGE
 
+$23.25
WEEK AGO
 
$1,234.99
MONTH AGO
 
$1,222.50
YEAR AGO
 
$786.75
PALLADIUM
 
TODAY
 
$2,739.00
CHANGE
 
+$55.03
WEEK AGO
 
$2,635.41
MONTH AGO
 
$2,671.10
YEAR AGO
 
$2,247.43
GOLD/SILVER RATIO
 
68.25
 

U.S. Market at Close Report: Dow Breaks 300 Points on Thursday for the First Time after Key Companies Report Strong Earnings and Fresh data points to Rebound Economic Consumption.

 cnbc.com

Dow jumps 300 points to top 34,000 for the first time amid blowout economic data

Yun Li

U.S. stocks climbed to record levels on Thursday after key companies reported strong earnings and fresh economic data pointed to a rebound in consumer spending and the jobs market.

The Dow Jones Industrial Average rose 270 points to hit an all-time high, topping 34,000 for the first time ever. The S&P 500 gained 0.9%, also reaching an intraday record. The Nasdaq Composite advanced 1.1%.

Technology shares rebounded as bond yields fell. Netflix, Facebook and Alphabet climbed more than 2% each, while Amazon, Microsoft and Apple all gained at least 1%. The 10-year Treasury yield dropped 11 basis points below 1.53%. Higher rates tend to erode future earnings for growth-oriented companies.

Retail sales surged 9.8% in March as additional stimulus sent consumer spending soaring, the Commerce Department reported Thursday. That number topped the Dow Jones estimate of a 6.1% gain.

A separate report on Thursday showed that first-time filings for unemployment insurance dropped to the lowest level since March 2020. The Labor Department reported 576,000 new jobless claims for the week ended April 10. Economists polled by Dow Jones expected a total of 710,000.

"Although 34,000 by itself is just another number, this is a monumental feat when you think back to where we were last year at this time," said Ryan Detrick, chief market strategist at LPL Financial. "The speed and resiliency of this economic recovery is unlike anything we've ever seen and it helps to justify stocks at all-time highs."

Shares of UnitedHealth, a Dow member, gained 4% after results topped the Street's forecasts and the health insurer raised guidance for 2021.

Pepsi shares added 0.3% after the consumer snack and drink maker said sales last quarter rose nearly 7%, topping estimates.

The market has been grinding higher to reach new records in recent sessions amid the economic reopening and trillions of dollars in stimulus. The S&P 500 has gained nearly 10% in 2021 with energy and financials up the most year to date.

"I am incredibly bullish on the markets, and you are right to be worried about our deficits," Larry Fink, BlackRock CEO, said in an interview on "Squawk Box." "If we don't have economic growth that is sustainable over the next 10 years — our deficits are going to matter and they are going to elevate interest rates ... I believe because of monetary stimulus, fiscal stimulus, cash on the sidelines, earnings, markets are okay. Markets are going to continue to be stronger."

Shares of Citigroup erased earlier gains and last traded 0.4% lower. The bank posted results that beat analysts' estimates for first-quarter profit with strong investment banking revenue and a bigger-than-expected release of loan-loss reserves.

Bank of America shares rose as earnings last quarter blew past the Street on booming trading and investment banking results as well the release of loan-loss reserves. The shares dipped 2%, however.

Newly public crypto exchange Coinbase erased earlier gains and traded 1.6% lower in volatile trading. The stock got a boost earlier after it was revealed Ark Invest's Cathie Wood loaded up on the first day of trading.

On Tuesday, the Food and Drug Administration called for a pause in administering J&J's Covid-19 vaccine after six people in the U.S. developed a rare disorder involving blood clots. The announcement triggered a sell-off in reopening plays earlier in the week, but is not expected to have a material impact on the pace of the U.S. vaccine rollout.

Biggest Moves Midday: Coinbase, Virgin Galactic, Nvidia, United Health and More.

 cnbc.com

Stocks making the biggest moves midday: Coinbase, Virgin Galactic, Nvidia, UnitedHealth & more

Yun Li

Check out the companies making headlines in midday trading. 

UnitedHealth – Shares of health care giant jumped more than 3% after results topped the Street's forecasts. Its adjusted earnings came in at $5.31 per share, exceeding the $4.39 per share expected by analysts, according to FactSet. UnitedHealth also raised its earnings guidance for 2021.

Virgin Galactic – The space stock tumbled more than 12% to turn negative on the year after a filing showed founder Richard Branson sold more than $150 million worth of the company's stock over the past three days. Branson, and four entities he controls including Virgin Group, sold 5,584,000 shares of Virgin Galactic between April 12 and April 14.

Rite Aid — Shares of the pharmacy chain tumbled more than 8% after the company's fourth-quarter loss came in larger than expected. Rite Aid reported a loss of 78 cents per share on $5.92 billion in revenue. Analysts surveyed by Refinitiv expected a loss of 76 cents per share and $5.80 billion in revenue. The company's CEO said in a release that business was impacted by a "historically soft" cold and flu season.

Coinbase — A day after the cryptocurrency exchange's debut on the Nasdaq, shares rose 1.5%. The company got a buy rating and $500 per share price target, implying about 50% upside from yesterday's close. The cryptocurrency exchange also got a vote of confidence from popular investor Cathie Wood, whose firm Ark Invest bought about $250 million worth of Coinbase on Wednesday.

Charles Schwab — Shares of the e-broker dipped more than 3%, despite beating on the top and bottom lines of its first quarter earnings. Schwab also said it added a record 3.2 million new clients in the first quarter of 2021. The firm added about 2.4 million new accounts in all of 2020, which excludes accounts added from its acquisitions.

Nvidia – The chip stock rose 4.6% after Raymond James upgraded the company to a strong buy. "Our call … is meant to express our conviction in both the short and long term," the firm wrote in a note to clients. Raymond James also lifted its target on the stock from $700 to $750. The new target implies a 23% upside from where shares closed on Wednesday.

American Eagle – The retailer gained 3.7% after American Eagle said it anticipates first-quarter revenue topping $1 billion. The figure is ahead of the $904.1 million analysts surveyed by Refinitiv were expecting. The company told CNBC that it's seen strength in its denim division, and that customers have also started buying more tops. 

Bank of America – The bank stock fell 2.9% even after a quarterly report that topped Wall Street estimates on booming investment banking and trading results. Some analysts including Ken Usdin of Jefferies pointed to Bank of America's heightened expenses in the quarter, while others flagged the weaker-than-expected loan growth as a source for concern.

— CNBC's Maggie Fitzgerald, Tom Franck, Pippa Stevens and Jesse Pound contributed reporting.

Europe Markets at Close Report: European Markets Close at Record Highs

 EUROPE MARKETS


cnbc.com

European markets notch record highs with earnings season in focus

Elliot Smith

LONDON — European markets rallied to record highs Thursday as investors digested a fresh round of corporate earnings.

The pan-European Stoxx 600 closed up around 0.5% after hitting an all-time high earlier in the session. Mining stocks were the standout gainers, climbing 1.5%, with most sectors and major bourses in positive territory.

On Wall Street, U.S. stocks climbed to record levels on Thursday after key companies reported strong earnings and fresh economic data pointed to a rebound in consumer spending and the jobs market. Bank of America and Citi both posted strong earnings beats.

In coronavirus news, the U.S. Centers for Disease Control and Prevention panel decided Wednesday to postpone a decision on Johnson and Johnson's Covid-19 vaccine following the development of a rare, but potentially life-threatening blood-clotting disorder in six women.

Governments around the world are trying to up the ante on vaccine rollouts as the proliferation of Covid-19 is "growing exponentially," the World Health Organization warned on Monday.

Investors in Europe had an eye on a host of March inflation data out of major economies on the continent. Germany's overall non-harmonized consumer price index came in at 0.5% on a monthly basis and 1.7% year-on-year. France's official statistics agency reported monthly harmonized CPI inflation at 0.7% in March.

Corporate activity was also in focus in Europe on Thursday, with L'Oreal set to report first-quarter earnings after the bell and Italy's Unicredit held its AGM. Oil major Shell also published its annual environmental, social and governance update.

Deliveroo said its orders more than doubled in the first quarter from the same period last year, in its first trading update since the British food delivery company's high-profile IPO flop. But shares sank 3.8% after the firm warned of a "deceleration" in growth as coronavirus lockdown restrictions are rolled back.

In terms of individual share price movement, ABB gained 3.1% after the Swedish-Swiss tech manufacturer beat first-quarter profit expectations, while Belgian brewer AB InBev added 3.8% after Barclays upgraded the stock to "overweight" and raised its price target.

Toward the top of of the Stoxx 600, GSK climbed 4.6% as the FT reported that activist hedge fund Elliott Management had taken a multi-billion dollar stake in the company, while the European Medicines Agency said Thursday it is beginning a review of GSK's monoclonal antibody to treat Covid-19.

At the bottom of the European blue chip index, British e-commerce firm The Hut Group sank 5.8% after posting annual operating loss, citing costs that were largely related to a share-based payments charge.

Shares of real estate companies with assets in Berlin rose on Thursday after Germany's Constitutional Court struck down a law putting a rent cap on apartments in the capital. Deutsche Wohnen gained 2.5% following the ruling.

News | Business | Quarter Earnings: High Expectations Disappointment.

 barrons..com

This Quarter’s Earnings Have Impressed—So Far


High expectations often lead to disappointment. That hasn’t been the case this earnings season.

Yes, we’re two days into reporting season, but so far the numbers have been very, very good. All five of the major companies that reported Wednesday morning beat estimates and three of them finished higher on the day.

That’s a trend that looks set to continue Thursday, with Bank of America, PepsiCo, and UnitedHealth among the companies reporting better-than-expected earnings. So far, the reaction to the earnings looks good as well, with Bank of America up 1.1%, PepsiCo up 0.2%, and United Health up 1.8%.

That’s a far cry from the fourth-quarter earnings season where companies beat earnings handily but their stocks got hit. At that point, the future was uncertain and investors weren’t willing to bet on the gains continuing. This time, investors appear willing to bet that the good times can continue.

That’s especially true for banks. The three banks that reported earnings Wednesday averaged gains of 2.24% and there appear to be more gains ahead for the group. “While it is still early in the season, this could be an early sign that sentiment on the bank industry is changing for the better,” Wells Fargo Securities strategist Chris Harvey says.

It’s still early, but perhaps the market wasn’t set up for disappointment after all.

Ben Levisohn

***

Coinbase Is Now Worth More Than $85 Billion

The largest cryptocurrency exchange in the U.S. made a splash on its first day of public trading Wednesday, with shares soaring as high as $429—briefly giving the company a valuation of more than $100 billion—before closing below that high.

  • Shares closed at $328, more than 30% above their $250 reference price and valuing the company at $85.8 billion on a fully diluted basis. Coinbase is now one of the 100 most valuable U.S. companies.
  • The company reported preliminary profits of $730 million to $800 million in the first quarter of 2021, versus $32 million during the same period in 2020.
  • Coinbase’s rise coincides with the resurgence of cryptocurrencies, most notably Bitcoin. The virtual currency has risen more than 112% in 2021 as it gains more mainstream acceptance.
  • Federal Reserve Chair Jerome Powell called cryptocurrencies “vehicles for speculation,” in an interview with the Economic Club of New York. Mike Novogratz, CEO of Galaxy Digital and a prominent crypto proponent, warned that the market could be in store for “a washout.”

What’s Next: The listing wasn’t just a boon for Coinbase. It also sent the price of Bitcoin to an intraday record of nearly $65,000, and Ether, the second largest cryptocurrency by market value, as high as $2,400, in Wednesday trading. The Dow Jones Industrial Average also hit a new intraday high.

—Anita Hamilton

***

Delta Kicks Off Airline Earnings as Carriers Expand Summer Flight Schedules

With travel expected to surge this summer as the nation emerges from the worst of the pandemic, Wall Street is urging investors to focus less on earnings for the first quarter of 2021, and more on profits going forward.

  • Delta is expected to report an earnings drop of 53% compared to the first quarter of 2020, with losses of $1.6 billion, according to consensus estimates. But analysts will likely be more interested in the airline’s outlook for summer travel as well as business and international markets.
  • There are already signs of an uptick in bookings. Delta said it expects March revenue to be 40% higher than February. American Airlines said Wednesday that it is planning to operate a near normal summer schedule.
  • Other airlines are ramping up for summer as well: United will start two dozen new routes starting Memorial Day, while discounter Frontier said Tuesday that it is adding eight new routes plus flights to Alaska.

What’s Next: Leisure travel is expected to recover to 95% of its 2019 levels in 2022, according to a JPMorgan forecast from analyst Jamie Baker. If operating costs return to 2019 levels as well, that could result in nearly $18 billion in savings for the industry.

Anita Hamilton

***

Fully Vaccinated? Get Ready for Another Booster Shot Later This Year

Moderna is the first U.S. vaccine maker to announce that a booster shot aimed at neutralizing a specific coronavirus variant will be available this fall. Concerns that existing coronavirus vaccines may not adequately protect against variants has led other vaccine makers to look at ways to modify their drugs as well.

  • After announcing in March that it had injected its first human trial participant with a booster shot aimed at protecting against the coronavirus variant first identified in South Africa, Moderna said Wednesday that its modified vaccine will be ready by this fall.
  • “I want to make sure there are boost vaccines available in the fall so that we protect people as we go into the next fall and next winter season in the U.S.,” Moderna CEO Stéphane Bancel told CNBC.
  • The news follows Tuesday’s announcement that the Moderna vaccine remains highly effective six months after the second dose. Pfizer reported the same earlier this month. That’s key to both vaccines gaining full U.S. regulatory approval, enabling makers to market shots directly to consumers and sell them to private companies.
  • Pfizer spokeswoman Jerica Pitts told Barron’s on Wednesday, “We are also studying a new construct of the Pfizer-BioNTech vaccine based on the B.1.351 lineage, first identified in South Africa.” Pfizer announced in February that it was testing the effectiveness of a third dose of its existing formula on variants.

What’s Next: Bancel said Moderna is also working on a flu vaccine which it eventually hopes to combine with its Covid-19 vaccine, “so you only have to get one boost… every year that would protect you to the variant of concern against Covid and the seasonal flu strain.”

Janet H. Cho

***

U.S. to Slap Tough New Sanctions on Russia Over Alleged Election Meddling, Hacking

The U.S. government is due to announce on Thursday severe new sanctions on Russia for election interference and other malign activity, according to government officials quoted in multiple U.S. news media.

  • The measures would include for the first time far-reaching financial sanctions, including tough restrictions on U.S. financial institutions’ ability to trade Russian sovereign debt, according to the reports.
  • The sanctions would be largely in response to the cyberattack on SolarWinds software, discovered in December, which U.S. authorities say allowed Russian hackers to access thousands of companies and government offices.
  • Ten diplomats from the Russian embassy in Washington will also be expelled, according to The Wall Street Journal. The sanctions will designate Russian companies and individuals alleged to share responsibility for the hacking.
  • The announcement would come two days after President Biden called his Russian counterpart Vladimir Putin to express his concerns about those issues, as well as over the Russian military buildup on Ukraine’s borders, and suggest a bilateral meeting.

What’s Next: Putin always took care to appear relaxed after previous sanctions rounds from the U.S. and Europe, but this time it might be different: The Biden version will be much more costly for the Russian economy, if the U.S. takes radical steps to curb the trading of Russian debt on international markets.

Pierre Briançon

***

Convicted Fraudster Bernie Madoff Dies at 82

Bernard Madoff died in prison at the age of 82. The convicted fraudster was serving a 150-year sentence in federal prison for one of the largest financial crimes in U.S. history.

  • The former chairman of the Nasdaq Stock Market made a reputation of providing unerring positive returns, year in and year out, regardless of the fluctuations of the stock market. He would take on investors on the condition they didn’t ask any questions.
  • Madoff’s Ponzi scheme unraveled when the stock market plunged in the wake of the 2008-09 financial crisis. Until then, he could simply falsify his investors’ statements with bogus trades that showed their accounts steadily rising in value.
  • Barron’sraised doubts about Madoff’s inexplicably consistent high returns back in 2001, but the scheme continued for years. He confessed after his arrest that there were no trades, just fictitious numbers. As with all Ponzi schemes, as long as the money kept coming in, the fraud could continue.

What’s Next: A court-appointed trustee has recovered more than $13 billion of the $17.5 billion investors had entrusted to Madoff, according to the Associated Press. At the time of his arrest in December 2008, their account statements showed holdings totaling $60 billion.

Randall W. Forsyth and Connor Smith

Alissa Resnick and Brett Benhazl’s experience buying a home will sound familiar to many Americans negotiating today’s housing market.

The married couple began seriously searching for a property to buy in Austin, Texas, after November’s presidential election. After their first two bids fell through, they were ready to go all out, Resnick said.

“We were seeing the cost of houses increase even in the couple of months that we were looking, and we were worried about getting priced out if we didn’t get something quickly,” Resnick, 30, said.

They quickly realized that, at a minimum, they would need to include an appraisal waiver in whatever offer they made. The Austin real estate market is as competitive as ever. Buyers from pricier markets including California and New York are coming in, ready to make all-cash offers. Same goes for investors, looking to convert properties into rentals or flip them for a profit.

A reasonably-priced home could fetch 20 or more offers, said Resnick, who works as a senior product manager in the tech industry. Their real estate agents explained to them that to be competitive, the couple should consider doing an appraisal waiver.

The couple understood the rationale behind buyers waiving the appraisal contingency—after all, sellers wouldn’t want to deal with buyers who might back out if the appraisal came in low, especially given how high bids could come in above the asking price. But that didn’t mean the decision came without apprehension, once their third offer was accepted.

While Austin may have one of the most competitive real-estate markets in the country, home buyers all across the U.S. are facing these same difficult decisions. With so many buyers in the market—and so few homes to go around—families are often facing pressure to waive certain contingencies in order to make their bids stand out.

But these waivers involve risky trade-offs that could cost buyers thousands of dollars or more, and leave them without vital protections should elements of a deal fall through.

Read more here.

Jacob Passy

Latest Post Published

India Proved to become a popular and Clever Investor in Poor Countries.

  economist.com India has proved to be a popular—and clever—investor in poor countries Apr 15th 2021 ...