Equity investors are getting a bit on the gas; IMF raises economic growth projections |
Stocks fall as the market returns from highs
NEW YORK – A wobbly trading day on Wall Street left stocks slightly lower on April 6, pulling the market from all-time highs it had reached a day earlier.
The S&P 500 broke a three-day winning streak, slipping 0.1% after hesitating between small gains and losses much of the afternoon. Stocks in the benchmark were split almost evenly between winners and losers. Technology and healthcare stocks were responsible for much of the decline.
Financials fell as bond yields eased. This has thwarted the broader gains of companies that depend on continued economic growth to recover. Oil prices have gone up.
Much of the market swings lately have been happening as Wall Street assesses the health and speed of the economic recovery.
Many sectors and businesses have been strongly supported by the pandemic, as vaccine distribution helps businesses reopen, while government stimulus measures help consolidate businesses in the meantime. Even if this shift happens, the technology and other stocks that have benefited from the closings still look fundamentally strong, said Jeff Buchbinder, equity strategist at LPL Financial.
“We see this battle happening here in the markets every day,” he said. “This will lead to a bit of unsubscribing.”
IMF improves growth outlook for ’21
WASHINGTON – The deployment of COVID-19 vaccines and vast amounts of government assistance will accelerate global economic growth to an all-time high this year in a powerful rebound from the pandemic recession, the International Monetary Fund says in its latest forecast.
The 190-country lending agency said on Tuesday it forecast global economic growth of 6% in 2021, down from 5.5% it forecast in January. This would be the fastest expansion of the world economy in IMF records dating back to 1980. In 2022, the IMF predicts that international economic growth will slow to 4.4%, still strong, from its forecast 4.2% in January.
“A way out of this health and economic crisis is increasingly visible,” said IMF chief economist Gita Gopinath.
The agency now estimates that the global economy shrank 3.3% in 2020 after the recession that followed the outbreak of the coronavirus across the world more than a year ago. It’s the worst annual figure in the IMF’s database, but not as bad as the 3.5% drop he estimated three months ago.
The US economy, the world’s largest, is now expected to grow 6.4% in 2021 – its fastest growth since 1984 – and 3.5% in 2022.
Jobs at the highest rate ever
WASHINGTON – The pace of job vacancies reached an all-time high in February, a sign of healthy hiring and a sign of hope for those looking for work.
The vacancy rate – which is the number of jobs available as a percentage of occupied and open jobs, combined – rose to 4.9%, the highest since the figure was first monitored in December 2000, the Ministry of Labor announced on Tuesday.
The increase reflects a sharp increase in job vacancies to 7.4 million, up from 7.1 million in January and well above the pre-pandemic level of around 7 million. Total hires rose to 5.7 million, although this figure was lower than the February 2020 figure, just before the coronavirus escalated.
The figures come from the Job Postings and Labor Turnover Survey, or JOLTS, which reports the number of job postings, total hires, layoffs and departures . The hiring figures represent a gross figure, while the monthly jobs report provides a net number of jobs gained or lost.
Hedge fund default costs the bank $ 4.7 billion
GENEVA – Swiss bank Credit Suisse on Tuesday announced the departure of two senior executives and said it expected a one-time charge equal to $ 4.7 billion in connection with a previously announced default by a US hedge fund on calls margin.
The bank said it tentatively plans to report a loss of 900 million francs for the first quarter – although the final figures are still being worked out. Credit Suisse has announced that it has suspended a share buyback program and reduced its dividend following the default.
“The significant loss of our blue chip service business linked to the failure of a US-based hedge fund is unacceptable,” said CEO Thomas Gottstein. “Serious lessons will be learned.”
The bank said it had launched two investigations “to be conducted by external parties,” and said Brian Chin, chief investment officer of Credit Suisse, and Lara Warner, chief compliance and risk officer, will leave the bank.
Credit Suisse has not identified the hedge fund or other banks involved, or given further details on what happened. Press reports identified the hedge fund as New York-based Archegos Capital Management.
The Financial Times reported last month that Archegos was heavily exposed to ViacomCBS and some Chinese tech stocks and was hit hard after shares in the US media group fell in March. A margin call is triggered when investors borrow using their stock portfolio as collateral and must offset the balance when the stock price falls and the collateral is worth less.
Topps to go public in $ 1.3 billion PSPC deal
NEW YORK – Sports collectible card company Topps partners with special purpose acquisition company in deal valued at $ 1.3 billion and seeking a public listing.
Topps Co. announced on April 6 that it will join Mudrick Capital Acquisition Corp., which will complete a $ 250 million investment. Other investors include GAMCO Investors and Wells Capital Management.
Former Disney CEO Michael Eisner will remain Chairman of Topps. His company, The Tornante Co., which bought Topps in 2007, will integrate all of its capital into the new company, which will keep the name Topps. The merged company will be headed by Michael Brandstaedter, CEO of Topps.
Topps, which sells collectible cards, stickers, albums and collectible card games, has many sporting partners including Major League Baseball, Major League Soccer, UEFA, Bundesliga, National League of hockey and Formula 1. It also has agreements with Disney and World Wresting Entertainment. The 80-year-old company reported $ 567 million in revenue last year.
GM’s electric vehicle pickup to travel 400 miles per charge
DETROIT – An electric version of the Chevrolet Silverado pickup will have an estimated range of 400 miles per charge, according to General Motors.
The company announced the scope on April 6 and said the truck would be built at a factory straddling the border of Detroit and the Hamtramck enclave. He also announced that the plant will build the new GMC Hummer 2024 SUV.
The announcement of the pickup raises the level of competition for future buyers in the hot truck market. Ford has already announced plans to build an electric F-150 starting next year in Dearborn, Mich., While Fiat Chrysler, now Stellantis, has announced plans to have a fully electric Ram pickup. .
GM hasn’t said when the electric Silverado will hit dealerships.
Small businesses seek to protect themselves from giants
NEW YORK – A group of independent small businesses are joining together to push for more protection against giant corporations that threaten to eradicate them.
The new coalition, called Small Business Rising, seeks to change federal policies that it says favors large companies like Amazon and puts them at a disadvantage over the competition.
The group wants policy makers to break and regulate technology monopolies; make antitrust laws stronger and easier to enforce; and take a closer look at large-scale mergers.
Coalition members include the American Booksellers Association, the American Independent Business Alliance, the Main Street Alliance, and the National Grocers Association.
EU to give $ 4.7 billion to help Air France
BRUSSELS – The European Union has approved $ 4.7 billion in state aid for the national airline Air France as it combats the economic impact of the COVID-19 pandemic, a decision that the French government hailed as “good news”.
In exchange for the help, the carrier promised to make slots available to competitors at the busy Orly airport in Paris. “Public support will come with conditions,” said European Commission Vice-President Margrethe Vestager.
Last year, Air France secured more than $ 3 billion in direct loans from the French state, which will be converted into bonds as part of a recapitalization to the tune of $ 4.7 billion. In return, the government has set profitability conditions and more environmentally sustainable policies.
In addition, the French state will participate in the capital increase of the holding company of the airline alliance Air France-KLM, to hold up to 29.9% of the group’s capital, the French and Dutch governments announced in a statement. joint press release. The French state now owns 14.3% of the shares.
France and the Netherlands reaffirmed that they do not plan to nationalize the group.
The French government, the airline’s largest sole shareholder, said it was essential to save the national carrier. Air France-KLM expects an operating loss of around 1.3 billion euros ($ 1.5 billion) for the first quarter of 2021.