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Tag Archives: Commodities
SEC’s Gensler Signals Support for Commodities Regulator Having Bitcoin Oversight
WASHINGTON—Securities and Exchange Commission Chairman
Gary Gensler
signaled that he would support Congress handing more authority to the SEC’s sister markets regulator to oversee certain cryptocurrencies such as bitcoin.
Mr. Gensler, speaking at an industry conference, said Thursday he looked forward to working with Congress to give the Commodity Futures Trading Commission added power, to the extent the agency needs greater authority to oversee and regulate “nonsecurity tokens…and the related intermediaries.”
The remarks come amid an intensifying battle among federal agencies and congressional committees that oversee them over who will regulate crypto.
Cryptocurrencies remain largely unregulated by the federal government, leaving investors without protections from fraud and market manipulation that come with many other types of investments. The competition for jurisdiction heated up in recent months as a meltdown in crypto markets underscored the need for guardrails in the eyes of many policy makers.
The competition also reflects the industry’s ramped-up lobbying presence in Washington and its push to reach more mainstream investors through Super Bowl ads and other high-profile marketing initiatives.
Mr. Gensler, who headed the CFTC from 2009 to 2014, qualified his remarks by saying he welcomed working with lawmakers as long as it doesn’t take away power from the SEC.
“Let’s ensure that we don’t inadvertently undermine securities laws,” he said. “We’ve got a $100 trillion capital market. Crypto is less than $1 trillion worldwide. But we don’t want that to somehow undermine what we do elsewhere.”
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Leaders of the Senate Agriculture Committee, which oversees the CFTC, are pitching legislation that would assign oversight of the two largest cryptocurrencies—bitcoin and ether—to that agency. At present, the CFTC generally has the power to regulate derivatives—such as futures and swaps—as opposed to cash or spot markets where the underlying assets are bought and sold for immediate delivery.
The SEC has declined for years to assert jurisdiction over bitcoin and ether, which proponents say are more “decentralized” than other cryptocurrencies. Mr. Gensler noted Thursday that bitcoin is often likened to a digital form of gold, and that it doesn’t bear all of the characteristics of a security.
The bill from the leaders of the agriculture panel is one of several that lawmakers have offered to more tightly oversee cryptocurrencies. In his remarks, Mr. Gensler didn’t express support for any particular bill.
CFTC Chairman
Rostin Behnam
has asked Congress to pass a law that would allow the CFTC to regulate cash markets for certain types of cryptocurrencies and provide it with funding to conduct additional oversight.
After objecting for years to meaningful federal oversight, cryptocurrency lobbyists have recently shifted their focus to convincing lawmakers and regulators that the CFTC should have primary jurisdiction over their industry. They say the SEC’s rules for traditional securities like stocks and bonds don’t fit because cryptocurrencies aren’t organized as traditional corporations with stockholders.
Jake Chervinsky, head of policy at the Blockchain Association, a crypto lobbying group, said in a statement that “decades of legal precedent shows that most digital assets” are commodities.” He said lawmakers should address the issue.
“This is a matter for Congress rather than regulators, and we’re glad to see consensus in Congress that the CFTC, not the SEC, should regulate spot markets,” he said.
While Mr. Gensler’s comments suggest that his agency shouldn’t oversee bitcoin, he said the majority of crypto tokens are securities that fall under his agency’s jurisdiction and should comply with investor-protection laws. Mr. Gensler also said it is possible some crypto intermediaries would need to be dually registered with both his agency and the CFTC, similar to the way some brokers and mutual-fund firms are overseen by both agencies.
Mr. Gensler has also repeatedly demanded that cryptocurrency-trading platforms such as Coinbase Global Inc. register with the agency as securities exchanges akin to the New York Stock Exchange or Nasdaq. In May, the SEC nearly doubled the staff of an enforcement unit focused on cryptocurrencies.
—Paul Kiernan contributed to this article.
Write to Andrew Ackerman at andrew.ackerman@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Recession Fears Can’t Curb The Commodity Boom
Earlier this week, Brent crude fell below $100 per barrel for the first time in months. So did West Texas Intermediate. Copper dropped to the lowest in almost two years. It looked like inflation had done its evil deed. A recession was coming, and demand for commodities was about to plunge. And then both oil and copper rebounded. It lasted all of one day, although the price of copper has been fluctuating with the flow of news from China and the prospects of its economy for the rest of the year and the medium term. The latest copper price rebound was, in fact, attributed by some to the possibility that the Chinese government would provide additional stimulus to keep the economy going at a healthy pace.
The rebound in oil, however, was easy to see coming despite the notorious uncertainty of oil markets. And the reason it was easy to see coming was fundamentals. Whatever happens in the speculative market, the fact that the global supply of oil is tight while demand is very much alive and still rising cannot be ignored.
The Financial Times out it quite clearly. In an article from earlier this week addressing the price drop across commodities, the authors said that “Hedge funds have been central to the recent price declines across commodities — selling out of long, or positive, positions in certain commodities and often replacing them with bearish wagers.”
If the big scare of 2020 and 2021 was Covid, this year has two: Russia’s Vladimir Putin and recession. And it is increasingly looking like the latter is overtaking the former in terms of scare value.
Talk about recession is all over the news. Central banks are being targeted with criticism for tightening monetary policy too fast, accelerating recessionary pressure. It was only a matter of time before hedge funds decided to play it safe and start selling out. But, and this is the important bit, this has nothing to do with fundamentals. Fundamentals are why oil was up a day after the dip.
Just how much nothing market price movements have to do with actual demand and supply sometimes was recently highlighted by Wells Fargo. According to the bank’s investment strategy division, the United States, the world’s largest oil consumer, is already in a recession.
“There’s the technical part of the recession, but then there’s the meaningful deterioration in consumption and employment,” Wells Fargo Investment Institute’s senior global market strategist Sameer Samana told Bloomberg this week. “The technical part is a first half story and the brunt of the unemployment and consumption is the second-half,” Samana added.
Inflation, according to Wells Fargo analysts, has proven to be much faster and more broad than initially expected, consumer sentiment has as a result worsened, and businesses are changing their spending plans. But oil demand is still robust as it appears to be across the world, even though some analysts are projecting a decline. According to Citi’s Ed Morse, for example, “Almost everybody has reduced their expectations of demand for the year.” Demand was “simply not growing on an empirical basis to the degree that people had expected,” Morse told Bloomberg TV.
Related: Buffett Buys Another $700 Million In Occidental Shares
Demand might not be growing per expectations—it would have been a wonder at these prices—but supply is not exactly booming, either, which was what probably motivated Saudi Arabia’s latest price hike for Asian buyers to near-record levels. Sellers don’t tend to hike their prices when they expect demand for their goods to decline.
No wonder, then, that Goldman Sachs, unlike Citi, says that oil could yet hit $140 per barrel, even with all the recession fears swirling around the market. “$140 is still our base case because, unlike equity, which are anticipatory assets, commodities need to solve for today’s mismatched supply and demand,” Goldman’s Damien Courvalin told CNBC this week.
These price projections, both from Citi and from Goldman, do not factor in supply disruptions—the same supply disruptions that just a couple of months ago, even a month ago, held markets captive. The disruptions are mainly expected to come from Russian oil exports, but this may have by now been factored into prices as there are still close to six months until the European Union’s oil embargo enters into effect.
Meanwhile, alternatives to this supply for Europe remain few and far between simply because of the size of Russian oil exports to the continent. This would likely continue having a bullish effect on oil prices, whatever the economic trends. Even if a recession dampens the demand for oil, it would take quite a while for real demand destruction of the kind that Citi says could push oil to $65 per barrel.
Recession fears have solid foundations. There is little doubt about it. Commodity fundamentals, however, not only in oil and gas but in agricultural commodities and metals, have not changed just because hedge funds have suddenly started worrying about a recession. They are still tight. And this is putting a floor under prices that will remain there as long as supply remains tight.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Bruised stocks find support as growth fears dent commodities By Reuters
© Reuters. FILE PHOTO: Men wearing protective masks amid the coronavirus disease (COVID-19) outbreak, use mobile phones in front of an electronic board displaying Japan’s Nikkei index outside a brokerage in Tokyo, Japan June 16, 2022. REUTERS/Kim Kyung-Hoon
By Tom Westbrook and Sam Byford
SINGAPORE/TOKYO (Reuters) – Global stocks and bonds headed for their first weekly gain in a month on Friday, with growth concerns tempered by hopes that sliding commodity prices can help brake runaway inflation.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.4% on Friday, helped by short sellers bailing out of Alibaba (NYSE:) – which rose nearly 7% – amid hints that China’s technology crackdown is abating.
rose 1.2% for a 2% weekly gain, while extended overnight gains by 0.76%. EuroSTOXX 50 futures rose 1% and futures rose 0.6%.
The week has been marked by steep declines for commodities on worries that the world economy is looking shaky and that interest rate hikes will hurt growth – which in turn is also prompting traders to pare back some bets on the size of rate hikes.
, a bellwether for economic output with its wide range of industrial and construction uses, is heading for its steepest weekly drop since March 2020. It fell in Shanghai on Friday and is down about 8% on the week.
Oil is also headed for a weekly loss. futures are down 2.5% on the week to $110.35 a barrel, while benchmark grain prices sank with Chicago wheat off more than 8% for the week. [O/R][GRA/]
The falls have made for some relief in equities since energy and food have been the drivers of inflation. After heavy recent losses, MSCI’s World equities index is up 2.3% this week, setting it up for the first weekly gain since May.
“While market worries about an abrupt slowdown are the culprit behind recent moves lower in raw materials prices, lower commodity prices do feel like they could be just what the doctor ordered for the global economy,” said NatWest markets strategist Brian Daingerfield.
“So much of our hard landing fears relate to concerns that link back to commodity prices.”
Soft data through this week has been to blame.
Gauges of factory activity in Japan, Britain, the euro zone and United States all softened in June, with U.S. producers reporting the first outright drop in new orders in two years in the face of slumping confidence.
Bonds rallied hard on hopes the bets on aggressive rate hikes would have to be curtailed, with German two-year yields down 26 basis points on Thursday in their biggest drop since 2008. [GVD/EUR]
The benchmark fell 7 bps on Thursday and was steady at 3.0908%. [US/]
The U.S. dollar has slipped from recent highs, but not too far as investors remain cautious. It was last fairly steady at $1.05395 per euro and bought 134.73 yen. [FRX/]
The battered yen has steadied this week and drew a little support on Friday from Japanese inflation topping the Bank of Japan’s 2% target for a second straight month, putting more pressure on its ultra-easy policy stance.
European Central Bank and Federal Reserve speakers will be watched closely later in the day, as will British retail sales data and German business confidence. Beyond that, the main worry is what it all means for company performance.
“Second quarter earnings reports will send shockwaves to the market as the earnings outlook hasn’t deteriorated materially so far, and that will further build concerns of a recession,” said Charu Chanana, market strategist at brokerage Saxo in Singapore.
Oil, commodities surge amid selloff in global shares
NEW YORK, March 7 (Reuters) – Oil and other commodities prices soared while global shares tanked on Monday as the United States said it was willing to ban Russian oil imports, stoking investor fears over inflation and slowing economic growth.
Brent, the international benchmark, briefly hit more than $139 a barrel, its highest level since 2008. Nickel prices rocketed 90%, gold broke through $2,000 an ounce and wheat jumped to a 14-year high, as industrial buyers and traders scrambled amid supply disruptions linked to Russia’s invasion of Ukraine. read more
Euro zone real government bond yields fell sharply as surging energy prices fueled concerns that global economies are at risk of stagflation, a condition in which prices soar while growth stagnates.
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Germany’s 10-year and 30-year inflation-linked government bond yields fell to new record lows , while the benchmark U.S. 10-year Treasury yield rose slightly after touching its lowest level in two months.
Wall Street’s main indexes fell sharply, with the Nasdaq Composite (.IXIC) confirming it was in a bear market, and the pan-European STOXX 600 index (.STOXX) cut losses of around 3% to close at a near one-year low.
President Joe Biden’s administration is willing to move ahead with a U.S. ban on Russian oil imports even if European allies do not, two people familiar with the matter told Reuters. read more
Russia calls its actions in Ukraine a “special operation,” but it has triggered sweeping sanctions by the United States and Europe that aim to isolate Russia to a degree never before experienced by such a large economy. read more
“The crippling effect of oil prices above $130 would send many European economies into a recession,” and that scenario caused European stocks to move into bear market territory, said Edward Moya, senior analyst at OANDA.
“The U.S. can handle not having any Russian energy supplies, but that is not the case for Europe.”
The Dow Jones Industrial Average (.DJI) fell 797.42 points, or 2.37%, the S&P 500 (.SPX) lost 127.79 points, or 2.95% and the Nasdaq Composite (.IXIC) dropped 482.48 points, or 3.62%.
MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 2.73%.
Brent crude futures settled up 4.3% at $123.21 a barrel. U.S. crude settled up 3.22% at $119.40 a barrel.
A view of Horizon Singapore Terminals storage facility on Jurong Island in Singapore July 11, 2019. Picture taken July 11, 2019. REUTERS/Edgar Su
Bank of America analysts estimate that the loss of Russia’s 5 million barrels a day could cause crude oil prices to hit $200 a barrel.
The Russia-Ukraine conflict also weighed on talks aimed at reviving Iran’s nuclear deal with major powers, after Tehran accused Russia of “interference.” read more
Nickel prices, which reached $55,000 a ton earlier in the trading session, last traded up 76% at $50,925 a ton.
Russia supplies around 10% of the world’s nickel, and investors fear that Western sanctions against Russia could disrupt air and sea shipments of commodities produced and exported by Russia.
The conflict and broader supply-chain disruptions provide a challenging backdrop for upcoming central bank meetings, ANZ economist Finn Robinson wrote in a note to investors.
“Policy makers will need to safeguard the smooth transmission of monetary policy whilst also shoring up their inflation credentials at a time of surging inflation pressures and growing evidence of second round effects,” Robinson wrote.
A majority of economists polled by Reuters now expect the European Central Bank will wait until the end of the year to raise interest rates. read more
In the United States, investors are closely watching the consumer prices report due out on Thursday. The data is expected to show core U.S. CPI for February rose 6.4% year-on-year, up from 6% in January.
A hotter reading will likely seal a Federal Reserve rate hike later this month.
Traders now see a 99% probability of a 25 basis-point rate hike by the Fed at its March meeting, while seeing a 1% chance of no change in rates.
The dollar index , which measures the value of the greenback against six global peers, was last up 0.33% at 99.24.
The euro was down 0.7% against the dollar at $1.08575.
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Reporting by Elizabeth Dilts Marshall in New York
Additional reporting by Lawrence White in London and Wayne Cole in Sydney
Editing by Lisa Shumaker and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
Charts and history suggest stocks, most commodities may have a strong 2022, says Jim Cramer
CNBC’s Jim Cramer on Monday broke down technical analysis from Carley Garner, explaining why the DeCarley Trading co-founder holds a positive outlook for a range of asset classes despite the Federal Reserve’s policy tightening.
“The charts and the history, as interpreted by Carley Garner, suggest that 2022 could be a strong year for most commodities, the bond market, and even the stock market,” the “Mad Money” host said.
“Even with the Fed hitting the brakes, she thinks the momentum from the last couple years of money-printing will continue to push these asset classes higher, something frankly almost no one else is predicting.”
Garner’s analysis is focused on forecasting the impact of the Fed reducing the pace of its monthly bond purchases and then ending them all together later this year. It would mark the end of what’s known as quantitative easing, which the U.S. central bank started in 2020 for only the second time. The first came in 2008 in response to the financial crisis; it concluded in 2014.
“If history is any guide, Garner suspects we could be in for a period similar to 2010 to 2012, when all assets increased in value at some point, occasionally at ridiculous levels. Even with the Fed taking its foot off the gas pedal, Garner thinks it could take another year or maybe two before we digest all the liquidity that’s been created since 2020.”
Monthly chart of corn futures for the past 20 years.
Mad Money with Jim Cramer
For example, Cramer said Garner thinks corn prices could be in for another rally this year — even though it’s declined from its recent highs in May 2021. She expects it to be similar to 2012, when “we got round two of the post-financial crisis rally.”
For the stock market, in particular, Garner believes the S&P 500 may move lower in the near term, but she’s not expecting there to be a severe downturn for equity indexes at this stage of the Fed’s tightening efforts.
Monthly chart of the S&P 500 over the past two decades.
Mad Money with Jim Cramer
“Remember, when the Fed started raising rates last time in late 2015, we caught some early volatility, but then the S&P resumed its long march higher,” Cramer said. “Because we already seem to have priced in several rate hikes in advance, Garner thinks we’re headed for a period where bad news for the economy is good news for the stock market, because weak economic data means the Fed won’t have to raise interest rates as aggressively as we expect.”
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SEC Has No Authority Over Pure Commodities Like Crypto Assets, Says CFTC Commissioner – Regulation Bitcoin News
Both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have claimed jurisdiction over the crypto industry. A CFTC commissioner clarified that pure commodities, including crypto assets, or their trading venues are not regulated by the SEC.
Regulation of Crypto Assets by SEC and CFTC
A commissioner with the U.S. Commodity Futures Trading Commission, Brian Quintenz, clarified Wednesday that pure commodities, including crypto assets, fall under the jurisdiction of his agency.
He tweeted: “Just so we’re all clear here, the SEC has no authority over pure commodities or their trading venues, whether those commodities are wheat, gold, oil …. or crypto assets.”
Quintenz’s clarification followed the statements by SEC Chairman Gary Gensler on Tuesday and Wednesday regarding the regulation of the crypto industry whenever investment products are considered securities.
Gensler stressed that there is not enough investor protection when it comes to crypto assets and their trading platforms. He called for additional authority and resources to protect investors.
The CFTC declared several years ago that cryptocurrencies, including bitcoin, are commodities. The derivatives watchdog’s website explains:
Virtual currencies, such as bitcoin, have been determined to be commodities under the Commodity Exchange Act (CEA).
In addition, the U.S. District Court for the District of Massachusetts ruled in October 2018 that virtual currencies are commodities and the CFTC has the power to prosecute crypto-related fraud.
Over the years, the CFTC has been working closely with the SEC on consumer protection relating to crypto assets. They have jointly issued several Investor Alerts on topics such as funds trading in bitcoin futures and websites promoting fraudulent crypto trading.
The Digital Asset Market Structure and Investor Protection Act introduced last week by U.S. Representative Don Beyer provides the SEC with authority over “digital asset securities” and the CFTC with “authority over digital assets.”
What do you think about the clarification by the CFTC commissioner about the SEC’s jurisdiction over crypto assets? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Investors flee bonds and snap up commodities on economic recovery hopes, while European stocks trade lower
Investors continued to flee bonds and snap up commodities on hopes the rollout of vaccines will reinvigorate the global economy, sending European stocks lower on Monday.
The yield on the benchmark 10-year Treasury
TMUBMUSD10Y,
1.363%
rose to 1.37%, after rising 14.5 basis points last week. The yield on the 10-year U.K. gilt
TMBMKGB-10Y,
0.698%
and German bund
TMBMKDE-10Y,
-0.315%
also increased. Yields move in the opposite direction to prices.
U.K. Prime Minister Boris Johnson on Monday is set to unveil England’s reopening plan, that will start with schools and by the end of March extend to golf courses and tennis courts, according to published reports. The country’s furlough plan is set to be extended through the summer.
Globally, new coronavirus cases have dropped after peaking in January.
Copper
HG00,
+0.76%
and palladium
PA00,
+0.14%
led an advance in much of the metals complex on Monday.
“One of the (many) hot stories in financial markets right now is the surge in base metal prices, where the likes of copper, tin, nickel, lead and zinc are all rallying on the back of global recovery hopes and supply challenges. This comes at a time when investors are coming around to the view that the Fed really does want to let inflation run hot and that bonds are certainly not an asset class to hold in the current environment. The key challenge for financial markets is whether the bond sell-off can prove orderly enough to allow reflationary asset classes – including equities to prosper,” said strategists at ING.
After squeaking out a 0.2% rise last week, the Stoxx Europe 600
SXXP,
-0.90%
slumped 1.1%. U.S. stock futures
YM00,
-0.58%
ES00,
-0.74%
NQ00,
-1.18%
also were lower.
Miners including BHP Group
BHP,
+0.42%
and Rio Tinto
RIO,
-0.88%
advanced, and banks including HSBC Holdings
HSBA,
+0.05%
were helped by the steepening of the yield curve, which is suggestive of higher margins.
Tech-sector plays such as microchip equipment maker ASML Holding
ASML,
-2.29%
fell. Also lower were companies that have thrived during the pandemic, such as fast-food delivery company Delivery Hero
DHER,
-4.23%,
mealkit preparer HelloFresh
HFG,
-4.48%
and supermarket delivery firm Ocado
OCDO,
-4.57%.
Silver prices hit highest since 2013 as Reddit army turns to commodities
The price of silver (SI=F) rocketed more than 10% to its highest since February 2013 on Monday, briefly trading over the $30 (£ ) per ounce mark, as retail investors piled in on the commodity.
It became the latest target after a retail frenzy last week saw the likes of heavily-shorted GameStop (GME) and AMC Entertainment (AMC) surge in revolt to large institutional investors.
Recently amateur traders have been buying stocks and assets that Wall Street funds bet against. Similarly, traders are looking to squeeze silver shorts.
There have been thousands of Reddit posts with multiple mentions of the hashtag #silversqueeze, and a string of videos on YouTube encouraging small investors to buy the precious metal.
The surge sent silver miner Fresnillo (FRES.L) almost 20% higher in early trading in London, while Glencore (GLEN.L), BHP (BHP.L) and Anglo-American (AAL.L) also rose.
Users in the Reddit forum Wallstreetbets argued that silver is a heavily manipulated market, and that a rise in the silver price could hurt large financial services companies.
“Think about the Gainz. If you don’t care about the gains, think about the banks like JP Morgan you’d be destroying along the way,” a Reddit user posted.
“Whether it will be quite so easy to shunt around silver as it was GameStop remain to be seen,” Russ Mould, AJ Bell investment director, said.
“You can understand why silver is attracting the attentions of the social media traders who are looking to vent their fury upon, and profit from, short sellers. Allegations about, and fines for, investment banks rigging precious metal markets have abounded for some time. More fundamentally, money supply is surging, markets more generally are watching carefully for any signs of inflation and precious metals are traditionally seen as a potential hedge here.
“In addition, gold currently trades at 70 times the silver price, against the long-run average of 58 times, so on paper silver is the cheaper of the precious metals. This will be an interesting test of the conspiracy theories that precious metals prices have been kept artificially low.”
READ MORE: How the tale of Reddit, GameStop, Robinhood is really about 5 big trends
The world’s largest silver-backed exchange traded fund, iShares Silver Trust (SLV), posted almost $1bn (£730m) in inflows on Friday, according to data from BlackRock, the fund’s sponsor. It was the biggest one-day rise since the ETF started trading in April 2006.
Meanwhile, US bullion broker APMEX said it saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day on Friday.
“Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week,” it said.
In November, around $6bn worth of silver traded hands in the silver market, according to the latest statistics from the London Bullion Market Association. London’s vaults hold around 33,500 tonnes of silver, valued at some $24bn.
WATCH: Dissecting the swampy backstory to GameStop stock controversy
Microsoft, BlackBerry, GE, Leon Black – 5 Things You Must Know
Here are five things you must know for Tuesday, Jan. 26:
1. — Stock Futures Move Higher on Solid Earnings
Stock futures moved mostly higher Tuesday following solid earnings reports from Johnson & Johnson (JNJ) – Get Report, 3M (MMM) – Get Report and General Electric (GE) – Get Report.
Equities had wavered for most of the premarket session on the possibility that a U.S. coronavirus relief package could be delayed.
Contracts linked to the Dow Jones Industrial Average rose 56 points, S&P 500 futures rose 2 points and Nasdaq futures were down 7 points ahead of earnings reports from some of the biggest tech companies.
Senate Majority Leader Chuck Schumer said Monday an aid package was unlikely before mid-March. That is when federal unemployment benefits authorized by last $900 billion package will expire.
President Joe Biden said he was open to negotiations on his proposed $1.9 trillion plan to send $1,400 to most Americans and deliver other support for the economy, including funds for vaccine distribution.
A bipartisan group of senators already have voiced opposition to the size of Biden’s plan.
The coronavirus pandemic, meanwhile, has killed more than 421,000 in the U.S. and concerns have been growing about the bumpy rollout of vaccines in the country. Biden said he anticipates vaccines will be available to anyone in the U.S. by spring, but to meet that projection vaccine makers will have to sharply increase production.
Stocks finished mixed on Monday amid questions about whether the Biden White House will be able to deliver another round of stimulus. The S&P 500 and Nasdaq, however, did manage to close at record highs.
2. — Tuesday’s Calendar: Microsoft and AMD Earnings, Federal Reserve Meeting
General Electric (GE) – Get Report reported fourth-quarter adjusted earnings of 8 cents a share, 1 cent below analysts’ estimates. Total revenue of $21.93 billion topped forecasts.
Johnson & Johnson (JNJ) – Get Report posted stronger-than-expected fourth- quarter earnings and said Tuesday it would provide an update on its vaccine development progress “soon.”
“We continue to progress our Covid-19 vaccine candidate and look forward to sharing details from our Phase 3 study soon. Johnson & Johnson was built for times like these, and I am extremely confident in our ability to deliver lasting value and continued innovation in 2021 and for years to come,” said CEO Alex Gorsky.
Earnings reports are also expected Tuesday from Microsoft (MSFT) – Get Report, Advanced Micro Devices (AMD) – Get Report, Starbucks (SBUX) – Get Report, Verizon (VZ) – Get Report, Lockheed Martin (LMT) – Get Report, American Express (AXP) – Get Report, 3M (MMM) – Get Report, Xilinx (XLNX) – Get Report, Raytheon Technologies (RTX) – Get Report and Texas Instruments (TXN) – Get Report.
Microsoft, Advanced Micro Devices and Starbucks are holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.
The U.S. economic calendar on Tuesday includes the first day of a two-day meeting of the Federal Reserve. The central bank isn’t expected to move on interest rates and has signaled it will keep them near zero through 2023.
Mark Heppenstall, chief investment officer at Penn Mutual Asset Management, said the central bank likely will reiterate its “commitment to prolonged monetary accommodation” at the meeting.
“Uncertainty surrounding the pandemic’s near-term course and signs of weakening labor markets suggest recent taper talk by Fed officials is still premature,” Heppenstall added, referring to when the Fed might begin tapering asset purchases.
The calendar also includes the Case-Shiller Home Price Index for November at 9 a.m. ET and Consumer Confidence for January at 10 a.m.
3. — Leon Black Will Step Down as CEO of Private-Equity Giant Apollo
Leon Black, the founder and CEO of private-equity giant Apollo Global Management (APO) – Get Report, will step down as chief executive after it was revealed he made larger-than-expected payments to Jeffrey Epstein, the disgraced financier.
Black paid Epstein $158 million in fees for trust- and estate-tax planning in the five years to 2017, far more than was previously known, according to a report from law firm Dechert.
The review by Dechert found no evidence that Black was involved in the criminal activities of the late Epstein, who was indicted in 2019 on federal sex-trafficking charges involving underage girls. Epstein committed suicide in prison while awaiting child sex charges.
Apollo also never retained Epstein for any services, the report concluded.
Black wrote in a letter to Apollo’s fund investors that he would cede the role of CEO to co-founder Marc Rowan on or before his 70th birthday on July 31, while retaining the role of chairman.
The Wall Street Journal was first to report on the contents of the report and letter.
Shares of Apollo Global rose 3.86% to $47.65 in after-hours trading on Monday.
4. — BlackBerry Shares Surge Again
BlackBerry (BB) – Get Report was jumping more than 11% in premarket trading Tuesday, following the stock’s more than 28% gain in the previous session as it received a boost from retail traders and was being heavily mentioned on online message boards such as Reddit.
BlackBerry, the security software and services company, said in a statement that it was unaware of reasons for the stock move.
Shares of BlackBerry rose 11.87% to $20.17 in premarket trading Tuesday. The stock has gained 172% so far in 2021.
BlackBerry Rises Again, Gets Lift From Expanded Baidu Partnership
Analysts at RBC cut the stock to underperform from sector perform, citing valuation and saying there has been no change to the company’s fundamental outlook. Analyst Paul Treiber maintained his price target at $7.50.
BlackBerry has become a favorite on the Reddit message board, much like GameStop (GME) – Get Report and Express (EXPR) – Get Report.
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5. — Apple Lead Hardware Engineer Shifting to ‘New Project’
Apple (AAPL) – Get Report said its leading hardware engineer, Dan Riccio, was moving to a new project and will be replaced by John Ternus, currently a vice president of hardware engineering.
Riccio has been with Apple since 1998 and has worked on most of the company’s major products over that time, from the first iMac computers to the latest 5G phones.
Apple didn’t specify what project Riccio will lead. But recent speculation has focused on efforts by the company to develop a high-end virtual reality headset, or augmented reality glasses.
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