1.95k followers • 31 symbols Watchlist by Yahoo Finance
Follow this list to discover and track stocks that have set death crosses within the last week. A Death Cross is when a stock's 50 day moving average crosses below the 200 day moving average. This list is generated daily, ranked based on market cap and limited to the top 30 stocks that meet the criteria.
Banco Santander, S.A. GTD PFD SECS 6
Bank of America Corporation
Bank of America Corporation
Bank of America Corporation
Wells Fargo & Company
Texas Instruments Incorporated
China Life Insurance Company Limited
The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc.
Waste Management, Inc.
Mitsubishi UFJ Financial Group, Inc.
The PNC Financial Services Group, Inc.
HCA Healthcare, Inc.
Manulife Financial Corporation
McCormick & Company, Incorporated
Fresenius Medical Care AG & Co. KGaA
Chipotle Mexican Grill, Inc.
Smith & Nephew plc
Yum China Holdings, Inc.
CrowdStrike Holdings, Inc.
Mid-America Apartment Communities, Inc.
Laboratory Corporation of America Holdings
Invitation Homes Inc.
Cboe Global Markets, Inc.
The Goldman Sachs Group, Inc. PFD 1/1000 C
Banks were supposed to start processing loan applications on Thursday at midnight from small businesses under the $349 billion Paycheck Protection Program, but they weren't prepared for the onslaught.
(Bloomberg) -- Half a million of Bank of America Corp.’s 66 million customers have deferred loan payments because of financial fallout from the coronavirus.“The idea is to defer the payment, defer the impact,” Chief Executive Officer Brian Moynihan said in an interview Friday on CNBC. “We’re working with our customers who need help, who are losing their jobs. We have to preserve their ability to have cash flow.”The bank’s portal for small-business relief loans went live Friday morning and had 40,000 applications by the afternoon, according to a person familiar with the situation. The Charlotte, North Carolina-based lender is prioritizing 1 million of its existing small-business borrowers because they’ve already been vetted and can receive funds the fastest, Moynihan said.Other large banks including Wells Fargo & Co. and JPMorgan Chase & Co. said they weren’t ready to start accepting applications in the unprecedented and quickly assembled initiative as lenders grappled with lack of detailed guidelines from the government.Separately, Moynihan said only 5% of trading employees are working from the bank’s offices.(Updates with loan application volume in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil extended its biggest-ever surge in New York, though the advance was tempered by skepticism over whether a producer meeting Monday would deliver output cuts large enough to avert a glut.The OPEC+ coalition including Saudi Arabia will hold a meeting of its members by video conference on Monday, with the gathering open to even producers outside the group. While it’s unclear who will attend, market watchers are predicting that stockpiles are likely to swell even with a cut of 10 million barrels a day in global supplies.Investors will be closing watching the guest list of the meeting -- especially names outside the Organization of Petroleum Exporting Countries and its allies -- after Saudi Arabia made clear it will only cut production if others, including the U.S., shoulder some of the burden.U.S. West Texas Intermediate futures rose as much as 13% Friday, before paring gains to about 5%. They had soared a record 24% in the previous session. Still, prices are less than half the levels at the start of the year, with the coronavirus crisis crushing demand.See also: Trump’s Push for Huge Deal to Cut Oil Supply Draws Disbelief“I think Russia, Saudi Arabia and OPEC are coming to the conclusion that if they don’t agree to something, it will be forced on them by the market,” said Brian Kessens, a portfolio manager at Tortoise Capital Advisors. “Any cuts will extend the run way to June instead of May, which is helpful as countries try to work through the coronavirus lockdown. But it only softens the blow.”One delegate from the producer group said a global cut of 10 million barrels a day is a realistic goal. Russian President Vladimir Putin told the country’s top oil executives that producing countries should join together to slash output to reverse the collapse in prices, adding that worldwide curbs of a little above or below 10 million barrels a day are possible.Getting countries from all over the world to agree would be a tough ask. Even if that’s successful, an output reduction of the size that’s being discussed will be just a fraction of the 35 million barrels of daily demand destruction some traders now see.Citigroup Inc. and Goldman Sachs Group Inc. have argued any supply-reduction deal would anyway be too little, too late as consumption craters due to efforts to stem the spread of the coronavirus.“A near-term return to production cuts still seems unlikely, and we are skeptical that such a large coalition could be put together,” Morgan Stanley analysts wrote in a note. Some of the necessary production shut-ins are likely to occur in the U.S. due purely to market forces.The announcement of a potential supply cut first came from U.S. President Donald Trump, who tweeted on Thursday that he had spoken to Saudi Crown Prince Mohammed bin Salman, who had in turn spoken with Russia’s Putin.However, the U.S. leader’s goal is purely aspirational and will ultimately hinge on whether Riyadh and Moscow can reach a deal, a person familiar with the situation said.Apart from benchmark futures, hopes for the curbs have boosted every corner of the market over the last 24 hours, from timespreads used to gauge market health, to key North Sea swaps. Those gains are now easing as traders worry that the undertaking may be too fraught with hurdles.The physical oil market of actual barrels of crude continued to remain under pressure, giving producers more urgency to act. Belarus said Russian companies are offering Urals oil for $4 a barrel.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- U.S. employment plummeted last month by a degree not seen since the last recession, in just an early glimpse of the devastation from the coronavirus pandemic.Payrolls fell 701,000 from the prior month -- compared with the median forecast of economists for a 100,000 decline -- according to Labor Department data Friday that mainly covered the early part of March, before government-mandated shutdowns forced firms to lay off millions more workers. This was the first decline in monthly payrolls since 2010.The jobless rate jumped to 4.4% -- the highest since 2017 -- from a half-century low of 3.5%, and is expected to surge in the coming months. Bloomberg Economics sees the rate rising to 15% soon, while Federal Reserve Bank of St. Louis President James Bullard said it may hit 30% this quarter.Click here for a transcript of Bloomberg’s TOPLive blog on the jobs report.The numbers are already outdated. Because the reference period for the jobs report is based on the 12th of the month, it didn’t capture the vast majority of the nearly 10 million people who have filed for unemployment benefits in the last two weeks alone.Such projections are a dramatic shift from just a month ago, when job gains topped 200,000 and employers were having so much difficulty finding qualified workers that they were hiring previously marginalized populations such as people with criminal records. President Donald Trump has frequently touted strong employment figures as he runs for re-election this year.But in the last few weeks, the disease known as Covid-19 has rapidly spread across the U.S., killing thousands and leading an increasing number of states to encourage or order their citizens to stay home.“The abruptness with which the economy has taken this step down is so striking,” FS Investments Inc. Chief U.S. Economist Lara Rhame said on Bloomberg Television. “It’s like a hurricane but hitting the entire country at the exact same time.”What Bloomberg’s Economists Say“Workers who were paid for just a few hours during the early part of the month were still counted as a nonfarm payroll, so the March data are only an early snapshot illustrating the start of unprecedented job losses -- in terms of both speed and magnitude -- in the economy. April job losses will be at least 30 times larger, in the vicinity of 20 million. Unemployment will soar toward 15% next month.”\-- Carl Riccadonna, Yelena Shulyatyeva and Andrew HusbyClick here for the full note.Treasury yields and U.S. stocks were lower Friday following the report. The Bloomberg dollar index held gains.Congress and the Trump administration are trying to help individuals and small businesses rocked by the economic shutdown, with a loan program for small firms getting off the the ground Friday and direct checks en route to many households in coming weeks.But the program that provides up to $350 billion in aid to small businesses, aimed at preventing further layoffs, has been mired with website glitches and a lack of communication with lenders. Additionally, some of the $1,200 checks meant to soften the economic toll on Americans may not arrive until September.Employment in leisure and hospitality was hit particularly hard, falling by 459,000 in March, nearly wiping out two years of job gains. The losses were mainly in food services and drinking places. Private payrolls overall dropped by 713,000.Average hourly earnings rose 0.4% from the prior month and were up 3.1% from a year earlier, both above estimates -- and potentially due to the removal of low-wage workers from the ranks of the employed.The Bureau of Labor Statistics said the unemployment rate would have been almost 1 percentage point higher if workers who were recorded as employed but absent from work due to “other reasons,” were classified as unemployed on temporary layoff. The BLS said that this discrepancy might result from respondents misunderstanding a survey question.“The jobs report was extremely weak, sending an ominous signal of what is to come,” said Michelle Meyer, head of U.S. economics at Bank of America Corp. “Not only were the numbers terrible but the BLS noted that they could have been worse.”In addition, the figures may be less reliable than usual because survey response rates were significantly below typical levels from both households and businesses.The Labor Department said in a special note that “It is important to keep in mind that the March survey reference periods for both surveys predated many coronavirus-related business and school closures in the second half of the month.”A separate report Friday from the Institute for Supply Management showed measures of business activity and employment at U.S. services firms contracted in March, an abrupt reversal from solid growth the previous month.Other DetailsThe average work week fell to 34.2 hours, the lowest since 2011, in a sign companies began pulling back before laying off workers. Temporary workers fell by 49,500, the largest decline since 2009; retail jobs fell by 46,200.The initial wave of layoffs hit Hispanic and Asian Americans harder, with their unemployment rates each jumping 1.6 percentage points to 6% and 4.1%, respectively. The white jobless rate rose 0.9 point to 4%, and it was up 0.9 point to 6.7% for black Americans.Government jobs rose by 12,000, with a 17,000 rise in temporary jobs tied to the decennial census count.The number of people classified as unemployed on temporary layoff totaled 1.85 million, up from 801,000 in February, for the biggest one-month increase in records going back to the 1960s.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- If the past two days of trading in U.S. Treasuries are any guide, yield-curve control might have already reached the world’s biggest bond market.On Thursday, Labor Department data showed a record 6.65 million people filed jobless claims in the week ended March 28, blowing past estimates for 3.76 million. When added to the previous week’s tally, it showed almost 10 million Americans were out of work because of the coronavirus pandemic. And yet, 10-year Treasuries took those figures in stride. The borrowing benchmark fluctuated by less than 7 basis points, the tightest range since Feb. 19, the same day the S&P 500 Index hit a record high. It closed 1 basis point higher than where it started the day, at 0.597%.On Friday, Labor Department data showed U.S. payrolls fell 701,000 in March compared with February, the first decline since 2010 and far exceeding the median forecast for a 100,000 drop. The jobless rate rose to 4.4%, the highest since 2017, and strategists are already expecting the April report to show nothing short of a crash, with 20 million jobs lost and an unemployment rate of 15%. Again, 10-year Treasuries barely budged at about 0.59%.From an economic state-of-play perspective, Friday’s jobs report was always going to be stale. It only captured payrolls from the week that included March 12 — when many people were still reporting to work as usual. Bond traders are paid to look ahead, and no employment figures right now will help in that effort. They have the same question as the rest of America: “Is the worst over yet?”Until they get an answer, the best way forward seems to be counting on the Federal Reserve to take whatever actions are necessary to keep the $17 trillion Treasuries market in order. Effectively, bond traders seem to be entering a period of unofficial “yield-curve control” as long as the world’s largest economy deliberately grinds to a standstill.The increase in the Fed’s balance sheet since the job report’s reference date has been nothing short of extraordinary. The central bank gobbled up $1.5 trillion of assets in the past three weeks, far and away the steepest climb on record. It has started to scale back only slightly, while also introducing a temporary repurchase agreement facility that lets other central banks swap Treasuries for dollars. That should stem forced sales by so-called foreign official holders.It seems reasonable to expect the Fed to continue outright purchases for the foreseeable future, given that the Treasury will ramp up issuance to cover the $2 trillion coronavirus relief package. Taking cues from the central bank is at least a more reliable strategy than trying to read between the lines of horrid jobs data. Wage growth, once the most important figure in the monthly release, is now meaningless. Average hourly earnings actually beat expectations in March by rising 3.1%, likely because a large group of lower-paid workers lost their jobs.I have called yield-curve control, an idea championed last year by Fed Governor Lael Brainard, a bond trader’s nightmare. That’s probably still true, though the wild price swings of March were arguably even more frightening. To be clear, the central bank has not officially set any sort of target. But it has provided clear forward guidance: the Fed will buy “in the amounts needed to support the smooth functioning of markets for Treasury securities and agency MBS.”With so much still unknown about how long it will take the U.S. to slow the pace of the coronavirus outbreak and what the ultimate economic damage will look like, it makes sense that traders would find comfort in a range. While Bank of America Corp. technical strategists said this week that 10-year yields could hit zero in the next three months, somewhere around the current 0.6% feels about right, given what’s known about the labor market and nationwide shutdowns so far, as well as what’s contained in the relief package.Treasuries have little data to trade on except glimmers of hope that the global economy will get to the other side of this crisis sooner rather than later. That’s not a backdrop for decisive trades. It’s not quite yield-curve control, but it’s close.This column does not necessarily reflect the opinion of 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
PNC Financial (PNC) appears to be a promising buying opportunity now, based on its rising loan and deposit balances aiding top-line growth.
(Bloomberg) -- Bank of America Corp. is preparing for a flood of applications from U.S. small businesses seeking government relief to weather the coronavirus outbreak.“We know for these businesses speed is of the essence,” the bank said in a statement. “We can move fastest with our nearly 1 million small-business borrowing clients. That is our near-term priority. As the administration has made clear, going to your current lending bank is the fastest route.”The Charlotte, North Carolina-based company had staff working overnight Thursday to prepare for expected high volumes of applications Friday. The initiative is part of the $2.2 trillion government stimulus package and is aimed at helping small businesses survive the devastating impact of the pandemic.“We’re setting up shop and activating thousands of people to be able to take the applications,” Chief Executive Officer Brian Moynihan said in an interview Wednesday on Bloomberg Television. The bank has been heavily involved in talks with the White House and Treasury on the program, he said.On Thursday, the Small Business Administration bumped up to 1% the interest rate lenders may charge small businesses after banks complained that the previous approved rate of 0.5% was below even their own cost of funds.U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza released additional guidelines for the program just a few hours before it’s expected to become widely available Friday.“This is a very important program,” Mnuchin said in a news conference Thursday. “Please bring your workers back to work if you’ve let them go.”(Updates with Mnuchin’s comment in last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nonfarm payrolls and service sector PMIs are in focus today. With the West in shutdown mode, both labor market numbers and PMIs are expected to be dire…
(Bloomberg Opinion) -- Private equity firms are crying foul, fearful that companies they own are largely cut off from the $377 billion of small business loans and grants baked into the U.S.'s $2 trillion coronavirus relief bill. But do they really deserve any part in a bailout?Statistics from corporate loan borrowers that make $50 million a year or less in Ebitda don’t paint a pretty picture. An average middle-market business has a debt-to-Ebitda ratio of 4.8 times and is paying an interest rate of 7.7%, data from S&P Global Market Intelligence show. Put another way, this company is using about 37% of its operating earnings to pay interest alone(1) — and that was before the outbreak. So if this business were running at, say, one-third of its full capacity because of regional lockdowns, it wouldn’t even be able to cover its interest payments. A cheap loan from the Small Business Administration would certainly help. But before asking Uncle Sam for money, private equity firms should consider their role in this mess. Should they be liable if this virus morphs into a full-blown credit crisis?In the past decade, the sector started urging portfolio companies to tap the loan market rather than issue high-yield bonds, which were largely closed off to businesses their size. Today, roughly half of leveraged loans, or about $1.5 trillion, are issued by sponsors for their holdings.There’s certainly a good case for private equity firms to back leveraged loans. Unlike bonds, these loans can be called immediately — that is, borrowers can redeem them at any time — which allows portfolio companies to refinance more easily. What’s more, these businesses tend to be closely held; the loan market’s opaque reporting standards spare firms from quarterly financial disclosures to the Securities and Exchange Commission.But private equity’s large presence in the market has caused a fast deterioration of loan quality. Roughly half of borrowers are rated B or worse, up from 30% in 2012, data compiled by Citigroup Inc. show. After all, levering up to juice returns is the sector’s forte. Last year, more than 75% of deals included debt multiples greater than six times Ebitda, compared with 25% after the collapse of Lehman Brothers Holdings Inc., as I’ve noted.Everyone suffers in times of distress, private equity firms and corporate issuers alike. In March, the average yield of the S&P/LSTA U.S. Leveraged Loan 100 Index shot as high as 13% from 5.6% just a month earlier, as the Big Three ratings agencies were busy downgrading high-yield issuers at the fastest pace in at least a decade. If the Federal Reserve hadn’t stepped in with new financing facilities, how would Middle America roll over its loans?According to the parameters of the rescue bill, companies with more than 500 employees aren’t eligible for small-business relief. That number includes affiliates, meaning staff at portfolio companies are being added together. To get around this, the industry wants the Trump administration to view their investments as independent entities. In reality, these holdings don’t operate separately, at least not in terms of financing decisions. Private equity firms have teams of lawyers and advisers dedicated to crafting credit agreements that give them as much financial flexibility as possible, such as removing caps on leverage ratios. As a result, the leveraged loan market is now filled with covenant-lite loans, as my colleague Brian Chappatta has written. The wheel of fortune is turning. Banks that agreed to help private equity firms may be too busy with other obligations right now. With blue-chip companies drawing at least $124 billion from their credit lines in the first three weeks of March alone, and dollar funding tight, do lenders have the bandwidth? There are $66 billion leveraged loans mandated, or in the works, and about $10 billion under syndication — that is, marketed but not priced, data compiled by Bloomberg show.There’s good reason to believe the current jitters go beyond a few canceled deals, and could threaten to trigger system-wide margin calls. Leveraged loans aren’t mark-to-market, but the financing facilities that banks provide to asset managers (which allow the latter to buy such loans before packaging and selling them as bonds) tell a lot about the quality of these assets. Goldman Sachs Group Inc. and JPMorgan Chase & Co. already demanded their clients to put up extra collateral, or face the risk of liquidation, Bloomberg News reported last month.It’s unclear if industry titans can convince President Donald Trump to bail out their investments. For its part, the Federal Reserve is loath to make loans to distressed companies. Since the passage of the Dodd-Frank Act in 2010, the Fed isn’t allowed to take big credit risks and can only lend with a high degree of protection.Private equity may be in the eye of the storm, but it certainly doesn’t need a bailout. Last year, capital committed to this sector grew 20% to a record $1.3 trillion, according to data provided by PitchBook, a Morningstar company. So instead of trying to pass off their portfolio companies as small businesses, firms can use that dry powder to shore up the balance sheets of their investments.These firms came out of the collapse of Lehman Brothers fairly unscathed. Perhaps the coronavirus could finally teach them a lesson: Using cheap debt to pay themselves dividends isn’t such a savvy investment model after all. (1) 4.8 times 7.7% comes to 37%.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil soared after U.S. President Donald Trump said Saudi Arabia and Russia would make major output cuts, though uncertainty swirled over the volume of curbs and whether reductions would be made at all.While Trump tweeted that cuts of 10 million to 15 million barrels were possible, he didn’t specify if that reduction would be per day. He also said he spoke to Saudi Crown Prince Mohammed Bin Salman about the market.His comments immediately triggered skepticism, even within the U.S. government. One person familiar with the administration’s discussions with the Saudis said there was widespread internal confusion about what the president was referring to and the numbers he mentioned may not be reliable.The prospect of the U.S. joining in on any output cuts was raised after Ryan Sitton of the Texas Railroad Commission, in a rare move for the state’s oil regulator, spoke with Russian Energy Minister Alexander Novak on reducing global supplies by 10 million barrels a day. He said he would also talk to the Saudi oil minister soon.Meanwhile, Kremlin spokesman Dmitry Peskov said Russian President Vladimir Putin hasn’t spoken to the Saudi crown prince and hasn’t agreed to cut oil production to boost prices.The Middle East kingdom also didn’t confirm the cuts, but called for an urgent meeting of the OPEC+ producer alliance to reach a “fair deal” that would restore balance in oil markets, state-run Saudi Press Agency reported. Any curbs by the group would be conditional on other countries joining, according to a delegate.U.S. West Texas Intermediate futures jumped as much as 35%, before closing up almost 25% -- their biggest single-day advance ever. Brent crude increased as much as 47%, the global benchmark’s largest surge in intraday trading.“The 10, 15 million barrel a day cut is just not going to happen. On top of that, Russia has older oil wells, so they can’t restart in the same way that Saudi Arabia can,” said Tariq Zahir, a fund manager at Tyche Capital Advisors.If Trump meant 10 million barrels per day, that would equal both Moscow and Riyadh curbing nearly 45% of their production in what would prove an unprecedented move. If collective action does remove that much from the market, that would be the equivalent of about 10% of world demand prior to the impact of coronavirus crisis.Still, that may not be enough to stop the pain that’s rippled across the energy industry as demand craters with the coronavirus outbreak shutting down economies around the world.Oil’s move comes after prices were already climbing following China’s instruction to government agencies to start buying cheap crude for its strategic reserves.The Trump administration will also rent space in the U.S. emergency oil reserve to domestic producers that are scrambling to find places to store excess barrels. After years of saying OPEC should work to reduce oil prices, Trump has recently changed tack as American shale producers struggle in the wake of crude’s collapse.The person familiar with the administration’s discussions with Saudi Arabia said U.S. leverage had been undermined by the president’s conflicting messages.The sudden jerk in prices Thursday also reverberated across the oil futures curve, with the prompt WTI timespread narrowing by almost 58% to trade at negative $1.45 a barrel in the 15-minute period following Trump’s tweets. The six-month spread, or gap between the May and November contracts, also narrowed by as much as $3.78 a barrel.Meanwhile, Brent’s premium over WTI, which had been hovering at around $1 barrel, widened to as much as $3.09 a barrel.Before the news on Thursday, Saudi Arabia hadn’t appeared to relent on its bid to flood the market, saying a day prior it was pumping at a record and had this week loaded almost 19 million barrels of oil in a single day.Goldman Sachs Group Inc. also doesn’t see a bright outlook. In a note earlier this week, it said any conceivable oil production cut by the U.S., OPEC+ and Canada would still “fall well short” of its estimated 26 million barrels a day of demand loss and only provide “fleeting support to inland crude prices.”Meanwhile, the physical crude market continues to show deepening signs of strain.Dated Brent, the benchmark for two-thirds of the world’s physical supply, was assessed at $15.135 on Wednesday, the lowest since at least 1999. Crude has slipped below $10 in some areas including Canada and shale regions in the U.S., Belarus wants to buy Russian oil for $4, while some grades have posted negative prices.As supply balloons, there are growing signs that the world is running out of places to store the glut.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Market condition: severe. That’s Bank of America Corp.’s new assessment of a corner of the U.S. mortgage industry facing a deluge of applications from homeowners looking to shore up their finances.The coronavirus pandemic, which is prompting nervous Americans to tap into record amounts of home equity as a buffer against an economy tipping into recession, has also led Bank of America to aggressively tighten its standards for home equity lines of credit, or Helocs. Wells Fargo & Co. has taken similar actions, and JPMorgan & Co. may change its policies too.Homeowners looking for ways to build up a cash cushion while capitalizing on interest-rate cuts by the Federal Reserve can do so through Helocs -- open-ended credit lines that use properties as collateral -- or through cash-out refinancings. But banks are getting choosier about underwriting Helocs, with the aim of ensuring that customers will actually use the loans rather than hoarding the money for a rainy day.Applications for home equity loans and lines of credit jumped as much as 33% from a year earlier in recent weeks, before stay-at-home orders cut application volumes, according to data from Informa Financial Intelligence. At Nations Lending Corp., which originated some $2 billion of mortgages last year, applications for cash-out refinancings have doubled, a spokesman said.The surge in applications comes as economists warn that the U.S. economy will contract as a result of government-imposed shutdowns to stem the spread of the deadly coronavirus, putting millions of people out of work and erasing trillions of dollars of wealth.‘Fear Is Building’“If you’re a homeowner, you’ve always been told that one of the easiest ways to access cash in a pinch is to tap the equity in your home,” Nations Lending Chief Executive Officer Jeremy Sopko said in an email. “In a normal environment, this is absolutely true. But this is no normal environment. And so fear is building.”But at big banks, the worsening economy is leading them to restrict who they’ll lend money to, one illustration of how banks are working to bolster their balance sheets ahead of the coming downturn.Bank of America significantly tightened its standards for loans to homeowners wanting to borrow against their equity, ratcheting up an internal gauge that measures market conditions from the company’s lowest level to its highest, “severe,” according to records reviewed by Bloomberg. The minimal credit score it’ll accept from borrowers is now 720, up from 660.JPMorgan, meanwhile, may boost its minimum credit score for new Helocs to 720 as well, up from 680, and is also considering other changes, such as limiting approvals to customers who already have a mortgage or checking account with the bank, said a person with knowledge of the matter. The bank’s goal is to slash application volume by as much as 75%.Stingier ValuationsWells Fargo cut the maximum amount homeowners can borrow and reduced how much the bank will lend relative to a property’s value, according to a person with knowledge of the changes. The bank is applying stingier valuations to homes due to a lack of inspections and appraisals resulting from the pandemic.Representatives for Bank of America and JPMorgan declined to comment. A Wells Fargo spokesperson said the bank is “focused on continuing to support our customers and meet their needs, while appropriately managing risks in the current environment.”The banks’ move to limit loan approvals for homeowners stands in contrast to their lending to businesses, which increased almost 13% last quarter, according to figures from the Bank Policy Institute, a trade association representing large financial firms.Piggy BanksHelocs function like credit cards, with lenders setting a maximum amount homeowners can borrow at any one time. Their use exploded in the years leading up to the housing crash more than a decade ago, as surging property values prompted homeowners to use their dwellings as piggy banks. Heloc borrowing dropped off after the housing bubble burst and scarred homeowners sought to reduce their debt.The property recovery since then has inflated homeowners’ net worth, leading to a record $6.2 trillion of housing equity that U.S. homeowners could borrow against as of December, the highest ever year-end total, according to analytics firm Black Knight Inc.The average homeowner has about $119,000 in equity to use as collateral, Black Knight figures show. For residences with a mortgage, homeowners collectively owe the equivalent of 52% of their homes’ value, making their properties prime targets for taking out loans against.“The uncertainty around the depth and length of the economic contraction caused by the coronavirus is prompting people to act,” Tendayi Kapfidze, chief economist at online marketplace LendingTree Inc., said in an email. “Having a line of credit available can be a buffer against loss of income or employment, an insurance of sorts.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil tanks at one of the world’s largest storage hubs on Africa’s southern tip are filling up fast, said people familiar with the matter, depriving many traders of vital capacity just as the market is hit by a historic flood of crude.The 45 million-barrel Saldanha Bay oil storage terminal, the largest in the southern hemisphere, has been a vital outlet for surplus crude in past slumps, such as the great recession of 2008 to 2009. This time around, as the combination of the coronavirus pandemic and Saudi Arabia’s price war with Russia creates a record-breaking oversupply, its role may be more limited.The facility is close to full, said four people with knowledge of the site’s operations. Several other people said all of the capacity there had been leased to trading houses, but space remained in some of their tanks and they expected additional crude deliveries.A spokesman for South Africa’s Central Energy Fund, which manages the country’s energy assets, declined to comment. Saudi Arabia is only a couple of days into a record supply surge above 12 million barrels a day, but the oil market has already been contending with a vast surplus for weeks. International lockdowns aimed at slowing the spread of the coronavirus are emptying roads, shutting businesses and factories, and keeping billions of people at home.Oil has slumped 60% this year as about a quarter of global demand was wiped out. The market structure is deep into contango -- when future prices are higher than near-term contracts -- making it profitable to store the commodity for any trader with access to tanks.Multiple analysts have predicted that, based on current supply, demand and inventory levels, the world is just weeks from running out of places to store the glut.Saldanha’s six tanks -- completed in the 1980s during the apartheid era to ensure oil supplies for the then politically isolated country -- are generally leased out to trading companies. A joint venture of Hamburg-based Oiltanking GmbH and local company MOGS Oil & Gas Services, has been building over 13 million barrels of additional storage with smaller tanks that allow more flexible blending options.(Updates with differing views on status of tanks in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Banks that agreed to help finance leveraged buyouts are starting to feel the pain from a freeze in the market for risky corporate debt.Lenders including Morgan Stanley, Bank of Ireland Group Plc and Citizens Financial Group Inc. have been forced to self-fund at least $1 billion of loans in recent weeks to ensure private-equity led acquisitions close as planned, according to people with knowledge of the matter.Unable to syndicate the debt to institutional investors, the banks have become unintentional holders of speculative-grade loans to a filtered-water company, a pet-food manufacturer and a U.K.-based maker of audio mixing consoles for DJs, said the people, who asked not to be named because the details are private.The loans represent only a small slice of over $30 billion in junk-rated debt that lenders may be forced to take onto their balance sheets this quarter if the market remains fragile. And while the exposure is a fraction of the commitments they held heading into the 2008 financial crisis, it nonetheless risks consuming precious capital just when banks need it most.While the high-yield bond market is starting to show signs of thawing, the cost of borrowing has soared. That could erode the fees banks are due depending on the terms of lending commitments they agreed to before the sell-off, and expose them to losses if they’re eventually forced to offload the debt at a steep discount.Read more: Wall Street is quietly telling companies not to draw their loansA group of lenders led by Morgan Stanley were forced to come up with $350 million at the end of March to allow Culligan NV, a filtered-water company owned by buyout firm Advent International, to close its takeover of AquaVenture Holdings Ltd., according to the people. The funded loan was smaller than the $500 million the banks had initially agreed to underwrite because AquaVenture sold its water-treatment unit to Morgan Stanley Infrastructure Partners, one of the people said.Just a couple weeks earlier, Citizens Financial had to fund a $285 million leveraged loan it agreed to provide J.H. Whitney Capital Partners-owned C.J. Foods Inc. for its acquisition of American Nutrition Inc. In Europe, a group led by Bank of Ireland got stuck with around $400 million of debt for private equity firm Ardian’s acquisition of Audiotonix Ltd., a U.K.-based maker of mixing consoles used in music and broadcasting, according to people with knowledge of the deal.Representatives for Morgan Stanley, Bank of Ireland, Advent and Ardian declined to comment, while Citizens Financial and J.H. Whitney didn’t respond to requests for comment.The leveraged loan market has been shut for roughly three weeks now. While smaller financings aren’t especially painful for banks to hold, they can become difficult to offload in the broadly-syndicated market even when conditions improve, given competition from bigger, more liquid transactions.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Canadian dollar loses ground following weak U.S. Initial Jobless Claims data but rebounds after the surge in oil prices.
CBOE (CBOE) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.