From Bloomberg
Bill Gross Is Betting on Leverage to Lift Returns at Janus
Bill Gross is betting on leverage to lift returns in an environment of persistently low interest rates and inflated asset prices, an approach he says he shares with hedge fund managers Ray Dalio and Robert Prince.
Gross wrote in an investment outlook for Janus Capital Group Inc. that investors could opt for several approaches to balance risk with reward, espoused by managers including Jeremy Grantham, Warren Buffett and Jack Bogle. Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, wrote that he is most aligned with the philosophy of Dalio and Prince at Bridgewater Associates, of being “cautiously levered” while being wary of the risk of shocks. (More)
Return of Goldilocks Has UBS Asking If It Gets Better Than This
Does it get any better than this?
That’s the question Larry Hatheway, UBS Group AG’s chief economist, is asking about financial markets.
His answer: Probably not.
Right now, the MSCI World Index of stocks is trading near record highs and bond yields are at historic lows. Oil and the dollar seem to have settled down at about $60 and $1.08 per euro respectively. The Chicago Board Options Exchange Volatility Index, or VIX, has dropped from its highs of the year… (Continue)
How Brazil's President Plans to Get the Country and Herself Out of This Mess
Brazil’s President Dilma Rousseff is battling to regain the trust of voters and global investors alike as the economy sinks and a corruption scandal deepens. On Tuesday she charted what she hopes is a path to recovery.
In an exclusive interview in the presidential palace in Brasilia, Rousseff said the recovery process at the state-run oil giant Petrobras would proceed by publishing a long-delayed audited financial statement by the end of April — and issued a strong denial that she knew about the bribery that has shaken the company she chaired from 2003 to 2010. (Continue)
GoDaddy Surges in Trading Debut After $460 Million Share Sale
GoDaddy Inc. gained in its trading debut, after the company raised $460 million in a larger than expected initial public offering.
Shares of the 18-year-old company, which provides domain-name registration and hosting services, rose 31 percent to $26.15 as of 10:08 a.m. in New York. GoDaddy sold 23 million shares for $20 each, after offering 22 million for up to $19. (More here)
U.S. Oil Imports From OPEC Have Plunged to a 28-Year Low
America is the world's biggest oil customer, and OPEC is losing its business—fast.
U.S. imports of oil and petroleum products from OPEC have fallen to a 28-year low, according to data from the Energy Information Administration. The U.S. is pumping more of its own oil, and relying less on OPEC imports than any time since April 1987. (Continue)
Rousseff Rules Out Currency Intervention After Real’s Tumble
Brazil will let the real fluctuate freely and doesn’t intend to intervene in the market to defend the currency, President Dilma Rousseff said.
“What we are doing is a policy of floating currency, and we’ll continue to do that,” she said in an interview at the presidential palace in Brasilia on Tuesday.
Rousseff’s comments show a commitment to the type of economic orthodoxy championed by Finance Minister Joaquim Levy as key for the country to retain its investment-grade credit rating. Even as the real posts the biggest decline among major currencies this year, the central bank scaled back support by ending sales of foreign-exchange swaps last month. (Full article)
Manufacturing in U.S. Expands at Slowest Pace Since 2013
Factories expanded in March at the slowest pace since May 2013, a sign struggling overseas economies and cutbacks among oil producers are hindering U.S. manufacturing.
The Institute for Supply Management’s index declined to 51.5 from 52.9 a month earlier, the Tempe, Arizona-based group’s report showed Wednesday. Readings above 50 indicate growth and the median forecast in a Bloomberg survey of economists was 52.5. (Here)
Canada Stocks Fluctuate as Commodities Rally, Banks Fall
Canadian stocks fluctuated, after capping the first quarterly increase in three yesterday, as commodities advanced to offset a drop among the banks.
Suncor Energy Inc. and Canadian Natural Resources Ltd. climbed at least 0.6 percent as crude oil reversed an earlier loss. AuRico Gold Inc. and Detour Gold Corp. increased more than 4.3 percent as gold advanced. Labrador Iron Ore Royalty Corp. tumbled 1.5 percent as iron ore slumped on prospects of a widening global glut. (Read more)
NYC Luxury Listings Jump as Lower-End Buyers Shut Out
Newly constructed luxury condominiums are proliferating in Manhattan, creating an excess of high-priced homes for sale at a time of limited supply for buyers seeking more affordable options.
At the end of the first quarter, 1,345 units in new developments were listed for sale, a 22 percent jump from a year earlier, according to a report Wednesday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Purchases of such properties dropped 13 percent. (More).
Simon Property Withdraws $16.8 Billion Offer for Macerich
Simon Property Group Inc. withdrew a $16.8 billion proposal to acquire Macerich Co. after the smaller mall owner rejected the sweetened takeover offer as too low.
Macerich said in a statement late Tuesday that the $95.50-a-share offer doesn’t reflect the full value of the company. Simon said separately that it pulled its bid after Macerich’s board refused to engage in talks. Macerich shares fell 5.1 percent to $80.01 at 9:36 a.m. New York time Wednesday. (Read more)
Russian Economy Unexpectedly Expanded 0.4% in Fourth Quarter
ussia’s economy unexpectedly grew in the fourth quarter before the full effect of the country’s currency crisis took hold.
Gross domestic product expanded 0.4 percent from a year earlier after a revised 0.9 percent gain in the previous three months, the Federal Statistics Service in Moscow said on Wednesday, citing a preliminary estimate. That was above the median estimate for zero growth by 11 economists in a Bloomberg survey. Full-year GDP rose 0.6 percent in 2014, the service said, confirming its first assessment in January. (More)
U.S. Stocks Decline Amid Weaker-Than-Forecast Jobs, Factory Data
U.S. stocks fell, after a ninth straight quarterly gain, as weaker-than-estimated data on hiring and manufacturing reinforced concern that economic growth may be slowing.
American Airlines Group Inc. and Delta Air Lines Inc. slumped more than 4.1 percent after Deutsche Bank cut its ratings on the shares amid concerns about their international business. Wal-Mart Stores Inc., Boeing Co. and Merck & Co. Inc. slipped at least 1.2 percent. (Here)
GE Makes Once-a-Decade Bet on Big Turbines as Energy Use Surges
General Electric Co.’s industrial overhaul rests in part on a piece of machinery that’s larger than a Winnebago and weighs as much as a Boeing 747. Now, it just needs to work.
GE plans to deliver its newest gas turbine in July, a decade after the rollout of an earlier model that was hindered by performance issues and sold poorly. The company is investing $2 billion developing the new 433-ton unit, which can churn out enough electricity to power 400,000 homes. (Full story)
Greek-Bond Champion JPMorgan Says Buy Debt as Pessimism Overdone
JPMorgan Chase & Co. is challenging the consensus view on the first quarter’s worst-performing developed-nation sovereign bonds.
While Greece is locked in negotiations over its funding, the market is overly pessimistic on the nation’s debt and long-term investors should buy its 30-year securities, according to Aditya Chordia and Nikolaos Panigirtzoglou, rates strategists at JPMorgan in London. (More here)
U.S. Vacation-Home Sales Set Record as Economy Improves
Even before the remnants of eastern Massachusetts’ snowiest winter have melted, second-home buyers flocking to Cape Cod’s beach towns have helped Steve Clay’s team of agents break their sales record.
Clay, an agent with Keller Williams Realty, said he and his four agents have 17 properties under contract, more than at any one time since the team formed in 2009.
“Buyers know they missed the bottom of the market, and now they don’t want to miss the bottom of interest rates,” he said. (Read more.)
Inequality and Mobility Put Yellen on Tightrope Between Economy and Politics
Janet Yellen is set to deliver remarks at a Federal Reserve conference on economic mobility on Thursday. Though monetary policy isn’t the topic of the day, she’ll still need to weigh every word.
Some Republican lawmakers say the Fed chair sided with Democrats on economic inequality during an October speech, overstepping the Fed’s politically independent role. (Read here)
Uber a Taxi Service or a Mobile-Phone App? EU Asks
European Union regulators reviewing complaints filed by Uber Technologies Inc. against various national laws are asking a serious question about the company. Is it a web app or a taxi service?
“Uber is a technology, but it is a technology that has an impact on transportation,” Jakub Adamowicz, a European Commission spokesman, said at a press conference Wednesday. “We’re taking our time to analyze, see and study.” (Continue)
Small-Business Hiring Gives Mixed Signals on U.S. Economy
Looking for a read on the U.S. labor market ahead of the April 3 employment report? Hiring at the smallest businesses may not provide the clarity you seek.
Figures released today show accelerating job growth last month, though other indexes still point to sluggishness in hiring at companies with fewer than 20 workers. This indicates a disconnect in the job market: Payrolls for all nonfarm employers rose at the fastest pace since 2001 in the 12 months through February, based on Labor Department data. (More here)
