|Bid||26.44 x 27000|
|Ask||26.52 x 36200|
|Day's range||26.26 - 27.22|
|52-week range||22.66 - 31.49|
|Beta (3Y monthly)||1.57|
|PE ratio (TTM)||9.42|
|Forward dividend & yield||0.72 (2.65%)|
|1y target est||N/A|
The turbulence created by a slowing economy and inversion in yield curve has forced investors to look for safe stocks. These five stocks are sure winners.
German banking fintech N26 is making a big push for the U.S. market, announcing a nationwide rollout in the U.S. Thursday after a two-month beta program the company called successful.
(Bloomberg Opinion) -- By all accounts, it was supposed to be a sleepy August for the U.S. corporate bond market. Three weeks ago, the thinking went something like this: Sure, the Federal Reserve would cut its benchmark lending rate on July 31, in what Chair Jerome Powell would call a “mid-cycle adjustment.” But Treasuries were already pricing in such a move on the short end. Further out on the curve, the 30-year yield was about 2.6%, still more than 50 basis points away from its all-time low. Ten-year yields were about 2%, which seemed like a comfortable range for both buyers and sellers. For company finance officers, it had the makings of a sellers’ market but one that would be around once summer drew to a close.Then things got crazy. The 30-year yield lurched lower by 8 basis points on Aug. 1, then 13 basis points on Aug. 5, then another 13 basis points on Aug. 12. After a one-day reprieve near its all-time low of 2.0882%, it cruised through that level, tumbling to as low as 1.914%. The rally was so intense that the U.S. Treasury Department made an unusual, unscheduled announcement that it was again exploring issuing 50- or 100-year bonds. Companies clearly felt they couldn’t afford to pass up this opportunity. In the first full week of August, CVS Health Corp., Humana Inc. and Welltower Inc. headlined $35 billion of debt sales among investment-grade firms, easily surpassing estimates. Then in the week through Aug. 16, more than $22 billion went through, including a rarely seen offering from Exxon Mobil to the tune of $7 billion. Market watchers expected that would just about wrap things up until after Labor Day on Sept. 2.Some finance officers had other ideas. 3M Co. borrowed $3.25 billion on Monday to help finance its acquisition of medical-products maker Acelity Inc. In total, issuers sold $6.65 billion of investment-grade debt on Aug. 19, already topping some predictions for $5 billion this week. Then on Tuesday, Bank of New York Mellon Corp. priced $1 billion at the lower end of its expected yield range, along with a handful of other borrowers with multimillion-dollar deals.All this is to say, companies are simple: They see staggering low yields, and they issue bonds. Investors, for their part, can’t get enough of them. The Bloomberg Barclays U.S. Corporate Bond Index has returned 13.3% so far in 2019. Over the past 12 months, the index is up 12.5%, compared with just 1.5% for the S&P 500 Index. The average spread on corporate bonds has widened to 122 basis points, from 107 basis points at the end of July, but that’s just because they couldn’t keep up with the relentless rally in Treasuries, not because of a lack of buyers. If Bank of America Corp. strategists led by Hans Mikkelsen are correct, the demand in credit markets has lasting power. They say the $16 trillion of negative-yielding debt globally has left investors — and particularly those outside the U.S. — with few alternatives besides purchasing companies’ debt. “There is a wall of new money being forced into the global corporate bond market,” they wrote on Aug. 16. “Given the near extinction of non-USD IG yield, foreign investors are forced to take more risk.”Of course, buying investment-grade bonds hardly qualifies as a speculative endeavor. Exxon Mobil, in fact, has the same credit rating as the U.S. government from both Moody’s Investors Service and S&P Global Ratings. On the other hand, Bloomberg News’s Jeannine Amodeo and Davide Scigliuzzo reported this week that three leveraged-loan sales that had been languishing in the U.S. market for weeks were pulled as investors sought higher-quality assets. Vewd Software became the fourth on Tuesday, scrapping a $125 million term loan due to market conditions. Leveraged loans, it should be noted, are floating-rate securities and so face weaker demand when the Fed appears poised to cut rates, as it does now. But for large, highly rated companies, their behavior in recent weeks is exactly what should be expected. Exxon Mobil issued 30-year bonds to yield 3.095%. In November, five-year Treasuries offered the same amount. 3M, rated a few steps below triple-A, priced 30-year debt to yield 3.37%, less than the going rate on long Treasury bonds just nine months ago. No matter how you slice it, they’re getting borrowing costs that seemed unthinkable around this time last year.Interestingly, these low yields should be encouraging governments to borrow more, too. I wrote last week that the bond markets were begging for infrastructure spending. However, it seems neither Germany nor the U.S. has any appetite for that sort of initiative. The German government is reportedly preparing fiscal stimulus that could be triggered by a deep recession, while President Donald Trump hasn’t ruled out a payroll tax cut to stave off any economic weakness.It’s certainly possible that U.S. yields will only fall further from here, and other companies can also borrow or refinance at rock-bottom interest rates. But the move in global bond markets in recent weeks could was extreme, to say the least. The weak demand for Germany’s 30-year bond auction on Wednesday, which offered a coupon of 0% at a yield of -0.11%, suggests there are at least some lines that investors won’t cross.For prudent companies, it was well worth delaying summer vacations to get their deals done.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Despite a challenging backdrop, Warren Buffett is adding bank stocks to his investment portfolio. Thus, investing in banks with strong fundamentals and prospects seem to be a wise decision.
Tottenham Hotspur Football Club plans to refinance about 400 million pounds ($485 million) of its stadium debt through bonds issued via a private placement arranged by Bank of America Merrill Lynch (BAML), according to a source familiar with the matter. The holding company of the English soccer club originally took out a 400 million pound five-year loan from BAML, Goldman Sachs and HSBC in 2017 to finance the construction of its new 62,062-seat stadium. BAML declined to comment and the soccer club was not immediately reachable for comment.
Investing.com – Wall Street rose on Wednesday after positive earnings from Lowe’s (NYSE:LOW) and Target (NYSE:TGT) helped boost confidence over the economic health of U.S. consumers.
(Bloomberg) -- JPMorgan Chase & Co. plans to host a conference call on Tuesday to help clients make sense of markets after a week of wild swings for stocks and bonds.“In the wake of a rather violent decline in yields, inversion of the curve, and volatility in equity markets, we consider the role of poor liquidity and systematic flows in exacerbating these market moves,” JPMorgan strategists led by Marko Kolanovic wrote in an invitation to clients obtained by Bloomberg. A spokeswoman for the lender confirmed the event.The meeting comes after U.S. equities suffered one of the deepest sell-offs of the year on Aug. 14 and a key portion of the U.S. Treasury yield curve inverted for the first time in 12 years, stoking fears of a recession. President Donald Trump held a conference call that day with the chief executive officers of JPMorgan, Bank of America Corp. and Citigroup Inc.Kolanovic and strategist Munier Salem plan to address the bout of unusual illiquidity in U.S. equities and discuss the extent to which high-frequency trading is to blame for drops in market depth, according to the invitation. Joshua Younger, a fixed-income strategist, will lead a discussion on convexity hedging in rate markets.The bank said last week that measures of market depth in U.S. equities, Treasuries and currencies relative to the rest of the year have fallen below the average since 2010 -- a sign that market players don’t have as much capacity to absorb the trade-driven trends sweeping assets.Some Wall Street trading desks have warned that the sudden rupture of volatility could cause quant-driven funds to dump billions of dollars of stocks.(Adds conference call with president in third paragraph.)To contact the reporter on this story: Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Josh Friedman, Linus ChuaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- With interest rates on 30-year U.S. debt hitting all-time lows this week, the government is once again considering whether to start borrowing for even longer.The U.S. Treasury Department said Friday that it wants to know what investors think about the government potentially issuing 50-year or 100-year bonds, going way beyond the current three-decade maximum.The government stressed that no decision has yet been made on ultra-long bonds, explaining that it’s looking to “refresh its understanding of market appetite.” The idea was broached before, back in 2017, but was shelved after receiving a less-than-warm reception.“This comes up every now and again,” said Gennadiy Goldberg, U.S. rates strategist at TD Securities. “Every time the takeaway is, there simply isn’t enough demand at that tenor, or at least there hasn’t been in the past.”The announcement follows a plunge in the 30-year yield to a record low this week below 2%, and also comes in the wake of many other nations opting to extend their borrowing profiles with so-called century bonds. Investors have snapped up 100-year bonds issued by the likes of Austria, although the experience of Argentina underscores some of the potential pitfalls of buying such long-maturity debt.The yield on America’s current benchmark 30-year bond spiked to its highs of the day and the curve steepened following the Treasury announcement. The 30-year rate climbed as much as 8 basis points on the day to 2.05%, before ending the session at around 2.03%. The yield spread between the U.S.’s longest-maturity debt and its two-year note widened the most in five weeks on Friday.The Treasury’s group of market consultants, the Treasury Borrowing Advisory Committee, has long been unenthusiastic on the prospect of an ultra-long issue, said Bruno Braizinha, director of U.S. rates research at Bank of America.The challenge for the Treasury would be to offer a yield attractive enough for the typical investor base of pension funds and institutions, while keeping a lid on the cost of borrowing for U.S. taxpayers.By Braizinha’s estimates, the yield on a 50-year issue would be expected to come in around 10-30 basis points above the 30-year rate.(Updates with yield spread in sixth paragraph)\--With assistance from Liz Capo McCormick, Benjamin Purvis and Katherine Greifeld.To contact the reporters on this story: Alexandra Harris in New York at email@example.com;Emily Barrett in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Nick Baker, Margaret CollinsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Investors terrified of the yield curve inversion may find solace in exchange-traded funds, according to Bank of America Corp.Strategist Mary Ann Bartels recommends ETFs focused on technology and energy stocks -- industries that have beaten the broader equity market following past bond inversions, a notorious harbinger of U.S. recessions.Energy stocks have an especially strong track record of outperformance following yield flips, and the fact that they’ve been “beaten down” should provide some cushion to any potential market weakness, according to Bartels. She recommends the Energy Select Sector SPDR Fund, or XLE, as the best way to gain exposure to the industry. Since 1965, the sector has outpaced the broader equity market 80% of the time in the 12 months that followed yield curve inversions, the study showed.The energy ETF rose about 14% in the 12 months after the 2005 yield inversion, beating the S&P 500 Index, and is down about 10% in August.Although not as successfully as energy, the tech sector has on average brushed off inversions and outperformed equities. And thanks to its exposure to growth and momentum factors, the industry is likely to continue to do so, according to the strategist. She recommends the Vanguard Information Technology ETF, known as VGT, which has fallen 4.1% so far this month.In contrast, consumer-discretionary stocks tend to lag the broader equity market following yield curve inversions, the bank said.(Updates prices.)\--With assistance from Rachel Evans.To contact the reporter on this story: Ksenia Galouchko in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Blaise Robinson at email@example.com, ;Jeremy Herron at firstname.lastname@example.org, Rita Nazareth, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Bank of America (BAC) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
(Bloomberg Opinion) -- The company behind Aston Martin should take the plunge and raise some equity while it can. Aston Martin Lagonda Global Holdings Plc doesn’t need the money immediately. But the historic sportscar maker may in the future, and it would be better to secure the cushion now before its window of opportunity shuts entirely. Thursday’s brief 21% share price fall should focus minds.When Aston went public in October, it had a goal to produce about 7,200 cars this year, doubling to 14,000 in the “medium term” (understood as 2022). Last month it revised that first target down to 6,400 vehicles. Analysts are less optimistic about the future, with some now expecting Aston to deliver only 11,000-12,000 three years out.The shortfall matters. Aston’s business model is to use cash from car sales to fund development of its next models. Its yearly capital spending budget is roughly 300 million pounds ($362 million). Ongoing cash interest charges are estimated at about 65 million pounds. Operating cash flow is expected to be only 234 million pounds this year, according to Bank of America Merrill Lynch analysts. So Aston will have to dip into its 127 million pounds of cash reserves.Can the company pay its own way from 2020? Opinions diverge. The group is due to launch its DBX sports utility vehicle in the second quarter, aiding cash generation. Some analysts expect operating cash flow to pick up and capex to fall, facilitating a reduction in net debt. Others sees the cash equation remaining slightly out of balance, and net debt rising next year and in 2021 but falling sharply thereafter. Aston can fund itself without recourse to new money in both scenarios.But what if sales and cash generation fall sharply? There are three predictable risks: A badly managed Brexit could disrupt Aston’s supply chain more than it’s prepared for; the DBX might flop because of production snags or poor demand; a global economic slowdown would see Aston’s Asian and U.S. markets suffer from the same weakness that’s held Europe back this year.In any of these scenarios, Aston’s cash could run dry unless the group slammed the brakes on the business and slashed capex. That might be a solution if Aston didn’t also face a looming refinancing in 2022. In reality, it will not want to go into that leaking cash and with the business on hold.True, the carmaker could raise some new long-term debt now. This seems to be management’s preferred option. But it’s strange to be borrowing more when Aston is stretching to service its current debts. A 250-500 million pound rights offer would alleviate the strain, as BAML notes. With Aston’s market value now just 1 billion pounds, the chance to grab the top of that range may already have passed.The weak share price, having already fallen so far, may make underwriters more willing to support a capital raise. James Bond is careful to drive a bulletproof Aston. This balance sheet needs the same armor.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. U.S. retail sales rose by the most in four months on a surge in online purchases, offering some comfort for the economic-growth picture amid increasing recession fears that some other data Thursday may feed into.The value of overall retail sales climbed 0.7% in July after a downwardly revised 0.3% increase in the prior month, according to Commerce Department figures. Two regional Federal Reserve indexes for August came in higher than expected, but the central bank’s measure of factory output for July declined, jobless claims were higher than estimated last week and a measure of consumer sentiment posted the biggest two-week drop since 2011.The retail reading topped all estimates in a Bloomberg survey of economists that had called for a 0.3% gain. Sales in the “control group” subset, which some analysts view as a more reliable gauge of underlying consumer demand, jumped 1% and also exceeded the most optimistic projection after a 0.7% rise in June. The measure excludes food services, car dealers, building-materials stores and gasoline stations.The fifth-straight increase in retail sales shows Americans, buoyed by plentiful jobs and wage gains, are still spending -- a welcome sign as the trade war with China weighs on the global outlook with threats of new levies on consumer goods. Personal consumption, the biggest part of the economy, was the largest driver of the expansion in the second quarter.“The numbers are extremely strong and they come on the back of several good months in a row,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “The main driver is the labor market, kicking off very good income gains. It’s a consumer that’s got plenty of wherewithal to spend.”What Bloomberg’s Economists Say“Consumers will remain the driving force behind economic growth in the second half of the year -- unless market volatility hinders consumer spirits to a critical degree.-- Yelena Shulyatyeva and Carl RiccadonnaClick here for the full note.Ten of 13 major retail categories increased, led by a 2.8% jump for non-store sellers, which include online shopping. Retail sales in July may have been propped up by Amazon.com Inc.’s 48-hour Prime Day event, which the company said surpassed sales from the previous Black Friday and Cyber Monday combined. The promotion also likely drove shoppers to rivals Walmart Inc. and Target Corp.Walmart on Thursday posted strong second-quarter sales and boosted its full-year outlook, and its chief financial officer said the company has used its scale to minimize price increases.U.S. sales at department stores climbed 1.2% for the best gain since October.Among the main categories, spending dropped at automobile dealers, while readings for both health and personal care stores and sports and hobby retailers dropped the most this year.Rate CutFed officials cut interest rates last month for the first time in a decade while saying the labor market remains strong and citing robust consumption despite growing headwinds. Still, President Donald Trump’s feud with Beijing adds to global growth risks as signs of fragility spread from Germany to China and Singapore, and investors continue to expect additional rate reductions.Stocks have slumped this week and yields on two-year U.S. Treasuries rose above 10-year notes for the first time since the financial crisis, an inversion that is widely viewed as a sign of coming recession.Fed officials are more likely to look at expectations for future data rather than the current figures, said Michelle Meyer, head of U.S. economics at Bank of America Corp. “In the past few weeks we’ve definitely seen more risk to the global outlook,” she said.Motor vehicle dealers saw spending drop 0.6% after increasing 0.3% in the previous month. Industry data from Wards Automotive Group previously showed July unit sales slipped to a three-month low.Excluding automobiles and gasoline, retail sales rose 0.9%, after a 0.6% gain the previous month.Labor MarketSeparate data showed labor market strength eased somewhat, though conditions remain tight overall.Jobless claims rose to a six-week high of 220,000 in the week ended Aug. 10, and a measure of continuing claims -- the number of unemployed Americans who qualify for benefits under the unemployment program -- jumped to 1.726 million in the prior week for the biggest gain since February. Economists had projected initial claims would rise to 212,000.Meanwhile, a measure of nonfarm productivity grew at a 2.3% pace in the second quarter, exceeding projections, after an upwardly revised 3.5% rate in the first quarter. Unit labor costs increased at a 2.4% pace after a 5.5% gain. That first-quarter figure was revised from a drop and became the biggest rise in five years.Get MoreSentiment among U.S. consumers tumbled for a second week in the largest back-to-back slide since March 2011. The Bloomberg Consumer Comfort Index decreased 1.7 points to 61.2 in the week ended Aug. 11.A separate report Thursday showed sentiment among U.S. homebuilders rose in August to match its 2019 high as mortgage rates tumbled, though a weaker outlook signaled concern that any gains will be temporary.The New York Fed’s Empire State index for August, which covers manufacturers in New York, rose to 4.8, bucking expectations for a decline. A similar gauge for the Philadelphia Fed’s region fell by less than projected, dropping to 16.8.(Updates with consumer comfort and other data in second paragraph and bullet points. An earlier version of this story corrected the second deck headline to show the factory indexes exceeded estimates, not both rising.)\--With assistance from Chris Middleton, Anne Riley Moffat and Ryan Haar.To contact the reporters on this story: Katia Dmitrieva in Washington at email@example.com;Reade Pickert in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Scott Lanman at email@example.com, Vince GolleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.