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Tag: US Stocks

  • Robinhood (HOOD) Extends Trading Services To The UK

    Robinhood (HOOD) Extends Trading Services To The UK

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    Robinhood, a major player in the United States financial technology industry is set to stretch out its trading services in the United Kingdom for the purpose of growing its business globally.

    Robinhood To Offer US Stock Trading In the UK

    Co-founder and Chief Executive Officer (CEO) of Robinhood Vladimir Tenev confirmed the expansion toward the UK sector in an interview with Bloomberg. According to the CEO, the expansion aims to bring the US stocks into the UK market.

    The CEO stated:

    The intention is, for the U.K. market, Robinhood to be the best place to invest U.S. stocks, U.S. dollars, and we believe we can fill that need better than anyone else.

    Tenev noted that the company plans to gradually extend its platform to all users in the United Kingdom in early 2024. With the launch, consumers in the UK market will be able to trade 6,000 equities in the US market. 

    The CEO further asserted that a waitlist has been made available to people who wish to gain early assess to the app. Furthermore, the platform’s launch in the UK is under the Financial Conduct Authority (FCA) regulation.

    Additionally, the platform offers users features like a five percent interest, and can change their uninvested funds from pounds to dollars. These offers aim to attract a larger range of investors, particularly those with little financial resources.

    Robinhood’s expansion sparks wider growth for its business globally. The CEO explained, “I aspire for Robinhood to be a global company. That’s been the plan from the very beginning. Baiju and I started this company as immigrants and children of immigrants, and so, the idea of making our services […] available to anyone in the world is just the vision that I had in mind from the very beginning.”

    The company’s entry into the UK market also puts it in direct competition with national and international companies. These include companies like Public.com, based in New York, Revolut, and Freetrade, among others.

    Zero – Fee Trading Initiative

    The CEO also underscored the platform’s commitment to offering Zero-Fee trading and accessible trading alternatives for UK users. This initiative is similar to the effective charge reduction strategy that was put in place in the US before the epidemic.

    Notably, Robinhood does not demand any commission fee for buying and selling stocks on the platform. Due to this, individuals can start creating their investment portfolios with a minimum of one US dollar (79p).

    Tenev explained:

    So we are launching imminently to the initial set of customers in the UK, and what we are launching is a commission-free share trading of US stocks.

    With its zero-fee trading strategy, the platform’s introduction into the UK market will completely change how average investors interact with the stock market.

    Also, with its focus on technology and user-centric features, the platform is poised to impact the current market. It will also bring fresh energy to the UK investment landscape.

    BTC trading at $37,800 on the 1D chart | Source: BTCUSDT on Tradingview.com

    Featured image by Shutterstock, chart by Tradingview.com

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  • Credit Suisse sinks, fuelling $60 billion rout in European Banks

    Credit Suisse sinks, fuelling $60 billion rout in European Banks

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    Credit Suisse Group AG shares plunged and credit default swaps were near a distressed level after its biggest shareholder ruled out any additional support. 

    Saudi National Bank Chairman Ammar Al Khudairy said “absolutely not” in response to a question on Wednesday about whether the bank was open to further injections if there was another call for additional liquidity.

    The comments sent Credit Suisse shares down 20 per cent in the biggest one-day selloff on record. Traders were seeing prices of as high as 1,200 basis points on one-year senior credit-default swaps on Wednesday morning, according to two people who saw the quotes and asked not to be named. The last recorded quote on pricing source CMAQ stood at 835.9 basis points on Tuesday. 

    The panic selling spread to European banks and dragged US stock futures lower. Two-year yields on German bunds fell 33 basis points, in a further sign of flight to safety. 

    Also read: World markets set for aftershocks as SVB collapse ripples out

    A gauge for the European banking sector declined 7 per cent, reaching the lowest since early January, and BNP Paribas SA sank 11 per cent. The combined market value lost among European banks was more than $60 billion on Wednesday.

    “Markets are very sensitive to the negative news flow after the surprise of seeing a US bank disappear from one day to the other,” said Francois Lavier, head of financial debt strategies at Lazard Freres Gestion. “In a context where market sentiment is already weakened, not much is needed to weaken it even further.” 

    Credit Suisse is just months into a complex turnaround plan that will see the Swiss firm spin out the investment banking unit while focusing on its key wealth management business. That effort risks being further complicated by market unease across financials after the collapse of multiple US regional banks. 

    Also read: How SVB and Signature Bank failed so quickly — and why the US banking crisis still persists

    A spokesperson at Credit Suisse declined to comment when contacted by Bloomberg News. Chief Executive Officer Ulrich Koerner said in a Bloomberg Television interview on Tuesday that business momentum improved this quarter and that the bank attracted funds after the collapse of SVB.

    Shares of large US lenders sank in premarket trading. Bank of America Corp. fell as much as 3.9 per cent and Wells Fargo & Co. dropped 4 per cent. Citigroup Inc. shares declined 3.8 per cent

    In the credit market, spreads of more than 1,000 basis points in one-year senior bank CDS are extremely rare. Major Greek banks traded at similar levels during the country’s debt crisis and economic slump. The level recorded on Tuesday is about 18 times the contract for a rival Swiss bank, UBS Group AG, and about nine times the equivalent for Deutsche Bank AG.

    Also read: Biden promises ‘whatever needed’ for U.S. bank system as SVB shock hammers stocks

    The CDS curve is also deeply inverted for the bank, meaning that it costs more to protect against an immediate failure, instead of a default further down the line. The lender’s CDS curve had a normal upward slope as recently as Friday. Traders typically ascribe a higher cost of protection over longer, more uncertain periods.

    “When we have this kind of material risk, it takes some time for calm to come back to markets,” said Frederic Dodard, head of asset allocation at State Street Global Advisors Ltd. “We could continue to see market swings for a few days, especially with central banks meetings this week and next week. They could help restore confidence or even worsen it. We’re not out of the woods yet.”

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  • Stocks, oil skid as China’s COVID protests roil sentiment

    Stocks, oil skid as China’s COVID protests roil sentiment

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    Stocks and oil weakened on Monday as rare protests in major Chinese cities against the country’s strict zero-COVID policy raised worries about the management of the virus in the world’s second-largest economy.

    MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6% after US stocks ended the previous session with mild losses.

    Australian shares lost 0.47% while Japan’s Nikkei stock index was down 0.37%.

    South Korea’s KOSPI 200 index retreated 1.35% in early trade and New Zealand’s S&P/NZX50 Index was off 0.4%.

    In China, demonstrators and police clashed in Shanghai on Sunday night as protests over the country’s stringent COVID restrictions flared for the third day.

    There were also protests in Wuhan, Chengdu, and parts of the capital Beijing late Sunday as COVID restrictions were put in place in an attempt to quell fresh outbreaks.

    The dollar extended gains against the offshore yuan, rising 0.74%, and the focus shifts to the opening of China’s markets later in the Asian morning.

    The COVID rules and resulting protests are creating fears the economic hit for China will be greater than expected.

    “A growing list of cities, including those with large populations, have imposed strong restrictions on movement because of a surge in infections, there will inevitably be a negative impact on economic activity from the restrictions on movement,” CBA analysts said on Monday.

    “Even if China is on a path to eventually move away from its zero-COVID approach, the low level of vaccination among the elderly means the exit is likely to be slow and possibly disorderly. The economic impacts are unlikely to be small.”

    China’s case numbers have hit record highs, with nearly 40,000 new infections on Saturday.

    Fears about Chinese economic growth also hit commodities in Asia trade.

    S&P 500 and Nasdaq futures both fell, pointing to possible declines in Wall Street later in the day.

    US crude CLc1 dipped 0.25% to $76.08 a barrel. Brent crude LCOc1 fell 0.16 to $83.48 per barrel.

    Both benchmarks slid to 10-month lows last week and declined for a third consecutive week

    “Mobility data in China is showing the impact of a resurgence in COVID-19 cases,” ANZ analysts wrote in a research note Monday. “This remains a headwind for oil demand that, combined with weakness in the US dollar, is creating a negative backdrop for oil prices.”

    Yields on benchmark 10-year Treasury notes rose to 3.6905% from its US close of 3.702% on Friday. The two-year yield, which tracks traders’ expectations of Fed fund rates, touched 4.467% compared with a US close of 4.479%.

    The dollar rose 0.22% against the yen to 139.4 JPY. It remains well off its high this year of 151.94 on Oct. 21.

    The euro was down 0.2% on the day at $1.0371, having gained 4.94% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 106.3.

    In the United States, a speech by Federal Reserve Chair Jerome Powell in Washington on Wednesday to the Brookings Institute on the economic outlook and the labour market will be closely watched by investors.

    Gold was slightly lower. Spot gold was traded at $1750.49 per ounce.

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  • Federal Reserve seen slowing rate hike pace as inflation eases

    Federal Reserve seen slowing rate hike pace as inflation eases

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    A larger-than-expected drop in consumer inflation last month will likely prompt the Federal Reserve to pare down future interest rate increases as the impact of its swift monetary tightening this year begins to take hold.

    October data published Thursday by the Labor Department showed key items like rents increasing less than expected, while the price index for used cars – a culprit in the initial, pandemic-related surge in inflation – declined by 2.4%, the fourth consecutive monthly drop. Prices for airfares, medical services, and apparel all declined.

    Though overall inflation remained high by historic standards, with prices increasing 7.7% from a year earlier, the monthly pace of “core” inflation that excludes volatile food and energy costs dropped by half, to 0.3% in October from 0.6% the month before.

    Some analysts said this may just be the start of inflation being defused after emerging last year as a chief risk to the economy.

    “This is not some kind of outlier,” wrote Omair Sharif of Inflation Insights. “This is the start…of lower prints.”

    The report sent US stocks soaring, with the S&P 500 up more than 4% in late morning trading on hopes the Fed, while not expected to turn dovish any time soon, may at least not be forced into a more aggressive posture.

    The yield on the 2-year U.S. Treasury note, the maturity most sensitive to Fed rate expectations, dropped by nearly 20 basis points, the most in one day since June. Traders in futures contracts tied to the Fed’s benchmark rate show investors now expect the blistering pace of policy tightening to slow next month – and for the Fed to stop its rate hikes sooner than expected.

    After raising rates more sharply this year than at any time since the 1980s, including four straight 75-basis-point rate hikes that brought the policy rate to a 3.75%-4% range as of last week, the Fed is now seen shifting to a half-point rate hike next month and quarter-point hikes after that. Rate futures contracts are now pricing in a top policy rate in the 4.75%-5% range next March — lower than the 5%-plus range seen before the report — and interest-rate cuts in the second half of the year.

    Fed policymakers took some relief from the data but, in an era when their initially sanguine view of inflation left them playing catch-up, also said the fight with rising prices is far from over.

    “This morning’s CPI data were a welcome relief, but there is still a long way to go,” new Dallas Fed President Lorie Logan said. “While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy.”

    Fed officials have said they want convincing evidence that inflation is in decline before altering their approach, and still believe returning inflation to their 2% target will require keeping rates at a “restrictive” level for a potentially extended period of time.

    Continued high inflation for services, possibly reflecting labor markets that remain tight for those more labor-intensive businesses, could prevent any quick resolution of the overall inflation problem.

    But the central bank at its last meeting also indicated it could take a step back from delivering interest rate hikes in such large chunks in favor of a more tempered approach as the economy adjusts to the “lagged” impact of monetary policy.

    “The hikes in interest rates are beginning to bite into the economy and lower inflation as consumers become more frugal,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

    Speaking after the report, Philadelphia Fed president Patrick Harker indicated his support for slowing rate hikes and then stopping, perhaps even earlier than markets now expect.

    “I am in the camp of wanting to get to what would clearly be a restrictive stance (with the policy rate) somewhere north of four-ish, you know, four and a half percent, and then I would be okay with taking a brief pause, seeing how things are moving,” he said.

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  • US stocks dip, dollar up as China sticks to pandemic policy

    US stocks dip, dollar up as China sticks to pandemic policy

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    US stock futures slipped in Asia on Monday after Beijing denied it was considering easing its zero COVID-19 policy, helping the dollar recover some losses while dealing a setback to oil and commodities.

    Risk assets had rallied on Friday amid speculation China was preparing to relax its pandemic restrictions, but over the weekend health officials reiterated their commitment to the “dynamic-clearing” approach to COVID cases as soon as they emerge. 

    “Despite the denial, notions that China will pivot to living with COVID in the new year are unlikely to be quashed given the very real toll that zero-COVID is having on the economy,” said Tapas Strickland, head of market economics at NAB.

    “With China going into winter, most analysts think a change in zero-COVID is unlikely until at least March.”

    Speculation that China might open its economy saw copper jump 7% on Friday in its biggest one-day rally since 2009, while a range of resources all benefited from hopes of increased demand. 

    It also sent the yuan surging and triggered a round of profit taking on long US dollar positions, particularly against commodity sensitive currencies such as the Australian dollar.

    Some of that reversed early Monday, with the Aussie down 0.8% at $0.6414 AUD-D3 after jumping 3% on Friday. The dollar gained 0.6% on the offshore yuan.

    The US dollar index bounced 0.4% having dived almost 2% at the end of last week. The dollar edged back up to 147.00 yen, while the euro eased 0.4% to $0.9920. 

    S&P 500 futures ESc1 turned tail and fell 0.7%, while Nasdaq futures NQc1 lost 0.8%. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4%.

    Aiding risk sentiment at the margin were reports the White House is privately encouraging Ukraine to signal an openness to negotiate with Russia. 

    Dealers were still digesting a mixed U.S jobs report which showed solid gains in the payrolls survey but softness in the less reliable household survey of unemployment. 

    Four Federal Reserve policymakers on Friday indicated they would still consider a smaller interest rate hike at their next policy meeting, sounding less hawkish than Chair Jerome Powell. 

    There are at least seven Fed officials scheduled to speak this week, which will help refine the rate outlook with markets now narrowly leaning toward a half-point rate hike next month to 4.25-4.5%.

    “We maintain the Fed will see sufficient progress on inflation to pause at 4.75% in February, but the risks are skewed to more hikes that likely bring about a recession sometime later in 2023 or early 2024,” said Bruce Kasman, head of economic research at JPMorgan.

    Short-term Treasuries managed a minor rally on Friday with two-year yields edging back to 4.66% and off highs not seen since 2007.

    The market faces a major hurdle on Thursday when US consumer prices for October are released, with any upside surprise set to test hopes for a step down in Fed hikes.

    Median forecasts are for annual CPI inflation to slow to 8.0% and for the core to dip a tick to 6.5%.

    Also of note will be midterm US elections on Tuesday where Republicans could win control of one or both chambers and lead to deadlock on fiscal policy.

    In commodity markets, gold eased back to $1,677 an ounce after jumping over 3% on Friday. 

    Oil futures lost some of their gains with Brent LCOc1 off $1.79 at $96.78, while US crude CLc1 dropped $1.71 to $90.90 per barrel.

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  • Wall St down for fourth straight day on Fed rate hike worry

    Wall St down for fourth straight day on Fed rate hike worry

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    US stocks closed lower for a fourth consecutive session on Thursday as economic data did little to alter expectations the Federal Reserve would continue raising interest rates for longer than previously thought.

    Following the Federal Reserve’s statement on Wednesday, comments from Fed Chair Jerome Powell that it was “very premature” to be thinking about pausing its rate hikes sent stocks lower as U.S. bond yields and the U.S. dollar rose, a pattern that extended into Thursday.

    Economic data on Thursday showed a labor market that continues to stay strong, although a separate report showed growth in the services sector slowed in October, keeping the Fed on its aggressive interest rate hike path.

    “Years ago the Fed’s job was to take away the punch bowl and that balance is always a very difficult transition, you want the economy to slow to keep inflation from getting out of hand but you want enough earnings to support stock prices,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

    “It is about the rate of change as much as the change so when the rate of change starts to slow … that almost becomes a positive even though in absolute terms we are going to continue to see higher rates, and higher rates means more competition for stocks and lower multiples.”

    The Dow Jones Industrial Average fell 146.51 points, or 0.46%, to 32,001.25, the S&P 500 .SPX lost 39.8 points, or 1.06%, to 3,719.89 and the Nasdaq Composite dropped 181.86 points, or 1.73%, to 10,342.94.
    While traders are roughly evenly split between the odds of a 50 basis-point and 75 basis-point rate hike in December, the peak Fed funds rate is seen climbing to at least 5%, compared with a prior view of a rise to the 4.50%-4.75% range.

    Investors will closely eye the nonfarm payrolls report due on Friday for signs the Fed’s rate hikes are beginning to have a notable impact on slowing the economy.

    The climb in yields weighed on megacap growth companies such as Apple Inc, down 4.24%, and Alphabet Inc, which lost 4.07% and pulled down the technology and communication services sectors as the worst-performing on the session.

    Losses were curbed on the Dow thanks to gains in industrials including Boeing Co, which rose 6.34%, and a 2.20% climb in heavy equipment maker Caterpillar Inc.

    Qualcomm Inc and Roku Inc shed 7.66% and 4.57%, respectively, after their holiday quarter forecasts fell below expectations.

    With roughly 80% of S&P 500 companies having reported earnings, the expected growth rate is 4.7%, according to Refinitiv data, up slightly from the 4.5% at the start of October.

    Volume on US exchanges was 11.81 billion shares, compared with the 11.63 billion average for the full session over the last 20 trading days.

    Declining issues outnumbered advancing ones on the NYSE by a 1.75-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored decliners.

    The S&P 500 posted 6 new 52-week highs and 46 new lows; the Nasdaq Composite recorded 77 new highs and 291 new lows.

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