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Yahoo
23-05-2025
- Business
- Yahoo
BofA's Hartnett Says Buy the Dip in Treasurys as Yields Top 5%
(Bloomberg) — Investors should buy the selloff in long-dated Treasuries as the government is likely to heed warnings from bond vigilantes to bring its debt under control, according to Bank of America Corp.'s (BAC) Michael Hartnett. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NYC's War on Trash Gets a Glam Squad NJ Transit Makes Deal With Engineers, Ending Three-Day Strike The 30-year Treasury note (^TYX) is at a 'great entry point' with the yield above 5%, the strategist wrote. Bond investors are 'incentivized to punish the unambiguously unsustainable path of debt and deficit,' he added. US bond yields have surged this week as President Donald Trump's tax cut plan has ignited concerns that it would add trillions of dollars in coming years to already bulging budget deficits, at a time when investor appetite is waning for US assets across the globe. Sentiment toward Treasuries has also taken a hit since Moody's Ratings stripped the US of its top credit grade late last week. The 30-year yield rose to as high as 5.15% on Thursday, just shy of a two-decade high. Long-dated bonds in Japan, Germany, Australia and the UK have also been under pressure, while US equities and the dollar have retreated. Hartnett has recommended bonds over equities this year. The strategist said in the note dated Thursday that Treasuries are now reflecting the drivers of a bear market, with 10-year annualized returns from long-term government bonds falling to a record low of -1.3% in January. —With assistance from Michael Msika. Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His ©2025 Bloomberg L.P. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-05-2025
- Business
- Yahoo
BofA's Hartnett Says EM Stocks Will Outperform Everything Else
(Bloomberg) -- Emerging-market stocks are 'the next bull market' as they benefit from a weaker dollar and an economic recovery in China, according to Bank of America Corp.'s Michael Hartnett. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Maryland's Credit Rating Gets Downgraded as Governor Blames Trump NYC Commuters Brace for Chaos as NJ Transit Strike Looms Power-Hungry Data Centers Are Warming Homes in the Nordics The MSCI Emerging Markets Index excluding China is up 20% from April lows and is set to break out of a 20-year trading range. The benchmark is up about 7% this year as investors seek alternatives to US assets, while S&P 500 is barely changed. 'Nothing will work better than emerging-market stocks,' Hartnett wrote in a note. US equities fell out of favor amid President Donald Trump's attempts to shake up global trade earlier this year. They've since recovered most of their losses and there are signs that investors are returning. Fund managers added $20 billion to US stock funds in the past week, the first inflow to the region in more than a month, according to EPFR Global data cited in the BofA note. Hartnett said he expects US shares to sell off again if the yield on 30-year Treasuries climbs above 5%, from around 4.87%. Still, he said the current yield level 'holds for now.' --With assistance from Michael Msika. Cartoon Network's Last Gasp Microsoft's CEO on How AI Will Remake Every Company, Including His DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Why Obesity Drugs Are Getting Cheaper — and Also More Expensive ©2025 Bloomberg L.P.
Bloomberg
24-04-2025
- Business
- Bloomberg
Toppan's Chip-Material Unit Tekscend Said to Plan IPO This Year
Japanese chip-material maker Tekscend Photomask Corp. is planning an initial public offering in Tokyo as soon as the second half of this year, according to people familiar with the matter. Bank of America Corp., Nomura Holdings Inc. and SMBC Nikko Securities Inc. have been tapped to work on the potential listing, the people said, asking not to be identified because the information isn't public. More banks may be added, they said.
Mint
23-04-2025
- Business
- Mint
US Banks Ride Out Market Turmoil Thanks to Capital Buildup They Opposed
Big US banks are navigating a choppy environment just two years after the last round of turmoil, this time with almost no one questioning the industry's ability to ride out whatever is coming. That's because there's plenty of capital — ironically due to a buildup of financial buffers that bankers mostly opposed. 'This is the moment of peak capital for the industry,' said Mike Mayo, the veteran bank analyst at Wells Fargo Securities. 'When you look at the entirety of capital, reserves and earnings power, banks are about as resilient as they've been in a couple of decades.' Capital at 20 of the largest US banks surged by more than $175 billion in the past three years. This brought the most carefully watched metric — Tier 1 common equity — to almost $1.3 trillion by the end of last month. There's so much cash sloshing around that bankers are planning to return more of it to shareholders. A preliminary tally shows 20 of the largest banks bought back at least $26.56 billion of shares in the first quarter. This includes $7.1 billion by JPMorgan Chase & Co. and $4.5 billion at Bank of America Corp., where Chief Financial Officer Alastair Borthwick said there was 'some flexibility' to go higher. Citigroup Inc., which has lagged peers in repurchases, is conducting a massive $20 billion buyback over the next couple of years. To industry observers like Mayo, it's an overdue swing of the pendulum, after banks were prodded to stockpile capital following the Great Financial Crisis and in anticipation of higher requirements proposed by Biden-era regulators to meet Basel III international standards. The proposal, which followed several big bank failures in 2023, mandated an aggregate 16% increase in Tier 1 Common Equity for lenders with more than $100 billion in assets. Known as CET1 in bank lingo, it's the highest-quality capital that can absorb losses the most efficiently. Bankers have fought hard against the surcharges, with vocal opponents like JPMorgan Chief Executive Officer Jamie Dimon calling it 'hugely disappointing.' They're now expecting a friendlier revision from regulators, with the change in the US administration putting the update on an indefinite pause. While Mayo advocated for higher capital in 2010, the number of complex capital rules has since 'gone overboard,' he said, making it hard for US banks to compete with foreign banks and nonbank financial institutions. For some CEOs, a little extra resilience might not be so bad, with new tariffs potentially disrupting business activity, weakening loan demand and hindering borrowers' ability to repay. 'In an environment like this, having excess capital — and you could argue that we do — is not a burden but a luxury,' KeyCorp CEO Chris Gorman said in an interview. The board of the Cleveland-based bank has authorized share repurchases of up to $1 billion. The decision was made in March, although it was part of a long-term strategic plan that wouldn't have been altered by the tariff announcement, Gorman said. KeyCorp boosted its CET1 ratio to 11.8% at the end of its first quarter from 9.07% in March 2023, putting it well above regulatory minimums. To bolster capital, KeyCorp sold a minority stake to Scotiabank for roughly $2.8 billion last year, and Gorman said he'll continue ditching securities with unrealized losses to buy higher-yielding bonds. The drag on capital from underwater holdings can also ease naturally over time as bonds mature, said Citizens Financial's CEO Bruce Van Saun. Citizens expects by the end of 2026, about $500 million in unrealized losses will burn off, improving its adjusted CET1 ratio, which was 9.1%, by 30 basis points. M&T Bank Corp. largely erased the impact of unrealized losses ahead of the current turmoil, the bank told shareholders during its earnings call. 'Certainly the economic backdrop is dynamic with the recent news, but I think if we look at M&T versus its peers, we're in an enviable position as far as the strength of our capital position in particular,' said John Taylor, M&T's controller. All three of those regionals expect to repurchase shares in the months ahead. The tally was $200 million for Citizens in the first quarter and $662 million for M&T. KeyCorp expects to spend $1 billion on buybacks starting in the second half. M&T noted that its buybacks trimmed its CET1 ratio by 18 basis points to 11.5%, and cautioned during its earnings call that it might slow or pause the program if the economy weakens. The buybacks come on top of dividends. All told, for instance, Citizens returned $386 million to shareholders so far this year counting the cash payouts. Those efforts are dwarfed by Citigroup, whose stock stubbornly trades well below tangible book value. The New York-based bank's $20 billion buyback program announced in January includes $1.75 billion of repurchases in the first quarter amid plans to deliberately trim the bank's key capital ratio, with CFO Mark Mason citing 'our robust capital and liquidity position.' 'We continue to feel good about that program as you would expect,' Mason said on the earnings call. 'That is a smart thing to do.' This article was generated from an automated news agency feed without modifications to text. First Published: 23 Apr 2025, 06:47 PM IST
Yahoo
11-04-2025
- Business
- Yahoo
BofA's Hartnett Says Sell S&P 500 Rally Until Trade War Abates
(Bloomberg) -- Investors should sell any rallies in the S&P 500 Index until the Federal Reserve steps in and the US and China de-escalate the global trade war, according to Bank of America Corp.'s Michael Hartnett. Midtown Office Building Evacuated on Concerns of Wall Collapse In Chicago, a Former Steel Mill Looks to Make a Quantum Leap The Secret Formula for Faster Trains NYC Tourist Helicopter Crashes in Hudson River, Killing Six Inside the Quiet, Extravagant Expansion of the Frick Collection The strategist said President Donald Trump's tariffs and the resulting market turmoil were turning US exceptionalism into 'US repudiation.' He recommends a short position on stocks — until the S&P 500 hits 4,800 points — and a long bet on two-year Treasuries. Higher bond yields, lower stocks and a weaker dollar are 'driving global asset liquidation, will likely force policymakers to act,' Hartnett wrote in a note. But investors should 'sell the rips in risk assets.' The S&P 500 has slumped over 10% this year as Trump's unpredictable tariff policy hammered global sentiment. The president's announcement of sweeping levies last week cratered equities worldwide and fueled worries about a recession. This week Trump said he was pausing some tariffs for 90 days, although he raised duties on China to 145% after the world's second-biggest economy said it would apply tit-for-tat levies. On Friday, China said it will increase tariffs on US goods to 125%. The S&P 500 rallied the most since 2008 after tariffs were paused, but resumed declines Thursday in a sign of low conviction in the rebound. Hartnett said he would be short until the Fed cuts interest rates 'hard' to break the cycle of liquidation and for the US and China to pause the trade war. He recommended buying the S&P 500 around 4,800 points — a decline of another 9% from Thursday's close — 'if policy panic makes recession short/shallow.' But he said many investors had shown 'tremendous pushback' to that view as they expect a slump in earnings estimates to send the index toward 4,000. --With assistance from Michael Msika. Trump Is Firing the Wrong People, on Purpose World Travelers Are Rethinking Vacation Plans to the US AI Coding Assistant Cursor Draws a Million Users Without Even Trying Cheap Consumer Goods Are the American Dream, Actually How One MBA Grad Blew the Whistle on a $2 Billion Deal ©2025 Bloomberg L.P. Sign in to access your portfolio
